Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 07, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | PAYC | ||
Entity Registrant Name | Paycom Software, Inc. | ||
Entity Central Index Key | 0001590955 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 60,321,077 | ||
Entity Public Float | $ 14.4 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Security Exchange Name | NYSE | ||
Entity File Number | 001-36393 | ||
Entity Tax Identification Number | 80-0957485 | ||
Entity Address, Address Line One | 7501 W. Memorial Road | ||
Entity Address, City or Town | Oklahoma City | ||
Entity Address, State or Province | OK | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Postal Zip Code | 73142 | ||
City Area Code | 405 | ||
Local Phone Number | 722-6900 | ||
Entity Interactive Data Current | Yes | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Auditor Firm ID | 248 | ||
Auditor Name | GRANT THORNTON LLP | ||
Auditor Location | Oklahoma City, Oklahoma | ||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement on Schedule 14A to be furnished to stockholders in connection with its 2023 Annual Meeting of Stockholders are incorporated by reference in Part III, Items 10-14 of this Annual Report on Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 400,730 | $ 277,978 |
Accounts receivable | 22,843 | 9,490 |
Prepaid expenses | 34,056 | 23,729 |
Inventory | 1,607 | 1,131 |
Income tax receivable | 5,583 | 16,413 |
Deferred contract costs | 96,378 | 76,724 |
Current assets before funds held for clients | 561,197 | 405,465 |
Funds held for clients | 2,202,975 | 1,846,573 |
Total current assets | 2,764,172 | 2,252,038 |
Property and equipment, net | 402,448 | 348,953 |
Intangible assets, net | 54,017 | 58,028 |
Goodwill | 51,889 | 51,889 |
Long-term deferred contract costs | 567,974 | 461,852 |
Other assets | 62,013 | 42,385 |
Total assets | 3,902,513 | 3,215,145 |
Current liabilities: | ||
Accounts payable | 16,054 | 5,772 |
Accrued commissions and bonuses | 28,439 | 22,357 |
Accrued payroll and vacation | 45,023 | 34,259 |
Deferred revenue | 19,825 | 16,277 |
Current portion of long-term debt | 0 | 1,775 |
Accrued expenses and other current liabilities | 59,990 | 63,397 |
Current liabilities before client funds obligation | 169,331 | 143,837 |
Client funds obligation | 2,207,706 | 1,846,573 |
Total current liabilities | 2,377,037 | 1,990,410 |
Deferred income tax liabilities, net | 141,033 | 145,504 |
Long-term deferred revenue | 97,591 | 85,149 |
Net long-term debt, less current portion | 29,000 | 27,380 |
Other long-term liabilities | 75,245 | 72,988 |
Total long-term liabilities | 342,869 | 331,021 |
Total liabilities | 2,719,906 | 2,321,431 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value (100,000 shares authorized, 62,518 and 62,298 shares issued at December 31, 2022 and December 31, 2021, respectively; 57,867 and 58,012 shares outstanding at December 31, 2022 and December 31, 2021, respectively) | 625 | 623 |
Additional paid-in capital | 576,622 | 465,594 |
Retained earnings | 1,196,968 | 915,579 |
Accumulated other comprehensive earnings (loss) | (3,703) | |
Treasury stock, at cost (4,651 and 4,286 shares at December 31, 2022 and December 31, 2021, respectively) | (587,905) | (488,082) |
Total stockholders’ equity | 1,182,607 | 893,714 |
Total liabilities and stockholders’ equity | $ 3,902,513 | $ 3,215,145 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 62,518,000 | 62,298,000 |
Common stock, shares outstanding | 57,867,000 | 58,012,000 |
Treasury stock, shares | 4,651,000 | 4,286,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | |||
Total revenues | $ 1,375,218 | $ 1,055,524 | $ 841,434 |
Cost of revenues | |||
Operating expenses | 169,806 | 130,475 | 97,778 |
Depreciation and amortization | 42,935 | 31,411 | 25,768 |
Total cost of revenues | 212,741 | 161,886 | 123,546 |
Administrative expenses | |||
Sales and marketing | 346,561 | 275,994 | 235,716 |
Research and development | 148,343 | 118,426 | 90,244 |
General and administrative | 239,130 | 209,840 | 178,200 |
Depreciation and amortization | 49,764 | 35,811 | 27,605 |
Total administrative expenses | 783,798 | 640,071 | 531,765 |
Total operating expenses | 996,539 | 801,957 | 655,311 |
Operating income | 378,679 | 253,567 | 186,123 |
Interest expense | (2,536) | (19) | |
Other income (expense), net | 13,435 | 2,395 | (168) |
Income before income taxes | 389,578 | 255,962 | 185,936 |
Provision for income taxes | 108,189 | 60,002 | 42,483 |
Net income | $ 281,389 | $ 195,960 | $ 143,453 |
Earnings per share, basic | $ 4.86 | $ 3.39 | $ 2.49 |
Earnings per share, diluted | $ 4.84 | $ 3.37 | $ 2.46 |
Weighted average shares outstanding: | |||
Basic | 57,928 | 57,885 | 57,620 |
Diluted | 58,175 | 58,191 | 58,285 |
Comprehensive earnings (loss): | |||
Net income | $ 281,389 | $ 195,960 | $ 143,453 |
Unrealized net gains (losses) on available-for-sale securities | (4,757) | ||
Tax effect | 1,054 | ||
Other comprehensive income (loss), net of tax | (3,703) | ||
Comprehensive earnings (loss) | 277,686 | 195,960 | 143,453 |
Recurring [Member] | |||
Revenues | |||
Total revenues | 1,351,856 | 1,036,691 | 825,856 |
Implementation and Other [Member] | |||
Revenues | |||
Total revenues | $ 23,362 | $ 18,833 | $ 15,578 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] |
Beginning balance, value at Dec. 31, 2019 | $ 526,628 | $ 613 | $ 257,501 | $ 576,166 | $ (307,652) | |
Beginning balance, shares at Dec. 31, 2019 | 61,350 | 3,689 | ||||
Vesting of restricted stock | $ 5 | (5) | ||||
Vesting of restricted stock, shares | 511 | |||||
Stock-based compensation | 100,412 | 100,412 | ||||
Repurchases of common stock | (114,850) | $ (114,850) | ||||
Repurchases of common stock, shares | 433 | |||||
Net income | 143,453 | 143,453 | ||||
Ending balance, value at Dec. 31, 2020 | 655,643 | $ 618 | 357,908 | 719,619 | $ (422,502) | |
Ending balance, shares at Dec. 31, 2020 | 61,861 | 4,122 | ||||
Vesting of restricted stock | $ 5 | (5) | ||||
Vesting of restricted stock, shares | 437 | |||||
Stock-based compensation | 107,691 | 107,691 | ||||
Repurchases of common stock | (65,580) | $ (65,580) | ||||
Repurchases of common stock, shares | 164 | |||||
Net income | 195,960 | 195,960 | ||||
Ending balance, value at Dec. 31, 2021 | 893,714 | $ 623 | 465,594 | 915,579 | $ (488,082) | |
Ending balance, shares at Dec. 31, 2021 | 62,298 | 4,286 | ||||
Vesting of restricted stock | $ 2 | (2) | ||||
Vesting of restricted stock, shares | 220 | |||||
Stock-based compensation | 111,030 | 111,030 | ||||
Repurchases of common stock | (99,823) | $ (99,823) | ||||
Repurchases of common stock, shares | 365 | |||||
Net income | 281,389 | 281,389 | ||||
Other comprehensive income (loss), net of tax | (3,703) | $ (3,703) | ||||
Ending balance, value at Dec. 31, 2022 | $ 1,182,607 | $ 625 | $ 576,622 | $ 1,196,968 | $ (3,703) | $ (587,905) |
Ending balance, shares at Dec. 31, 2022 | 62,518 | 4,651 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net income | $ 281,389 | $ 195,960 | $ 143,453 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 92,699 | 67,222 | 53,373 |
Accretion of discount on available-for-sale securities | (1,020) | (452) | (1,563) |
Non-cash marketing expense | 1,734 | 1,051 | |
(Gain)/loss on disposition of property and equipment | (150) | 146 | |
Amortization of debt issuance costs | 847 | 36 | 36 |
Stock-based compensation expense | 94,898 | 97,506 | 90,108 |
Cash paid for derivative settlement | 205 | (741) | (613) |
(Gain)/loss on derivative | (1,559) | (662) | 1,993 |
Deferred income taxes, net | (3,210) | 32,906 | 21,381 |
Other | (206) | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (13,353) | (360) | 168 |
Prepaid expenses | (6,497) | (5,875) | (4,293) |
Inventory | (224) | 481 | (41) |
Other assets | (13,907) | (7,862) | (1,720) |
Deferred contract costs | (122,440) | (103,356) | (89,776) |
Accounts payable | 11,676 | (660) | 1,529 |
Income taxes, net | 10,830 | (5,966) | (6,427) |
Accrued commissions and bonuses | 6,082 | 8,654 | 1,360 |
Accrued payroll and vacation | 10,764 | 9,730 | 9,659 |
Deferred revenue | 15,990 | 14,600 | 10,582 |
Accrued expenses and other current liabilities | 555 | 17,004 | (2,002) |
Net cash provided by operating activities | 365,103 | 319,362 | 227,207 |
Cash flows from investing activities | |||
Purchases of investments from funds held for clients | (268,718) | (398,819) | (332,756) |
Proceeds from investments from funds held for clients | 382,230 | 267,341 | 308,981 |
Purchases of intangible assets | (4,120) | (5,500) | |
Purchases of property and equipment | (132,678) | (120,692) | (94,102) |
Net cash used in investing activities | (23,286) | (257,670) | (117,877) |
Cash flows from financing activities | |||
Proceeds from the issuance of debt | 29,000 | ||
Repurchases of common stock | (94,652) | (52,040) | |
Withholding taxes paid related to net share settlements | (5,171) | (65,580) | (62,811) |
Payments on long-term debt | (29,287) | (1,775) | (1,775) |
Net change in client funds obligation | 361,133 | 233,079 | (49,283) |
Payment of debt issuance costs | (6,436) | ||
Net cash provided by (used in) financing activities | 254,587 | 165,724 | (165,909) |
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents | 596,404 | 227,416 | (56,579) |
Cash, cash equivalents, restricted cash and restricted cash equivalents | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period | 1,812,691 | 1,585,275 | 1,641,854 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | 2,409,095 | 1,812,691 | 1,585,275 |
Cash and cash equivalents | 400,730 | 277,978 | 151,710 |
Restricted cash included in funds held for clients | 2,008,365 | 1,534,713 | 1,433,565 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest, net of amounts capitalized | 507 | 2 | |
Cash paid for income taxes | 100,578 | 33,068 | 27,530 |
Non-cash investing and financing activities: | |||
Purchases of property and equipment, accrued but not paid | 5,899 | 7,581 | 837 |
Stock-based compensation for capitalized software | 8,965 | 7,141 | 6,655 |
Right of use assets obtained in exchange for operating lease liabilities | $ 21,467 | $ 14,141 | $ 9,693 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Description of Business Paycom Software, Inc. (“Software”) and its wholly-owned subsidiaries (collectively, the “Company”) is a leading provider of a comprehensive, cloud-based human capital management (“HCM”) solution delivered as Software-as-a-Service. Unless we state otherwise or the context otherwise requires, the terms “we,” “our,” “us” and the “Company” refer to Software and its consolidated subsidiaries. We provide functionality and data analytics that businesses need to manage the complete employment lifecycle from recruitment to retirement. Our solution requires virtually no customization and is based on a core system of record maintained in a single database for all HCM functions, including talent acquisition, time and labor management, payroll, talent management and human resources (“HR”) management applications. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our consolidated financial statements include the financial results of Software and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying consolidated financial statements include all adjustments necessary for the fair presentation for the periods presented. Adoption of New Accounting Pronouncements In January 2021, we adopted Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes” (“ASU 2019-12”) utilizing the prospective transition method. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income tax in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The adoption of this guidance did not have a material impact on our consolidated financial statements. In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, “Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. Prior to August 24, 2022, our floating-to-fixed interest rate swap was outstanding to offset the rate variability associated with our outstanding indebtedness. As discussed in Note 7, the interest rate swap was terminated on August 24, 2022. As a result, the adoption of ASU 2020-04 had no material impact on our unaudited financial statements. In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848) Scope” (“ASU 2021-01”), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that are affected by the discounting transition. ASU 2021-01 amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. As discussed in Note 7, the interest rate swap was terminated on August 24, 2022. As a result, the adoption of ASU 2021-01 had no material impact on our unaudited financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include income taxes, loss contingencies, the useful life of property and equipment and intangible assets, the life of our client relationships, the fair value of our stock-based awards and the fair value of our financial instruments, intangible assets and goodwill. These estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Actual results could materially differ from these estimates. Segment Information We operate in a single operating segment and a single reporting segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is also the chief executive officer, in deciding how to allocate resources and assessing performance. Our chief executive officer allocates resources and assesses performance based upon financial information at the consolidated level. As we operate in one operating segment, all required financial segment information is presented in the consolidated financial statements. Cash Equivalents We consider all highly liquid instruments purchased with a maturity of three months or less and money market funds to be cash equivalents. We maintain cash and cash equivalents in demand deposit accounts, money market funds, and certificates of deposit, which may not be federally insured. The fair value of our cash and cash equivalents approximates carrying value. We have not experienced any losses in such accounts and do not believe there is exposure to any significant credit risk on such accounts. Accounts Receivable We generally collect revenues from our clients through an automatic deduction from the clients’ bank accounts at the time payroll processing occurs. Accounts receivable on our consolidated balance sheets generally consists of revenue-related receivables, including processing fees, interest income receivable, and revenue fees related to the last business day of the year, which are collected on the following business day. As accounts receivable are collected via automatic deduction on the following business day, the Company has not recognized an allowance for doubtful accounts. Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight line method over the estimated useful lives of the assets as follows: Furniture, fixtures and equipment 5 years Computer equipment 3 years Software and capitalized software 3 years Buildings 30 years Leasehold improvements 5 years Rental clocks 5 years Land improvements 15 years Vehicles 3 years Costs incurred during construction of long-lived assets are recorded as construction in progress and are not depreciated until the asset is placed in service. We capitalize interest costs incurred related to construction in progress. For the years ended December 31, 2022, 2021 and 2020, we incurred interest costs of $ 3.4 million, $ 1.4 million and $ 1.5 million, respectively. For the years ended December 31, 2022, 2021 and 2020, interest costs of $ 0.9 million, $ 1.4 million and $ 1.5 million, respectively, were capitalized. Leases Our leases primarily consist of noncancellable operating leases for office space. We recognize a right-of-use asset and operating lease liability on the lease commencement date based on the present value of the lease payments over the lease term. Operating lease liabilities are measured by discounting future lease payments at an estimated incremental borrowing rate. Right-of-use assets are amortized over the lease term and include adjustments related to prepaid rent. Internal Use Software Capitalized costs include services associated with developing or obtaining internal use computer software and certain payroll and payroll-related costs for employees who are directly associated with internal use computer software projects. The amount of payroll costs that are capitalized with respect to these employees is limited to the time directly spent on such projects. Expenditures for software purchases and software developed or obtained for internal use are capitalized and amortized over a three-year period on a straight-line basis. Costs associated with preliminary project stage activities, training, maintenance and all other post-implementation stage activities are expensed as incurred. We also expense internal costs related to minor upgrades and enhancements, as it is impractical to separate these costs from normal maintenance activities. The total capitalized payroll costs related to internal use computer software projects were $ 66.4 million and $ 52.9 million during the years ended December 31, 2022 and 2021, respectively, and are included in property and equipment. Amortization expense of capitalized software costs were $ 47.3 million, $ 36.5 million and $ 27.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. Derivatives In December 2017, we entered into a floating-to-fixed interest rate swap agreement to limit the exposure to floating interest rate risk related to the 2017 Term Loans (as defined in Note 6). We do not hold derivative instruments for trading or speculative purposes. The interest rate swap agreement effectively converted a portion of the variable interest rate payments to fixed interest rate payments. We account for our derivatives under ASC Topic 815, “Derivatives and Hedging,” and recognize all derivative instruments in the consolidated balance sheets at fair value as either short-term or long-term assets or liabilities based on their anticipated settlement date. See Note 9, “Fair Value of Financial Instruments”. We have elected not to designate our interest rate swap as a hedge; therefore, changes in the fair value of the derivative instrument are recognized in our consolidated statements of comprehensive income within Other income (expense), net. As further discussed in Note 7, on August 24, 2022, we terminated the interest rate swap by settling the contract. Goodwill and Other Intangible Assets Goodwill is not amortized, but we are required to test the carrying value of goodwill for impairment at least annually, or earlier if, at the reporting unit level, an indicator of impairment arises. Our business is largely homogeneous and, as a result, goodwill is associated with one reporting unit. We have selected June 30 as our annual goodwill impairment testing date. A review of goodwill may be initiated before or after conducting the annual analysis if events or changes in circumstances indicate the carrying value of goodwill may no longer be recoverable. The Company performed a qualitative assessment to determine if it is more-likely-than-not that the fair value of the reporting unit had declined below its carrying value. In the qualitative assessment, we consider the macroeconomic conditions, including any deterioration of general economic conditions, industry and market conditions, including any deterioration in the environment where the reporting unit operates, changes in the products/services and regulator and political developments; cost of doing business; overall financial performance; other relevant reporting unit specific facts, such as changes in management or key personnel or pending litigation. Based on our assessment, there was no impairment recorded as of June 30, 2022. For the years ended December 31, 2022, 2021 and 2020, there were no indicators of impairment. Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives. Impairment of Long-Lived Assets Long-lived assets, including intangible assets with definite lives, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. We have determined that there was no impairment of long-lived assets including intangible assets with definite lives, for the years ended December 31, 2022, 2021 and 2020. Funds Held for Clients and Client Funds Obligation As part of our payroll and tax filing application, we (i) collect client funds to satisfy their respective federal, state and local employment tax obligations, (ii) remit such funds to the appropriate taxing authorities and accounts designated by our clients, and (iii) manage client tax filings and any related correspondence with taxing authorities. Amounts collected by us from clients for their federal, state and local employment taxes are invested by us, and we earn interest on these funds during the interval between receipt and disbursement. These investments are shown in our consolidated balance sheets as funds held for clients, and the associated liability for the tax filings is shown as client funds obligation. The liability is recorded in the accompanying consolidated balance sheets at the time we obtain the funds from clients. The client funds obligation represents liabilities that will be repaid within one year of the consolidated balance sheet date. As of December 31, 2022 and December 31, 2021, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper and certificates of deposit. Additionally, as of December 31, 2022, the funds held for clients were invested in U.S. treasury securities with an original maturity of greater than one year. Short-term investments in commercial paper and certificates of deposit with an original maturity greater than three months are classified as available for-sale securities, and are also included within the funds held for clients line item in the consolidated balance sheets. U.S. treasury securities with an original maturity of greater than one year are also classified as available-for-sale securities and included within the funds held for clients line item in the consolidated balance sheets. These available-for-sale securities are recorded in the consolidated balance sheets at fair value, with the difference between the amortized cost and fair value of these available-for-sale securities recorded as unrealized net gains (losses) on available-for-sale securities and are included within comprehensive earnings (loss) in the consolidated statements of comprehensive income. Funds held for clients are classified as a current asset in the consolidated balance sheets because the funds are held solely to satisfy the client funds obligation. Additionally, the funds held for clients is classified as restricted cash and restricted cash equivalents and presented within the reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents on the consolidated statements of cash flows. Stock Repurchase Plan In May 2016, our Board of Directors authorized a stock repurchase plan allowing for the repurchase of shares of our common stock in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs. Since the initial authorization of the stock repurchase plan, our Board of Directors has amended and extended and authorized new stock repurchase plans from time to time. Most recently, in August 2022, our Board of Directors authorized the repurchase of up to $ 1.1 billion of our common stock. As of December 31, 2022 there was $ 1.1 billion available for repurchases under our stock repurchase plan. Our stock repurchase plan may be suspended or discontinued at any time. The actual timing, number and value of shares repurchased depends on a number of factors, including the market price of our common stock, general market and economic conditions, shares withheld for taxes associated with the vesting of restricted stock and other corporate considerations. The current stock repurchase plan will expire on August 15, 2024. During the year ended December 31, 2022, we repurchased an aggregate of 364,667 shares of our common stock at an average cost of $ 273.74 per share, including 17,355 shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of restricted stock. During the year ended December 31, 2021, we repurchased an aggregate of 163,849 shares of our common stock at an average cost of $ 400.24 per share, all of which were shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of the restricted stock. Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to our clients in an amount that reflects the consideration we expect to be entitled to for those goods or services. Substantially all of our revenues are comprised of revenue from contracts with clients. Sales taxes and other applicable taxes are excluded from revenues. Recurring Revenues Recurring revenues are derived primarily from our talent acquisition, time and labor management, payroll, talent management and HR management applications as well as fees charged for form filings and delivery of client payroll checks and reports. Talent acquisition includes our Applicant Tracking, Candidate Tracker, Enhanced Background Checks, Onboarding, E-Verify and Tax Credit Services applications. Time and labor management includes Time and Attendance, Scheduling/Schedule exchange, Time-Off Requests, Labor Allocation, Labor Management Reports/Push Reporting, Geofencing/Geotracking and Microfence tools and applications. Payroll includes Beti, Payroll and Tax Management, Vault Card, Paycom Pay, Expense Management, Mileage Tracker/FAVR, Garnishment Administration and GL Concierge applications. Talent management includes our Employee Self-Service, Compensation Budgeting, Performance Management, Position Management, My Analytics and Paycom Learning and Content Subscriptions applications. HR management includes our Manager on-the-Go, Direct Data Exchange, Ask Here, Documents and Checklists, Government and Compliance, Benefits Administration/Benefits to Carrier, Benefit Enrollment Service, COBRA Administration, Personnel Action Forms and Performance Discussion Forms, Surveys, Enhanced ACA and Clue applications. The performance obligations related to recurring revenues are satisfied during each client’s payroll period, with the agreed-upon fee being charged and collected as part of our processing of the client’s payroll. Recurring revenues are recognized at the conclusion of processing of each client’s payroll period, when each respective payroll client is billed. Collectability is reasonably assured as the fees are collected through an automated clearing house as part of the client’s payroll cycle or through direct wire transfer, which minimizes the default risk. The contract period for substantially all contracts associated with these revenues is one month due to the fact that both we and the client have the unilateral right to terminate a wholly unperformed contract without compensating the other party by providing 30 days’ notice of termination. Our payroll application is the foundation of our solution, and all of our clients are required to utilize this application in order to access our other applications. For clients who purchase multiple applications, due to the short-term nature of our contracts, we do not believe it is meaningful to separately assess and identify whether or not each application potentially represents its own, individual, performance obligation as the revenue generated from each application is recognized within the same month as the revenue from the core payroll application. Similarly, we do not believe it is meaningful to individually determine the standalone selling price for each application. We consider the total price charged to a client in a given period to be indicative of the standalone selling price, as the total amount charged is within a reasonable range of prices typically charged for our goods and services for comparable classes of client groups, which we periodically assess for price adjustments. Interest income on funds held for clients is earned on funds that are collected from clients in advance of either the applicable due date for payroll tax submissions or the applicable disbursement date for employee payment services. The interest earned on these funds is included in recurring revenues in the consolidated statements of comprehensive income as the collection, holding, and remittance of these funds are essential components of providing these services. Implementation and Other Revenues Implementation and other revenues consist of nonrefundable upfront conversion fees which are charged to new clients to offset the expense of new client set-up as well as revenues from the sale of time clocks as part of our employee time and attendance services. Although these revenues are related to our recurring revenues, they represent distinct performance obligations. Implementation activities primarily represent administrative activities that allow us to fulfill future performance obligations for our clients and do not represent services transferred to the client. However, the nonrefundable upfront fee charged to our clients results in an implied performance obligation in the form of a material right to the client related to the client’s option to renew at the end of each 30-day contract period. Further, given that all other services within the contract are sold at a total price indicative of the standalone selling price, coupled with the fact that the upfront fees are consistent with upfront fees charged in similar contracts that we have with clients, the standalone selling price of the client’s option to renew the contract approximates the dollar amount of the nonrefundable upfront fee. The nonrefundable upfront fee is typically included on the client’s first invoice, and is deferred and recognized ratably over the estimated renewal period ( i.e. , ten-year estimated client life). Revenues from the sale of time clocks are recognized when control is transferred to the client upon delivery of the product. We estimate the standalone selling price for the time clocks by maximizing the use of observable inputs such as our specific pricing practices for time clocks. Contract Balances The timing of revenue recognition for recurring services is consistent with the invoicing of clients as they both occur during the respective client payroll period for which the services are provided. Therefore, we do not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing. Changes in deferred revenue related to material rights for the years ended December 31, 2022 and 2021 were as follows: Year Ended December 31, 2022 2021 Balance, beginning of period $ 101,426 $ 86,826 Recognition of revenue included in beginning of year balance ( 15,949 ) ( 13,298 ) Contract balance, net of revenue recognized during the period 31,939 27,898 Balance, end of period $ 117,416 $ 101,426 We expect to recognize $ 24.3 million of deferred revenue related to material rights in 2023, $ 18.5 million in 2024, and $ 74.6 million of such deferred revenue thereafter . Assets Recognized from the Costs to Obtain and Costs to Fulfill Revenue Contracts We recognize an asset for the incremental costs of obtaining a contract with a client if we expect the amortization period to be longer than one year. We also recognize an asset for the costs to fulfill a contract with a client if such costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. We have determined that substantially all costs related to implementation activities are administrative in nature and also meet the capitalization criteria under ASC 340-40. These capitalized costs to fulfill principally relate to upfront direct costs that are expected to be recovered through margin and that enhance our ability to satisfy future performance obligations. The assets related to both costs to obtain, and costs to fulfill, contracts with clients are accounted for utilizing a portfolio approach, and are capitalized and amortized over the expected period of benefit, which we have determined to be the estimated client relationship of ten years. The expected period of benefit has been determined to be the estimated life of the client relationship primarily because we incur no new costs to obtain, or costs to fulfill, a contract upon renewal of such contract. Additional commission costs may be incurred when an existing client purchases additional applications; however, these commission costs relate solely to the additional applications purchased and are not related to contract renewal. Furthermore, additional fulfillment costs associated with existing clients purchasing additional applications are minimized by our seamless single-database platform. These assets are presented as deferred contract costs in the accompanying consolidated balance sheets. Amortization expense related to costs to obtain and costs to fulfill a contract are included in the “sales and marketing” and “general and administrative” line items in the accompanying consolidated statements of comprehensive income. The following tables present the asset balances and related amortization expense for these contract costs: As of and for the Year Ended December 31, 2022 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 272,919 $ 97,978 $ ( 45,440 ) $ 325,457 Costs to fulfill a contract $ 265,657 $ 114,152 $ ( 40,914 ) $ 338,895 As of and for the Year Ended December 31, 2021 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 232,583 $ 77,644 $ ( 37,308 ) $ 272,919 Costs to fulfill a contract $ 199,593 $ 96,728 $ ( 30,664 ) $ 265,657 Cost of Revenues Our costs and expenses applicable to total revenues represent operating expenses and systems support and technology costs, including labor and related expenses, bank fees, shipping fees and costs of paper stock, envelopes, etc. In addition, costs included to derive gross margins are comprised of support labor and related expenses, related hardware costs and applicable depreciation and amortization costs. Advertising Costs Advertising costs are expensed the first time that advertising takes place. Advertising costs for the years ended December 31, 2022, 2021 and 2020 were $ 90.6 million, $ 71.6 million and $ 66.9 million, respectively. Sales Taxes We collect and remit sales tax on sales of time and attendance clocks and on payroll services in certain states. These taxes are recognized on a net basis, and therefore, excluded from revenues. For the years ended December 31, 2022, 2021 and 2020, sales taxes collected were $ 15.5 million, $ 11.9 million and $ 9.7 million, respectively. Employee Stock-Based Compensation Time-based stock compensation awards to employees are recognized on a straight-line basis over the applicable vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair values measured as of the date of grant. Market-based stock compensation awards to employees are recognized on a straight-line basis over the applicable estimated vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair value as of the date of the grant unless vesting occurs sooner at which time the remaining respective unrecognized compensation cost is recognized. Performance-based restricted stock compensation awards are recognized on a straight-line basis over the applicable vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair values measured as of the date of grant. Forfeitures related to our stock-based compensation awards are recognized as they occur. Employee Stock Purchase Plan An award issued under the Paycom Software, Inc. Employee Stock Purchase Plan (the “ESPP”) is classified as a share-based liability and recognized at the fair value of the award. Expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period. Income Taxes Our consolidated financial statements include a provision for income taxes incurred for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We recognize a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. We file income tax returns with the United States federal government and various state jurisdictions. We evaluate tax positions taken or expected to be taken in the course of preparing our tax returns and disallow the recognition of tax positions not deemed to meet a “more-likely-than-not” threshold of being sustained by the applicable tax authority. We do not believe there are any tax positions taken within the consolidated financial statements that do not meet this threshold. Our policy is to recognize interest and penalties, if any, related to uncertain tax positions as a component of general and administrative expenses. With few exceptions, we are no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2019. Seasonality Our revenues are seasonal in nature and generally we expect our first and fourth quarter recurring revenues to be higher than other quarters during the year. Recurring revenues include revenues relating to the annual processing of payroll tax filing forms and ACA form filing requirements, such as Form W-2, Form 1099, and Form 1095 and revenues from processing unscheduled payroll runs (such as bonuses) for our clients. As payroll tax forms are typically processed in the first quarter of the year, first quarter recurring revenues and margins are positively impacted. In addition, unscheduled payroll runs at the end of the year often result in increased recurring revenues in the fourth quarter. These seasonal fluctuations in revenues can also have an impact on gross profits. Historical results impacted by these seasonal trends should not be considered a reliable indicator of our future results of operations. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. PROPERTY AND EQUIPMENT Property and equipment and accumulated depreciation and amortization were as follows: December 31, 2022 December 31, 2021 Property and equipment Software and capitalized software costs $ 270,645 $ 199,470 Buildings 177,765 172,807 Computer equipment 133,715 102,509 Rental clocks 35,846 30,313 Furniture, fixtures and equipment 28,414 24,971 Other 17,321 16,397 663,706 546,467 Less: accumulated depreciation and amortization ( 331,340 ) ( 242,652 ) 332,366 303,815 Construction in progress 36,286 11,342 Land 33,796 33,796 Property and equipment, net $ 402,448 $ 348,953 We capitalize computer software development costs related to software developed for internal use in accordance with ASC 350-40. For the years ended December 31, 2022 and 2021, we capitalized $ 66.4 million and $ 52.9 million, respectively, of computer software development costs related to software developed for internal use. Rental clocks included in property and equipment, net represent time clocks issued to clients under month-to-month operating leases. As such, these items are transferred from inventory to property and equipment and depreciated over their estimated useful lives. We capitalize interest incurred for indebtedness related to construction in progress. For the years ended December 31, 2022, 2021 and 2020, we incurred interest costs of $ 3.4 million, $ 1.4 million and $ 1.5 million, respectively. For the years ended December 31, 2022, 2021 and 2020, interest cost of $ 0.9 million, $ 1.4 million and $ 1.5 million, respectively, was capitalized. Included in the construction in progress balance at December 31, 2022 and 2021 is $ 2.0 million and $ 0.1 million in retainage, respectively. Depreciation and amortization expense for property and equipment, net was $ 88.7 million, $ 64.7 million and $ 53.