Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 05, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | PAYC | ||
Entity Registrant Name | Paycom Software, Inc. | ||
Entity Central Index Key | 1,590,955 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 59,182,715 | ||
Entity Public Float | $ 3.3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 46,077 | $ 60,158 |
Accounts receivable | 1,576 | 1,339 |
Prepaid expenses | 4,982 | 4,475 |
Inventory | 979 | 675 |
Income tax receivable | 7,047 | 692 |
Current assets before funds held for clients | 60,661 | 67,339 |
Funds held for clients | 1,089,201 | 858,244 |
Total current assets | 1,149,862 | 925,583 |
Property and equipment, net | 147,705 | 96,848 |
Deposits and other assets | 1,456 | 1,215 |
Goodwill | 51,889 | 51,889 |
Intangible assets, net | 958 | 1,871 |
Deferred income tax assets, net | 3,294 | 1,207 |
Total assets | 1,355,164 | 1,078,613 |
Current liabilities: | ||
Accounts payable | 6,490 | 3,737 |
Accrued commissions and bonuses | 9,585 | 8,003 |
Accrued payroll and vacation | 7,015 | 4,769 |
Deferred revenue | 6,982 | 5,230 |
Current portion of long-term debt | 888 | 1,113 |
Accrued expenses and other current liabilities | 19,991 | 17,798 |
Current liabilities before client funds obligation | 50,951 | 40,650 |
Client funds obligation | 1,089,201 | 858,244 |
Total current liabilities | 1,140,152 | 898,894 |
Long-term derivative liability | 554 | |
Long-term deferred revenue | 44,642 | 34,481 |
Net long-term debt, less current portion | 34,414 | 28,711 |
Total long-term liabilities | 79,610 | 63,192 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.01 par value (100,000,000 shares authorized, 60,149,411 and 58,453,283 shares issued at December 31, 2017 and 2016, respectively; 57,788,573 and 57,331,022 shares outstanding at December 31, 2017 and 2016, respectively) | 601 | 585 |
Additional paid in capital | 137,234 | 95,452 |
Retained earnings | 137,255 | 70,448 |
Treasury stock, at cost (2,360,838 and 1,122,261 shares at December 31, 2017 and 2016, respectively) | (139,688) | (49,958) |
Total stockholders' equity | 135,402 | 116,527 |
Total liabilities and stockholders' equity | $ 1,355,164 | $ 1,078,613 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
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 | 60,149,411 | 58,453,283 |
Common stock, shares outstanding | 57,788,573 | 57,331,022 |
Treasury stock, shares | 2,360,838 | 1,122,261 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||
Recurring | $ 425,424 | $ 323,548 | $ 219,987 |
Implementation and other | 7,623 | 5,593 | 4,666 |
Total revenues | 433,047 | 329,141 | 224,653 |
Cost of revenues | |||
Operating expenses | 62,438 | 48,268 | 31,790 |
Depreciation and amortization | 9,590 | 5,798 | 3,683 |
Total cost of revenues | 72,028 | 54,066 | 35,473 |
Administrative expenses | |||
Sales and marketing | 150,512 | 119,258 | 92,554 |
Research and development | 30,430 | 20,966 | 8,627 |
General and administrative | 91,647 | 69,046 | 47,826 |
Depreciation and amortization | 9,805 | 7,834 | 5,738 |
Total administrative expenses | 282,394 | 217,104 | 154,745 |
Total operating expenses | 354,422 | 271,170 | 190,218 |
Operating income | 78,625 | 57,971 | 34,435 |
Interest expense | (911) | (1,036) | (1,427) |
Other income, net | (1,067) | 308 | 517 |
Income before income taxes | 76,647 | 57,243 | 33,525 |
Provision for income taxes | 9,840 | 13,403 | 12,580 |
Net income | $ 66,807 | $ 43,840 | $ 20,945 |
Earnings per share, basic | $ 1.15 | $ 0.76 | $ 0.37 |
Earnings per share, diluted | $ 1.13 | $ 0.74 | $ 0.36 |
Weighted average shares outstanding: | |||
Basic | 57,839,155 | 57,550,204 | 56,495,170 |
Diluted | 58,790,019 | 58,968,099 | 57,919,700 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] |
Beginning balance, value at Dec. 31, 2014 | $ 74,138 | $ 538 | $ 67,937 | $ 5,663 | |
Beginning balance, shares at Dec. 31, 2014 | 53,832,782 | ||||
Vesting of restricted stock | $ 33 | (33) | |||
Vesting of restricted stock, shares | 3,287,091 | ||||
Stock-based compensation | 3,231 | 3,231 | |||
Net income | 20,945 | 20,945 | |||
Ending balance, value at Dec. 31, 2015 | 98,314 | $ 571 | 71,135 | 26,608 | |
Ending balance, shares at Dec. 31, 2015 | 57,119,873 | ||||
Vesting of restricted stock | $ 14 | (14) | |||
Vesting of restricted stock, shares | 1,333,410 | ||||
Stock-based compensation | 24,331 | 24,331 | |||
Repurchases of common stock | (49,958) | $ (49,958) | |||
Repurchases of common stock, shares | 1,122,261 | ||||
Net income | 43,840 | 43,840 | |||
Ending balance, value at Dec. 31, 2016 | 116,527 | $ 585 | 95,452 | 70,448 | $ (49,958) |
Ending balance, shares at Dec. 31, 2016 | 58,453,283 | 1,122,261 | |||
Vesting of restricted stock | $ 16 | (16) | |||
Vesting of restricted stock, shares | 1,696,128 | ||||
Stock-based compensation | 41,798 | 41,798 | |||
Repurchases of common stock | (89,730) | $ (89,730) | |||
Repurchases of common stock, shares | 1,238,577 | ||||
Net income | 66,807 | 66,807 | |||
Ending balance, value at Dec. 31, 2017 | $ 135,402 | $ 601 | $ 137,234 | $ 137,255 | $ (139,688) |
Ending balance, shares at Dec. 31, 2017 | 60,149,411 | 2,360,838 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 66,807 | $ 43,840 | $ 20,945 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 19,395 | 13,632 | 9,421 |
(Gain)/loss on disposition of property and equipment | 21 | (64) | 15 |
Amortization of debt discount and debt issuance costs | 117 | 124 | 157 |
Stock-based compensation expense | 38,542 | 22,471 | 3,219 |
Loss on early repayment of debt | 923 | ||
Cash paid for derivative settlement | (24) | ||
Loss on derivative | 673 | ||
Deferred income taxes, net | (2,087) | (1,848) | (1,021) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (237) | 1,015 | 440 |
Prepaid expenses | (507) | (944) | (1,579) |
Inventory | 462 | 418 | (224) |
Deposits and other assets | (241) | 71 | (810) |
Accounts payable | 79 | (1,571) | (431) |
Income taxes, net | (6,355) | 6,051 | (5,808) |
Accrued commissions and bonuses | 1,582 | (684) | 3,607 |
Accrued payroll and vacation | 2,246 | 1,871 | 1,316 |
Deferred revenue | 11,913 | 10,675 | 9,699 |
Accrued expenses and other current liabilities | (2,709) | 3,896 | 4,026 |
Net cash provided by operating activities | 130,600 | 98,953 | 42,972 |
Cash flows from investing activities: | |||
Net change in funds held for clients | (230,957) | (161,541) | (36,146) |
Decrease in restricted cash | 371 | ||
Purchases of property and equipment | (59,389) | (43,805) | (16,549) |
Proceeds from sale of property and equipment | 295 | ||
Net cash used in investing activities | (290,346) | (205,051) | (52,324) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 40,940 | 5,000 | |
Repurchases of common stock | (56,880) | (35,561) | |
Withholding taxes paid related to net share settlements | (32,850) | (14,396) | |
Principal payments on long-term debt | (35,335) | (964) | (1,118) |
Net change in client funds obligation | 230,957 | 161,541 | 36,146 |
Debt extinguishment costs | (823) | ||
Payment of debt issuance costs | (344) | (78) | (106) |
Net cash provided by financing activities | 145,665 | 115,542 | 34,922 |
Net change in cash and cash equivalents | (14,081) | 9,444 | 25,570 |
Cash and cash equivalents | |||
Beginning of year | 60,158 | 50,714 | 25,144 |
End of year | 46,077 | 60,158 | 50,714 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest, net of amounts capitalized | 791 | 938 | 1,271 |
Cash paid for income taxes | 18,332 | 9,323 | 19,205 |
Noncash investing and financing activities: | |||
Purchases of property and equipment, accrued but not paid | 6,686 | 4,651 | 1,613 |
