Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 23, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | PAYC | |
Entity Registrant Name | Paycom Software, Inc. | |
Entity Central Index Key | 0001590955 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 57,432,442 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Security Exchange Name | NYSE | |
Entity File Number | 001-36393 | |
Entity Tax Identification Number | 80-0957485 | |
Entity Address, Address Line One | 7501 W. Memorial Road | |
Entity Address, City or Town | Oklahoma City | |
Entity Address, State or Province | OK | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Postal Zip Code | 73142 | |
City Area Code | 405 | |
Local Phone Number | 722-6900 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 346,456 | $ 294,025 |
Accounts receivable | 20,034 | 16,442 |
Prepaid expenses | 46,529 | 37,613 |
Inventory | 1,415 | 1,383 |
Income tax receivable | 18,391 | |
Deferred contract costs | 128,728 | 118,206 |
Current assets before funds held for clients | 543,162 | 486,060 |
Funds held for clients | 2,303,159 | 2,327,366 |
Total current assets | 2,846,321 | 2,813,426 |
Property and equipment, net | 531,884 | 498,197 |
Intangible assets, net | 48,159 | 50,112 |
Goodwill | 51,889 | 51,889 |
Long-term deferred contract costs | 727,956 | 680,272 |
Other assets | 106,535 | 103,643 |
Total assets | 4,312,744 | 4,197,539 |
Current liabilities: | ||
Accounts payable | 14,997 | 13,875 |
Income tax payable | 10,281 | |
Accrued commissions and bonuses | 22,227 | 30,492 |
Accrued payroll and vacation | 60,533 | 56,086 |
Deferred revenue | 31,432 | 22,812 |
Accrued expenses and other current liabilities | 84,215 | 83,302 |
Current liabilities before client funds obligation | 223,685 | 206,567 |
Client funds obligation | 2,303,198 | 2,328,076 |
Total current liabilities | 2,526,883 | 2,534,643 |
Deferred income tax liabilities, net | 136,213 | 143,750 |
Long-term deferred revenue | 110,928 | 107,657 |
Other long-term liabilities | 112,189 | 108,453 |
Total long-term liabilities | 359,330 | 359,860 |
Total liabilities | 2,886,213 | 2,894,503 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Common stock, $0.01 par value (100,000 shares authorized, 62,887 and 62,675 shares issued at June 30, 2024 and December 31, 2023, respectively; 56,151 and 56,528 shares outstanding at June 30, 2024 and December 31, 2023, respectively) | 629 | 627 |
Additional paid-in capital | 667,197 | 724,493 |
Retained earnings | 1,743,608 | 1,469,981 |
Accumulated other comprehensive earnings (loss) | (305) | (1,039) |
Treasury stock, at cost (6,736 and 6,147 shares at June 30, 2024 and December 31, 2023, respectively) | (984,598) | (891,026) |
Total stockholders’ equity | 1,426,531 | 1,303,036 |
Total liabilities and stockholders’ equity | $ 4,312,744 | $ 4,197,539 |
Unaudited Consolidated Balanc_2
Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
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 | 62,887,000 | 62,675,000 |
Common stock, shares outstanding | 56,151,000 | 56,528,000 |
Treasury stock, shares | 6,736,000 | 6,147,000 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenues | ||||
Total revenues | $ 437,512 | $ 401,139 | $ 937,393 | $ 852,776 |
Cost of revenues | ||||
Operating expenses | 67,451 | 54,617 | 131,121 | 107,702 |
Depreciation and amortization | 16,433 | 12,811 | 31,394 | 24,958 |
Total cost of revenues | 83,884 | 67,428 | 162,515 | 132,660 |
Administrative expenses | ||||
Sales and marketing | 106,864 | 106,435 | 222,388 | 210,009 |
Research and development | 62,371 | 49,118 | 112,880 | 91,787 |
General and administrative | 70,072 | 75,965 | 21,968 | 141,570 |
Depreciation and amortization | 19,181 | 14,927 | 36,688 | 29,052 |
Total administrative expenses | 258,488 | 246,445 | 393,924 | 472,418 |
Total operating expenses | 342,372 | 313,873 | 556,439 | 605,078 |
Operating income | 95,140 | 87,266 | 380,954 | 247,698 |
Interest expense | (782) | (602) | (1,564) | (1,439) |
Other income (expense), net | 4,787 | 6,183 | 9,796 | 12,187 |
Income before income taxes | 99,145 | 92,847 | 389,186 | 258,446 |
Provision for income taxes | 31,175 | 28,331 | 74,029 | 74,634 |
Net income | $ 67,970 | $ 64,516 | $ 315,157 | $ 183,812 |
Earnings per share, basic | $ 1.2 | $ 1.11 | $ 5.58 | $ 3.17 |
Earnings per share, diluted | $ 1.2 | $ 1.11 | $ 5.57 | $ 3.17 |
Weighted average shares outstanding: | ||||
Basic | 56,451 | 57,920 | 56,499 | 57,895 |
Diluted | 56,771 | 58,033 | 56,548 | 58,050 |
Comprehensive earnings: | ||||
Net income | $ 67,970 | $ 64,516 | $ 315,157 | $ 183,812 |
Unrealized net gains on available-for-sale securities | 318 | (235) | 1,155 | 815 |
Tax effect | (128) | 95 | (421) | (105) |
Other comprehensive income, net of tax | 190 | (140) | 734 | 710 |
Comprehensive earnings: | 68,160 | 64,376 | 315,891 | 184,522 |
Recurring [Member] | ||||
Revenues | ||||
Total revenues | 430,400 | 394,522 | 922,296 | 838,943 |
Implementation and Other [Member] | ||||
Revenues | ||||
Total revenues | $ 7,112 | $ 6,617 | $ 15,097 | $ 13,833 |
Unaudited Consolidated Statem_2
Unaudited 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, 2022 | $ 1,182,607 | $ 625 | $ 576,622 | $ 1,196,968 | $ (3,703) | $ (587,905) |
Beginning balance, shares at Dec. 31, 2022 | 62,518 | 4,651 | ||||
Vesting of restricted stock, shares | 7 | |||||
Stock-based compensation | 32,344 | 32,344 | ||||
Repurchases of common stock | (626) | $ (626) | ||||
Repurchases of common stock, shares | 2 | |||||
Net income | 119,296 | 119,296 | ||||
Other comprehensive earnings (loss), net of tax | 850 | 850 | ||||
Ending balance, value at Mar. 31, 2023 | 1,334,471 | $ 625 | 608,966 | 1,316,264 | (2,853) | $ (588,531) |
Ending balance, shares at Mar. 31, 2023 | 62,525 | 4,653 | ||||
Beginning balance, value at Dec. 31, 2022 | 1,182,607 | $ 625 | 576,622 | 1,196,968 | (3,703) | $ (587,905) |
Beginning balance, shares at Dec. 31, 2022 | 62,518 | 4,651 | ||||
Net income | 183,812 | |||||
Ending balance, value at Jun. 30, 2023 | 1,406,685 | $ 626 | 649,965 | 1,358,059 | (2,993) | $ (598,972) |
Ending balance, shares at Jun. 30, 2023 | 62,640 | 4,691 | ||||
Beginning balance, value at Mar. 31, 2023 | 1,334,471 | $ 625 | 608,966 | 1,316,264 | (2,853) | $ (588,531) |
Beginning balance, shares at Mar. 31, 2023 | 62,525 | 4,653 | ||||
Vesting of restricted stock | $ 1 | (1) | ||||
Vesting of restricted stock, shares | 115 | |||||
Stock-based compensation | 41,000 | 41,000 | ||||
Repurchases of common stock | (10,441) | $ (10,441) | ||||
Repurchases of common stock, shares | 38 | |||||
Dividends declared | (22,721) | (22,721) | ||||
Net income | 64,516 | 64,516 | ||||
Other comprehensive earnings (loss), net of tax | (140) | (140) | ||||
Ending balance, value at Jun. 30, 2023 | 1,406,685 | $ 626 | 649,965 | 1,358,059 | (2,993) | $ (598,972) |
Ending balance, shares at Jun. 30, 2023 | 62,640 | 4,691 | ||||
Beginning balance, value at Dec. 31, 2023 | 1,303,036 | $ 627 | 724,493 | 1,469,981 | (1,039) | $ (891,026) |
Beginning balance, shares at Dec. 31, 2023 | 62,675 | 6,147 | ||||
Vesting of restricted stock, shares | 44 | |||||
Stock-based compensation | (89,675) | (89,675) | ||||
Repurchases of common stock | (3,052) | $ (3,052) | ||||
Repurchases of common stock, shares | 15 | |||||
Dividends declared | (19,977) | (19,977) | ||||
Net income | 247,187 | 247,187 | ||||
Other comprehensive earnings (loss), net of tax | 544 | 544 | ||||
Ending balance, value at Mar. 31, 2024 | 1,438,063 | $ 627 | 634,818 | 1,697,191 | (495) | $ (894,078) |
Ending balance, shares at Mar. 31, 2024 | 62,719 | 6,162 | ||||
Beginning balance, value at Dec. 31, 2023 | 1,303,036 | $ 627 | 724,493 | 1,469,981 | (1,039) | $ (891,026) |
Beginning balance, shares at Dec. 31, 2023 | 62,675 | 6,147 | ||||
Net income | 315,157 | |||||
Ending balance, value at Jun. 30, 2024 | 1,426,531 | $ 629 | 667,197 | 1,743,608 | (305) | $ (984,598) |
Ending balance, shares at Jun. 30, 2024 | 62,887 | 6,736 | ||||
Beginning balance, value at Mar. 31, 2024 | 1,438,063 | $ 627 | 634,818 | 1,697,191 | (495) | $ (894,078) |
Beginning balance, shares at Mar. 31, 2024 | 62,719 | 6,162 | ||||
Vesting of restricted stock | $ 2 | (2) | ||||
Vesting of restricted stock, shares | 168 | |||||
Stock-based compensation | 32,381 | 32,381 | ||||
Repurchases of common stock | (90,520) | $ (90,520) | ||||
Repurchases of common stock, shares | 574 | |||||
Dividends declared | (21,553) | (21,553) | ||||
Net income | 67,970 | 67,970 | ||||
Other comprehensive earnings (loss), net of tax | 190 | 190 | ||||
Ending balance, value at Jun. 30, 2024 | $ 1,426,531 | $ 629 | $ 667,197 | $ 1,743,608 | $ (305) | $ (984,598) |
Ending balance, shares at Jun. 30, 2024 | 62,887 | 6,736 |
Unaudited Consolidated Statem_3
Unaudited Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | ||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | |
Dividends declared per share | $ 0.375 | $ 0.375 | $ 0.375 |
Unaudited Consolidated Statem_4
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities | ||
Net income | $ 315,157 | $ 183,812 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 68,082 | 54,010 |
Accretion of discount on available-for-sale securities | (108) | (253) |
Non-cash marketing expense | 798 | 839 |
Loss (Gain) on disposition of property and equipment | 12 | (21) |