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 4. GOODWILL AND INTANGIBLE ASSETS, NET As of both December 31, 2022 and 2021, goodwill totaled $ 51.9 million. We have selected June 30 as our annual goodwill impairment testing date. We performed a qualitative impairment test of our goodwill and concluded that, as of June 30, 2022, it was more likely than not that the fair value exceeded the carrying value and therefore goodwill was no t impaired. As of December 31, 2022 and 2021, there were no indicators of impairment. In connection with our marketing initiatives, we purchased the naming rights to the downtown Oklahoma City arena that is home to the Oklahoma City Thunder National Basketball Association franchise. Under the terms of the naming rights agreement, we committed to make payments escalating annually from $ 4.0 million in 2021 to $ 6.1 million in 2035. We also made a $ 1.5 million one time payment in July 2021 to cover sponsorship rights leading up to the 2021- 2022 season. Upon the conclusion of the initial term, the agreement may be extended upon the mutual agreement of both parties for an additional five-year period. The cost of the naming rights has been recorded as an intangible asset with an offsetting liability as of the date of the contract. The intangible asset is being amortized over the life of the agreement on a straight line basis that commenced in June 2021. The difference between the present value of the offsetting liability and actual cash payments is being relieved through sales and marketing expense using the effective interest method over the life of the agreement. All of our intangible assets other than goodwill are considered to have definite lives and, as such, are subject to amortization. The following tables present the components of intangible assets within our consolidated balance sheets: December 31, 2022 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Naming rights 13.8 $ 60,199 $ ( 6,182 ) $ 54,017 Trade name — 3,194 ( 3,194 ) — Total $ 63,393 $ ( 9,376 ) $ 54,017 December 31, 2021 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Naming rights 14.8 $ 60,199 $ ( 2,278 ) $ 57,921 Trade name 0.5 3,194 ( 3,087 ) 107 Total $ 63,393 $ ( 5,365 ) $ 58,028 Amortization of intangible assets for the years ended December 31, 2022, 2021 and 2020 was $ 4.0 million, $ 2.5 million and $ 0.2 million, respectively. We estimate the aggregate amortization expense will be $ 3.9 million in 2023, and $ 3.9 million for each of 2024, 2025, 2026 and 2027, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 5. LEASES The Company’s leases primarily consist of noncancellable operating leases for office space with contractual terms expiring from 2023 to 2029 . All of our leases are operating leases and, as a lessee, we have not entered into any sublease agreements. The lease term is defined as the fixed noncancellable term of the lease plus all periods, if any, for which failure to renew the lease imposes a penalty on us in an amount that appears, at the inception of the lease, to be reasonably assured. While some of our leases include an option to extend the lease up to five years , it is not reasonably certain that any such options will be exercised due, in part, to the dynamic nature of our sales force and rate of growth. Some of our leases contain a termination option that is not reasonably certain to be exercised. If a termination option is exercised, we remeasure the lease asset in the consolidated balance sheets using the updated lease period. None of our leases contain residual value guarantees, substantial restrictions or covenants. The table below presents the lease assets and liabilities as of December 31, 2022 and December 31, 2021. Balance Sheet location December 31, 2022 December 31, 2021 Other assets $ 39,776 $ 29,841 Lease liabilities: Accrued expenses and other current liabilities $ 14,986 $ 10,853 Other long-term liabilities $ 26,026 $ 20,059 Rent expense under operating leases for the years ended December 31, 2022, 2021 and 2020 was $ 12.3 million, $ 11.9 million and $ 11.3 million, respectively. Cash paid for amounts relating to our operating leases was $ 14.4 million for the year ended December 31, 2022. Because no implicit discount rates for our leases could be readily determined, we elected to use an estimated incremental borrowing rate to determine the present value of our leases. The weighted average discount rate related to our portfolio of leases at December 31, 2022 was 3.7 %. The average remaining lease term for our leases was 2.9 years as of December 31, 2022. The undiscounted cash flows for the future annual maturities of our operating lease liabilities and the reconciliation of those total undiscounted cash flows to our lease liabilities as of December 31, 2022 were as follows: 2023 $ 14,791 2024 9,587 2025 6,962 2026 5,192 2027 2,711 Thereafter 3,500 Total undiscounted cash flows $ 42,743 Present value discount ( 1,731 ) Lease liabilities $ 41,012 The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced. As of December 31, 2022, the present value of the operating lease liabilities that had not yet commenced was $ 0.7 million. |
Long-Term Debt, Net
Long-Term Debt, Net | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt, Net | 6. LONG-TERM DEBT, NET Long-term debt consisted of the following: December 31, 2022 December 31, 2021 July 2022 Revolving Credit Agreement due July 29, 2027 $ 29,000 $ — Net term note to bank due September 7, 2025 — 29,155 Total long-term debt, net (including current portion) 29,000 29,155 Less: Current portion — ( 1,775 ) Total long-term debt, net $ 29,000 $ 27,380 On December 7, 2017 , we entered into a senior secured term credit agreement (as amended from time to time, the “2017 Term Credit Agreement”), pursuant to which JPMorgan Chase Bank, N.A., Bank of America, N.A. and Kirkpatrick Bank made certain term loans to us (the “2017 Term Loans”). Our obligations under the 2017 Term Loans were secured by a mortgage and first priority security interest in our corporate headquarters property. The 2017 Term Loans were due to mature on September 7, 2025 and bore interest, at our option, at either (a) a prime rate plus 1.0 % or (b) an adjusted LIBOR rate for the interest period in effect for such 2017 Term Loan plus 1.5 %. As discussed below, the 2017 Term Loans were repaid in full on May 4, 2022 and the 2017 Term Credit Agreement was terminated. At the time of payoff, unamortized debt issuance costs totaling $ 0.1 million were written off. On May 4, 2022 (the “May 2022 Facility Closing Date”), Paycom Payroll, LLC (the “Borrower”), Software, and certain other subsidiaries of Software (collectively, the “Guarantors,” and collectively with the Borrower, the “Loan Parties”), entered into a credit agreement (as amended from time to time, the “May 2022 Revolving Credit Agreement”) with Bank of America, N.A., as a lender, swingline lender and letters of credit issuer, the lenders from time to time party thereto and Bank of America, N.A., as the administrative agent. The May 2022 Revolving Credit Agreement provided for a senior secured revolving credit facility (the “May 2022 Facility”) in the initial aggregate principal amount of up to $ 250.0 million, and the ability to request an incremental facility of up to an additional $ 100.0 million, subject to obtaining additional lender commitments and certain approvals and satisfying certain other conditions. The May 2022 Facility included a $ 25.0 million sublimit for swingline loans and a $ 2.5 million sublimit for letters of credit. On June 7, 2022, the aggregate commitments under the May 2022 Revolving Credit Agreement were increased from $ 250.0 million to $ 350.0 million. Our obligations under the May 2022 Facility were secured by a senior security interest in all personal property of the Loan Parties. The May 2022 Facility was scheduled to mature on May 4, 2027 . On the May 2022 Facility Closing Date, we borrowed $ 29.0 million under the May 2022 Facility to repay the 2017 Term Loans, along with accrued interest, expenses and fees. The loan on the May 2022 Facility Closing Date bore interest at the BSBY rate plus 1.125 %. In connection with the repayment of the 2017 Term Loans, the 2017 Term Credit Agreement was terminated on May 4, 2022 . As discussed below, the May 2022 Facility was repaid in full on July 29, 2022 and the May 2022 Revolving Credit Agreement was terminated. On July 29, 2022 (the “July 2022 Facility Closing Date”), the Borrower, Software, and certain other subsidiaries of Software entered into a new credit agreement (the “July 2022 Credit Agreement”) with JPMorgan Chase Bank, N.A., as a lender, swingline lender and issuing bank, the lenders from time to time party thereto (collectively with JPMorgan Chase Bank, N.A., the “July 2022 Lenders”), and JPMorgan Chase Bank, N.A., as the administrative agent. The July 2022 Credit Agreement provides for a senior secured revolving credit facility (the “July 2022 Revolving Credit Facility”) in the aggregate principal amount of up to $ 650.0 million, and the ability to request an incremental facility of up to an additional $ 500.0 million, subject to obtaining additional lender commitments and certain approvals and satisfying certain other conditions. The July 2022 Credit Agreement includes a $ 25.0 million sublimit for swingline loans and a $ 6.5 million sublimit for letters of credit. The July 2022 Credit Agreement also provides for a senior secured delayed draw term loan (the “July 2022 Term Loan Facility”) in the aggregate amount of up to $ 750.0 million. All loans under the July 2022 Credit Agreement will mature on July 29, 2027 (the “Scheduled Maturity Date”). Unamortized debt issuance costs of $ 5.7 million as of December 31, 2022 are included in “Other assets” on our consolidated balance sheets. The borrowings under the July 2022 Credit Agreement will bear interest at a rate per annum equal to (i) the Alternate Base Rate (“ABR”) plus an applicable margin (“ABR Loans”) or (ii) (x) the term Secured Overnight Financing Rate (“SOFR”) plus 0.10 % (the “Adjusted Term SOFR Rate”) or (y) the daily SOFR plus 0.10 %, in each case plus an applicable margin (“SOFR Rate Loans”). ABR is calculated as the highest of (i) the rate of interest last quoted by The Wall Street Journal in the United States as the prime rate in effect, (ii) the federal funds rate plus 0.5 % and (iii) the Adjusted Term SOFR Rate for a one-month interest period plus 1.00 %; provided that, if the ABR as determined pursuant to the foregoing would be less than 1.00%, such rate shall be deemed to be 1.00%. The applicable margin for ABR Loans is (i) 0.25 % if the Company’s consolidated leverage ratio is less than 1.0 to 1.0; (ii) 0.50 % if the Company’s consolidated leverage ratio is greater than or equal to 1.0 to 1.0 but less than 2.0 to 1.0; (iii) 0.75 % if the Company’s consolidated leverage ratio is greater than or equal to 2.0 to 1.0 but less than 3.0 to 1.0; or (iv) 1.00 % if the Company’s consolidated leverage ratio is greater than or equal to 3.0 to 1.0. The applicable margin for SOFR Rate Loans is (i) 1.25 % if the Company’s consolidated leverage ratio is less than 1.0 to 1.0; (ii) 1.5 % if the Company’s consolidated leverage ratio is greater than or equal to 1.0 to 1.0 but less than 2.0 to 1.0; (iii) 1.75 % if the Company’s consolidated leverage ratio is greater than or equal to 2.0 to 1.0 but less than 3.0 to 1.0; or (iv) 2.00 % if the Company’s consolidated leverage ratio is greater than or equal to 3.0 to 1.0. We are required to pay a quarterly commitment fee on the daily amount of the undrawn portion of the revolving commitments under the July 2022 Revolving Credit Facility and a quarterly ticking fee on the daily amount of the undrawn portion of the July 2022 Term Loan Facility, in each case at a rate per annum of (i) 0.20 % if the Company’s consolidated leverage ratio is less than 1.0 to 1.0; (ii) 0.225 % if the Company’s consolidated leverage ratio is greater than or equal to 1.0 to 1.0 but less than 2.0 to 1.0; (iii) 0.25 % if the Company’s consolidated leverage ratio is greater than or equal to 2.0 to 1.0 but less than 3.0 to 1.0; or (iv) 0.275 % if the Company’s consolidated leverage ratio is greater than or equal to 3.0 to 1.0. We are also required to pay customary letter of credit fees upon drawing any letter of credit. The July 2022 Revolving Credit Facility provides for no scheduled principal amortization prior to the Scheduled Maturity Date. Subject to certain conditions set forth in the July 2022 Credit Agreement, we may borrow, prepay and reborrow under the July 2022 Revolving Credit Facility and terminate or reduce the July 2022 Lenders’ commitments at any time prior to the Scheduled Maturity Date. We may make up to ten draws under the July 2022 Term Loan Facility at any time during the period from and after the July 2022 Facility Closing Date through twelve months after the July 2022 Facility Closing Date. Loans under the July 2022 Term Loan Facility will amortize in equal quarterly installments commencing with the first full fiscal quarter after the earlier of (x) the date on which the July 2022 Term Loan Facility has been fully drawn and (y) the expiration of the draw period, in an aggregate annual amount equal to 7.5 % in year one (if applicable) and year two, and 10 % thereafter. The proceeds of the loans and letters of credit under the July 2022 Credit Agreement are to be used for ongoing working capital and general corporate purposes, permitted acquisitions, share repurchases and refinancing the May 2022 Facility. On the July 2022 Facility Closing Date, we borrowed $ 29.0 million under the July 2022 Revolving Credit Facility to repay the outstanding indebtedness under the May 2022 Facility, along with accrued interest, expenses and fees. The loan bears interest at the Adjusted Term SOFR Rate for the interest period in effect plus 1.25 %. In connection with the repayment of the May 2022 Facility, the May 2022 Revolving Credit Agreement was terminated on July 29, 2022 . Under the July 2022 Credit Agreement, we are required to maintain as of the end of each fiscal quarter a consolidated interest ratio of not less than 3.0 to 1.0 and a consolidated leverage ratio of not greater than 3.75 to 1.0, stepping down to 3.0 to 1.0 at intervals thereafter. Additionally, the July 2022 Credit Agreement contains customary affirmative and negative covenants, including covenants limiting our ability to, among other things, grant liens, incur debt, effect certain mergers, make investments, dispose of assets, enter into certain transactions, including swap agreements and sale and leaseback transactions, pay dividends or distributions on our capital stock, and enter into transactions with affiliates, in each case subject to customary exceptions. As of December 31, 2022, we were in compliance with these covenants. Our obligations under the July 2022 Credit Agreement are secured by a senior security interest in all personal property of the Loan Parties. The events of default under the July 2022 Credit Agreement include, among others, payment defaults, breaches of covenants, defaults under the related loan documents, material misrepresentations, cross defaults with certain other material indebtedness, bankruptcy and insolvency events, judgment defaults, certain events related to plans subject to the Employee Retirement Income Security Act of 1974, as amended, invalidity of the July 2022 Credit Agreement or the related loan documents and change in control events. The occurrence of an event of default could result in the acceleration of our obligations under the July 2022 Credit Agreement, the requirement to post cash collateral with respect to letters of credit, the termination of the July 2022 Lenders’ commitments and a 2.0 % increase in the rate of interest. As of December 31, 2022 and 2021, the carrying value of our total long-term debt approximated its fair value as of such date. The fair value of our long-term debt is estimated based on the borrowing rates currently available to us for bank loans with similar terms and maturities. Aggregate future maturities of long-term debt for the next five years and thereafter (including current portion) as of December 31, 2022 are as follows: Year Ending December 31, 2023 — 2024 — 2025 — 2026 — 2027 29,000 Thereafter — Total $ 29,000 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 7. DERIVATIVE INSTRUMENTS In December 2017, we entered into a floating-to-fixed interest rate swap agreement to limit the exposure to floating interest rate risk related to the 2017 Term Loans. We do not hold derivative instruments for trading or speculative purposes. The interest rate swap agreement effectively converted a portion of the variable interest rate payments to fixed interest rate payments. We account for our derivatives under ASC Topic 815, “Derivatives and Hedging,” and recognize all derivative instruments in the consolidated balance sheets at fair value as either short-term or long-term assets or liabilities based on their anticipated settlement date. See Note 9, “Fair Value of Financial Instruments”. We have elected not to designate our interest rate swap as a hedge; therefore, changes in the fair value of the derivative instrument were recognized in our consolidated statements of comprehensive income within Other income (expense), net. The objective of the interest rate swap was to reduce the variability in the forecasted interest payments of the 2017 Term Loans, which was based on a one-month USD LIBOR rate versus a fixed interest rate of 2.54 % on a notional value of $ 35.5 million. Under the terms of the interest rate swap agreement, we received quarterly variable interest payments based on the LIBOR rate and paid interest at a fixed rate. As further discussed in Note 6, on May 4, 2022, we repaid the 2017 Term Loans and terminated the 2017 Term Credit Agreement. In connection with the repayment of the 2017 Term Loans, we borrowed funds under the May 2022 Facility. The interest rate swap agreement had a maturity date of September 7, 2025 . On August 24, 2022, we terminated the interest rate swap by settling the contract, which resulted in a cash receipt of $ 0.5 million. The realized gain from the settlement of the interest rate swap contract is included in Other income (expense), net in the consolidated statements of comprehensive income. |
Corporate Investments and Funds