Stock-based compensation for capitalized software | $ 3,285 | $ 1,784 | $ 220 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Description of Business Paycom Software, Inc. (“Software”) and its wholly owned subsidiaries (collectively, the “Company”) is a leading provider of comprehensive, cloud-based human capital management (“HCM”) software 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 life cycle from recruitment to retirement. Our solution requires virtually no customization and is based on a core system of record maintained in a single database for all HCM functions, including talent acquisition, time and labor management, payroll, talent management and human resources (“HR”) management applications. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Basis of Presentation and Principles of Consolidation Our consolidated financial statements include the financial results of Software and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying consolidated financial statements include all adjustments necessary for the fair presentation for the periods presented. Such adjustments are of a normal recurring nature. Adoption of New Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, “Simplifying the Test for Goodwill Impairment (Topic 350)” to simplify the subsequent measurement of goodwill. Under this new guidance, Step 2 of the goodwill impairment test is eliminated, including elimination of the requirement to perform Step 2 for any reporting unit with a zero or negative carrying amount that failed a qualitative assessment. This standard should be applied on a prospective basis with the nature of and reason for the change in accounting principle disclosed upon transition. The standard is effective in fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We adopted this guidance for the annual goodwill impairment test we performed as of June 30, 2017. Use of Estimates The preparation of financial statements in conformity with US 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 for long-lived and intangible assets, the life of our client relationships, the fair market value of our equity incentive awards and the fair value of our financial instruments. These estimates are based on historical experience where applicable and other assumptions that management believes are reasonable under circumstances. As such, actual results could materially differ from these estimates. Segment Information We operate in a single operating segment and a single reporting segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is also the chief executive officer in deciding how to allocate resources and assessing performance. Our chief executive officer allocates resources and assesses performance based upon financial information at the consolidated level. As we operate in one operating segment, all required financial segment information is presented in the consolidated financial statements. Cash Equivalents We consider all highly liquid instruments purchased with a maturity of three months or less and money market funds to be cash equivalents. We maintain cash and cash equivalents in demand deposit accounts, money market funds, and certificates of deposit, which may not be federally insured. The fair value of our cash and cash equivalents approximates carrying value. We have not experienced any losses in such accounts and do not believe there is exposure to any significant credit risk on such accounts. Accounts Receivable We generally collect revenues from our clients through an automatic deduction from the clients’ bank accounts at the time payroll processing occurs. Accounts receivable on our consolidated balance sheets consists primarily of revenue fees related to the last business day of the year, which are collected on the following business day. As accounts receivable are collected via automatic deduction on the following business day, the Company has not recorded an allowance for doubtful accounts. Inventory Our inventory consists of two types of time clocks, and related clock attachments, sold to clients as part of our time and attendance services and are stated at the lower of cost or market. Cost is determined using the first-in first-out (FIFO) cost method. Time clocks are purchased as finished goods from a third party and as such we do not have any inventory classified as raw materials or work in process inventory. Rental clocks are issued to clients under month-to-month operating leases and are classified as property and equipment. We retain inventory in certain lines primarily as replacements for those clients who use the various clocks and have determined that no write-down for obsolete items was required based on inventory turnover and our historical experience during the years ended December 31, 2017, 2016 and 2015. Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight line method over the estimated useful lives of the assets as follows: Furniture, fixtures and equipment 5 years Computer equipment 3 years Software and capitalized software 3 years Buildings 30 years Leasehold improvements 3 - 5 years Rental clocks 5 years Vehicles 3 years Our leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease terms. Costs incurred during construction of long-lived assets are recorded as construction in progress and are not depreciated until the asset is placed in service. We capitalize interest costs incurred related to construction in progress. For the years ended December 31, 2017, 2016 and 2015, we incurred interest costs of $1.7 million, $1.3 million and $1.3 million, respectively. For the years ended December 31, 2017, 2016 and 2015, interest expense of $0.8 million, $0.4 million and less than $0.1 million, respectively, was capitalized. Internal Use Software Expenditures for software purchases and software developed or obtained for internal use are capitalized and amortized over a three-year period on a straight-line basis. Capitalized costs include external direct costs of materials and services associated with developing or obtaining internal use computer software and The total capitalized payroll costs related to internal use computer software projects was $15.8 million and $8.8 million during the years ended December 31, 2017 and 2016, respectively, which have been included in property and equipment. Amortization expense related to capitalized software costs of $7.0 million, $3.6 million and $1.8 million was charged to expense for the years ended December 31, 2017, 2016 and 2015, respectively. Derivatives We do not hold derivative instruments for trading or speculative purposes. Our interest rate swap effectively converts a portion of the variable interest rate payments to fixed interest rate payments. Goodwill and Other Intangible Assets Goodwill is not amortized, but is instead tested for impairment annually, or earlier if, at the reporting unit level, an indicator of impairment arises. The estimates and assumptions about future results of operations and cash flows made in connection with the impairment testing could differ from future actual results of operations and cash flows. If impairment exists, a write-down to fair value is recorded. Our business is largely homogeneous and, as a result, goodwill is associated with one reporting unit. We have selected June 30 as our annual goodwill impairment testing date and determined there was no impairment as of June 30, 2017. For the years ended December 31, 2017, 2016 and 2015, there were no indicators of impairment. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. Impairment of Long-Lived Assets Long-lived assets, including intangible assets with finite lives, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. We have determined that there was no impairment of long-lived assets including intangible assets with finite lives, for the years ended December 31, 2017, 2016 and 2015. Funds Held for Clients and Client Funds Obligation As part of our payroll and tax filing application, we (i) collect client funds to satisfy their respective federal, state and local employment tax obligations, (ii) remit such funds to the appropriate taxing authorities and accounts designated by our clients, and (iii) manage client tax filings and any related correspondence with taxing authorities. Amounts collected by us from clients for their federal, state and local employment taxes are invested and earn interest during the interval between receipt and disbursement. These investments are shown in the consolidated balance sheets as funds held for clients, and the offsetting liability for the tax filings is shown as client funds obligation. The liability is recorded in the accompanying 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 balance sheet date. Beginning April 1, 2016, the interest income earned on funds held for clients is recorded in recurring revenues. Prior to April 1, 2016, the interest income earned on these funds was recorded in other income, net in the consolidated statements of income. As of December 31, 2017 and 2016, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper and certificates of deposit and classified as a current asset in the accompanying balance sheets, as these funds are held solely to satisfy the client funds obligation. Stock Repurchase Plan On February 8, 2017, we announced that our Board of Directors amended and extended our stock repurchase plan originally announced on May 26, 2016, such that we were authorized to purchase (in the aggregate) up to an additional $50.0 million of common stock through January 2019. On October 30, 2017, our Board of Directors again amended and extended the stock repurchase plan, such that we are authorized to purchase (in the