Amortization of debt issuance costs | 552 | 620 |
Stock-based compensation expense | (69,670) | 63,185 |
Deferred income taxes, net | (7,798) | 1,706 |
Other | (161) | 111 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,592) | 6,650 |
Prepaid expenses | (8,345) | (10,597) |
Inventory | 431 | 336 |
Other assets | (3,445) | (9,057) |
Deferred contract costs | (55,198) | (62,489) |
Accounts payable | 91 | (10,277) |
Income taxes, net | 28,672 | 3,645 |
Accrued commissions and bonuses | (8,265) | (6,560) |
Accrued payroll and vacation | 4,197 | 4,954 |
Deferred revenue | 11,891 | 6,817 |
Accrued expenses and other current liabilities | 7,431 | 24,560 |
Net cash provided by operating activities | 280,732 | 251,991 |
Cash flows from investing activities | ||
Purchases of investments from funds held for clients | (25,000) | |
Proceeds from investments from funds held for clients | 165,000 | 25,000 |
Purchases of property and equipment | (93,335) | (83,422) |
Proceeds from sale of property and equipment | 13 | 44 |
Net cash provided by (used in) investing activities | 71,678 | (83,378) |
Cash flows from financing activities | ||
Repurchases of common stock | (80,761) | |
Withholding taxes paid related to net share settlements | (12,410) | (11,067) |
Dividends paid | (42,400) | (21,731) |
Net change in client funds obligation | (24,878) | (201,552) |
Net cash (used in) financing activities | (160,449) | (234,350) |
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents | 191,961 | (65,737) |
Cash, cash equivalents, restricted cash and restricted cash equivalents | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period | 2,422,760 | 2,409,095 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | 2,614,721 | 2,343,358 |
Cash and cash equivalents | 346,456 | 536,545 |
Restricted cash included in funds held for clients | 2,268,265 | 1,806,813 |
Total cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | 2,614,721 | 2,343,358 |
Non-cash investing and financing activities: | ||
Purchases of property and equipment, accrued but not paid | 8,507 | 11,968 |
Stock-based compensation for capitalized software | 8,797 | 7,752 |
Right of use assets obtained in exchange for operating lease liabilities | $ 11,933 | $ 16,341 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||||
Net Income (Loss) | $ 67,970 | $ 247,187 | $ 64,516 | $ 119,296 | $ 315,157 | $ 183,812 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Rule 10b5-1 Trading Arrangements During the quarter ended June 30, 2024 , no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted , modified , or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408(a) of Regulation S-K). |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule 10b5-1 Arrangement Modified | false |
Non-Rule 10b5-1 Arrangement Modified | false |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2024 | |
Organization And Description Of Business Abstract | |
Organization and Description of Business | ORGANIZATION AND DESCRIPTION OF BUSINESS Paycom Software, Inc. (“Software”), together with 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 payroll, talent acquisition, talent management, human resources (“HR”) management and time and labor management applications. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Our significant accounting policies are discussed in “Note 2. Summary of Significant Accounting Policies” in the notes to our audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”) filed with the Securities and Exchange Commission (“SEC”) on February 15, 2024. Basis of Presentation The accompanying unaudited interim 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 SEC regarding interim financial statements that permit reduced disclosure for interim periods. Intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s results for the interim periods presented. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes presented in the Form 10-K. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results expected for the full year. 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. Seasonality Our revenues are seasonal in nature. Generally, we expect our first and fourth quarter recurring revenues to be higher than other quarters during the year because payroll tax filing forms and Affordable Care Act forms are typically processed in the first quarter, and unscheduled payroll runs (such as bonuses) for our clients are typically concentrated in the fourth quarter. In addition, these seasonal fluctuations in recurring revenues impact operating income. Funds Held for Clients and Client Funds Obligation As part of our payroll and tax filing services, we (i) collect client funds to satisfy their respective payroll and employment tax obligations, (ii) remit such funds to accounts designated by our clients and to the appropriate taxing authorities, as applicable, and (iii) manage client tax filings and any related correspondence with taxing authorities. Amounts collected from clients for their 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. We typically invest funds held for clients in money market funds, demand deposit accounts, certificates of deposit, commercial paper and U.S. treasury securities. Short-term investments in instruments with an original maturity of less than three months are classified as cash and cash equivalents within funds held for clients in the consolidated balance sheets. Investments in instruments with an original maturity greater than three months are classified as available-for-sale securities and are also included within funds held for clients in the consolidated balance sheets. These available-for-sale securities are recorded 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. The Company reports the cash flows related to the purchases of investments from funds held for clients and related to the proceeds from the maturities of investments from funds held for clients on a gross basis in the cash flows from investing activities section of the consolidated statements of cash flows. Additionally, the Company reports cash flows related to cash received from and paid on behalf of clients on a net basis within the net change in client funds obligation in the cash flows from financing activities section of 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. In August 2022, our Board of Directors authorized the repurchase of up to $ 1.1 billion of our common stock over a two-year period expiring on August 15, 2024 . As of June 30, 2024, there was $ 705.9 million available for repurchases under our stock repurchase plan. On July 29, 2024, our Board of Directors increased and extended the stock repurchase plan. See Note 14 for additional information. 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 equity incentive awards and other corporate considerations. During the six months ended June 30, 2024, we repurchased an aggregate of 589,424 shares of our common stock at an average cost of $ 158.06 per share, including 68,482 shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of equity incentive awards. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires incremental disclosures in annual and interim periods related reportable segments, and segment expenses but does not change the definition of a segment, the method for determining segments, or the criteria for aggregating operating segments into reportable segments. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are assessing the impact of this ASU on our consolidated financial statements and disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information on income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are assessing the impact of this ASU on our consolidated financial statements and disclosures. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. REVENUE 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 from contracts with clients. Sales taxes and other applicable taxes are excluded from revenues. Recurring Revenues Recurring revenues are derived primarily from our payroll, talent acquisition, talent management, HR management and time and labor management applications as well as fees charged for form filings and delivery of client payroll checks and reports. Payroll includes Beti®, Payroll and Tax Management, Vault, Everyday®, Paycom Pay®, Client Action Center, Expense Management, Mileage Tracker, Garnishment Administration and GL Concierge applications. Talent acquisition includes our Applicant Tracking, Candidate Tracker, Enhanced Background Checks®, Onboarding, E-Verify® and Tax Credits applications. Talent management includes our Employee Self-Service®, Compensation Budgeting, Performance Management, Position Management, My Analytics and Paycom Learning 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. Time and labor management includes Time and Attendance, Scheduling, Time-Off Requests with GONE®, Labor Allocation, Labor Management Reports/Push Reporting®, Geofencing/Geotracking and Microfence® tools and applications. In addition, with Global HCM, a number of our HCM applications and tools are available in 15 languages and dialects and are accessible to users in more than 180 countries. The performance obligations related to recurring revenues are generally 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 generally 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 typically 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 Time and Attendance application. 