Corporate Investments and Funds Held for Clients | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Corporate Investments and Funds Held for Clients | 8. CORPORATE INVESTMENTS AND FUNDS HELD FOR CLIENTS The tables below present our cash and cash equivalents, the funds held for clients’ cash and cash equivalents as well as the investments that were included within funds held for clients on the consolidated balance sheets: December 31, 2022 Type of issue Amortized cost Gross unrealized gains Gross unrealized losses (1) Fair value Cash and cash equivalents $ 400,730 $ — $ — $ 400,730 Funds held for clients’ cash and cash equivalents 2,008,365 — — 2,008,365 Available-for-sale securities (2) : Commercial paper — — — — Certificates of deposit 25,000 — — 25,000 U.S. treasury securities 174,367 — ( 4,757 ) 169,610 Total investments $ 2,608,462 $ — $ ( 4,757 ) $ 2,603,705 December 31, 2021 Type of issue Amortized cost Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 277,978 $ — $ — $ 277,978 Funds held for clients’ cash and cash equivalents 1,534,894 — — 1,534,894 Available-for-sale securities (2) : Commercial paper 311,679 — — 311,679 Certificates of deposit — — — — Total investments $ 2,124,551 $ — $ — $ 2,124,551 (1) These securities have been in a gross unrealized loss position for a period of less than 12 months. (2) All available-for-sale securities were included within the funds held for clients. We did not make any reclassification adjustments out of accumulated other comprehensive income for realized gains or losses on the sale or maturity of available-for-sale securities for the years ended December 31, 2022 or 2021. There were no realized gains or losses on the sale of available-for-sale securities for the years ended December 31, 2022 or 2021. We regularly review the composition of our investment portfolio and did no t recognize any credit impairment losses during the years ended December, 2022 or 2021. All of our commercial paper securities held an A-2 rating or better as of December 31, 2022 and the U.S. treasury securities held a rating of AAA as of December 31, 2022. Expected maturities of available-for-sale securities at December 31, 2022 are as follows: Expected maturity Amortized cost Fair value One year or less $ 25,000 $ 25,000 One year to five years $ 174,367 $ 169,610 Total available-for-sale securities $ 199,367 $ 194,610 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 9. FAIR VALUE OF FINANCIAL INSTRUMENTS Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients, client funds obligation and long-term debt. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients and client funds obligation approximates fair value due to the short-term nature of the instruments. See Note 6 for discussion of the fair value of our debt. As discussed in Note 2, we invest the funds held for clients in money market funds, demand deposit accounts, commercial paper with a maturity of less than three months and certificates of deposit, and classify these items as cash and cash equivalents within the funds held for clients line item in the consolidated balance sheets. Short-term investments in commercial paper and certificates of deposit with an original maturity of greater than three months are classified as available-for-sale securities, and are also included within the funds held for clients line item. These available-for-sale securities are recognized in the consolidated balance sheets at fair value, with the difference between the amortized cost and fair value of these available-for-sale securities recorded as unrealized net gains (losses) within comprehensive earnings (loss) in our consolidated statements of comprehensive income. See Note 8 for additional information. The accounting standard for fair value measurements establishes a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: • Level 1 – Observable inputs such as quoted prices in active markets • Level 2 – Inputs other than quoted prices in active markets for identical assets or liabilities that are observable either directly or indirectly or quoted prices that are not active • Level 3 – Unobservable inputs in which there is little or no market data Included in the following tables are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021: December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ — $ — $ — Certificates of deposit $ — $ 25,000 $ — $ 25,000 U.S. treasury securities $ — $ 169,610 $ — $ 169,610 Liabilities: Interest rate swap $ — $ — $ — $ — December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ 311,679 $ — $ 311,679 Certificates of deposit $ — $ — $ — $ — Liabilities: Interest rate swap $ — $ 1,335 $ — $ 1,335 |
Employee Savings Plan and Emplo
Employee Savings Plan and Employee Stock Purchase Plan | 12 Months Ended |
Dec. 31, 2022 | |
Compensation Related Costs [Abstract] | |
Employee Savings Plan and Employee Stock Purchase Plan | 10. EMPLOYEE SAVINGS PLAN AND EMPLOYEE STOCK PURCHASE PLAN Employees over the age of 18 who have completed ninety days of service are eligible to participate in our 401(k) plan. We have made a Qualified Automatic Contribution Arrangement (“QACA”) election, whereby the Company matches the contribution of our employees equal to 100 % of the first 1 % of salary deferrals and 50 % of salary deferrals between 2 % and 6 %, up to a maximum matching contribution of 3.5 % of an employee’s salary each plan year. We are allowed to make additional discretionary matching contributions and discretionary profit sharing contributions. Employees are 100 % vested in amounts attributable to salary deferrals and rollover contributions. The QACA matching contributions as well as the discretionary matching and profit sharing contributions vest 100 % after two years of employment from the date of hire. Matching contributions were $ 12.7 million, $ 11.6 million and $ 8.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. The ESPP has overlapping offering periods, with each offering period lasting approximately 24 months. At the beginning of each offering period, eligible employees may elect to contribute, through payroll deductions, up to 10 % of their compensation, subject to an annual per employee maximum of $ 25,000 . Eligible employees purchase shares of the Company’s common stock at a price equal to 85 % of the fair market value of the shares on the exercise date. The maximum number of shares that may be purchased by a participant during each offering period is 2,000 shares, subject to limits specified by the Internal Revenue Service. The shares reserved for purposes of the ESPP are shares we purchase in the open market. The maximum aggregate number of shares of the Company’s common stock that may be purchased by all participants under the ESPP is 2.0 million shares. During the years ended December 31, 2022, 2021 and 2020, eligible employees purchased 54,059 , 40,699 and 51,407 shares, respectively, of the Company’s common stock under the ESPP. Compensation expense related to the ESPP is recognized on a straight-line basis over the requisite service period. Our compensation expense related to the ESPP was $ 2.8 million, $ 2.7 million and $ 2.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 11. EARNINGS PER SHARE Basic earnings per share is based on the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share is computed in a similar manner to basic earnings per share after assuming the issuance of shares of common stock for all potentially dilutive shares of restricted stock whether or not they are vested. The following is a reconciliation of net income and the shares of common stock used in the computation of basic and diluted earnings per share: Year Ended December 31, 2022 2021 2020 Numerator: Net income $ 281,389 $ 195,960 $ 143,453 Denominator: Basic weighted average shares outstanding 57,928 57,885 57,620 Dilutive effect of unvested restricted stock 247 306 665 Diluted weighted average shares outstanding 58,175 58,191 58,285 Earnings per share: Basic $ 4.86 $ 3.39 $ 2.49 Diluted $ 4.84 $ 3.37 $ 2.46 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 12. STOCK-BASED COMPENSATION Restricted Stock Awards We have historically issued shares of restricted stock under the Paycom Software, Inc. 2014 Long-Term Incentive Plan (as amended, the “LTIP”) that are subject to either time-based vesting conditions (“Time-Based Shares”) or market-based vesting conditions (“Market-Based Shares”). The maximum number of shares that may be delivered pursuant to awards under the LTIP is 13,350,881 shares. The market-based vesting conditions are based on the Company’s total enterprise value (“TEV”) or volume weighted average stock price over a specific period exceeding certain specified thresholds. Compensation expense related to the issuance of Time-Based Share s is measured based on the fair value of the award on the grant date and recognized over the requisite service period on a straight-line basis. Compensation expense related to the issuance of Market-Based Shares is measured based upon the fair value of the award on the grant date and recognized on a straight-line basis over the vesting period based upon the probability that the vesting conditions will be met. During the year ended December 31, 2022, we issued an aggregate of 451,737 restricted shares of common stock under the LTIP, consisting of 59,503 Market-Based Shares and 392,234 Time-Based Shares. Market-Based Shares will vest 50 % on the first date, if any, that the arithmetic average of the Company’s volume weighted average price on each of the twenty consecutive trading days immediately preceding such date (the “VWAP Value”) equals or exceeds $ 484 per share and 50 % on the first date, if any, that the Company’s VWAP Value equals or exceeds $ 559 per share, in each case provided that (i) such date occurs on or before the eighth anniversary of the grant date and (ii) the recipient is employed by, or providing services to, the Company on the applicable vesting date, and subject to the terms and conditions of the LTIP and the applicable restricted stock award agreement. The Time-Based Shares granted to non-executive employees will vest over periods ranging from three to five years , provided that the recipient is employed by, or providing services to, the Company on the applicable vesting date, and subject to the terms and conditions of the LTIP and the applicable restricted stock award agreement. The 392,234 Time-Based Shares mentioned above include an aggregate of 5,210 Time-Based Shares issued to the non-employee members of our Board of Directors in May 2022, all of which will cliff-vest on May 9, 2023, provided that such director is providing services to the Company through the applicable vesting date, and subject to the terms and conditions of the LTIP and the applicable restricted stock award agreement. On April 14, 2022, the Company announced the departure of Jon Evans from the position of Chief Operating Officer of the Company, effective April 14, 2022. Justin Long, the Company’s Executive Vice President of Operations, assumed Mr. Evans’s responsibilities. In connection with Mr. Evans’s departure, 5,663 of the Time-Based Shares previously granted to Mr. Evans accelerated in vesting. The following table presents a summary of the grant-date fair values of restricted stock granted during the years ended December 31, 2022, 2021 and 2020 and the related assumptions: Year Ended December 31, 2022 2021 2020 Grant-date fair value of restricted stock $ 259.65 - $ 348.19 $ 315.95 - $ 521.17 $ 99.56 - $ 377.68 Risk-free interest rate 1.75 % 0.95 % 0.52 % - 1.44 % Estimated volatility 40.0 % 33.0 % 30.0 % - 32.0 % Expected life (in years) 2.5 2.3 4.4 The following table summarizes restricted stock awards activity for the year ended December 31, 2022: Time-Based Market-Based Restricted Stock Awards Restricted Stock Awards Shares Weighted Average Shares Weighted Average Unvested shares of restricted stock outstanding at December 31, 2021 369.6 $ 259.94 1,628.3 $ 111.87 Granted 392.2 $ 304.28 59.5 $ 269.00 Vested ( 219.8 ) $ 202.40 ( 0.1 ) $ 347.62 Forfeited ( 62.9 ) $ 317.73 ( 10.7 ) $ 279.87 Unvested shares of restricted stock outstanding at December 31, 2022 479.1 $ 315.04 1,677.0 $ 116.36 The following table presents the aggregate fair value of awards that vested during the indicated period. 2022 2021 2020 Time-Based Restricted Stock Awards $ 63,970 $ 97,242 $ 76,653 Market-Based Restricted Stock Awards $ — $ 76,153 $ 90,122 Restricted Stock Units In February 2022, the Compensation Committee of the Board of Directors authorized the granting of performance-based restricted stock units (“PSUs”) to certain executive officers pursuant to the LTIP (the “2022 PSU Awards”). Each PSU granted under the LTIP represents a notional share of the Company’s common stock. The 2022 PSU Awards represented an aggregate of 51,494 target units that may increase to an aggregate of 128,735 awarded units based upon the Company’s performance over two separate performance periods: (i) a two-year performance period commencing on January 1, 2022 and ending on December 31, 2023 (the “Two-Year Performance Period”); and (ii) a three-year performance period commencing on January 1, 2022 and ending on December 31, 2024 (the “Three Year Performance Period”). Up to 25 % of the PSUs will be eligible to vest no later than February 29, 2024 , for the Two-Year Performance Period, and up to 75 % of the PSUs will be eligible to vest no later than March 1, 2025 , for the Three-Year Performance Period, provided that the grantee remains employed by or providing services to the Company on the applicable vesting date, and subject to the terms and conditions of the LTIP and the Restricted Stock Unit Award Agreement – Performance Based Vesting (the “PSU Award Agreement”). The number of PSUs that will vest and be converted into shares of common stock will depend on the Company’s relative total stockholder return (“Relative TSR”), expressed as a percentile ranking of the Company’s total stockholder return (“TSR”) as compared to the Company’s peer group set forth in the PSU Award Agreement. For purposes of the 2022 PSU Awards, TSR is determined by dividing (i) the sum of (A) the average daily volume weighted average price (or “VWAP” as defined in the PSU Award Agreement) of a share of the Company’s common stock or the common stock of a peer company, as applicable, during the final 60 trading day period of the applicable performance period, less (B) the average VWAP of a share of the Company’s common stock or the common stock of a peer company, as applicable, during the 60 trading day period ending on December 31, 2021, plus (C) the sum of all dividends which are paid by the Company (or the member of the peer group) to its stockholders, assuming such dividends are reinvested in the applicable company through the applicable performance period, by (ii) the average VWAP of a share of the Company’s common stock or the common stock of a peer company, as applicable, during the 60 trading day period ending on December 31, 2021. The Company’s peer group includes 35 publicly traded companies, which were reflective of the S&P 500 Software & Services index on the grant date. In connection with the departure of Jon Evans described above, the PSUs granted to Mr. Evans in 2021 and 2022 will remain eligible for vesting based on the Company’s actual performance, but pro-rated for the number of days Mr. Evans was employed during the applicable two-year performance periods and three-year performance periods. During the year ended December 31, 2022, we issued 500 time-based restricted stock units (“Time RSUs”) under the LTIP. The Time RSUs will vest over four years , provided that the recipient is employed by, or providing services to, the Company on the applicable vesting date, and subject to the terms and conditions of the LTIP and the applicable Time RSU award agreement. The following table summarizes restricted stock unit activity for the year ended December 31, 2022: Year Ended December 31, 2022 2021 2020 Grant-date fair value of restricted stock $ 252.16 - $ 377.01 $ 382.78 - $ 587.97 — Risk-free interest rate 1.25 % - 1.51 % 0.11 % - 0.34 % — Estimated volatility 49.2 % 50.3 % - 51.2 % — Expected life (in years) 2.7 2.6 — Time RSUs PSUs Units Weighted Average Units Weighted Average Unvested restricted stock units outstanding at December 31, 2021 — $ — 37.1 $ 556.50 Granted 0.5 $ 377.01 51.5 $ 296.07 Vested — $ — — $ — Forfeited — $ — ( 10.8 ) $ 376.69 Unvested restricted stock units outstanding at December 31, 2022 (1) 0.5 $ 377.01 77.8 $ 409.13 (1) A maximum of 194,478 shares could be delivered upon settlement of PSUs based upon Paycom’s Relative TSR over the applicable performance periods. The following table presents the unrecognized compensation cost and the related weighted average recognition period associated with unvested restricted stock awards and unvested restricted stock unit awards as of December 31, 2022: Restricted Stock Restricted Stock Awards Units Unrecognized compensation cost $ 217,409 $ 13,210 Weighted average period for recognition (years) 3.0 1.5 The following table presents our total non-cash stock-based compensation expense resulting from restricted stock awards and restricted stock unit awards in the aggregate, which is included in the following line items in the accompanying consolidated statements of comprehensive income: Year Ended December 31, 2022 2021 2020 Operating expenses $ 4,671 $ 4,570 $ 5,185 Sales and marketing 18,659 13,801 14,376 Research and development 11,063 7,527 9,107 General and administrative 60,505 71,608 61,440 Total non-cash stock-based compensation expense $ 94,898 $ 97,506 $ 90,108 We capitalized stock-based compensation costs related to software developed for internal use of $ 9.0 million, $ 7.1 million and $ 6.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. COMMITMENTS AND CONTINGENCIES Employment Agreements We have employment agreements with certain of our executive officers. The agreements allow for annual compensation, participation in executive benefit plans, and performance-based cash bonuses. Legal Proceedings We are involved in various legal proceedings in the ordinary course of business. Although we cannot predict the outcome of these proceedings, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of these matters could have a material adverse effect on our business, financial condition, results of operations and cash flows. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. INCOME TAXES The items comprising income tax expense are as follows: Year Ended December 31, 2022 2021 2020 Provision for current income taxes Federal $ 81,348 $ 17,557 $ 14,680 State 30,051 9,539 6,422 Total provision for current income taxes 111,399 27,096 21,102 Provision for deferred income taxes Federal ( 2,823 ) 26,579 15,204 State ( 387 ) 6,327 6,177 Total provision for deferred income taxes ( 3,210 ) 32,906 21,381 Total provision for income taxes $ 108,189 $ 60,002 $ 42,483 The following schedule reconciles the statutory Federal tax rate to the effective income tax rate: Year Ended December 31, 2022 2021 2020 Federal statutory tax rate 21 % 21 % 21 % Increase (decrease) resulting from: State income taxes, net of Federal income tax benefit 6 % 8 % 8 % Nondeductible expenses 4 % 6 % 6 % Research credit, Federal benefit ( 2 %) ( 3 %) ( 3 %) Stock-based compensation ( 1 %) ( 7 %) ( 9 %) Remeasurement of state deferred tax liabilities ( 0 %) ( 2 %) 0 % Effective income tax rate 28 % 23 % 23 % Our effective income tax rate was 28 % and 23 % for the years ended December 31, 2022 and 2021, respectively. The higher effective income tax rate for the year ended December 31, 2022 primarily resulted from a decrease of excess tax benefits from shares that vested in 2022. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of our deferred tax assets and liabilities were as follows: December 31, 2022 2021 Deferred income tax assets (liabilities): Mark-to-market investments - OCI $ 1,260 $ — Stock-based compensation 4,425 1,541 Investment in Paycom Payroll Holdings, LLC ( 146,907 ) ( 147,659 ) Net operating losses 189 614 Noncurrent deferred income tax liabilities, net $ ( 141,033 ) $ ( 145,504 ) At December 31, 2022, we had net operating loss carryforwards for state income tax purposes of approximately $ 0.2 million, which are available to offset future state taxable income that begin expiring in 2032 . At December 31, 2022 and 2021, we had no material unrecognized tax benefits related to uncertain tax positions. We file income tax returns with the United States federal government and various state jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2019. On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law, which, among other things, implements a 15 % minimum tax on book income of certain large corporations, a 1 % excise tax on net stock repurchases and several tax incentives to promote clean energy. Based on our current analysis of the provisions, we do not believe this legislation will have a material impact on our consolidated financial statements |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. SUBSEQUENT EVENTS On February 4, 2023, we issued an aggregate of 302,015 restricted shares of common stock to certain non-executive employees under the LTIP, consisting of 87,618 Market-Based Shares and 214,397 Time-Based Shares. Market-Based Shares for non-executive employees will vest 50 % on the first date, if any, that the Company’s VWAP Value equals or exceeds $ 404 per share and 50 % on the first date, if any, that the Company’s VWAP Value equals or exceeds $ 466 per share, in each case provided that (i) such date occurs on or before the eighth anniversary of the grant date and (ii) the recipient is employed by, or providing services to, the Company on the applicable vesting date. Of the 214,397 Time-Based Shares granted to non-executive employees, 213,397 will vest 21 % on a specified initial vesting date, 21 % on the first anniversary of such initial vesting date, 25 % on the second anniversary of such initial vesting date, and 33 % on the third anniversary of such initial vesting date, provided that the recipient is employed by, or providing services to, the Company on the applicable vesting date. Effective February 6, 2023, we issued, in the aggregate, 5,232 shares of common stock upon the vesting of PSUs awarded to certain executive officers in February 2021. The number of shares delivered upon vesting of the PSUs was determined based on the Company’s achievement of a Relative TSR performance goal, which compared the Company’s TSR to the TSR of a peer group of 34 publicly traded companies for the two-year performance period that commenced on January 1, 2021 and ended on December 31, 2022 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our consolidated financial statements include the financial results of Software and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying consolidated financial statements include all adjustments necessary for the fair presentation for the periods presented. |