aggregate) up to an additional $75 million of common stock over a 24-month period. The stock repurchase plan will expire on October 30, 2019. Shares may be repurchased from time-to-time 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, and the 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, the net-downs associated with the vesting of restricted stock and other corporate considerations. During the year ended December 31, 2017, we repurchased an aggregate of 1,238,577 shares of our common stock at an average cost of $72.45 per share, including 464,302 shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of restricted common stock. During the year ended December 31, 2016, we repurchased an aggregate of 1,112,261 shares of our common stock at an average cost of $44.52, including 302,424 shares withheld to satisfy withholding obligations for certain employees upon the vesting of restricted common stock. Revenue Recognition Our total revenue is comprised of recurring revenues and implementation and other revenues. We recognize revenues in accordance with accounting standards for software and service companies when all of the following criteria have been met: • There is persuasive evidence of an arrangement; • The service has been or is being provided to the client; • Collection of the fees is reasonably assured; and • The amount of fees to be paid by the client is fixed or determinable. Recurring Recurring revenues are derived primarily from our talent acquisition, time and labor management, payroll, talent management and HR management applications as well as fees charged for form filings and delivery of client payroll checks and reports. Talent acquisition includes applicant tracking, candidate tracker, background checks, on-boarding, e-verify and tax credit services. Time and labor management includes time and attendance, scheduling/schedule exchange, time-off requests, labor allocation, labor management reports/push reporting and geofencing/geotracking. Payroll includes payroll and tax management, Paycom pay, expense management, garnishment management and GL Concierge. Talent management includes employee self-service, compensation budgeting, performance management, executive dashboard and Paycom learning and course content. HR management includes document and task management, government and compliance, benefits administration, COBRA administration, personnel action forms, surveys and enhanced ACA. The services related to recurring revenues are rendered during each client’s payroll period, with the agreed-upon fee being charged and collected as part of our processing of the client’s payroll. Recurring revenues are recognized at the conclusion of processing of each client’s payroll-period, when each respective payroll client is billed. Collectability is reasonably assured as the fees are collected through an Automated Clearing House (“ACH”) as part of the client’s payroll cycle or through direct wire transfer, which minimizes the default risk. Implementation and other Implementation and other revenues represent non-refundable conversion fees which are charged to new clients to offset the expense of new client set-up and revenues from the sale of time clocks as part of our employee time and attendance services. Because these conversion fees and sale of time clocks relate to our recurring revenues, we have evaluated such arrangements under the accounting guidance that governs multiple element arrangements. For arrangements with multiple elements, we evaluate whether each element represents a separate unit of accounting. In order to treat deliverables in a multiple element arrangement as separate units of accounting, the deliverables must have standalone value upon delivery. If the deliverables have stand-alone value upon delivery, we account for each deliverable separately and revenue is recognized for the respective deliverables as they are delivered. If one or more of the deliverables does not have stand-alone value upon delivery, the deliverables that do not have stand-alone value are generally combined with the final deliverable within the arrangement and treated as a single unit of accounting. When multiple deliverables included in an arrangement are separable into different units of accounting, the arrangement consideration is allocated to the identified separate units of accounting based on their relative selling price. Multiple deliverable arrangements accounting guidance provides a hierarchy to use when determining the relative selling price for each unit of accounting. Vendor-specific objective evidence (“VSOE”) of selling price, based on the price at which the item is regularly sold by the vendor on a stand-alone basis, should be used if it exists. If VSOE of selling price is not available, third-party evidence (“TPE”) of selling price is used to establish the selling price if it exists, and if not it would be based on our best estimate of selling price. For the years ended December 31, 2017, 2016 and 2015, we have determined that there is no stand-alone value associated with the upfront conversion fees as they do not have value to our clients on a stand-alone basis nor are they offered as an individual service; therefore, the conversion fees are deferred and recognized ratably over the estimated life of our clients, which we have estimated to be ten years. For the years ended December 31, 2017, 2016, and 2015, we have determined that the revenues from the employee time and attendance services, and the revenues from the sale of time clocks as part of our time and attendance services, have VSOE of selling price as they are sold on a stand-alone basis. Revenue is therefore recognized for the respective deliverables as they are delivered. Cost of Revenues Our costs and expenses applicable to total revenues represent operating expenses and systems support and technology costs, including labor and related expenses, bank fees, shipping fees and costs of paper stock, envelopes, etc. In addition, costs included to derive gross margins are comprised of support labor and related expenses, related hardware costs and applicable depreciation and amortization costs. Advertising Costs Advertising costs are expensed the first time that advertising takes place. Advertising costs for the years ended December 31, 2017, 2016 and 2015 were $7.9 million, $4.9 million and $3.6 million, respectively. Sales Taxes We collect and remit sales tax on sales of time and attendance clocks and on payroll services in certain states. These taxes are shown on a net basis, and as such, excluded from revenues. For the years ended December 31, 2017, 2016 and 2015, sales taxes collected and remitted were $5.0 million, $4.3 million and $3.7 million, respectively. Employee Stock-Based Compensation Time-based stock compensation awards to employees are recognized pro rata over the applicable vesting period as compensation costs in the consolidated statements of income based on their fair values measured as of the date of grant. Market-based stock compensation awards to employees are recognized pro rata over the applicable estimated vesting period as compensation costs in the consolidated statements of income based on their fair value as of the date of the grant unless vesting occurs sooner at which time the remaining respective unrecognized compensation cost would be recognized. Employee Stock Purchase Plan An award issued under the Paycom Software, Inc., Employee Stock Purchase Plan (the “ESPP”) is classified as a share-based liability and recorded at the fair value of the award. Expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period. Income Taxes Our consolidated financial statements include a provision for income taxes incurred for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Act”). Further information on the tax impacts of the Tax Act is included in Note 13 below. We file income tax returns in the United States and various state jurisdictions. We evaluate tax positions taken or expected to be taken in the course of preparing our tax returns and disallow the recognition of tax positions not deemed to meet a “more-likely-than-not” threshold of being sustained by the applicable tax authority. We do not believe there are any tax positions taken within the consolidated financial statements that would not meet this threshold. Our policy is to record interest and penalties, if any, related to uncertain tax positions as a component of general and administrative expenses. We are not aware of any open income tax examinations as of December 31, 2017. However, the tax years 2007 through 2017 remain open to examination for federal income tax purposes and by other major taxing jurisdictions. Seasonality Our revenues are seasonal in nature. Recurring revenues include revenues relating to the annual processing of payroll forms, such as Form W-2, Form 1099, and Form 1095 and revenues from processing unscheduled payroll runs (such as bonuses) for our clients. Because payroll forms are typically processed in the first quarter of the year, first quarter revenues and margins are generally higher than in subsequent quarters. These seasonal fluctuations in revenues can also have an impact on gross profits. Historical results impacted by these seasonal trends should not be considered a reliable indicator of our future results of operations. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This authoritative guidance includes a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. ASU 2014-09 also includes ASC 340-40 which codifies the guidance on other assets and deferred costs relating to contracts with customers. ASC 340-40 specifies the accounting for costs an entity incurs to obtain and fulfill a contract to provide goods and services to customers. The FASB has since issued several additional amendments to ASU 2014-09. On July 9, 2015, the FASB approved a one-year deferral of the effective date of the new revenue recognition standard for public and non-public entities reporting under U.S. GAAP. The amended standard is effective for us beginning January 1, 2018. As of the date of this report, we have finalized our accounting assessment of the new standard, and we are nearly complete in determining the impacts of the disclosure requirements of the new standard. Additionally, we are in the process of updating our control framework for new internal controls, as well as changes to existing controls, as it relates to the new standard. We will be in a position to begin reporting under the new standard beginning with the first quarter of 2018. Furthermore, we determined to adopt the requirements of the new standard in the first quarter of 2018 utilizing the full retrospective method of transition. When compared to current U.S. GAAP, we have concluded that the provisions of the new standard do not materially impact the timing or amount of revenue recognized. As anticipated, the primary impact of adopting the new standard was on the manner in which we account for certain costs to obtain new contracts ( i.e i.e Furthermore, we concluded that the nonrefundable upfront fee charged to our clients results in an implied performance obligation in the form of a material right to the customer related to the customer’s option to renew. Further, management determined that the standalone selling price of the customer’s option to renew equals the amount of the nonrefundable upfront fee. As a result, there is no impact to revenues upon adoption of the new standard, as the nonrefundable upfront fee will continue to be deferred and recognized ratably over the ten-year estimated customer life, consistent with our current accounting policy. The following table presents a recast of selected consolidated statement of operations line items, after giving effect to the adoption of ASU No. 2014-09 (dollars in thousands, except per share amounts): Year Ended December 31, 2017 2016 Costs and expenses: Sales and marketing $ 110,846 $ 85,361 General and administrative $ 80,228 $ 59,174 Operating income $ 129,710 $ 101,740 Net income $ 123,486 $ 70,421 Earnings per share, basic $ 2.13 $ 1.21 Earnings per share, diluted $ 2.10 $ 1.19 The following table presents a recast of selected consolidated balance sheet line items, after giving effect to the adoption of ASU No. 2014-09 (dollars in thousands): December 31, 2017 Assets: Deferred contract costs $ 26,403 Long-term deferred contract costs $ 171,865 In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842).” The purpose of the guidance is to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet as well as providing additional disclosure requirements related to leasing arrangements. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, though early adoption is permitted. Full retrospective application is prohibited. We are in the preliminary stages of gathering data and assessing the impact of the new lease standard, however, we anticipate that the adoption of this accounting standard will materially affect our consolidated balance sheets and may require changes to the system and processes that we use to account for leases. We have not yet made any decision on the timing of adoption or method of adoption with respect to the optional practical expedients. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 3. Property and equipment and accumulated depreciation and amortization were as follows (dollars in thousands): December 31, 2017 2016 Property and equipment Buildings $ 60,441 $ 48,250 Software and capitalized software costs 41,996 23,879 Computer equipment 27,928 18,987 Rental clocks 13,131 10,669 Furniture, fixtures and equipment 7,528 6,695 Leasehold improvements 767 680 151,791 109,160 Less: accumulated depreciation and amortization (53,525 ) (35,833 ) 98,266 73,327 Construction in progress 40,446 14,528 Land 8,993 8,993 Property and equipment, net $ 147,705 $ 96,848 Included in the construction in progress balance at December 31, 2017 and 2016 is $2.0 and $1.1 million in retainage, respectively. Rental clocks included in property and equipment, net represent time clocks issued to clients under month-to-month operating leases. As such, these items are transferred from inventory to property and equipment and depreciated over their useful estimated lives. Depreciation and amortization expense for property and equipment, net was $18.5 million, $12.0 million and $7.8 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 4. We had goodwill of $51.9 million as of December 31, 2017 and 2016. We performed the required impairment tests of goodwill as of June 30 for the years ended December 31, 2017, 2016 and 2015 including an assessment of whether or not indicators of impairment were present and determined there was no impairment for each of those years then ended. All of the intangible assets other than goodwill are considered to have finite lives and, as such, are subject to amortization. The components of intangible assets are as follows (dollars in thousands): December 31, 2017 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Trade name 4.5 3,194 (2,236 ) 958 Total $ 3,194 $ (2,236 ) $ 958 December 31, 2016 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Customer relationships 0.5 $ 13,997 $ (13,297 ) $ 700 Trade name 5.5 3,194 (2,023 ) 1,171 Total $ 17,191 $ (15,320 ) $ 1,871 Amortization of intangible assets the years ended December 31, 2017, 2016 and 2015 was $0.9 million, $1.6 million and $1.6 million, respectively. Estimated amortization expense for our existing intangible assets for the next five years and thereafter is as follows (dollars in thousands): Year Ending December 31, Amortization 2018 $ 213 2019 213 2020 213 2021 213 2022 106 Total $ 958 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 5. Our long-term debt consisted of the following (dollars in thousands): December 31, 2017 2016 Net term note to bank due September 7, 2025 $ 35,302 $ — Net term note to bank due May 30, 2021 — 24,950 Net term note to bank due August 31, 2023 — 4,874 Total long-term debt (including current portion) 35,302 29,824 Less: Current portion (888 ) (1,113 ) Total long-term debt, net $ 34,414 $ 28,711 On December 7, 2017 (the “Effective Date”), we entered into a senior secured term credit agreement (the “New Credit Agreement”), pursuant to which JPMorgan Chase Bank N.A., Bank of America, N.A. and Kirkpatrick Bank (collectively, the “Lenders”) have agreed to make certain term loans to us (the “Term Loans”) in an aggregate principal amount of $60.0 million on or prior to September 7, 2018. As of December 31, 2017, our indebtedness consisted solely of Term Loans made under the New Credit Agreement. Unamortized debt issuance costs of $0.2 million and $0.1 million as of December 31, 2017 and 2016, respectively, are presented as a direct deduction from the carrying amount of the debt liability. On the Effective Date, in connection with our entry into the New Credit Agreement, we terminated and prepaid all obligations outstanding under (i) the Consolidated, Amended and Restated Loan Agreement with Kirkpatrick Bank dated December 15, 2011, as amended from time to time, (ii) the Loan Agreement with Kirkpatrick Bank dated May 13, 2015, as amended from time to time, and (iii) the Loan Agreement with Kirkpatrick Bank dated August 2, 2016 (collectively, the “Existing Credit Agreements”), including applicable