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 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 collected upon contract inception and is deferred and recognized ratably over the estimated period of benefit ( i.e. , 10-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 generally do not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing. Changes in deferred revenue for the three and six months ended June 30, 2024 and 2023 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Balance, beginning of period $ 137,039 $ 120,802 $ 130,469 $ 117,416 Recognition of revenue included in beginning of period balance ( 10,321 ) ( 5,507 ) ( 16,044 ) ( 10,593 ) Contract balance, net of revenue recognized during the period 15,642 8,938 27,935 17,410 Balance, end of period $ 142,360 $ 124,233 $ 142,360 $ 124,233 We expect to recognize $ 17.9 million of deferred revenue related to deferred revenue in the remainder of 2024 , $ 23.8 million in 2025 , and $ 100.7 million 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 ratably over the expected period of benefit, which we have determined to be the estimated life of the client relationship of 10 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. 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 is included in sales and marketing expenses and general and administrative expenses 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 three months ended June 30, 2024 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 396,930 $ 15,838 $ ( 15,808 ) $ 396,960 Costs to fulfill a contract $ 440,402 $ 35,332 $ ( 16,010 ) $ 459,724 As of and for the three months ended June 30, 2023 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 343,991 $ 19,937 $ ( 13,442 ) $ 350,486 Costs to fulfill a contract $ 360,588 $ 32,514 $ ( 12,778 ) $ 380,324 As of and for the six months ended June 30, 2024 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 378,467 $ 49,681 $ ( 31,188 ) $ 396,960 Costs to fulfill a contract $ 420,011 $ 70,889 $ ( 31,176 ) $ 459,724 As of and for the six months ended June 30, 2023 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 325,457 $ 51,434 $ ( 26,405 ) $ 350,486 Costs to fulfill a contract $ 338,895 $ 66,162 $ ( 24,733 ) $ 380,324 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. PROPERTY AND EQUIPMENT Property and equipment and accumulated depreciation and amortization were as follows: June 30, 2024 December 31, 2023 Property and equipment Software and capitalized software development costs $ 432,452 $ 371,665 Buildings 259,020 179,874 Computer equipment 186,786 164,856 Rental clocks 45,106 42,364 Furniture, fixtures and equipment 41,353 32,413 Other 19,907 18,500 984,624 809,672 Less: accumulated depreciation and amortization ( 501,813 ) ( 437,291 ) 482,811 372,381 Construction in progress 15,277 92,020 Land 33,796 33,796 Property and equipment, net $ 531,884 $ 498,197 We capitalize software development costs related to software developed or obtained for internal use in accordance with ASC 350-40. For the three and six months ended June 30, 2024 , we capitalized $ 31.2 million and $ 61.0 million, respectively, of software development costs related to software developed or obtained for internal use. For the three and six months ended June 30, 2023 , we capitalized $ 22.9 million and $ 44.2 million, respectively, of software development costs related to software developed or obtained for internal use. Rental clocks included in property and equipment, net in the consolidated balance sheets, 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. Prior to the repayment of our debt on November 21, 2023, we capitalized interest costs incurred for indebtedness related to construction in progress. For the three and six months ended June 30, 2024 , we incurred interest costs of $ 0.8 million and $ 1.6 million, respectively, none of which was capitalized. For the three and six months ended June 30, 2023 , we incurred interest costs of $ 1.5 million and $ 2.9 million, respectively, of which we capitalized $ 0.9 million and $ 1.4 million, respectively. Depreciation and amortization expense for property and equipment was $ 34.6 million and $ 66.1 million for the three and six months ended June 30, 2024 , respectively. Depreciation and amortization expense for property and equipment was $ 26.8 million and $ 52.1 million for the three and six months ended June 30, 2023 , respectively. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 5. GOODWILL AND INTANGIBLE ASSETS, NET As of both June 30, 2024 and December 31, 2023 , goodwill was $ 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, 2024 , it was more likely than not that the fair value exceeded the carrying value and, therefore, goodwill was no t impaired. As of June 30, 2024 and December 31, 2023, 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: June 30, 2024 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Naming rights 12.3 $ 60,199 $ ( 12,040 ) $ 48,159 Total $ 60,199 $ ( 12,040 ) $ 48,159 December 31, 2023 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Naming rights 12.8 $ 60,199 $ ( 10,087 ) $ 50,112 Total $ 60,199 $ ( 10,087 ) $ 50,112 Amortization of intangible assets for the three and six months ended June 30, 2024 and 2023 was $ 1.0 million and $ 2.0 million, respectively. We estimate the aggregate amortization expense will be $ 2.0 million for the remainder of 2024 and $ 3.9 million for each of 2025, 2026, 2027, 2028 and 2029. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 6. LONG-TERM DEBT On July 29, 2022 (the “Facility Closing Date”), Paycom Payroll, LLC, Software, and certain other subsidiaries of Software (collectively, the “Loan Parties”) entered into a credit agreement (as amended from time to time, the “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 “Lenders”), and JPMorgan Chase Bank, N.A., as the administrative agent. The Credit Agreement initially provided for a senior secured revolving credit facility (the “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 Credit Agreement includes a $ 25.0 million sublimit for swingline loans and a $ 6.5 million sublimit for letters of credit. The Credit Agreement also initially provided for a senior secured delayed draw term loan (the “Term Loan Facility”) in the aggregate amount of up to $ 750.0 million. All loans under the Credit Agreement will mature on July 29, 2027 (the “Scheduled Maturity Date”). Unamortized debt issuance costs of $ 3.4 million as of June 30, 2024 are included in other assets on our consolidated balance sheets. On the Facility Closing Date, we borrowed $ 29.0 million under the Revolving Credit Facility to repay the outstanding indebtedness under our prior credit facility, along with accrued interest, expenses and fees. The loan bore interest at the Adjusted Term SOFR Rate (as defined below) for the interest period in effect plus 1.25 %. On July 28, 2023 , the Loan Parties entered into Amendment No. 2 to Credit Agreement with the Lenders, pursuant to which, among other things, (i) the aggregate revolving commitments under the Revolving Credit Facility were increased from $ 650.0 million to $ 1.0 billion, (ii) the Term Loan Facility was terminated and (iii) the Credit Agreement was amended in contemplation of the formation and future operating activities of the Paycom Client Trust (the “Client Trust”) and Paycom National Trust Bank, NA (the “Trust Bank”). The Company intends to form the Client Trust to hold client payroll and related funds and the Trust Bank to serve as trustee of the Client Trust. We did no t make any draws under the Term Loan Facility prior to its termination on July 28, 2023 . At the time of termination, unamortized debt issuance costs totaling $ 1.2 million were written off and recognized as a loss on extinguishment of debt, which was included in other income, net in the consolidated statements of comprehensive income. On November 21, 2023, we fully repaid the outstanding indebtedness under the Revolving Credit Facility. As of June 30, 2024 , there was no debt outstanding under the Revolving Credit Facility. Borrowings under the Credit Agreement 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. Subject to certain conditions set forth in the Credit Agreement, we may borrow, prepay and reborrow under the Revolving Credit Facility and terminate or reduce the Lenders’ commitments at any time prior to the Scheduled Maturity Date. We are required to pay a quarterly commitment fee on the daily amount of the undrawn portion of the revolving commitments under the Revolving Credit Facility 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. Under the Credit Agreement, we are required to maintain as of the end of each fiscal quarter a consolidated interest coverage ratio of not less than 3.0 to 1.0 and a consolidated leverage ratio of not greater than 3.5 to 1.0, stepping down to 3.25 to 1.0 as of December 31, 2024 and 3.0 to 1.0 as of December 31, 2025, and thereafter. Additionally, the 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 June 30, 2024 , we were in compliance with these covenants. Our obligations under the Credit Agreement are secured by a senior security interest in all personal property of the Loan Parties. |