Recently Adopted / Issued Accounting Pronouncements | Adoption of New Accounting Pronouncements In January 2021, we adopted Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes” (“ASU 2019-12”) utilizing the prospective transition method. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income tax in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The adoption of this guidance did not have a material impact on our consolidated financial statements. In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, “Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. Prior to August 24, 2022, our floating-to-fixed interest rate swap was outstanding to offset the rate variability associated with our outstanding indebtedness. As discussed in Note 7, the interest rate swap was terminated on August 24, 2022. As a result, the adoption of ASU 2020-04 had no material impact on our unaudited financial statements. In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848) Scope” (“ASU 2021-01”), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that are affected by the discounting transition. ASU 2021-01 amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. As discussed in Note 7, the interest rate swap was terminated on August 24, 2022. As a result, the adoption of ASU 2021-01 had no material impact on our unaudited financial statements. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include income taxes, loss contingencies, the useful life of property and equipment and intangible assets, the life of our client relationships, the fair value of our stock-based awards and the fair value of our financial instruments, intangible assets and goodwill. These estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Actual results could materially differ from these estimates. |
Segment Information | Segment Information We operate in a single operating segment and a single reporting segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is also the chief executive officer, in deciding how to allocate resources and assessing performance. Our chief executive officer allocates resources and assesses performance based upon financial information at the consolidated level. As we operate in one operating segment, all required financial segment information is presented in the consolidated financial statements. |
Cash Equivalents | Cash Equivalents We consider all highly liquid instruments purchased with a maturity of three months or less and money market funds to be cash equivalents. We maintain cash and cash equivalents in demand deposit accounts, money market funds, and certificates of deposit, which may not be federally insured. The fair value of our cash and cash equivalents approximates carrying value. We have not experienced any losses in such accounts and do not believe there is exposure to any significant credit risk on such accounts. |
Accounts Receivable | Accounts Receivable We generally collect revenues from our clients through an automatic deduction from the clients’ bank accounts at the time payroll processing occurs. Accounts receivable on our consolidated balance sheets generally consists of revenue-related receivables, including processing fees, interest income receivable, and revenue fees related to the last business day of the year, which are collected on the following business day. As accounts receivable are collected via automatic deduction on the following business day, the Company has not recognized an allowance for doubtful accounts. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight line method over the estimated useful lives of the assets as follows: Furniture, fixtures and equipment 5 years Computer equipment 3 years Software and capitalized software 3 years Buildings 30 years Leasehold improvements 5 years Rental clocks 5 years Land improvements 15 years Vehicles 3 years Costs incurred during construction of long-lived assets are recorded as construction in progress and are not depreciated until the asset is placed in service. We capitalize interest costs incurred related to construction in progress. For the years ended December 31, 2022, 2021 and 2020, we incurred interest costs of $ 3.4 million, $ 1.4 million and $ 1.5 million, respectively. For the years ended December 31, 2022, 2021 and 2020, interest costs of $ 0.9 million, $ 1.4 million and $ 1.5 million, respectively, were capitalized. |
Leases | Leases Our leases primarily consist of noncancellable operating leases for office space. We recognize a right-of-use asset and operating lease liability on the lease commencement date based on the present value of the lease payments over the lease term. Operating lease liabilities are measured by discounting future lease payments at an estimated incremental borrowing rate. Right-of-use assets are amortized over the lease term and include adjustments related to prepaid rent. |
Internal Use Software | Internal Use Software Capitalized costs include services associated with developing or obtaining internal use computer software and certain payroll and payroll-related costs for employees who are directly associated with internal use computer software projects. The amount of payroll costs that are capitalized with respect to these employees is limited to the time directly spent on such projects. Expenditures for software purchases and software developed or obtained for internal use are capitalized and amortized over a three-year period on a straight-line basis. Costs associated with preliminary project stage activities, training, maintenance and all other post-implementation stage activities are expensed as incurred. We also expense internal costs related to minor upgrades and enhancements, as it is impractical to separate these costs from normal maintenance activities. The total capitalized payroll costs related to internal use computer software projects were $ 66.4 million and $ 52.9 million during the years ended December 31, 2022 and 2021, respectively, and are included in property and equipment. Amortization expense of capitalized software costs were $ 47.3 million, $ 36.5 million and $ 27.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Derivatives | Derivatives In December 2017, we entered into a floating-to-fixed interest rate swap agreement to limit the exposure to floating interest rate risk related to the 2017 Term Loans (as defined in Note 6). We do not hold derivative instruments for trading or speculative purposes. The interest rate swap agreement effectively converted a portion of the variable interest rate payments to fixed interest rate payments. We account for our derivatives under ASC Topic 815, “Derivatives and Hedging,” and recognize all derivative instruments in the consolidated balance sheets at fair value as either short-term or long-term assets or liabilities based on their anticipated settlement date. See Note 9, “Fair Value of Financial Instruments”. We have elected not to designate our interest rate swap as a hedge; therefore, changes in the fair value of the derivative instrument are recognized in our consolidated statements of comprehensive income within Other income (expense), net. As further discussed in Note 7, on August 24, 2022, we terminated the interest rate swap by settling the contract. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill is not amortized, but we are required to test the carrying value of goodwill for impairment at least annually, or earlier if, at the reporting unit level, an indicator of impairment arises. Our business is largely homogeneous and, as a result, goodwill is associated with one reporting unit. We have selected June 30 as our annual goodwill impairment testing date. A review of goodwill may be initiated before or after conducting the annual analysis if events or changes in circumstances indicate the carrying value of goodwill may no longer be recoverable. The Company performed a qualitative assessment to determine if it is more-likely-than-not that the fair value of the reporting unit had declined below its carrying value. In the qualitative assessment, we consider the macroeconomic conditions, including any deterioration of general economic conditions, industry and market conditions, including any deterioration in the environment where the reporting unit operates, changes in the products/services and regulator and political developments; cost of doing business; overall financial performance; other relevant reporting unit specific facts, such as changes in management or key personnel or pending litigation. Based on our assessment, there was no impairment recorded as of June 30, 2022. For the years ended December 31, 2022, 2021 and 2020, there were no indicators of impairment. Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including intangible assets with definite lives, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. We have determined that there was no impairment of long-lived assets including intangible assets with definite lives, for the years ended December 31, 2022, 2021 and 2020. |
Funds Held for Clients and Client Funds Obligation | Funds Held for Clients and Client Funds Obligation As part of our payroll and tax filing application, we (i) collect client funds to satisfy their respective federal, state and local employment tax obligations, (ii) remit such funds to the appropriate taxing authorities and accounts designated by our clients, and (iii) manage client tax filings and any related correspondence with taxing authorities. Amounts collected by us from clients for their federal, state and local employment taxes are invested by us, and we earn interest on these funds during the interval between receipt and disbursement. These investments are shown in our consolidated balance sheets as funds held for clients, and the associated liability for the tax filings is shown as client funds obligation. The liability is recorded in the accompanying consolidated balance sheets at the time we obtain the funds from clients. The client funds obligation represents liabilities that will be repaid within one year of the consolidated balance sheet date. As of December 31, 2022 and December 31, 2021, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper and certificates of deposit. Additionally, as of December 31, 2022, the funds held for clients were invested in U.S. treasury securities with an original maturity of greater than one year. Short-term investments in commercial paper and certificates of deposit with an original maturity greater than three months are classified as available for-sale securities, and are also included within the funds held for clients line item in the consolidated balance sheets. U.S. treasury securities with an original maturity of greater than one year are also classified as available-for-sale securities and included within the funds held for clients line item in the consolidated balance sheets. These available-for-sale securities are recorded in the consolidated balance sheets at fair value, with the difference between the amortized cost and fair value of these available-for-sale securities recorded as unrealized net gains (losses) on available-for-sale securities and are included within comprehensive earnings (loss) in the consolidated statements of comprehensive income. Funds held for clients are classified as a current asset in the consolidated balance sheets because the funds are held solely to satisfy the client funds obligation. Additionally, the funds held for clients is classified as restricted cash and restricted cash equivalents and presented within the reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents on the consolidated statements of cash flows. |
Stock Repurchase Plan | Stock Repurchase Plan In May 2016, our Board of Directors authorized a stock repurchase plan allowing for the repurchase of shares of our common stock in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs. Since the initial authorization of the stock repurchase plan, our Board of Directors has amended and extended and authorized new stock repurchase plans from time to time. Most recently, in August 2022, our Board of Directors authorized the repurchase of up to $ 1.1 billion of our common stock. As of December 31, 2022 there was $ 1.1 billion available for repurchases under our stock repurchase plan. Our stock repurchase plan may be suspended or discontinued at any time. The actual timing, number and value of shares repurchased depends on a number of factors, including the market price of our common stock, general market and economic conditions, shares withheld for taxes associated with the vesting of restricted stock and other corporate considerations. The current stock repurchase plan will expire on August 15, 2024. During the year ended December 31, 2022, we repurchased an aggregate of 364,667 shares of our common stock at an average cost of $ 273.74 per share, including 17,355 shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of restricted stock. During the year ended December 31, 2021, we repurchased an aggregate of 163,849 shares of our common stock at an average cost of $ 400.24 per share, all of which were shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of the restricted stock. |
Revenue Recognition | Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to our clients in an amount that reflects the consideration we expect to be entitled to for those goods or services. Substantially all of our revenues are comprised of revenue from contracts with clients. Sales taxes and other applicable taxes are excluded from revenues. Recurring Revenues Recurring revenues are derived primarily from our talent acquisition, time and labor management, payroll, talent management and HR management applications as well as fees charged for form filings and delivery of client payroll checks and reports. Talent acquisition includes our Applicant Tracking, Candidate Tracker, Enhanced Background Checks, Onboarding, E-Verify and Tax Credit Services applications. Time and labor management includes Time and Attendance, Scheduling/Schedule exchange, Time-Off Requests, Labor Allocation, Labor Management Reports/Push Reporting, Geofencing/Geotracking and Microfence tools and applications. Payroll includes Beti, Payroll and Tax Management, Vault Card, Paycom Pay, Expense Management, Mileage Tracker/FAVR, Garnishment Administration and GL Concierge applications. Talent management includes our Employee Self-Service, Compensation Budgeting, Performance Management, Position Management, My Analytics and Paycom Learning and Content Subscriptions applications. HR management includes our Manager on-the-Go, Direct Data Exchange, Ask Here, Documents and Checklists, Government and Compliance, Benefits Administration/Benefits to Carrier, Benefit Enrollment Service, COBRA Administration, Personnel Action Forms and Performance Discussion Forms, Surveys, Enhanced ACA and Clue applications. The performance obligations related to recurring revenues are satisfied during each client’s payroll period, with the agreed-upon fee being charged and collected as part of our processing of the client’s payroll. Recurring revenues are recognized at the conclusion of processing of each client’s payroll period, when each respective payroll client is billed. Collectability is reasonably assured as the fees are collected through an automated clearing house as part of the client’s payroll cycle or through direct wire transfer, which minimizes the default risk. The contract period for substantially all contracts associated with these revenues is one month due to the fact that both we and the client have the unilateral right to terminate a wholly unperformed contract without compensating the other party by providing 30 days’ notice of termination. Our payroll application is the foundation of our solution, and all of our clients are required to utilize this application in order to access our other applications. For clients who purchase multiple applications, due to the short-term nature of our contracts, we do not believe it is meaningful to separately assess and identify whether or not each application potentially represents its own, individual, performance obligation as the revenue generated from each application is recognized within the same month as the revenue from the core payroll application. Similarly, we do not believe it is meaningful to individually determine the standalone selling price for each application. We consider the total price charged to a client in a given period to be indicative of the standalone selling price, as the total amount charged is within a reasonable range of prices typically charged for our goods and services for comparable classes of client groups, which we periodically assess for price adjustments. Interest income on funds held for clients is earned on funds that are collected from clients in advance of either the applicable due date for payroll tax submissions or the applicable disbursement date for employee payment services. The interest earned on these funds is included in recurring revenues in the consolidated statements of comprehensive income as the collection, holding, and remittance of these funds are essential components of providing these services. Implementation and Other Revenues Implementation and other revenues consist of nonrefundable upfront conversion fees which are charged to new clients to offset the expense of new client set-up as well as revenues from the sale of time clocks as part of our employee time and attendance services. Although these revenues are related to our recurring revenues, they represent distinct performance obligations. Implementation activities primarily represent administrative activities that allow us to fulfill future performance obligations for our clients and do not represent services transferred to the client. However, the nonrefundable upfront fee charged to our clients results in an implied performance obligation in the form of a material right to the client related to the client’s option to renew at the end of each 30-day contract period. Further, given that all other services within the contract are sold at a total price indicative of the standalone selling price, coupled with the fact that the upfront fees are consistent with upfront fees charged in similar contracts that we have with clients, the standalone selling price of the client’s option to renew the contract approximates the dollar amount of the nonrefundable upfront fee. The nonrefundable upfront fee is typically included on the client’s first invoice, and is deferred and recognized ratably over the estimated renewal period ( i.e. , ten-year estimated client life). Revenues from the sale of time clocks are recognized when control is transferred to the client upon delivery of the product. We estimate the standalone selling price for the time