interest and prepayment penalties. In conjunction with the termination and prepayment of the Existing Credit Agreements, we incurred debt extinguishment costs of $0.8 million for the year ended December 31, 2017, which is included in Other income, net in the consolidated statements of income. The principal and accrued interest outstanding, together with remaining borrowing capacity under these terminated agreements, was approximately $57.6 million in the aggregate as of the Effective Date. Proceeds of the Term Loans made on the Effective Date were used to refinance existing indebtedness associated with these terminated agreements. After giving effect to the Term Loans made on the Effective Date, and as of December 31, 2017, there was $24.5 million of borrowing capacity remaining under the New Credit Agreement. Our obligations under the Term Loans are secured by a mortgage and first priority security interest in our headquarters property. Term loans made after the Effective Date may be used to finance hard and soft costs related to the completion of construction of our fourth headquarters building and any landscaping, groundwork, parking lots and roads reasonably incidental thereto. The Term Loans mature on September 7, 2025. The Term Loans bear interest, at our option, at either (a) a prime rate plus 1.0% or (b) an adjusted LIBOR rate for the interest period in effect for such Term Loan plus 1.5%. Under the New Credit Agreement, the Company is subject to two material financial covenants, which require the Company to maintain a fixed charge coverage ratio of not less than 1.25 to 1.0 and a funded indebtedness to EBITDA ratio of not greater than 2.0 to 1.0. As of December 31, 2017, the Company was in compliance with these covenants. As of December 31, 2017 and December 31, 2016, the carrying value of our total long-term debt approximated its fair value. The fair value of our long-term debt is estimated based on the borrowing rates currently available to us for bank loans with similar terms and maturities. Aggregate future maturities of long-term debt for the next five years and thereafter (including current portion) as of December 31, 2017 are as follows (dollars in thousands): Year Ending December 31, 2018 $ 888 2019 1,775 2020 1,775 2021 1,775 2022 1,775 Thereafter 27,512 Total $ 35,500 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 6. In December 2017, the Company entered into a floating-to-fixed interest rate swap agreement to limit the exposure to interest rate risk related to the Term Loans. The Company does not hold derivative instruments for trading or speculative purposes. The interest rate swap effectively converts a portion of the variable interest rate payments to fixed interest rate payments. The objective of the interest rate swap is to reduce the variability in the forecasted interest payments of the Term Loans, which is based on a one-month LIBOR rate versus a fixed interest rate of 2.54% on a notional value of $35.5 million. Under the terms of the interest rate swap agreement, the Company will receive quarterly variable interest payments based on the LIBOR rate and will pay interest at a fixed rate. The swap agreement has a maturity date of September 7, 2025. Under ASC Topic 815, Derivatives and Hedging |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 7. 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 fund obligation approximates fair value because of the short-term nature of the instruments. As discussed in Note 6 above, during the year ended December 31, 2017, we entered into an interest rate swap. The interest rate swap is measured on a recurring basis based on quoted prices for similar financial instruments and other observable inputs that approximate fair value. We did not have any financial instruments that are measured on a recurring basis for the years ended 2016 or 2015. 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 table are the Company’s major categories of assets (liabilities) measured at fair value on a recurring basis as of December 31, 2017 (dollars in thousands): December 31, 2017 Level 1 Level 2 Level 3 Total Interest rate swap $ — $ (649 ) $ — $ (649 ) Total $ — $ (649 ) $ — $ (649 ) See Note 5 for further information on the fair value of debt . |
Employee Savings Plan
Employee Savings Plan | 12 Months Ended |
Dec. 31, 2017 | |
Compensation Related Costs [Abstract] | |
Employee Savings Plan and Employee Stock Purchase Plan | 8. Our employees that are over the age of 18 and have completed ninety (90) days of service are eligible to participate in our 401(k) plan. We have made a Qualified Automatic Contribution Arrangement (“QACA”) election, whereby we make a matching contribution for 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 amounted to $4.1 million, $3.5 and $2.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. The ESPP has overlapping offering periods, with each offering period lasting approximately 24 months. At the beginning of each offering period, eligible employees may elect to contribute, through payroll deductions, up to 10% of their compensation, subject to an annual per employee maximum. 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 IRS limits. 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 2,000,000 shares. During the year ended December 31, 2017, eligible employees purchased 76,728 shares of the Company’s common stock under the ESPP. Compensation expense related to the ESPP is recognized on a straight-line basis over the requisite service period. Our compensation expense related to the ESPP was $0.8 million, $0.6 million and $0.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 9. Basic earnings per share (“EPS”) is based on the weighted average number of shares of common stock outstanding for the period. Diluted EPS is computed in a similar manner to basic EPS after assuming the issuance of shares of common stock for all potentially dilutive shares of restricted stock whether or not they are vested. In accordance with ASC Topic 260 “Earnings Per Share”, the two-class method determines earnings for each class of common stock and participating securities according to an earnings allocation formula that adjusts the income available to common stockholders for dividends or dividend equivalents and participation rights in undistributed earnings. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share pursuant to the two-class method. The outstanding restricted shares of stock that were issued on July 8, 2015, are considered participating securities. The following is a reconciliation of net income and the shares of common stock used in the computation of basic and diluted net earnings per share (dollars in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Numerator: Net income $ 66,807 $ 43,840 $ 20,945 Less: income allocable to participating securities (171 ) (333 ) (270 ) Income allocable to common shares $ 66,636 $ 43,507 $ 20,675 Add back: undistributed earnings allocable to participating securities 171 333 270 Less: undistributed earnings reallocated to participating securities (168 ) (333 ) (264 ) Numerator for diluted earnings per share $ 66,639 $ 43,507 $ 20,681 Denominator: Weighted average common shares outstanding 50,315,455 50,315,455 50,315,455 Weighted average common shares repurchased (1,526,930 ) (286,699 ) — Adjustment for vested restricted stock 9,050,630 7,521,448 6,179,715 Shares for calculating basic earnings per share 57,839,155 57,550,204 56,495,170 Dilutive effect of unvested restricted stock 950,864 1,417,895 1,424,530 Shares for calculating diluted earnings per share 58,790,019 58,968,099 57,919,700 Earnings per share: Basic $ 1.15 $ 0.76 $ 0.37 Diluted $ 1.13 $ 0.74 $ 0.36 |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stockholders' Equity and Stock-Based Compensation | 10. We have historically issued shares of restricted stock under the Paycom Software, Inc. 2014 Long-Term Incentive Plan (the “LTIP”) that are subject to either time-based vesting conditions or market-based vesting conditions. The market-based vesting conditions are based on our total enterprise value (“TEV”) exceeding certain specified thresholds. Compensation expense related to the issuance of shares with time-based vesting conditions is measured based on the fair value of the award on the grant date and recognized over the requisite service period on a straight-line basis. Compensation expense related to the issuance of shares with market-based vesting conditions is measured based upon the fair value of the award on the grant date and recognized on a straight-line basis over the vesting period based upon the probability that the vesting condition will