Corporate Investments and Funds
Corporate Investments and Funds Held For Clients | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Corporate Investments and Funds Held For Clients | 7. 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: June 30, 2024 Type of issue Amortized cost Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 346,456 $ — $ — $ 346,456 Funds held for clients cash and cash equivalents 2,268,265 — — 2,268,265 Available-for-sale securities (1) : U.S. treasury securities 34,995 — ( 101 ) 34,894 Total investments $ 2,649,716 $ — $ ( 101 ) $ 2,649,615 December 31, 2023 Type of issue Amortized cost Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 294,025 $ — $ — $ 294,025 Funds held for clients cash and cash equivalents 2,128,735 — — 2,128,735 Available-for-sale securities (1) : Certificates of deposit 25,000 — — 25,000 U.S. treasury securities 174,887 — ( 1,256 ) 173,631 Total investments $ 2,622,647 $ — $ ( 1,256 ) $ 2,621,391 (1) All available-for-sale securities were included within the funds held for clients. The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2024, are as follows: June 30, 2024 Securities in unrealized loss position for less than 12 months Securities in unrealized loss position for greater than 12 months Total Type of issue Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value U.S. treasury securities $ — $ — $ ( 101 ) $ 34,894 $ ( 101 ) $ 34,894 Total $ — $ — $ ( 101 ) $ 34,894 $ ( 101 ) $ 34,894 The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2023, are as follows: December 31, 2023 Securities in unrealized loss position for less than 12 months Securities in unrealized loss position for greater than 12 months Total Type of issue Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value U.S. treasury securities $ — $ — $ ( 1,256 ) $ 173,631 $ ( 1,256 ) $ 173,631 Total $ — $ — $ ( 1,256 ) $ 173,631 $ ( 1,256 ) $ 173,631 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 six months ended June 30, 2024 or 2023 . There were no realized gains or losses on the sale of available-for-sale securities for the six months ended June 30, 2024 or 2023. We regularly review the composition of our investment portfolio and did no t recognize any credit impairment losses during the six months ended June 30, 2024 or 2023. The Company believes it is probable that the principal and interest will be collected in accordance with contractual terms and that the unrealized losses on these securities were due to changes in interest rates and were not due to increased credit risk. The U.S. treasury securities held a rating of AA+ as of June 30, 2024. Expected maturities of available-for-sale securities at June 30, 2024 are as follows: Expected maturity Amortized cost Fair value One year or less $ 34,995 $ 34,894 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 8. 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. Our corporate investments consist primarily of money market funds and demand deposit accounts and are classified as cash and cash equivalents on the consolidated balance sheets. As discussed in Note 2, we typically invest the funds held for clients in money market funds, demand deposit accounts, certificates of deposit, commercial paper and U.S. treasury securities. Short-term investments in instruments with an original maturity of less than three months are classified as cash and cash equivalents within funds held for clients in the consolidated balance sheets. Investments in instruments with an original maturity greater than three months are classified as available-for-sale securities and are also included within funds held for clients in the consolidated balance sheets. These available-for-sale securities are recognized 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 7 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 June 30, 2024 and December 31, 2023: June 30, 2024 Level 1 Level 2 Level 3 Total Assets: U.S. treasury securities $ — $ 34,894 $ — $ 34,894 December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Certificates of deposit $ — $ 25,000 $ — $ 25,000 U.S. treasury securities $ — $ 173,631 $ — $ 173,631 |
Employee Savings Plan and Emplo
Employee Savings Plan and Employee Stock Purchase Plan | 6 Months Ended |
Jun. 30, 2024 | |
Compensation Related Costs [Abstract] | |
Employee Savings Plan and Employee Stock Purchase Plan | 9. EMPLOYEE SAVINGS PLAN AND EMPLOYEE STOCK PURCHASE PLAN Employees over the age of 18 who have completed 30 days of service are eligible to participate in our employee savings plan (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 $ 5.4 million and $ 10.0 million for the three and six months ended June 30, 2024 , respectively. Matching contributions were $ 3.8 million and $ 7.8 million for the three and six months ended June 30, 2023, respectively. The Paycom Software, Inc. Employee Stock Purchase Plan (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. Eligible employees purchased 50,325 shares and 35,628 shares of the Company’s common stock under the ESPP during the six months ended June 30, 2024 and 2023, respectively. 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 $ 0.8 million and $ 1.7 million for the three and six months ended June 30, 2024 , respectively. Our compensation expense related to the ESPP was $ 0.9 million and $ 1.8 million for the three and six months ended June 30, 2023 , respectively. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 10. EARNINGS PER SHARE Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during 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 equity incentive awards. 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: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Numerator: Net income $ 67,970 $ 64,516 $ 315,157 $ 183,812 Denominator: Basic weighted average shares outstanding 56,451 57,920 56,499 57,895 Dilutive effect of unvested restricted stock and restricted stock units 320 113 49 155 Diluted weighted average shares outstanding 56,771 58,033 56,548 58,050 Earnings per share: Basic $ 1.20 $ 1.11 $ 5.58 $ 3.17 Diluted $ 1.20 $ 1.11 $ 5.57 $ 3.17 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 11. STOCK-BASED COMPENSATION The Company recognizes stock-based compensation expense related to awards of (i) restricted stock subject to time-based or no vesting conditions (“Time-Based Restricted Stock Awards”), (ii) restricted stock subject to market-based vesting conditions (“Market-Based Restricted Stock Awards”), (iii) restricted stock units subject to time-based vesting conditions (“RSUs”) and (iv) restricted stock units subject to performance-based vesting conditions (“PSUs”). During the six months ended June 30, 2024, awards were granted to executive officers, non-executive employees, non-employee directors and contractors pursuant to the Paycom Software, Inc. 2023 Long-Term Incentive Plan. The following table summarizes restricted stock awards activity for the six months ended June 30, 2024: Time-Based Restricted Stock Awards Market-Based Restricted Stock Awards Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Unvested shares of restricted stock outstanding at December 31, 2023 904.0 $ 293.74 1,745.5 $ 124.38 Granted 626.9 $ 181.09 187.2 $ 164.29 Vested ( 204.7 ) $ 297.12 — $ — Forfeited ( 119.8 ) $ 280.15 ( 1,633.3 ) (1) $ 111.03 Unvested shares of restricted stock outstanding at June 30, 2024 1,206.4 $ 235.98 299.4 $ 222.18 (1) The change in Mr. Richison’s position from Chief Executive Officer to Co-Chief Executive Officer, effective February 7, 2024, triggered the forfeiture of 1,610,000 shares of restricted stock granted to him on November 23, 2020, in accordance with the terms of the award. As a result, $ 117.5 million of previously recognized compensation costs that were recorded in reporting periods prior to 2024 were reversed to additional paid-in capital in the consolidated balance sheets and to general and administrative expenses in the consolidated statements of comprehensive income. The following table summarizes PSU and RSU activity for the six months ended June 30, 2024: RSUs PSUs Units Weighted Average Units Weighted Average Unvested restricted stock units outstanding at December 31, 2023 9.2 $ 300.74 37.2 $ 308.05 Granted 48.7 $ 187.02 50.5 $ 187.34 Vested ( 2.9 ) $ 297.55 ( 4.5 ) $ 288.77 Forfeited ( 31.2 ) $ 200.62 ( 33.0 ) $ 215.12 Unvested restricted stock units outstanding at June 30, 2024 (1) 23.8 $ 199.58 50.2 $ 249.52 (1) A maximum of 89,913 shares could be delivered upon settlement of PSUs based upon the Company’s achievement of the applicable performance goals over the applicable performance periods. For the six months ended June 30, 2024 , the Company recognized non-cash stock-based compensation expense, inclusive of forfeitures, that totaled a net benefit of $ 69.7 million. For the six months ended June 30, 2023 , our total non-cash stock-based compensation expense was $ 63.2 million. The following table presents the non-cash stock-based compensation expense that is included within the specified line items in our consolidated statements of comprehensive income: Six Months Ended June 30, 2024 2023 Non-cash stock-based compensation expense: Operating expenses $ 7,154 $ 5,738 Sales and marketing 10,296 11,516 Research and development 