clocks by maximizing the use of observable inputs such as our specific pricing practices for time clocks. Contract Balances The timing of revenue recognition for recurring services is consistent with the invoicing of clients as they both occur during the respective client payroll period for which the services are provided. Therefore, we do not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing. Changes in deferred revenue related to material rights for the years ended December 31, 2022 and 2021 were as follows: Year Ended December 31, 2022 2021 Balance, beginning of period $ 101,426 $ 86,826 Recognition of revenue included in beginning of year balance ( 15,949 ) ( 13,298 ) Contract balance, net of revenue recognized during the period 31,939 27,898 Balance, end of period $ 117,416 $ 101,426 We expect to recognize $ 24.3 million of deferred revenue related to material rights in 2023, $ 18.5 million in 2024, and $ 74.6 million of such deferred revenue thereafter . Assets Recognized from the Costs to Obtain and Costs to Fulfill Revenue Contracts We recognize an asset for the incremental costs of obtaining a contract with a client if we expect the amortization period to be longer than one year. We also recognize an asset for the costs to fulfill a contract with a client if such costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. We have determined that substantially all costs related to implementation activities are administrative in nature and also meet the capitalization criteria under ASC 340-40. These capitalized costs to fulfill principally relate to upfront direct costs that are expected to be recovered through margin and that enhance our ability to satisfy future performance obligations. The assets related to both costs to obtain, and costs to fulfill, contracts with clients are accounted for utilizing a portfolio approach, and are capitalized and amortized over the expected period of benefit, which we have determined to be the estimated client relationship of ten years. The expected period of benefit has been determined to be the estimated life of the client relationship primarily because we incur no new costs to obtain, or costs to fulfill, a contract upon renewal of such contract. Additional commission costs may be incurred when an existing client purchases additional applications; however, these commission costs relate solely to the additional applications purchased and are not related to contract renewal. Furthermore, additional fulfillment costs associated with existing clients purchasing additional applications are minimized by our seamless single-database platform. These assets are presented as deferred contract costs in the accompanying consolidated balance sheets. Amortization expense related to costs to obtain and costs to fulfill a contract are included in the “sales and marketing” and “general and administrative” line items in the accompanying consolidated statements of comprehensive income. The following tables present the asset balances and related amortization expense for these contract costs: As of and for the Year Ended December 31, 2022 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 272,919 $ 97,978 $ ( 45,440 ) $ 325,457 Costs to fulfill a contract $ 265,657 $ 114,152 $ ( 40,914 ) $ 338,895 As of and for the Year Ended December 31, 2021 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 232,583 $ 77,644 $ ( 37,308 ) $ 272,919 Costs to fulfill a contract $ 199,593 $ 96,728 $ ( 30,664 ) $ 265,657 |
Cost of Revenues | Cost of Revenues Our costs and expenses applicable to total revenues represent operating expenses and systems support and technology costs, including labor and related expenses, bank fees, shipping fees and costs of paper stock, envelopes, etc. In addition, costs included to derive gross margins are comprised of support labor and related expenses, related hardware costs and applicable depreciation and amortization costs. |
Advertising Costs | Advertising Costs Advertising costs are expensed the first time that advertising takes place. Advertising costs for the years ended December 31, 2022, 2021 and 2020 were $ 90.6 million, $ 71.6 million and $ 66.9 million, respectively. |
Sales Taxes | Sales Taxes We collect and remit sales tax on sales of time and attendance clocks and on payroll services in certain states. These taxes are recognized on a net basis, and therefore, excluded from revenues. For the years ended December 31, 2022, 2021 and 2020, sales taxes collected were $ 15.5 million, $ 11.9 million and $ 9.7 million, respectively. |
Employee Stock-Based Compensation | Employee Stock-Based Compensation Time-based stock compensation awards to employees are recognized on a straight-line basis over the applicable vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair values measured as of the date of grant. Market-based stock compensation awards to employees are recognized on a straight-line basis over the applicable estimated vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair value as of the date of the grant unless vesting occurs sooner at which time the remaining respective unrecognized compensation cost is recognized. Performance-based restricted stock compensation awards are recognized on a straight-line basis over the applicable vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair values measured as of the date of grant. Forfeitures related to our stock-based compensation awards are recognized as they occur. |
Employee Stock Purchase Plan | Employee Stock Purchase Plan An award issued under the Paycom Software, Inc. Employee Stock Purchase Plan (the “ESPP”) is classified as a share-based liability and recognized at the fair value of the award. Expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period. |
Income Taxes | Income Taxes Our consolidated financial statements include a provision for income taxes incurred for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We recognize a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. We file income tax returns with the United States federal government and various state jurisdictions. We evaluate tax positions taken or expected to be taken in the course of preparing our tax returns and disallow the recognition of tax positions not deemed to meet a “more-likely-than-not” threshold of being sustained by the applicable tax authority. We do not believe there are any tax positions taken within the consolidated financial statements that do not meet this threshold. Our policy is to recognize interest and penalties, if any, related to uncertain tax positions as a component of general and administrative expenses. With few exceptions, we are no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2019. |
Seasonality | Seasonality Our revenues are seasonal in nature and generally we expect our first and fourth quarter recurring revenues to be higher than other quarters during the year. Recurring revenues include revenues relating to the annual processing of payroll tax filing forms and ACA form filing requirements, such as Form W-2, Form 1099, and Form 1095 and revenues from processing unscheduled payroll runs (such as bonuses) for our clients. As payroll tax forms are typically processed in the first quarter of the year, first quarter recurring revenues and margins are positively impacted. In addition, unscheduled payroll runs at the end of the year often result in increased recurring revenues in the fourth quarter. These seasonal fluctuations in revenues can also have an impact on gross profits. Historical results impacted by these seasonal trends should not be considered a reliable indicator of our future results of operations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives | Depreciation is computed using the straight line method over the estimated useful lives of the assets as follows: Furniture, fixtures and equipment 5 years Computer equipment 3 years Software and capitalized software 3 years Buildings 30 years Leasehold improvements 5 years Rental clocks 5 years Land improvements 15 years Vehicles 3 years |
Summary of Changes in Deferred Revenue Related to Material Rights | Changes in deferred revenue related to material rights for the years ended December 31, 2022 and 2021 were as follows: Year Ended December 31, 2022 2021 Balance, beginning of period $ 101,426 $ 86,826 Recognition of revenue included in beginning of year balance ( 15,949 ) ( 13,298 ) Contract balance, net of revenue recognized during the period 31,939 27,898 Balance, end of period $ 117,416 $ 101,426 |
Summary of Asset Balances and Related Amortization Expense For Contract Costs | The following tables present the asset balances and related amortization expense for these contract costs: As of and for the Year Ended December 31, 2022 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 272,919 $ 97,978 $ ( 45,440 ) $ 325,457 Costs to fulfill a contract $ 265,657 $ 114,152 $ ( 40,914 ) $ 338,895 As of and for the Year Ended December 31, 2021 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 232,583 $ 77,644 $ ( 37,308 ) $ 272,919 Costs to fulfill a contract $ 199,593 $ 96,728 $ ( 30,664 ) $ 265,657 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment and Accumulated Depreciation and Amortization | Property and equipment and accumulated depreciation and amortization were as follows: December 31, 2022 December 31, 2021 Property and equipment Software and capitalized software costs $ 270,645 $ 199,470 Buildings 177,765 172,807 Computer equipment 133,715 102,509 Rental clocks 35,846 30,313 Furniture, fixtures and equipment 28,414 24,971 Other 17,321 16,397 663,706 546,467 Less: accumulated depreciation and amortization ( 331,340 ) ( 242,652 ) 332,366 303,815 Construction in progress 36,286 11,342 Land 33,796 33,796 Property and equipment, net $ 402,448 $ 348,953 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | All of our intangible assets other than goodwill are considered to have definite lives and, as such, are subject to amortization. The following tables present the components of intangible assets within our consolidated balance sheets: December 31, 2022 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Naming rights 13.8 $ 60,199 $ ( 6,182 ) $ 54,017 Trade name — 3,194 ( 3,194 ) — Total $ 63,393 $ ( 9,376 ) $ 54,017 December 31, 2021 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Naming rights 14.8 $ 60,199 $ ( 2,278 ) $ 57,921 Trade name 0.5 3,194 ( 3,087 ) 107 Total $ 63,393 $ ( 5,365 ) $ 58,028 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Summary of Lease Assets and Liabilities | The table below presents the lease assets and liabilities as of December 31, 2022 and December 31, 2021. Balance Sheet location December 31, 2022 December 31, 2021 Other assets $ 39,776 $ 29,841 Lease liabilities: Accrued expenses and other current liabilities $ 14,986 $ 10,853 Other long-term liabilities $ 26,026 $ 20,059 |
Schedule of Undiscounted Cash Flows for Future Annual Maturities of Operating Lease Liabilities | The undiscounted cash flows for the future annual maturities of our operating lease liabilities and the reconciliation of those total undiscounted cash flows to our lease liabilities as of December 31, 2022 were as follows: 2023 $ 14,791 2024 9,587 2025 6,962 2026 5,192 2027 2,711 Thereafter 3,500 Total undiscounted cash flows $ 42,743 Present value discount ( 1,731 ) Lease liabilities $ 41,012 |
Long-Term Debt, Net (Tables)
Long-Term Debt, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following: December 31, 2022 December 31, 2021 July 2022 Revolving Credit Agreement due July 29, 2027 $ 29,000 $ — Net term note to bank due September 7, 2025 — 29,155 Total long-term debt, net (including current portion) 29,000 29,155 Less: Current portion — ( 1,775 ) Total long-term debt, net $ 29,000 $ 27,380 |
Aggregate Future Maturities of Long-Term Debt | Year Ending December 31, 2023 — 2024 — 2025 — 2026 — 2027 29,000 Thereafter — Total $ 29,000 |
Corporate Investments and Fun_2
Corporate Investments and Funds Held for Clients (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash and Cash Equivalents and Investments | The tables below present our cash and cash equivalents, the funds held for clients’ cash and cash equivalents as well as the investments that were included within funds held for clients on the consolidated balance sheets: December 31, 2022 Type of issue Amortized cost Gross unrealized gains Gross unrealized losses (1) Fair value Cash and cash equivalents $ 400,730 $ — $ — $ 400,730 Funds held for clients’ cash and cash equivalents 2,008,365 — — 2,008,365 Available-for-sale securities (2) : Commercial paper — — — — Certificates of deposit 25,000 — — 25,000 U.S. treasury securities 174,367 — ( 4,757 ) 169,610 Total investments $ 2,608,462 $ — $ ( 4,757 ) $ 2,603,705 December 31, 2021 Type of issue Amortized cost Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 277,978 $ — $ — $ 277,978 Funds held for clients’ cash and cash equivalents 1,534,894 — — 1,534,894 Available-for-sale securities (2) : Commercial paper 311,679 — — 311,679 Certificates of deposit — — — — Total investments $ 2,124,551 $ — $ — $ 2,124,551 (1) These securities have been in a gross unrealized loss position for a period of less than 12 months. (2) All available-for-sale securities were included within the funds held for clients. |
Summary of Expected Maturities of Available for Sale Securities | Expected maturities of available-for-sale securities at December 31, 2022 are as follows: Expected maturity Amortized cost Fair value One year or less $ 25,000 $ 25,000 One year to five years $ 174,367 $ 169,610 Total available-for-sale securities $ 199,367 $ 194,610 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Major Categories of Assets and Liabilities Measured at Fair Value on Recurring Basis | Included in the following tables are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021: December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ — $ — $ — Certificates of deposit $ — $ 25,000 $ — $ 25,000 U.S. treasury securities $ — $ 169,610 $ — $ 169,610 Liabilities: Interest rate swap $ — $ — $ — $ — December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ 311,679 $ — $ 311,679 Certificates of deposit $ — $ — $ — $ — Liabilities: Interest rate swap $ — $ 1,335 $ — $ 1,335 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Earnings Per Share | The following is a reconciliation of net income and the shares of common stock used in the computation of basic and diluted earnings per share: Year Ended December 31, 2022 2021 2020 Numerator: Net income $ 281,389 $ 195,960 $ 143,453 Denominator: Basic weighted average shares outstanding 57,928 57,885 57,620 Dilutive effect of unvested restricted stock 247 306 665 Diluted weighted average shares outstanding 58,175 58,191 58,285 Earnings per share: Basic $ 4.86 $ 3.39 $ 2.49 Diluted $ 4.84 $ 3.37 $ 2.46 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Restricted Stock Unit and PSU Activity | The following table summarizes restricted stock awards activity for the year ended December 31, 2022: Time-Based Market-Based Restricted Stock Awards Restricted Stock Awards Shares Weighted Average Shares Weighted Average Unvested shares of restricted stock outstanding at December 31, 2021 369.6 $ 259.94 1,628.3 $ 111.87 Granted 392.2 $ 304.28 59.5 $ 269.00 Vested ( 219.8 ) $ 202.40 ( 0.1 ) $ 347.62 Forfeited ( 62.9 ) $ 317.73 ( 10.7 ) $ 279.87 Unvested shares of restricted stock outstanding at December 31, 2022 479.1 $ 315.04 1,677.0 $ 116.36 Time RSUs PSUs Units Weighted Average Units Weighted Average Unvested restricted stock units outstanding at December 31, 2021 — $ — 37.1 $ 556.50 Granted 0.5 $ 377.01 51.5 $ 296.07 Vested — $ — — $ — Forfeited — $ — ( 10.8 ) $ 376.69 Unvested restricted stock units outstanding at December 31, 2022 (1) 0.5 $ 377.01 77.8 $ 409.13 (1) A maximum of 194,478 shares could be delivered upon settlement of PSUs based upon Paycom’s Relative TSR over the applicable performance periods. |
Summary of Aggregate Fair Value of Awards | The following table presents the aggregate fair value of awards that vested during the indicated period. 2022 2021 2020 Time-Based Restricted Stock Awards $ 63,970 $ 97,242 $ 76,653 Market-Based Restricted Stock Awards $ — $ 76,153 $ 90,122 |
Summary of Unrecognized Compensation Cost and Related Weighted Average Recognition Period Associated with Unvested restricted Stock Awards and Unvested Restricted Stock Units | The following table presents the unrecognized compensation cost and the related weighted average recognition period associated with unvested restricted stock awards and unvested restricted stock unit awards as of December 31, 2022: Restricted Stock Restricted Stock Awards Units Unrecognized compensation cost $ 217,409 $ 13,210 Weighted average period for recognition (years) 3.0 1.5 |
Non-cash Stock-based Compensation Resulting From Restricted Stock Awards and Restricted Stock Units Awards | The following table presents our total non-cash stock-based compensation expense resulting from restricted stock awards and restricted stock unit awards in the aggregate, which is included in the following line items in the accompanying consolidated statements of comprehensive income: Year Ended December 31, 2022 2021 2020 Operating expenses $ 4,671 $ 4,570 $ 5,185 Sales and marketing 18,659 13,801 14,376 Research and development 11,063 7,527 9,107 General and administrative 60,505 71,608 61,440 Total non-cash stock-based compensation expense $ 94,898 $ 97,506 $ 90,108 |
Restricted Stock [Member] | |
Summary of Grant-Date Fair Values of Restricted Stock / PSUs Granted and Related Assumptions | The following table presents a summary of the grant-date fair values of restricted stock granted during the years ended December 31, 2022, 2021 and 2020 and the related assumptions: Year Ended December 31, 2022 2021 2020 Grant-date fair value of restricted stock $ 259.65 - $ 348.19 $ 315.95 - $ 521.17 $ 99.56 - $ 377.68 Risk-free interest rate 1.75 % 0.95 % 0.52 % - 1.44 % Estimated volatility 40.0 % 33.0 % 30.0 % - 32.0 % Expected life (in years) 2.5 2.3 4.4 Year Ended December 31, 2022 2021 2020 Grant-date fair value of restricted stock $ 252.16 - $ 377.01 $ 382.78 - $ 587.97 — Risk-free interest rate 1.25 % - 1.51 % 0.11 % - 0.34 % — Estimated volatility 49.2 % 50.3 % - 51.2 % — Expected life (in years) 2.7 2.6 — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense | The items comprising income tax expense are as follows: Year Ended December 31, 2022 2021 2020 Provision for current income taxes Federal $ 81,348 $ 17,557 $ 14,680 State 30,051 9,539 6,422 Total provision for current income taxes 111,399 27,096 21,102 Provision for deferred income taxes Federal ( 2,823 ) 26,579 15,204 State ( 387 ) 6,327 6,177 Total provision for deferred income taxes ( 3,210 ) 32,906 21,381 Total provision for income taxes $ 108,189 $ 60,002 $ 42,483 |
Income Tax Rate Reconciliation | The following schedule reconciles the statutory Federal tax rate to the effective income tax rate: Year Ended December 31, 2022 2021 2020 Federal statutory tax rate 21 % 21 % 21 % Increase (decrease) resulting from: State income taxes, net of Federal income tax benefit 6 % 8 % 8 % Nondeductible expenses 4 % 6 % 6 % Research credit, Federal benefit ( 2 %) ( 3 %) ( 3 %) Stock-based compensation ( 1 %) ( 7 %) ( 9 %) Remeasurement of state deferred tax liabilities ( 0 %) ( 2 %) 0 % Effective income tax rate 28 % 23 % 23 % |
Schedule of Net Deferred Tax Assets and Liabilities | The significant components of our deferred tax assets and liabilities were as follows: December 31, 2022 2021 Deferred income tax assets (liabilities): Mark-to-market investments - OCI $ 1,260 $ — Stock-based compensation 4,425 1,541 Investment in Paycom Payroll Holdings, LLC ( 146,907 ) ( 147,659 ) Net operating losses 189 614 Noncurrent deferred income tax liabilities, net $ ( 141,033 ) $ ( 145,504 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | ||||
Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) Segment $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) | Aug. 31, 2022 USD ($) | |
Summary Of Significant Accounting Policy [Line Items] | |||||
Number of operating segments | Segment | 1 | ||||
Interest costs incurred | $ 3,400,000 | $ 1,400,000 | $ 1,500,000 | ||
Interest costs capitalized | 900,000 | 1,400,000 | 1,500,000 | ||
Computer software development costs capitalized | 66,400,000 | 52,900,000 | |||
Amortization expense of capitalized software costs | 47,300,000 | 36,500,000 | 27,100,000 | ||
Goodwill impairment amount | $ 0 | ||||
Impairment of intangible assets with definite lives | 0 | 0 | 0 | ||
Impairment of long-lived assets | 0 | 0 | 0 | ||
Advertising costs | 90,600,000 | 71,600,000 | 66,900,000 | ||
Sales taxes | 15,500,000 | $ 11,900,000 | $ 9,700,000 | ||
Stock Repurchase Plan [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Available authorized repurchase amount | $ 1,100,000,000 | ||||
Shares withheld to satisfy tax withholding obligations | shares | 364,667 | 163,849 | |||
Stock repurchased, average costs per share | $ / shares | $ 273.74 | $ 400.24 | |||
Stock Repurchase Plan [Member] | Certain Employees [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Shares withheld to satisfy tax withholding obligations | shares | 17,355 | ||||
Maximum [Member] | Stock Repurchase Plan [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Stock repurchase plan, authorized amount | $ 1,100,000,000 | ||||
Internal use Software [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Capitalized and amortized period | 3 years | ||||
Accounting Standards Update 2019-12 [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Accounting standards update, adoption date | Jan. 01, 2022 | ||||
Accounting standards update, adopted | true | ||||
Accounting standards update, immaterial effect | true | ||||
Accounting Standards Update 2018-15 [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Accounting standards update, adoption date | Jan. 01, 2021 | ||||
Accounting standards update, adopted | true | ||||
Accounting standards update, immaterial effect | true |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Estimated Useful Lives (Detail) | 12 Months Ended |
Dec. 31, 2022 | |
Furniture, Fixtures and Equipment [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Computer Equipment [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Software and Capitalized Software Costs [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Buildings [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 30 years |
Leasehold Improvements [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Rental Clocks [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Vehicles [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Land Improvements [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 15 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Changes in Deferred Revenue Related to Material Rights (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Balance, beginning of period | $ 101,426 | $ 86,826 |
Recognition of revenue included in beginning of year balance | (15,949) | (13,298) |
Contract balance, net of revenue recognized during the period | 31,939 | 27,898 |
Balance, end of period | $ 117,416 | $ 101,426 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Additional Information (Detail1) $ in Millions | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Deferred revenue expect to recognize amount | $ 24.3 |
Deferred revenue expect to recognize period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Deferred revenue expect to recognize amount | $ 18.5 |
Deferred revenue expect to recognize period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Deferred revenue expect to recognize amount | $ 74.6 |
Deferred revenue expect to recognize period |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Asset Balances and Related Amortization Expense For Contract Costs (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Costs to Obtain a Contract [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Beginning Balance | $ 272,919 | $ 232,583 |
Capitalization of Costs | 97,978 | 77,644 |
Amortization | (45,440) | (37,308) |
Ending Balance | 325,457 | 272,919 |
Costs to Fulfill a Contract [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Beginning Balance | 265,657 | 199,593 |
Capitalization of Costs | 114,152 | 96,728 |
Amortization | (40,914) | (30,664) |
Ending Balance | $ 338,895 | $ 265,657 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment and Accumulated Depreciation and Amortization (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 663,706 | $ 546,467 |
Less: accumulated depreciation and amortization | (331,340) | (242,652) |
Property and equipment, net | 402,448 | 348,953 |
Software and Capitalized Software Costs [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 270,645 | 199,470 |
Buildings [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 177,765 | 172,807 |
Computer Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 133,715 | 102,509 |
Rental Clocks [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 35,846 | 30,313 |
Furniture, Fixtures and Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 28,414 | 24,971 |
Other [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 17,321 | 16,397 |
Property and Equipment, net, Excluding Land and Construction in Progress [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 332,366 | 303,815 |
Construction in Progress [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 36,286 | 11,342 |
Land [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | $ 33,796 | $ 33,796 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property and Equipment [Line Items] | |||
Computer software development costs capitalized | $ 66,400 | $ 52,900 | |
Interest costs incurred | 3,400 | 1,400 | $ 1,500 |
Interest costs capitalized | 900 | 1,400 | 1,500 |
Retainage amount included in construction in progress | 2,000 | 100 | |
Depreciation and amortization | 49,764 | 35,811 | 27,605 |
Property and Equipment [Member] | |||
Property and Equipment [Line Items] | |||
Depreciation and amortization | $ 88,700 | $ 64,700 | $ 53,200 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Line Items] | ||||
Goodwill | $ 51,889,000 | $ 51,889,000 | ||
Goodwill impairment amount | $ 0 | |||
Amortization of intangible assets | 4,000,000 | 2,500,000 | $ 200,000 | |
Estimated remaining amortization expense in 2023 | 3,900,000 | |||
Estimated remaining amortization expense in 2024 | 3,900,000 | |||
Estimated remaining amortization expense in 2025 | 3,900,000 | |||
Estimated remaining amortization expense in 2026 | 3,900,000 | |||
Estimated remaining amortization expense in 2027 | 3,900,000 | |||
Sponsorship Rights [Member] | ||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||
One-time payment for intangible asset agreement | 1,500,000 | |||
Naming Rights [Member] | Minimum [Member] | ||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||
Annual payments for intangible asset agreement | 4,000,000 | |||
Naming Rights [Member] | Maximum [Member] | ||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||
Annual payments for intangible asset agreement | 6,100,000 | |||
Goodwill [Member] | ||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||
Goodwill | $ 51,900,000 | $ 51,900,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 63,393 | $ 63,393 |
Accumulated Amortization | (9,376) | (5,365) |
Net | 54,017 | 58,028 |
Naming Rights [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 60,199 | 60,199 |
Accumulated Amortization | (6,182) | (2,278) |
Net | $ 54,017 | $ 57,921 |
Weighted average remaining useful life | 13 years 9 months 18 days | 14 years 9 months 18 days |
Trade Name [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 3,194 | $ 3,194 |
Accumulated Amortization | $ (3,194) | (3,087) |
Net | $ 107 | |
Weighted average remaining useful life | 6 months |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee Lease Description [Line Items] | |||
Operating lease rent expense | $ 12.3 | $ 11.9 | $ 11.3 |
Cash paid for operating leases | $ 14.4 | ||
Weighted average discount rate of operating leases | 3.70% | ||
Average remaining operating lease term | 2 years 10 months 24 days | ||
Operating lease liabilities, leases not yet commenced, description | As of December 31, 2022, the present value of the operating lease liabilities that had not yet commenced was $0.7 million. | ||
Operating lease liabilities, leases not yet commenced | $ 0.7 | ||
Minimum [Member] | |||
Lessee Lease Description [Line Items] | |||
Operating lease expiration year | Dec. 31, 2023 | ||
Maximum [Member] | |||
Lessee Lease Description [Line Items] | |||
Operating lease expiration year | Dec. 31, 2029 | ||
Operating lease option to extend | five years |
Leases - Summary of Lease Asset
Leases - Summary of Lease Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Lessee Lease Description [Line Items] | ||
Lease assets | $ 39,776 | $ 29,841 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Lease liabilities: | ||
Lease liabilities | $ 41,012 | |
Accrued Expenses and Other Current Liabilities [Member] | ||
Lease liabilities: | ||
Lease liabilities | 14,986 | $ 10,853 |
Other Long-term Liabilities [Member] | ||
Lease liabilities: | ||
Lease liabilities | $ 26,026 | $ 20,059 |
Leases - Schedule of Undiscount
Leases - Schedule of Undiscounted Cash Flows for Future Annual Maturities of Operating Lease Liabilities (Detail) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 14,791 |
2024 | 9,587 |
2025 | 6,962 |
2026 | 5,192 |
2027 | 2,711 |
Thereafter | 3,500 |
Total undiscounted cash flows | 42,743 |
Present value discount | (1,731) |
Lease liabilities | $ 41,012 |
Long-Term Debt, Net - Schedule
Long-Term Debt, Net - Schedule of Long-Term Debt (Detail) - USD ($) | Dec. 31, 2022 | Jul. 29, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
Total long-term debt, net (including current portion) | $ 29,000,000 | $ 29,155,000 | |
Less: Current portion | 0 | (1,775,000) | |
Total long-term debt, net | 29,000,000 | 27,380,000 | |
July 2022 Revolving Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit | $ 29,000,000 | $ 29,000,000 | |
Net Term Note to Bank Due September 7, 2025 [Member] | |||
Debt Instrument [Line Items] | |||
Term note to bank | $ 29,155,000 |
Long-Term Debt, Net - Schedul_2
Long-Term Debt, Net - Schedule of Long-Term Debt (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2022 | |
Net Term Note to Bank Due September 7, 2025 [Member] | |
Debt Instrument [Line Items] | |
Debt instrument maturity date | Sep. 07, 2025 |
July 2022 Revolving Credit Agreement [Member] | |
Debt Instrument [Line Items] | |
Line of credit facility, maturity date | Jul. 29, 2027 |
Long-Term Debt, Net - Additiona
Long-Term Debt, Net - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Jul. 29, 2022 | May 04, 2022 | Dec. 31, 2022 | Jun. 07, 2022 | |
2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Agreement termination date | Jul. 29, 2022 | |||
Additional credit facility capacity, subject to certain conditions | $ 100,000,000 | |||
Line of credit | 29,000,000 | |||
Line of credit facility, maximum borrowing capacity | $ 250,000,000 | |||
Line of credit facility, maturity date | May 04, 2027 | |||
Line of credit facility, borrowings outstanding | $ 29,000,000 | |||
July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread on variable rate | 1.25% | |||
Additional credit facility capacity, subject to certain conditions | $ 500,000,000 | |||
Line of credit | 29,000,000 | $ 29,000,000 | ||
Unamortized debt issuance cost | 5,700,000 | |||
Line of credit facility, maximum borrowing capacity | $ 650,000,000 | |||
Line of credit facility, maturity date | Jul. 29, 2027 | |||
Line of credit facility increase in rate of interest in event of default | 2% | |||
Line of credit facility, borrowings outstanding | $ 29,000,000 | 29,000,000 | ||
Minimum [Member] | 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 250,000,000 | |||
Maximum [Member] | 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 350,000,000 | |||
Federal Funds Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread on variable rate | 0.50% | |||
SOFR Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread on variable rate | 0.10% | |||
SOFR Rate Plus One [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread on variable rate | 1% | |||
Term Loan [Member] | Secured Revolving Line Of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs written off | $ 100,000 | |||
2017 Term Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility agreement date | Dec. 07, 2017 | |||
Agreement termination date | May 04, 2022 | |||
2017 Term Credit Agreement [Member] | Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument maturity date | Sep. 07, 2025 | |||
2017 Term Credit Agreement [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Agreement termination date | Jul. 29, 2022 | |||
2017 Term Credit Agreement [Member] | Prime Rate [Member] | Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread on variable rate | 1% | |||
2017 Term Credit Agreement [Member] | Adjusted London Interbank Offered Rate LIBOR [Member] | Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread on variable rate | 1.50% | |||
Leverage Ratio Is Less Than 1.0 To 1.0 [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Quarterly commitment fee | 0.20% | |||
Leverage Ratio Is Less Than 1.0 To 1.0 [Member] | SOFR Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Borrowings basis spread on variable rate | 1.25% | |||
Leverage Ratio Is Less Than 1.0 To 1.0 [Member] | ABR Loans [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread on variable rate | 0.25% | |||
Leverage Ratio Is Greater Than Or Equal to 1.0 To 1.0 But Less Than 2.0 to 1.0 [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Quarterly commitment fee | 0.225% | |||
Leverage Ratio Is Greater Than Or Equal to 1.0 To 1.0 But Less Than 2.0 to 1.0 [Member] | SOFR Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Borrowings basis spread on variable rate | 1.50% | |||
Leverage Ratio Is Greater Than Or Equal to 1.0 To 1.0 But Less Than 2.0 to 1.0 [Member] | ABR Loans [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread on variable rate | 0.50% | |||
Leverage Ratio Is Greater Than Or Equal to 2.0 To 1.0 But Less Than 3.0 to 1.0 [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Quarterly commitment fee | 0.25% | |||
Leverage Ratio Is Greater Than Or Equal to 2.0 To 1.0 But Less Than 3.0 to 1.0 [Member] | SOFR Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Borrowings basis spread on variable rate | 1.75% | |||
Leverage Ratio Is Greater Than Or Equal to 2.0 To 1.0 But Less Than 3.0 to 1.0 [Member] | ABR Loans [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread on variable rate | 0.75% | |||
Leverage Ratio Is Greater Than Or Equal to 3.0 To 1.0 [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Quarterly commitment fee | 0.275% | |||
Leverage Ratio Is Greater Than Or Equal to 3.0 To 1.0 [Member] | SOFR Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Borrowings basis spread on variable rate | 2% | |||
Leverage Ratio Is Greater Than Or Equal to 3.0 To 1.0 [Member] | ABR Loans [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread on variable rate | 1% | |||
Term Loan [Member] | BSBY Rate Plus [Member] | 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread on variable rate | 1.125% | |||
Letters of Credit [Member] | 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 2,500,000 | |||
Letters of Credit [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 6,500,000 | |||
Swingline Loans [Member] | 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | |||
Swingline Loans [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | |||
2022 Term Loan Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of draws made | ten | |||
2022 Term Loan Facility [Member] | July 2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 750,000,000 | |||
2022 Term Loan Facility [Member] | Debt Instrument, Redemption, Period Two [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage of aggregate annual amount | 7.50% | |||
2022 Term Loan Facility [Member] | Debt Instrument Redemption Period After Year Two [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage of aggregate annual amount | 10% |
Long-Term Debt, Net - Aggregate
Long-Term Debt, Net - Aggregate Future Maturities of Long-Term Debt (Detail) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2027 | $ 29,000 |
Total long-term debt | $ 29,000 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - Interest Rate Swap [Member] - USD ($) $ in Millions | 12 Months Ended | |
Aug. 24, 2022 | Dec. 31, 2022 | |
Derivative [Line Items] | ||
Derivative maturity date | Sep. 07, 2025 | |
Derivative rate received | one-month USD LIBOR | |
Derivative rate paid, percent | 2.54% | |
Derivative Instrument, notional value | $ 35.5 | |
Cash receipt from settlement of interest rate swap contract | $ 0.5 |
Corporate Investments and Fun_3
Corporate Investments and Funds Held for Clients - Cash and Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Corporate Investments And Funds Held For Clients [Line Items] | ||||
Cash and cash equivalents, amortized cost | $ 400,730 | $ 277,978 | ||
Funds held for clients' cash and cash equivalents, amortized cost | 2,008,365 | 1,534,894 | ||
Amortized cost | 199,367 | |||
Investments Amortized Cost, Total | 2,608,462 | 2,124,551 | ||
Gross unrealized losses | [1] | (4,757) | ||
Cash and cash equivalents, fair value | 400,730 | 277,978 | $ 151,710 | |
Funds held for clients' cash and cash equivalents, fair value | 2,008,365 | 1,534,894 | ||
Fair value | 194,610 | |||
Total investments, fair value | 2,603,705 | 2,124,551 | ||
Available-for-sale Securities [Member] | Commercial Paper [Member] | ||||
Corporate Investments And Funds Held For Clients [Line Items] | ||||
Amortized cost | [2] | 311,679 | ||
Fair value | [2] | $ 311,679 | ||
Available-for-sale Securities [Member] | U.S. Treasury Securities [Member] | ||||
Corporate Investments And Funds Held For Clients [Line Items] | ||||
Amortized cost | [2] | 174,367 | ||
Gross unrealized losses | [1],[2] | (4,757) | ||
Fair value | [2] | 169,610 | ||
Available-for-sale Securities [Member] | Certificates of Deposit [Member] | ||||
Corporate Investments And Funds Held For Clients [Line Items] | ||||
Amortized cost | [2] | 25,000 | ||
Fair value | [2] | $ 25,000 | ||
[1] These securities have been in a gross unrealized loss position for a period of less than 12 months. All available-for-sale securities were included within the funds held for clients. |
Corporate Investments and Fun_4
Corporate Investments and Funds Held for Clients - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities, Available-for-sale, Realized Gain (Loss) | $ 0 | $ 0 |
Credit impairment losses | $ 0 | $ 0 |
Corporate Investments and Fun_5
Corporate Investments and Funds Held for Clients - Summary of Expected Maturities of Available for Sale Securities (Details) (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Securities, Available-for-Sale, Amortized Cost, Fiscal Year Maturity [Abstract] | |
Amortized cost, One year or less | $ 25,000 |
One year to five years | 174,367 |
Amortized cost | 199,367 |
Fair value, One year or less | 25,000 |
Fair value, One year to five years | 169,610 |
Fair value, Total available-for-sale securities | $ 194,610 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Major Categories of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Commercial Paper [Member] | ||
Assets: | ||
Assets | $ 311,679 | |
Certificates of Deposit [Member] | ||
Assets: | ||
Assets | $ 25,000 | |
US Treasury Securities [Member] | ||
Assets: | ||
Assets | 169,610 | |
Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | 1,335 | |
Level 2 [Member] | Commercial Paper [Member] | ||
Assets: | ||
Assets | 311,679 | |
Level 2 [Member] | Certificates of Deposit [Member] | ||
Assets: | ||
Assets | 25,000 | |
Level 2 [Member] | US Treasury Securities [Member] | ||
Assets: | ||
Assets | $ 169,610 | |
Level 2 [Member] | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | $ 1,335 |
Employee Savings Plan and Emp_2
Employee Savings Plan and Employee Stock Purchase Plan - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | |||
401(k) minimum age of eligibility for participation | 18 years | ||
401(k) eligibility minimum service period | 90 days | ||
Employee vested percentage in salary deferrals and roll over contributions | 100% | ||
Minimum period for vesting 100% contributions | 2 years | ||
Minimum period for vesting of discretionary contributions | 2 years | ||
Matching contribution | $ 12,700,000 | $ 11,600,000 | $ 8,600,000 |
Employee stock purchase plan overlapping offering period | 24 months | ||
Compensation expense related to ESPP | $ 94,898,000 | $ 97,506,000 | $ 90,108,000 |
Employee Stock Purchase Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employees Company's common stock shares purchase limit percentage | 10% | ||
Employees Company's common stock shares purchase limit amount | $ 25,000 | ||
Purchase price of common stock expressed as a percentage of its fair market value | 85% | ||
Maximum number of shares that may be purchased by a participant | 2,000 | ||
Share of common stock purchase maximum | 2,000,000 | ||
Purchase of shares of common stock | 54,059 | 40,699 | 51,407 |
Compensation expense related to ESPP | $ 2,800,000 | $ 2,700,000 | $ 2,300,000 |
After Two Years Of Employment [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Matching contributions, vesting percentage | 100% | ||
One Hundred Percent Match For Percent Of Participants Contribution [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contribution percentage | 100% | ||
Percentage of salary deferrals | 1% | ||
50% Matching Contribution [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contribution percentage | 50% | ||
Minimum [Member] | 50% Matching Contribution [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of salary deferrals | 2% | ||
Maximum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of salary deferrals | 3.50% | ||
Maximum [Member] | 50% Matching Contribution [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of salary deferrals | 6% |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Net Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net income | $ 281,389 | $ 195,960 | $ 143,453 |
Denominator: | |||
Basic weighted average shares outstanding | 57,928 | 57,885 | 57,620 |
Dilutive effect of unvested restricted stock | 247 | 306 | 665 |
Diluted weighted average shares outstanding | 58,175 | 58,191 | 58,285 |
Earnings Per Share Reconciliation [Abstract] | |||
Earnings per share, basic | $ 4.86 | $ 3.39 | $ 2.49 |
Earnings per share, diluted | $ 4.84 | $ 3.37 | $ 2.46 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
May 31, 2022 shares | Apr. 14, 2022 shares | Feb. 28, 2022 TradingDay Company shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) Company | Dec. 31, 2020 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Capitalized compensation cost | $ | $ 8,965 | $ 7,141 | $ 6,655 | |||
Software and Capitalized Software Costs [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Capitalized compensation cost | $ | $ 9,000 | $ 7,100 | $ 6,700 | |||
LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Maximum number of shares authorized | 13,350,881 | |||||
Time-Based Shares [Member] | Chief Operating Officer [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Number of shares vested in period | 5,663 | |||||
Time-based Restricted Stock Units [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Restricted shares of common stock issued | 500 | |||||
Restricted Stock [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Restricted shares of common stock issued | 451,737 | |||||
Restricted Stock [Member] | VWAP Value Equals or Exceeds $484 Per Share [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
VWAP value of share | $ / shares | $ 484 | |||||
Vesting percentage, restricted shares | 50% | |||||
Restricted Stock [Member] | VWAP Value Equals or Exceeds $559 Per Share [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
VWAP value of share | $ / shares | $ 559 | |||||
Vesting percentage, restricted shares | 50% | |||||
Restricted Stock [Member] | Market-Based Shares [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Restricted shares of common stock issued | 59,503 | |||||
Restricted Stock [Member] | Time-Based Shares [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||||
Restricted shares of common stock issued | 392,234 | |||||
Restricted Stock [Member] | Time-Based Shares [Member] | Non Executive Employees [Member] | Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||
Restricted Stock [Member] | Time-Based Shares [Member] | Non Executive Employees [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | |||||
Restricted Stock [Member] | Time-Based Shares [Member] | Non-Employee Members [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Restricted shares of common stock issued | 5,210 | |||||
Share-based compensation arrangement by share-based payment award, award vesting rights | all of which will cliff-vest on May 9, 2023, provided that such director is providing services to the Company through the applicable vesting date, and subject to the terms and conditions of the LTIP and the applicable restricted stock award agreement. | |||||
Performance-Based Restricted Stock Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Restricted shares of common stock issued | 51,500 | |||||
Performance-Based Restricted Stock Units [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Number of trading day | TradingDay | 60 | |||||
Number of publicly traded companies | Company | 35 | |||||
Performance-Based Restricted Stock Units [Member] | Executive Officers [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Performance share units | 51,494 | |||||
Performance period commencement date | Jan. 01, 2021 | |||||
Performance period maturity date | Dec. 31, 2022 | |||||
Number of publicly traded companies | Company | 34 | |||||
Performance-Based Restricted Stock Units [Member] | Executive Officers [Member] | Maximum [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Performance share units | 128,735 | |||||
Performance-Based Restricted Stock Units [Member] | Two-Year Performance Period [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Performance period commencement date | Jan. 01, 2022 | |||||
Performance period maturity date | Dec. 31, 2023 | |||||
Percentage of PSUs eligible to vest | 25% | |||||
Deadline for vesting of shares | Feb. 29, 2024 | |||||
Performance-Based Restricted Stock Units [Member] | Three-Year Performance Period [Member] | LTIP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Performance period maturity date | Dec. 31, 2024 | |||||
Percentage of PSUs eligible to vest | 75% | |||||
Deadline for vesting of shares | Mar. 01, 2025 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Grant-Date Fair Values of Restricted Stock Granted and Related Assumptions (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Risk-free interest rate | 1.75% | 0.95% | |
Risk-free interest rate, minimum | 0.52% | ||
Risk-free interest rate, maximum | 1.44% | ||
Estimated volatility | 40% | 33% | |
Estimated volatility, minimum | 30% | ||
Estimated volatility, maximum | 32% | ||
Expected life (in years) | 2 years 6 months | 2 years 3 months 18 days | 4 years 4 months 24 days |
Restricted Stock [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Grant-date fair value | $ 259.65 | $ 315.95 | $ 99.56 |
Restricted Stock [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Grant-date fair value | $ 348.19 | $ 521.17 | $ 377.68 |
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Risk-free interest rate, minimum | 1.25% | 0.11% | |
Risk-free interest rate, maximum | 1.51% | 0.34% | |
Estimated volatility | 49.20% | ||
Estimated volatility, minimum | 50.30% | ||
Estimated volatility, maximum | 51.20% | ||
Expected life (in years) | 2 years 8 months 12 days | 2 years 7 months 6 days | |
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Grant-date fair value | $ 252.16 | $ 382.78 | |
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Grant-date fair value | $ 377.01 | $ 587.97 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Restricted Stock Unit and PSU Activity (Detail) | 12 Months Ended | |
Dec. 31, 2022 $ / shares shares | ||
Time-Based Restricted Stock Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Unvested shares of restricted stock and restricted stock units outstanding at beginning of period | shares | 369,600 | |
Restricted Stock Awards and restricted stock units, Granted | shares | 392,200 | |
Restricted Stock Awards and restricted stock units, Vested | shares | (219,800) | |
Restricted Stock Awards and restricted stock units, Forfeited | shares | (62,900) | |
Unvested shares of restricted stock and restricted stock units outstanding at end of period | shares | 479,100 | |
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at beginning of period | $ / shares | $ 259.94 | |
Granted, Weighted Average Grant Date Fair Value Per Share | $ / shares | 304.28 | |
Vested, Weighted Average Grant Date Fair Value Per Share | $ / shares | 202.40 | |
Forfeited, Weighted Average Grant Date Fair Value Per Share | $ / shares | 317.73 | |
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | $ / shares | $ 315.04 | |
Time-based Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Restricted Stock Awards and restricted stock units, Granted | shares | 500 | |
Unvested shares of restricted stock and restricted stock units outstanding at end of period | shares | 0.5 | [1] |
Granted, Weighted Average Grant Date Fair Value Per Share | $ / shares | $ 377.01 | |
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | $ / shares | $ 377.01 | [1] |
Market-Based Restricted Stock Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Unvested shares of restricted stock and restricted stock units outstanding at beginning of period | shares | 1,628,300 | |
Restricted Stock Awards and restricted stock units, Granted | shares | 59,500 | |
Restricted Stock Awards and restricted stock units, Vested | shares | (100) | |
Restricted Stock Awards and restricted stock units, Forfeited | shares | (10,700) | |
Unvested shares of restricted stock and restricted stock units outstanding at end of period | shares | 1,677,000 | |
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at beginning of period | $ / shares | $ 111.87 | |
Granted, Weighted Average Grant Date Fair Value Per Share | $ / shares | 269 | |
Vested, Weighted Average Grant Date Fair Value Per Share | $ / shares | 347.62 | |
Forfeited, Weighted Average Grant Date Fair Value Per Share | $ / shares | 279.87 | |
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | $ / shares | $ 116.36 | |
Performance-Based Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Unvested shares of restricted stock and restricted stock units outstanding at beginning of period | shares | 37,100 | |
Restricted Stock Awards and restricted stock units, Granted | shares | 51,500 | |
Restricted Stock Awards and restricted stock units, Forfeited | shares | (10,800) | |
Unvested shares of restricted stock and restricted stock units outstanding at end of period | shares | 77,800 | [1] |
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at beginning of period | $ / shares | $ 556.50 | |
Granted, Weighted Average Grant Date Fair Value Per Share | $ / shares | 296.07 | |
Vested, Weighted Average Grant Date Fair Value Per Share | $ / shares | 376.69 | |
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | $ / shares | $ 409.13 | [1] |
[1] A maximum of 194,478 shares could be delivered upon settlement of PSUs based upon Paycom’s Relative TSR over the applicable performance periods. |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Restricted Stock Unit and PSU Activity (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2022 shares | |
Performance-Based Restricted Stock Units [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Units that could be delivered upon settlement of PSUs based upon relative TSR over applicable performance periods | 194,478 |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Aggregate Fair Value of Awards (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Time-Based Restricted Stock Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Aggregate fair value of awards | $ 63,970 | $ 97,242 | $ 76,653 |
Market-Based Restricted Stock Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Aggregate fair value of awards | $ 76,153 | $ 90,122 |
Stock-Based Compensation - Su_5
Stock-Based Compensation - Summary of Unrecognized Compensation Cost and Related Weighted Average Recognition Period Associated with Unvested restricted Stock Awards and Unvested Restricted Stock Units (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Unrecognized compensation cost | $ 217,409 |
Weighted average period for recognition (years) | 3 years |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Unrecognized compensation cost | $ 13,210 |
Weighted average period for recognition (years) | 1 year 6 months |
Stock-based Compensation - Non-
Stock-based Compensation - Non-cash Stock-based Compensation Resulting From Restricted Stock Awards and Restricted Stock Units Awards (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-Based Payment Arrangement, Expense | $ 94,898 | $ 97,506 | $ 90,108 |
Operating Expenses [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-Based Payment Arrangement, Expense | 4,671 | 4,570 | 5,185 |
Sales and Marketing Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-Based Payment Arrangement, Expense | 18,659 | 13,801 | 14,376 |
Research and Development Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-Based Payment Arrangement, Expense | 11,063 | 7,527 | 9,107 |
General and Administrative Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-Based Payment Arrangement, Expense | $ 60,505 | $ 71,608 | $ 61,440 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Provision for current income taxes | |||
Federal | $ 81,348 | $ 17,557 | $ 14,680 |
State | 30,051 | 9,539 | 6,422 |
Total provision for current income taxes | 111,399 | 27,096 | 21,102 |
Provision for deferred income taxes | |||
Federal | (2,823) | 26,579 | 15,204 |
State | (387) | 6,327 | 6,177 |
Total provision for deferred income taxes | (3,210) | 32,906 | 21,381 |
Total provision for income taxes | $ 108,189 | $ 60,002 | $ 42,483 |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Detail) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax rate | 21% | 21% | 21% |
State income taxes, net of Federal income tax benefit | 6% | 8% | 8% |
Nondeductible expenses | 4% | 6% | 6% |
Research credit, Federal benefit | (2.00%) | (3.00%) | (3.00%) |
Stock-based compensation | (1.00%) | (7.00%) | (9.00%) |
Remeasurement of state deferred tax liabilities | 0% | (2.00%) | 0% |
Effective income tax rate | 28% | 23% | 23% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 16, 2022 | |
Income Tax [Line Items] | ||||
Effective income tax rate | 28% | 23% | 23% | |
Unrecognized tax benefits | $ 0 | $ 0 | ||
Inflation Reduction Act 2022 [Member] | ||||
Income Tax [Line Items] | ||||
Percentage of minimum tax on book income | 15% | |||
Percentage of excise tax on net stock repurchases | 1% | |||
State Income Tax [Member] | ||||
Income Tax [Line Items] | ||||
Net operating loss carryforwards for state income tax | $ 200,000 | |||
Net operating loss carryforwards expiration year | Dec. 31, 2032 |
Income Taxes - Schedule of Net
Income Taxes - Schedule of Net Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred income tax assets (liabilities): | ||
Mark-to-market investments - OCI | $ 1,260 | |
Stock-based compensation | 4,425 | $ 1,541 |
Investment in Paycom Payroll Holdings, LLC | (146,907) | (147,659) |
Net operating losses | 189 | 614 |
Noncurrent deferred income tax liabilities, net | $ (141,033) | $ (145,504) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | |||
Feb. 06, 2023 shares | Feb. 04, 2023 $ / shares shares | Feb. 28, 2022 Company | Dec. 31, 2022 shares | Dec. 31, 2021 Company | |
Restricted Stock [Member] | LTIP [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Restricted shares of common stock issued | 451,737 | ||||
Restricted Stock [Member] | LTIP [Member] | Market-Based Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Restricted shares of common stock issued | 59,503 | ||||
Restricted Stock [Member] | LTIP [Member] | Time-Based Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Restricted shares of common stock issued | 392,234 | ||||
Performance-Based Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Restricted shares of common stock issued | 51,500 | ||||
Performance-Based Restricted Stock Units [Member] | LTIP [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Number of publicly traded companies | Company | 35 | ||||
Performance-Based Restricted Stock Units [Member] | LTIP [Member] | Executive Officers [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Number of publicly traded companies | Company | 34 | ||||
Performance period commencement date | Jan. 01, 2021 | ||||
Performance period maturity date | Dec. 31, 2022 | ||||
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Non-executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Restricted shares of common stock issued | 302,015 | ||||
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Market-Based Shares [Member] | Non-executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Restricted shares of common stock issued | 87,618 | ||||
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | VWAP Value Equals or Exceeds $404 Per Share [Member] | Non-executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Vesting percentage, restricted shares | 50% | ||||
VWAP value of share | $ / shares | $ 404 | ||||
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | VWAP Value Equals or Exceeds $466 Per Share [Member] | Non-executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Vesting percentage, restricted shares | 50% | ||||
VWAP value of share | $ / shares | $ 466 | ||||
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Shares [Member] | Non-executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Restricted shares of common stock issued | 214,397 | ||||
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Vesting First Portion [Member] | Non-executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Restricted shares of common stock issued | 213,397 | ||||
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Vesting First Portion Tranche One [Member] | Non-executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Vesting percentage, restricted shares | 21% | ||||
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Vesting First Portion Tranche Two [Member] | Non-executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Vesting percentage, restricted shares | 21% | ||||
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Vesting First Portion Tranche Three [Member] | Non-executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Vesting percentage, restricted shares | 25% | ||||
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Vesting First Portion Tranche Four [Member] | Non-executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Vesting percentage, restricted shares | 33% | ||||
Subsequent Event [Member] | Performance-Based Restricted Stock Units [Member] | LTIP [Member] | Executive Officers [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Number of units vested | 5,232 |