be met. The following table presents a summary of the grant-date fair values of restricted stock granted during the years ended December 31, 2017, 2016 and 2015 and the related assumptions: Year Ended December 31, 2017 2016 2015 Grant-date fair value of restricted stock $46.78 - $60.67 $23.15 - $49.34 $21.76 - $33.33 Risk-free interest rates 1.85% 1.28% - 1.36% 2.2% Estimated volatility 23.0% 21.0% - 23.0% 26.0% Expected life (in years) 2.3 2.7 3.6 The following table summarizes restricted stock awards activity for the year ended December 31, 2017: 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, 2016 1,429,514 $ 20.56 738,425 $ 28.68 Granted 309,526 $ 60.00 314,021 $ 48.63 Vested (681,699 ) $ 6.67 (1,014,429 ) $ 34.44 Forfeited (168,661 ) $ 35.20 (38,017 ) $ 39.87 Unvested shares of restricted stock outstanding at December 31, 2017 888,680 $ 42.17 - $ - On April 26, 2017, we issued an aggregate of 613,677 shares of restricted stock under the LTIP to our executive officers and certain other employees, consisting of a combination of shares subject to market-based vesting conditions and shares subject to time-based vesting conditions. Shares subject to market-based vesting conditions were scheduled to vest 50% if the Company’s TEV (as defined in the applicable award agreement) equaled or exceeded $4.15 billion and the remaining 50% were scheduled to vest if the Company’s TEV equaled or exceeded $4.45 billion. Shares subject to market-based vesting conditions would be forfeited if they did not vest within six years of the date of grant. Shares subject to time-based vesting conditions were issued with vesting periods ranging from 2 to 5 years. On May 1, 2017, we issued an aggregate of 9,870 shares of restricted stock under the LTIP to members of our board of directors. Such shares of restricted stock cliff-vest on the seventh (7 th st The following table summarizes market-based restricted stock vesting activity during the year ended December 31, 2017, the associated compensation cost recognized in connection with the vesting event and the number of shares withheld to satisfy tax withholding obligations: Vesting Condition Date Vested Number of Shares Vested Compensation Cost Recognized Upon Vesting (in millions) Shares Withheld for Taxes 1 Market-based (TEV = $3.5 billion) May 13, 2017 229,075 $2.9 91,274 Market-based (TEV = $3.9 billion) June 20, 2017 248,250 $5.2 103,907 Market-based (TEV = $4.15 billion) August 25, 2017 153,764 $5.5 65,309 Market-based (TEV = $4.2 billion) September 7, 2017 244,850 $4.2 102,548 Market-based (TEV = $4.45 billion) October 13, 2017 138,490 $4.3 57,916 1 Our total compensation expense related to restricted stock was $38.5 million and $22.5 million for the years ended December 31, 2017 and 2016, respectively. There was $30.3 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested shares of restricted stock outstanding as of December 31, 2017. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.1 years as of December 31, 2017. We capitalized stock-based compensation costs related to software developed for internal use of $3.3 million, $1.8 million and $0.2 million for the years ended December 31, 2017, 2016 and 2015, respectively. The following table presents non-cash stock-based compensation expense resulting from restricted stock awards, which is included in the following line items in the accompanying consolidated statements of income for the years ended December 31, 2017, 2016 and 2015 (dollars in thousands): Year Ended December 31, 2017 2016 2015 Operating expense $ 3,950 $ 2,217 $ 235 Sales and marketing 6,086 3,656 559 Research and development 1,912 836 104 General and administrative 26,565 15,837 2,112 Total non-cash stock-based compensation expense $ 38,513 $ 22,546 $ 3,010 |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 11. Our Chief Sales Officer owned a .01% general partnership interest and a 10.49% limited partnership interest in 417 Oakbend, LP, a Texas limited partnership, until April 2016. For the period under his ownership during 2016, we paid rent on our Dallas office space to 417 Oakbend, LP in the amount of $0.1 million. We paid rent on our Dallas office space in the amount of $0.4 million for the year ended December 31, 2015. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Employment Agreements We have employment agreements with certain of our executive officers. The agreements allow for annual compensation, participation in executive benefit plans, and performance-based cash bonuses. Incentive Plan On May 2, 2016, our stockholders approved the Paycom Software, Inc. Annual Incentive Plan (the “Incentive Plan”). The Incentive Plan provides for payment of incentive compensation that is not subject to certain federal income tax deduction limitations. Participation in the Incentive Plan is limited to certain of our employees designated by the Compensation Committee of the Board of Directors. Operating Leases and Deferred Rent We lease office space under several noncancellable operating leases with contractual terms expiring from 2018 to 2024. Minimum rent expenses are recognized over the lease term. The lease term is defined as the fixed noncancellable term of the lease plus all periods, if any, for which failure to renew the lease imposes a penalty on us in an amount that a renewal appears, at the inception of the lease, to be reasonably assured. When a lease contains a predetermined fixed escalation of the minimum rent, we recognize the related rent expense on a straight-line basis and record the difference between the recognized rent expense and the amount payable under the lease as a liability. As of December 31, 2017 and 2016, we had $1.3 million and $1.1 million, respectively, recorded as a liability for deferred rent. Future annual minimum lease payments under noncancellable operating leases with initial or remaining terms of one year or more as of December 31, 2017 were as follows (dollars in thousands): Year Ending December 31, 2018 $ 6,833 2019 6,005 2020 3,494 2021 2,149 2022 1,626 Thereafter 852 Total minimum lease payments $ 20,959 Rent expense under operating leases for the years ended December 31, 2017, 2016 and 2015 was $6.1 million, $5.6 million and $4.4 million, respectively. Legal Proceedings We are involved in various legal proceedings in the ordinary course of business. We make a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. 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. We do not currently believe we are subject to material exposure with respect to any loss contingencies. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. The items comprising income tax expense are as follows (dollars in thousands): Year Ended December 31, 2017 2016 2015 Provision for current income taxes Federal $ 10,136 $ 12,207 $ 11,308 State 1,791 3,044 2,292 Total provision for current income taxes 11,927 15,251 13,600 Provision (benefit) for deferred income taxes, net Federal 199 (1,476 ) (1,109 ) State (2,286 ) (372 ) 89 Total benefit for deferred income taxes, net (2,087 ) (1,848 ) (1,020 ) Total provision for income taxes $ 9,840 $ 13,403 $ 12,580 The following schedule reconciles the statutory Federal tax rate to the effective income tax rate: Year Ended December 31, 2017 2016 2015 Federal statutory tax rate 35 % 35 % 35 % Increase (decrease) resulting from: State income taxes, net of Federal income tax benefit 4 % 4 % 4 % Nondeductible expenses 1 % 1 % 3 % Research credit, Federal benefit (3 %) (2 %) (1 %) Section 199 - Qualified production activities (2 %) (2 %) (3 %) Stock-based compensation (21 %) (12 %) 0 % Return to provision (1 %) 0 % 0 % Remeasurement of deferred tax assets 1 % 0 % 0 % Other (1 %) (1 %) 0 % Effective income tax rate 13 % 23 % 38 % Our effective income tax rate was 13% and 23% for the years ended December 31, 2017 and 2016, respectively. The lower effective income tax rate for the year ended December 31, 2017 primarily resulted from the recognition of excess tax benefits from share-based payment awards. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of our deferred tax assets and liabilities were as follows (dollars in thousands): December 31, 2017 2016 Deferred income tax assets (liabilities): Stock-based compensation $ 1,446 $ 2,658 Investment in Paycom Payroll Holdings, LLC 101 (1,487 ) Net operating losses 1,677 36 Federal tax credits 70 — Noncurrent deferred income tax assets, net $ 3,294 $ 1,207 The Tax Act was enacted on December 22, 2017. The Tax Act reduces the US federal corporate tax rate from 35% to 21% effective January 1, 2018. We remeasured certain deferred tax assets and liabilities based on the rate at which they are expected to be realized or settled in the future, which is generally 21%. The amount recorded related to the remeasurement of our deferred tax balance was $0.4 million of income tax expense. At December 31, 2017, we had net operating loss carryforwards for state income tax purposes of approximately $1.7 million that are available to offset future state taxable income that begin expiring in 2030. At December 31, 2017 and 2016, we had no material unrecognized tax benefits related to uncertain tax positions. We file income tax returns with the United States federal government and various state jurisdictions. Our 2007 through 2017 U.S. federal and state income tax returns remain open to examination by tax authorities, due to the usage of net operating loss carryovers. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (unaudited) | 14. The following tables set forth selected quarterly statements of income data for the periods indicated (dollars in thousands, except share and per share amounts): Quarter Ended December September 30, 2017 June 30, 2017 March 31, 2017 Revenues $ 114,025 $ 101,287 $ 98,227 $ 119,508 Operating income $ 19,434 $ 11,437 $ 9,089 $ 38,665 Net income $ 12,905 $ 14,067 $ 14,221 $ 25,614 Earnings per share, basic $ 0.22 $ 0.24 $ 0.24 $ 0.44 Earnings per share, diluted $ 0.22 $ 0.24 $ 0.24 $ 0.43 Weighted average shares outstanding: Basic 58,100,141 58,003,222 57,898,914 57,307,187 Diluted 58,850,271 58,873,502 58,816,442 58,525,980 Quarter Ended December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 Revenues $ 87,810 $ 77,325 $ 73,880 $ 90,126 Operating income $ 12,681 $ 582 $ 16,004 $ 28,704 Net income $ 8,633 $ 6,198 $ 10,421 $ 18,588 Earnings per share, basic $ 0.15 $ 0.11 $ 0.18 $ 0.32 Earnings per share, diluted $ 0.15 $ 0.10 $ 0.18 $ 0.31 Weighted average shares outstanding: Basic 57,652,531 57,819,734 57,591,556 57,132,909 Diluted 58,882,966 58,907,281 58,697,229 58,362,040 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. SUBSEQUENT EVENTS On January 26, 2018, we issued an aggregate of 510,473 restricted shares of common stock to our executive officers and certain non-executive, non-sales employees under the LTIP, consisting of 283,674 shares subject to market-based vesting conditions (“Market-Based Shares”) and 226,799 shares subject to time-based vesting conditions (“Time-Based Shares”). Market-Based Shares will vest 50% on the first date that the Company’s TEV (calculated as defined in the applicable restricted stock award agreement) equals or exceeds $5.9 billion and 50% on the first date that the Company’s TEV equals or exceeds $6.2 billion, in each case provided that (i) such date occurs on or before the sixth anniversary of the grant date and (ii) the recipient is employed by, or providing services to, the Company or a subsidiary on the applicable vesting date. Time-Based Shares granted to non-executive employees will vest 25% on a specified initial vesting date and 25% on each of the first three anniversaries of such initial vesting date, provided that the recipient is employed by, or providing services to, the Company or a subsidiary on the applicable vesting date. Time-Based Shares granted to executive officers will vest in three equal annual tranches beginning on a specified initial vesting date and thereafter on the first and second anniversaries of such date, provided that the executive officer is employed by, or providing services to, the Company or a subsidiary on the applicable vesting date. On February 12, 2018 we entered into a senior secured revolving credit agreement (the “Revolving Credit Agreement”) with JPMorgan Chase Bank, N.A. and Bank of America, N.A. that provides for a senior secured revolving credit facility (the “Facility”) in the aggregate principal amount of $50.0 million, which may be increased to up to $100.0 million. The Facility is scheduled to mature on February 12, 2020. Borrowings under the Facility will generally bear interest at a prime rate plus 1.0% or, at our option, an adjusted LIBOR rate for the interest period in effect for such borrowing plus 1.5%. Material financial covenants under the Revolving Credit Agreement are substantially similar to the covenants in the New Credit Agreement described in Note 5 above. As of the filing of this Form 10-K, we have not made any draws under the Facility. On February 13, 2018, we announced that our Board of Directors amended and extended the stock repurchase plan, such that we are authorized to purchase up to an additional $100.0 million of common stock. The stock repurchase plan will expire on February 12, 2020. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Paycom Software, Inc. (“Software”) and its wholly owned subsidiaries (collectively, the “Company”) is a leading provider of comprehensive, cloud-based human capital management (“HCM”) software 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 life cycle from recruitment to retirement. Our solution requires virtually no customization and is based on a core system of record maintained in a single database for all HCM functions, including talent acquisition, time and labor management, payroll, talent management and human resources (“HR”) management applications. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation Our consolidated financial statements include the financial results of Software and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying consolidated financial statements include all adjustments necessary for the fair presentation for the periods presented. Such adjustments are of a normal recurring nature. |
Adoption of New Pronouncements | Adoption of New Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, “Simplifying the Test for Goodwill Impairment (Topic 350)” to simplify the subsequent measurement of goodwill. Under this new guidance, Step 2 of the goodwill impairment test is eliminated, including elimination of the requirement to perform Step 2 for any reporting unit with a zero or negative carrying amount that failed a qualitative assessment. This standard should be applied on a prospective basis with the nature of and reason for the change in accounting principle disclosed upon transition. The standard is effective in fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We adopted this guidance for the annual goodwill impairment test we performed as of June 30, 2017. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US 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 for long-lived and intangible assets, the life of our client relationships, the fair market value of our equity incentive awards and the fair value of our financial instruments. These estimates are based on historical experience where applicable and other assumptions that management believes are reasonable under circumstances. As such, actual results could materially differ from these estimates. |
Segment Information | Segment Information We operate in a single operating segment and a single reporting segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is also the chief executive officer in deciding how to allocate resources and assessing performance. Our chief executive officer allocates resources and assesses performance based upon financial information at the consolidated level. As we operate in one operating segment, all required financial segment information is presented in the consolidated financial statements. |
Cash Equivalents | Cash Equivalents We consider all highly liquid instruments purchased with a maturity of three months or less and money market funds to be cash equivalents. We maintain cash and cash equivalents in demand deposit accounts, money market funds, and certificates of deposit, which may not be federally insured. The fair value of our cash and cash equivalents approximates carrying value. We have not experienced any losses in such accounts and do not believe there is exposure to any significant credit risk on such accounts. |
Accounts Receivable | Accounts Receivable We generally collect revenues from our clients through an automatic deduction from the clients’ bank accounts at the time payroll processing occurs. Accounts receivable on our consolidated balance sheets consists primarily of revenue fees related to the last business day of the year, which are collected on the following business day. As accounts receivable are collected via automatic deduction on the following business day, the Company has not recorded an allowance for doubtful accounts. |