13,145 11,897 General and administrative ( 100,265 ) 34,034 Total non-cash stock-based compensation expense $ ( 69,670 ) $ 63,185 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 (including RSUs and PSUs) as of June 30, 2024. Restricted Stock Restricted Stock Awards Units Unrecognized compensation cost $ 253,523 $ 9,670 Weighted average period for recognition (years) 2.7 1.2 We capitalized stock-based compensation costs related to software developed for internal use of $ 5.2 million and $ 8.8 million for the three and six months ended June 30, 2024 , respectively. We capitalized stock-based compensation costs related to software developed for internal use of $ 4.2 million and $ 7.8 million for the three and six months ended June 30, 2023, respectively. In May 2023, our Board of Directors adopted a dividend policy under which we intend to pay quarterly cash dividends on our common stock. All unvested shares of restricted stock, RSUs and PSUs currently outstanding are entitled to receive dividends or dividend equivalents, provided that such dividends or dividend equivalents are withheld by the Company and distributed to the applicable holder upon the release of restrictions on such shares of restricted stock, RSUs or PSUs ( i.e. , upon vesting). |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. COMMITMENTS AND CONTINGENCIES 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 | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. INCOME TAXES The Company’s effective income tax rate was 19.0 % and 28.9 % for the six months ended June 30, 2024 and 2023, respectively. The lower effective tax rate for the six months ended June 30, 2024 was primarily attributable to the tax benefit related to the forfeiture of the 2020 CEO Performance Award in February 2024. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. SUBSEQUENT EVENTS On July 29, 2024, our Board of Directors increased and extended the stock repurchase plan, such that $ 1.5 billion is available for repurchases between July 29, 2024 and August 15, 2026 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim 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 SEC regarding interim financial statements that permit reduced disclosure for interim periods. Intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s results for the interim periods presented. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes presented in the Form 10-K. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results expected for the full year. |
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. |
Seasonality | Seasonality Our revenues are seasonal in nature. Generally, we expect our first and fourth quarter recurring revenues to be higher than other quarters during the year because payroll tax filing forms and Affordable Care Act forms are typically processed in the first quarter, and unscheduled payroll runs (such as bonuses) for our clients are typically concentrated in the fourth quarter. In addition, these seasonal fluctuations in recurring revenues impact operating income. |
Funds Held for Clients and Client Funds Obligation | Funds Held for Clients and Client Funds Obligation As part of our payroll and tax filing services, we (i) collect client funds to satisfy their respective payroll and employment tax obligations, (ii) remit such funds to accounts designated by our clients and to the appropriate taxing authorities, as applicable, and (iii) manage client tax filings and any related correspondence with taxing authorities. Amounts collected from clients for their 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. We typically invest funds held for clients in money market funds, demand deposit accounts, certificates of deposit, commercial paper and U.S. treasury securities. Short-term investments in instruments with an original maturity of less than three months are classified as cash and cash equivalents within funds held for clients in the consolidated balance sheets. Investments in instruments with an original maturity greater than three months are classified as available-for-sale securities and are also included within funds held for clients in the consolidated balance sheets. These available-for-sale securities are recorded 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. The Company reports the cash flows related to the purchases of investments from funds held for clients and related to the proceeds from the maturities of investments from funds held for clients on a gross basis in the cash flows from investing activities section of the consolidated statements of cash flows. Additionally, the Company reports cash flows related to cash received from and paid on behalf of clients on a net basis within the net change in client funds obligation in the cash flows from financing activities section of 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. In August 2022, our Board of Directors authorized the repurchase of up to $ 1.1 billion of our common stock over a two-year period expiring on August 15, 2024 . As of June 30, 2024, there was $ 705.9 million available for repurchases under our stock repurchase plan. On July 29, 2024, our Board of Directors increased and extended the stock repurchase plan. See Note 14 for additional information. 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 equity incentive awards and other corporate considerations. During the six months ended June 30, 2024, we repurchased an aggregate of 589,424 shares of our common stock at an average cost of $ 158.06 per share, including 68,482 shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of equity incentive awards. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires incremental disclosures in annual and interim periods related reportable segments, and segment expenses but does not change the definition of a segment, the method for determining segments, or the criteria for aggregating operating segments into reportable segments. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are assessing the impact of this ASU on our consolidated financial statements and disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information on income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are assessing the impact of this ASU on our consolidated financial statements and disclosures. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Changes in Deferred Revenue | Changes in deferred revenue for the three and six months ended June 30, 2024 and 2023 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Balance, beginning of period $ 137,039 $ 120,802 $ 130,469 $ 117,416 Recognition of revenue included in beginning of period balance ( 10,321 ) ( 5,507 ) ( 16,044 ) ( 10,593 ) Contract balance, net of revenue recognized during the period 15,642 8,938 27,935 17,410 Balance, end of period $ 142,360 $ 124,233 $ 142,360 $ 124,233 |
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 three months ended June 30, 2024 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 396,930 $ 15,838 $ ( 15,808 ) $ 396,960 Costs to fulfill a contract $ 440,402 $ 35,332 $ ( 16,010 ) $ 459,724 As of and for the three months ended June 30, 2023 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 343,991 $ 19,937 $ ( 13,442 ) $ 350,486 Costs to fulfill a contract $ 360,588 $ 32,514 $ ( 12,778 ) $ 380,324 As of and for the six months ended June 30, 2024 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 378,467 $ 49,681 $ ( 31,188 ) $ 396,960 Costs to fulfill a contract $ 420,011 $ 70,889 $ ( 31,176 ) $ 459,724 As of and for the six months ended June 30, 2023 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 325,457 $ 51,434 $ ( 26,405 ) $ 350,486 Costs to fulfill a contract $ 338,895 $ 66,162 $ ( 24,733 ) $ 380,324 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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: June 30, 2024 December 31, 2023 Property and equipment Software and capitalized software development costs $ 432,452 $ 371,665 Buildings 259,020 179,874 Computer equipment 186,786 164,856 Rental clocks 45,106 42,364 Furniture, fixtures and equipment 41,353 32,413 Other 19,907 18,500 984,624 809,672 Less: accumulated depreciation and amortization ( 501,813 ) ( 437,291 ) 482,811 372,381 Construction in progress 15,277 92,020 Land 33,796 33,796 Property and equipment, net $ 531,884 $ 498,197 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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: June 30, 2024 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Naming rights 12.3 $ 60,199 $ ( 12,040 ) $ 48,159 Total $ 60,199 $ ( 12,040 ) $ 48,159 December 31, 2023 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Naming rights 12.8 $ 60,199 $ ( 10,087 ) $ 50,112 Total $ 60,199 $ ( 10,087 ) $ 50,112 |
Corporate Investments and Fun_2
Corporate Investments and Funds Held For Clients (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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: June 30, 2024 Type of issue Amortized cost Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 346,456 $ — $ — $ 346,456 Funds held for clients cash and cash equivalents 2,268,265 — — 2,268,265 Available-for-sale securities (1) : U.S. treasury securities 34,995 — ( 101 ) 34,894 Total investments $ 2,649,716 $ — $ ( 101 ) $ 2,649,615 December 31, 2023 Type of issue Amortized cost Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 294,025 $ — $ — $ 294,025 Funds held for clients cash and cash equivalents 2,128,735 — — 2,128,735 Available-for-sale securities (1) : Certificates of deposit 25,000 — — 25,000 U.S. treasury securities 174,887 — ( 1,256 ) 173,631 Total investments $ 2,622,647 $ — $ ( 1,256 ) $ 2,621,391 (1) All available-for-sale securities were included within the funds held for clients. |
Summary of Unrealized Losses and Fair Values of Available-for-Sale Securities that have been in Unrealized Loss Position for Period of Less than and Greater than 12 Months | The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2024, are as follows: June 30, 2024 Securities in unrealized loss position for less than 12 months Securities in unrealized loss position for greater than 12 months Total Type of issue Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value U.S. treasury securities $ — $ — $ ( 101 ) $ 34,894 $ ( 101 ) $ 34,894 Total $ — $ — $ ( 101 ) $ 34,894 $ ( 101 ) $ 34,894 The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2023, are as follows: December 31, 2023 Securities in unrealized loss position for less than 12 months Securities in unrealized loss position for greater than 12 months Total Type of issue Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value U.S. treasury securities $ — $ — $ ( 1,256 ) $ 173,631 $ ( 1,256 ) $ 173,631 Total $ — $ — $ ( 1,256 ) $ 173,631 $ ( 1,256 ) $ 173,631 |
Summary of Expected Maturities of Available for Sale Securities | Expected maturities of available-for-sale securities at June 30, 2024 are as follows: Expected maturity Amortized cost Fair value One year or less $ 34,995 $ 34,894 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and December 31, 2023: June 30, 2024 Level 1 Level 2 Level 3 Total Assets: U.S. treasury securities $ — $ 34,894 $ — $ 34,894 December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Certificates of deposit $ — $ 25,000 $ — $ 25,000 U.S. treasury securities $ — $ 173,631 $ — $ 173,631 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Numerator: Net income $ 67,970 $ 64,516 $ 315,157 $ 183,812 Denominator: Basic weighted average shares outstanding 56,451 57,920 56,499 57,895 Dilutive effect of unvested restricted stock and restricted stock units 320 113 49 155 Diluted weighted average shares outstanding 56,771 58,033 56,548 58,050 Earnings per share: Basic $ 1.20 $ 1.11 $ 5.58 $ 3.17 Diluted $ 1.20 $ 1.11 $ 5.57 $ 3.17 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Restricted Stock Unit and PSU Activity | The following table summarizes restricted stock awards activity for the six months ended June 30, 2024: Time-Based Restricted Stock Awards Market-Based Restricted Stock Awards Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Unvested shares of restricted stock outstanding at December 31, 2023 904.0 $ 293.74 1,745.5 $ 124.38 Granted 626.9 $ 181.09 187.2 $ 164.29 Vested ( 204.7 ) $ 297.12 — $ — Forfeited ( 119.8 ) $ 280.15 ( 1,633.3 ) (1) $ 111.03 Unvested shares of restricted stock outstanding at June 30, 2024 1,206.4 $ 235.98 299.4 $ 222.18 (1) The change in Mr. Richison’s position from Chief Executive Officer to Co-Chief Executive Officer, effective February 7, 2024, triggered the forfeiture of 1,610,000 shares of restricted stock granted to him on November 23, 2020, in accordance with the terms of the award. As a result, $ 117.5 million of previously recognized compensation costs that were recorded in reporting periods prior to 2024 were reversed to additional paid-in capital in the consolidated balance sheets and to general and administrative expenses in the consolidated statements of comprehensive income. The following table summarizes PSU and RSU activity for the six months ended June 30, 2024: RSUs PSUs Units Weighted Average Units Weighted Average Unvested restricted stock units outstanding at December 31, 2023 9.2 $ 300.74 37.2 $ 308.05 Granted 48.7 $ 187.02 50.5 $ 187.34 Vested ( 2.9 ) $ 297.55 ( 4.5 ) $ 288.77 Forfeited ( 31.2 ) $ 200.62 ( 33.0 ) $ 215.12 Unvested restricted stock units outstanding at June 30, 2024 (1) 23.8 $ 199.58 50.2 $ 249.52 (1) A maximum of 89,913 shares could be delivered upon settlement of PSUs based upon the Company’s achievement of the applicable performance goals over the applicable performance periods. |
Summary of Non-cash Stock-based Compensation | The following table presents the non-cash stock-based compensation expense that is included within the specified line items in our consolidated statements of comprehensive income: Six Months Ended June 30, 2024 2023 Non-cash stock-based compensation expense: Operating expenses $ 7,154 $ 5,738 Sales and marketing 10,296 11,516 Research and development 13,145 11,897 General and administrative ( 100,265 ) 34,034 Total non-cash stock-based compensation expense $ ( 69,670 ) $ 63,185 |
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 (including RSUs and PSUs) as of June 30, 2024. Restricted Stock Restricted Stock Awards Units Unrecognized compensation cost $ 253,523 $ 9,670 Weighted average period for recognition (years) 2.7 1.2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) - Stock Repurchase Plan [Member] | 6 Months Ended |
Jun. 30, 2024 USD ($) $ / shares shares | |
Summary Of Significant Accounting Policy [Line Items] | |
Available authorized repurchase amount | $ | $ 705,900,000 |
Stock repurchase plan expiration period | 2 years |
Stock repurchase plan expiration date | Aug. 15, 2024 |
Stock repurchased, average costs per share | $ / shares | $ 158.06 |
Repurchases of common stock, shares | shares | 589,424 |
Certain Employees [Member] | |
Summary Of Significant Accounting Policy [Line Items] | |
Shares withheld to satisfy tax withholding obligations | shares | 68,482 |
Maximum [Member] | |
Summary Of Significant Accounting Policy [Line Items] | |
Stock repurchase plan, authorized amount | $ | $ 1,100,000,000 |
Revenue - Summary of Changes in
Revenue - Summary of Changes in Deferred Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | ||||
Balance, beginning of period | $ 137,039 | $ 120,802 | $ 130,469 | $ 117,416 |
Recognition of revenue included in beginning of period balance | (10,321) | (5,507) | (16,044) | (10,593) |
Contract balance, net of revenue recognized during the period | 15,642 | 8,938 | 27,935 | 17,410 |
Balance, end of period | $ 142,360 | $ 124,233 | $ 142,360 | $ 124,233 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Deferred revenue expect to recognize description | We expect to recognize $17.9 million of deferred revenue related to deferred revenue in the remainder of 2024, $23.8 million in 2025, and $100.7 million thereafter. |
Revenue - Additional Informat_2
Revenue - Additional Information (Detail 1) $ in Millions | Jun. 30, 2024 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-07-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Deferred revenue expect to recognize amount | $ 17.9 |
Deferred revenue expect to recognize period | 6 months |
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 | $ 23.8 |
Deferred revenue expect to recognize period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Deferred revenue expect to recognize amount | $ 100.7 |
Deferred revenue expect to recognize period |
Revenue - Summary of Asset Bala
Revenue - Summary of Asset Balances and Related Amortization Expense For Contract Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Costs to Obtain a Contract [Member] | ||||
Capitalized Contract Cost [Line Items] | ||||
Beginning Balance | $ 396,930 | $ 343,991 | $ 378,467 | $ 325,457 |
Capitalization of Costs | 15,838 | 19,937 | 49,681 | 51,434 |
Amortization | (15,808) | (13,442) | (31,188) | (26,405) |
Ending Balance | 396,960 | 350,486 | 396,960 | 350,486 |
Costs to Fulfill a Contract [Member] | ||||
Capitalized Contract Cost [Line Items] | ||||
Beginning Balance | 440,402 | 360,588 | 420,011 | 338,895 |
Capitalization of Costs | 35,332 | 32,514 | 70,889 | 66,162 |
Amortization | (16,010) | (12,778) | (31,176) | (24,733) |
Ending Balance | $ 459,724 | $ 380,324 | $ 459,724 | $ 380,324 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment and Accumulated Depreciation and Amortization (Detail) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 984,624 | $ 809,672 |
Less: accumulated depreciation and amortization | (501,813) | (437,291) |
Property and equipment, net | 531,884 | 498,197 |
Software And Capitalized Software Development Costs [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 432,452 | 371,665 |
Buildings [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 259,020 | 179,874 |
Computer Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 186,786 | 164,856 |
Rental Clocks [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 45,106 | 42,364 |
Furniture, Fixtures and Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 41,353 | 32,413 |
Other [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 19,907 | 18,500 |
Property and Equipment, net, Excluding Land and Construction in Progress [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 482,811 | 372,381 |
Construction in Progress [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 15,277 | 92,020 |
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 | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Property and Equipment [Line Items] | ||||
Software development costs capitalized | $ 31,200 | $ 22,900 | $ 61,000 | $ 44,200 |
Interest and Debt Expense | 800 | 1,500 | 1,600 | 2,900 |
Interest Costs Capitalized | 0 | 900 | 0 | 1,400 |
Depreciation and amortization | 19,181 | 14,927 | 36,688 | 29,052 |
Property and Equipment [Member] | ||||
Property and Equipment [Line Items] | ||||
Depreciation and amortization | $ 34,600 | $ 26,800 | $ 66,100 | $ 52,100 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2021 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||
Goodwill | $ 51,889,000 | $ 51,889,000 | $ 51,889,000 | |||
Goodwill impairment amount | 0 | |||||
Amortization of intangible assets | 1,000,000 | $ 2,000,000 | 1,000,000 | $ 2,000,000 | ||
Estimated remaining amortization expense for remainder of 2024 | 2,000,000 | 2,000,000 | ||||
Estimated remaining amortization expense in 2025 | 3,900,000 | 3,900,000 | ||||
Estimated remaining amortization expense in 2026 | 3,900,000 | 3,900,000 | ||||
Estimated remaining amortization expense in 2027 | 3,900,000 | 3,900,000 | ||||
Estimated remaining amortization expense in 2028 | 3,900,000 | 3,900,000 | ||||
Estimated remaining amortization expense in 2029 | 3,900,000 | 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 | $ 51,900,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 60,199 | $ 60,199 |
Accumulated Amortization | (12,040) | (10,087) |
Net | 48,159 | 50,112 |
Naming Rights [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 60,199 | 60,199 |
Accumulated Amortization | (12,040) | (10,087) |
Net | $ 48,159 | $ 50,112 |
Weighted average remaining useful life | 12 years 3 months 18 days | 12 years 9 months 18 days |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | 6 Months Ended | ||
Jul. 28, 2023 | Jul. 29, 2022 | Jun. 30, 2024 | |
Term Loan Facility [Member] | |||
Debt Instrument [Line Items] | |||
Number of draws made | no | ||
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt outstanding | $ 0 | ||
Revolving Credit Facility [Member] | Maximum [Member] | Amendment No. 2 [Mmber] | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 1,000,000 | ||
Revolving Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument basis spread on variable rate | 1.25% | ||
Unamortized debt issuance costs written off | 1,200,000 | ||
Line of credit facility, maximum borrowing capacity | $ 650,000,000 | ||
Unamortized debt issuance cost | $ 3,400,000 | ||
Line of credit facility, maturity date | Jul. 29, 2027 | ||
Line of credit | $ 29,000,000 | ||
Additional credit facility capacity, subject to certain conditions | 500,000,000 | ||
Line of credit facility, borrowings outstanding | $ 29,000,000 | ||
Revolving Credit Agreement [Member] | Minimum [Member] | Amendment No. 2 [Mmber] | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 650,000,000 | ||
Revolving Credit Agreement [Member] | Lenders [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility agreement date | Jul. 29, 2022 | ||
Revolving Credit Agreement [Member] | Swingline Loans [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | ||
Revolving Credit Agreement [Member] | Letters of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 6,500,000 | ||
Revolving Credit Agreement [Member] | Term Loan Facility [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 750,000,000 | ||
Line of credit facility, maturity date | Jul. 28, 2023 | ||
Revolving Credit Agreement [Member] | Federal Funds Rate Plus [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument basis spread on variable rate | 0.50% | ||
Revolving Credit Agreement [Member] | S O F R Plus [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument basis spread on variable rate | 0.10% | ||
Revolving Credit Agreement [Member] | S O F R Plus One Month Interest Period [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument basis spread on variable rate | 1% | ||
Leverage Ratio Is Less Than 1.0 To 1.0 [Member] | July 2022 Revolving Credit Agreement [Member] | S O F R Plus [Member] | |||
Debt Instrument [Line Items] | |||
Borrowings basis spread on variable rate | 1.25% | ||
Leverage Ratio Is Less Than 1.0 To 1.0 [Member] | Revolving Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Quarterly commitment fee | 0.20% | ||
Leverage Ratio Is Less Than 1.0 To 1.0 [Member] | Revolving Credit Agreement [Member] | A B R Loans [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument basis spread on variable rate | 0.25% | ||
Leverage Ratio Is Greater Than Or Equal To One Point Zero To One Point Zero But Less Than Two Point Zero To One Point Zero [Member] | Revolving Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Quarterly commitment fee | 0.225% | ||
Leverage Ratio Is Greater Than Or Equal To One Point Zero To One Point Zero But Less Than Two Point Zero To One Point Zero [Member] | Revolving Credit Agreement [Member] | S O F R Plus [Member] | |||
Debt Instrument [Line Items] | |||
Borrowings basis spread on variable rate | 1.50% | ||
Leverage Ratio Is Greater Than Or Equal To One Point Zero To One Point Zero But Less Than Two Point Zero To One Point Zero [Member] | Revolving Credit Agreement [Member] | A B R Loans [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument basis spread on variable rate | 0.50% | ||
Leverage Ratio Is Greater Than Or Equal To Two Pont Zero To One Point Zero But Less Than Three Point Zero To One Point Zero [Member] | Revolving Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Borrowings basis spread on variable rate | 0.25% | ||
Leverage Ratio Is Greater Than Or Equal To Two Pont Zero To One Point Zero But Less Than Three Point Zero To One Point Zero [Member] | Revolving Credit Agreement [Member] | S O F R Plus [Member] | |||
Debt Instrument [Line Items] | |||
Borrowings basis spread on variable rate | 1.75% | ||
Leverage Ratio Is Greater Than Or Equal To Two Pont Zero To One Point Zero But Less Than Three Point Zero To One Point Zero [Member] | Revolving Credit Agreement [Member] | A B R Loans [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument basis spread on variable rate | 0.75% | ||
Leverage Ratio Is Greater Than Or Equal To Three Point Zero To One Point Zero [Member] | Revolving Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Borrowings basis spread on variable rate | 0.275% | ||
Leverage Ratio Is Greater Than Or Equal To Three Point Zero To One Point Zero [Member] | Revolving Credit Agreement [Member] | S O F R Plus [Member] | |||
Debt Instrument [Line Items] | |||
Borrowings basis spread on variable rate | 2% | ||
Leverage Ratio Is Greater Than Or Equal To Three Point Zero To One Point Zero [Member] | Revolving Credit Agreement [Member] | A B R Loans [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument basis spread on variable rate | 1% |
Corporate Investments and Fun_3
Corporate Investments and Funds Held For Clients - Cash and Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | |
Corporate Investments and Funds Held for Clients [Line Items] | ||||
Cash and cash equivalents, amortized cost | $ 346,456 | $ 294,025 | ||
Funds held for clients cash and cash equivalents, amortized cost | 2,268,265 | 2,128,735 | ||
Total investments, amortized cost | 2,649,716 | 2,622,647 | ||
Gross unrealized losses | (101) | (1,256) | ||
Cash and cash equivalents, fair value | 346,456 | 294,025 | $ 536,545 | |
Funds held for clients cash and cash equivalents, fair value | 2,268,265 | 2,128,735 | ||
Total investments, fair value | 2,649,615 | 2,621,391 | ||
Available-for-sale Securities [Member] | U.S. Treasury Securities [Member] | ||||
Corporate Investments and Funds Held for Clients [Line Items] | ||||
Amortized cost | [1] | 34,995 | 174,887 | |
Gross unrealized losses | [1] | (101) | (1,256) | |
Fair value | [1] | $ 34,894 | 173,631 | |
Available-for-sale Securities [Member] | Certificates of Deposit [Member] | ||||
Corporate Investments and Funds Held for Clients [Line Items] | ||||
Amortized cost | [1] | 25,000 | ||
Fair value | [1] | $ 25,000 | ||
[1] 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 - Summary of Unrealized Losses and Fair Values of Available-for-Sale Securities that have been in Unrealized Loss Position for Period of Less than and Greater than 12 Months (Details) - Available-for-sale Securities [Member] - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Corporate Investments And Funds Held For Clients [Line Items] | ||
Securities in unrealized loss position for greater than 12 months, Gross unrealized losses | $ (101) | $ (1,256) |
Securities in unrealized loss position for greater than 12 months, Fair value | 34,894 | 173,631 |
Gross unrealized losses | (101) | (1,256) |
Fair value | 34,894 | 173,631 |
U.S. Treasury Securities [Member] | ||
Corporate Investments And Funds Held For Clients [Line Items] | ||
Securities in unrealized loss position for greater than 12 months, Gross unrealized losses | (101) | (1,256) |
Securities in unrealized loss position for greater than 12 months, Fair value | 34,894 | 173,631 |
Gross unrealized losses | (101) | (1,256) |
Fair value | $ 34,894 | $ 173,631 |
Corporate Investments and Fun_5
Corporate Investments and Funds Held For Clients - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities, Available-for-sale, Realized Gain (Loss) | $ 0 | $ 0 |
Investment credit impairment losses | $ 0 | $ 0 |
Corporate Investments and Fun_6
Corporate Investments and Funds Held For Clients - Summary of Expected Maturities of Available for Sale Securities (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Debt Securities, Available-for-Sale, Amortized Cost, Fiscal Year Maturity [Abstract] | |
Amortized cost, One year or less | $ 34,995 |
Fair value, One year or less | $ 34,894 |
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 | Jun. 30, 2024 | Dec. 31, 2023 |
Certificates of Deposit [Member] | ||
Assets: | ||
Assets | $ 25,000 | |
U.S. Treasury Securities [Member] | ||
Assets: | ||
Assets | $ 34,894 | 173,631 |
Level 2 [Member] | Certificates of Deposit [Member] | ||
Assets: | ||
Assets | 25,000 | |
Level 2 [Member] | U.S. Treasury Securities [Member] | ||
Assets: | ||
Assets | $ 34,894 | $ 173,631 |
Employee Savings Plan and Emp_2
Employee Savings Plan and Employee Stock Purchase Plan - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
401(k) minimum age of eligibility for participation | 18 years | |||
401(k) eligibility minimum service period | 30 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 | $ 5,400,000 | $ 3,800,000 | $ 10,000,000 | $ 7,800,000 |
Employee stock purchase plan overlapping offering period | 24 months | |||
Compensation expense related to ESPP | $ (69,670,000) | $ 63,185,000 | ||
Employee Stock Purchase Plan [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employees Company's common stock shares purchase limit percentage | 10% | 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 | 50,325 | 35,628 | ||
Compensation expense related to ESPP | $ 800,000 | $ 900,000 | $ 1,700,000 | $ 1,800,000 |
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 | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Numerator: | ||||||
Net income | $ 67,970 | $ 247,187 | $ 64,516 | $ 119,296 | $ 315,157 | $ 183,812 |
Denominator: | ||||||
Basic weighted average shares outstanding | 56,451 | 57,920 | 56,499 | 57,895 | ||
Diluted weighted average shares outstanding | 56,771 | 58,033 | 56,548 | 58,050 | ||
Earnings per share: | ||||||
Earnings per share, basic | $ 1.2 | $ 1.11 | $ 5.58 | $ 3.17 | ||
Earnings per share, diluted | $ 1.2 | $ 1.11 | $ 5.57 | $ 3.17 | ||
Restricted Stock Units [Member] | ||||||
Denominator: | ||||||
Dilutive effect of unvested restricted stock and restricted stock units | 320 | 113 | 49 | 155 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Non-cash stock-based compensation expense | $ (69,670) | $ 63,185 | ||
Capitalized compensation cost | 8,797 | 7,752 | ||
Software and Capitalized Software Costs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Capitalized compensation cost | $ 5,200 | $ 4,200 | 8,800 | 7,800 |
Restricted Stock Awards and PSU Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Non-cash stock-based compensation expense | $ 63,200 | |||
Capitalized compensation cost | $ 69,700 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock Unit and PSU Activity (Detail) - $ / shares | 6 Months Ended | ||
Nov. 23, 2020 | Jun. 30, 2024 | ||
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 | 904,000 | ||
Restricted Stock Awards and restricted stock units, Granted | 626,900 | ||
Restricted Stock Awards and restricted stock units, Vested | (204,700) | ||
Restricted Stock Awards and restricted stock units, Forfeited | (119,800) | ||
Unvested shares of restricted stock and restricted stock units outstanding at end of period | 1,206,400 | ||
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at beginning of period | $ 293.74 | ||
Granted, Weighted Average Grant Date Fair Value Per Share | 181.09 | ||
Vested, Weighted Average Grant Date Fair Value Per Share | 297.12 | ||
Forfeited, Weighted Average Grant Date Fair Value Per Share | 280.15 | ||
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | $ 235.98 | ||
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 | 1,745,500 | ||
Restricted Stock Awards and restricted stock units, Granted | 1,610,000 | 187,200 | |
Restricted Stock Awards and restricted stock units, Forfeited | [1] | (1,633,300) | |
Unvested shares of restricted stock and restricted stock units outstanding at end of period | 299,400 | ||
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at beginning of period | $ 124.38 | ||
Granted, Weighted Average Grant Date Fair Value Per Share | 164.29 | ||
Forfeited, Weighted Average Grant Date Fair Value Per Share | 111.03 | ||
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | $ 222.18 | ||
Restricted Stock Units (RSUs) [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 | 9,200 | ||
Restricted Stock Awards and restricted stock units, Granted | 48,700 | ||
Restricted Stock Awards and restricted stock units, Vested | (2,900) | ||
Restricted Stock Awards and restricted stock units, Forfeited | (31,200) | ||
Unvested shares of restricted stock and restricted stock units outstanding at end of period | [2] | 23,800 | |
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at beginning of period | $ 300.74 | ||
Granted, Weighted Average Grant Date Fair Value Per Share | 187.02 | ||
Vested, Weighted Average Grant Date Fair Value Per Share | 297.55 | ||
Forfeited, Weighted Average Grant Date Fair Value Per Share | 200.62 | ||
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | [2] | $ 199.58 | |
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 | 37,200 | ||
Restricted Stock Awards and restricted stock units, Granted | 50,500 | ||
Restricted Stock Awards and restricted stock units, Vested | (4,500) | ||
Restricted Stock Awards and restricted stock units, Forfeited | (33,000) | ||
Unvested shares of restricted stock and restricted stock units outstanding at end of period | [2] | 50,200 | |
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at beginning of period | $ 308.05 | ||
Granted, Weighted Average Grant Date Fair Value Per Share | 187.34 | ||
Vested, Weighted Average Grant Date Fair Value Per Share | 288.77 | ||
Forfeited, Weighted Average Grant Date Fair Value Per Share | 215.12 | ||
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | [2] | $ 249.52 | |
[1] The change in Mr. Richison’s position from Chief Executive Officer to Co-Chief Executive Officer, effective February 7, 2024, triggered the forfeiture of 1,610,000 shares of restricted stock granted to him on November 23, 2020, in accordance with the terms of the award. As a result, $ 117.5 million of previously recognized compensation costs that were recorded in reporting periods prior to 2024 were reversed to additional paid-in capital in the consolidated balance sheets and to general and administrative expenses in the consolidated statements of comprehensive income. A maximum of 89,913 shares could be delivered upon settlement of PSUs based upon the Company’s achievement of the applicable performance goals over the applicable performance periods. |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Restricted Stock Unit and PSU Activity (Parenthetical) (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Nov. 23, 2020 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated Share Based Compensation Expense | $ (69,670) | $ 63,185 | |
Market-Based Restricted Stock Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Number of shares forfeitured | 1,610,000 | 187,200 | |
Allocated Share Based Compensation Expense | $ 117,500 | ||
Performance-Based Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Number of shares forfeitured | 50,500 | ||
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 | 89,913 |
Stock-based Compensation - Su_3
Stock-based Compensation - Summary of Non-cash Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Non-cash stock-based compensation expense | $ (69,670) | $ 63,185 |
Operating Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Non-cash stock-based compensation expense | 7,154 | 5,738 |
Sales and Marketing Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Non-cash stock-based compensation expense | 10,296 | 11,516 |
Research and Development Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Non-cash stock-based compensation expense | 13,145 | 11,897 |
General and Administrative Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Non-cash stock-based compensation expense | $ (100,265) | $ 34,034 |
Stock-Based Compensation - Su_4
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 | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Unrecognized compensation cost | $ 253,523 |
Weighted average period for recognition (years) | 2 years 8 months 12 days |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Unrecognized compensation cost | $ 9,670 |
Weighted average period for recognition (years) | 1 year 2 months 12 days |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Examination [Line Items] | ||
Effective income tax rate | 19% | 28.90% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Stock Repurchase Plan [Member] - USD ($) | 6 Months Ended | |
Jul. 29, 2024 | Jun. 30, 2024 | |
Subsequent Event [Line Items] | ||
Stock repurchase plan expiration date | Aug. 15, 2024 | |
Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Stock repurchase plan, authorized amount | $ 1,100,000,000 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Stock repurchase plan, authorized amount | $ 1,500,000,000 | |
Stock repurchase plan expiration date | Aug. 15, 2026 |