Inventory | Inventory Our inventory consists of two types of time clocks, and related clock attachments, sold to clients as part of our time and attendance services and are stated at the lower of cost or market. Cost is determined using the first-in first-out (FIFO) cost method. Time clocks are purchased as finished goods from a third party and as such we do not have any inventory classified as raw materials or work in process inventory. Rental clocks are issued to clients under month-to-month operating leases and are classified as property and equipment. We retain inventory in certain lines primarily as replacements for those clients who use the various clocks and have determined that no write-down for obsolete items was required based on inventory turnover and our historical experience during the years ended December 31, 2017, 2016 and 2015. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight line method over the estimated useful lives of the assets as follows: Furniture, fixtures and equipment 5 years Computer equipment 3 years Software and capitalized software 3 years Buildings 30 years Leasehold improvements 3 - 5 years Rental clocks 5 years Vehicles 3 years Our leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease terms. Costs incurred during construction of long-lived assets are recorded as construction in progress and are not depreciated until the asset is placed in service. We capitalize interest costs incurred related to construction in progress. For the years ended December 31, 2017, 2016 and 2015, we incurred interest costs of $1.7 million, $1.3 million and $1.3 million, respectively. For the years ended December 31, 2017, 2016 and 2015, interest expense of $0.8 million, $0.4 million and less than $0.1 million, respectively, was capitalized. |
Internal Use Software | Internal Use Software Expenditures for software purchases and software developed or obtained for internal use are capitalized and amortized over a three-year period on a straight-line basis. Capitalized costs include external direct costs of materials and services associated with developing or obtaining internal use computer software and The total capitalized payroll costs related to internal use computer software projects was $15.8 million and $8.8 million during the years ended December 31, 2017 and 2016, respectively, which have been included in property and equipment. Amortization expense related to capitalized software costs of $7.0 million, $3.6 million and $1.8 million was charged to expense for the years ended December 31, 2017, 2016 and 2015, respectively. |
Derivatives | Derivatives We do not hold derivative instruments for trading or speculative purposes. Our interest rate swap effectively converts a portion of the variable interest rate payments to fixed interest rate payments. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill is not amortized, but is instead tested for impairment annually, or earlier if, at the reporting unit level, an indicator of impairment arises. The estimates and assumptions about future results of operations and cash flows made in connection with the impairment testing could differ from future actual results of operations and cash flows. If impairment exists, a write-down to fair value is recorded. Our business is largely homogeneous and, as a result, goodwill is associated with one reporting unit. We have selected June 30 as our annual goodwill impairment testing date and determined there was no impairment as of June 30, 2017. For the years ended December 31, 2017, 2016 and 2015, there were no indicators of impairment. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including intangible assets with finite lives, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. We have determined that there was no impairment of long-lived assets including intangible assets with finite lives, for the years ended December 31, 2017, 2016 and 2015. |
Funds Held for Clients and Client Funds Obligation | Funds Held for Clients and Client Funds Obligation As part of our payroll and tax filing application, we (i) collect client funds to satisfy their respective federal, state and local employment tax obligations, (ii) remit such funds to the appropriate taxing authorities and accounts designated by our clients, and (iii) manage client tax filings and any related correspondence with taxing authorities. Amounts collected by us from clients for their federal, state and local employment taxes are invested and earn interest during the interval between receipt and disbursement. These investments are shown in the consolidated balance sheets as funds held for clients, and the offsetting liability for the tax filings is shown as client funds obligation. The liability is recorded in the accompanying 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 balance sheet date. Beginning April 1, 2016, the interest income earned on funds held for clients is recorded in recurring revenues. Prior to April 1, 2016, the interest income earned on these funds was recorded in other income, net in the consolidated statements of income. As of December 31, 2017 and 2016, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper and certificates of deposit and classified as a current asset in the accompanying balance sheets, as these funds are held solely to satisfy the client funds obligation. |
Stock Repurchase Plan | Stock Repurchase Plan On February 8, 2017, we announced that our Board of Directors amended and extended our stock repurchase plan originally announced on May 26, 2016, such that we were authorized to purchase (in the aggregate) up to an additional $50.0 million of common stock through January 2019. On October 30, 2017, our Board of Directors again amended and extended the stock repurchase plan, such that we are authorized to purchase (in the aggregate) up to an additional $75 million of common stock over a 24-month period. The stock repurchase plan will expire on October 30, 2019. Shares may be repurchased from time-to-time 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, and the 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, the net-downs associated with the vesting of restricted stock and other corporate considerations. During the year ended December 31, 2017, we repurchased an aggregate of 1,238,577 shares of our common stock at an average cost of $72.45 per share, including 464,302 shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of restricted common stock. During the year ended December 31, 2016, we repurchased an aggregate of 1,112,261 shares of our common stock at an average cost of $44.52, including 302,424 shares withheld to satisfy withholding obligations for certain employees upon the vesting of restricted common stock. |
Revenue Recognition | Revenue Recognition Our total revenue is comprised of recurring revenues and implementation and other revenues. We recognize revenues in accordance with accounting standards for software and service companies when all of the following criteria have been met: • There is persuasive evidence of an arrangement; • The service has been or is being provided to the client; • Collection of the fees is reasonably assured; and • The amount of fees to be paid by the client is fixed or determinable. Recurring Recurring revenues are derived primarily from our talent acquisition, time and labor management, payroll, talent management and HR management applications as well as fees charged for form filings and delivery of client payroll checks and reports. Talent acquisition includes applicant tracking, candidate tracker, background checks, on-boarding, e-verify and tax credit services. Time and labor management includes time and attendance, scheduling/schedule exchange, time-off requests, labor allocation, labor management reports/push reporting and geofencing/geotracking. Payroll includes payroll and tax management, Paycom pay, expense management, garnishment management and GL Concierge. Talent management includes employee self-service, compensation budgeting, performance management, executive dashboard and Paycom learning and course content. HR management includes document and task management, government and compliance, benefits administration, COBRA administration, personnel action forms, surveys and enhanced ACA. The services related to recurring revenues are rendered during each client’s payroll period, with the agreed-upon fee being charged and collected as part of our processing of the client’s payroll. Recurring revenues are recognized at the conclusion of processing of each client’s payroll-period, when each respective payroll client is billed. Collectability is reasonably assured as the fees are collected through an Automated Clearing House (“ACH”) as part of the client’s payroll cycle or through direct wire transfer, which minimizes the default risk. Implementation and other Implementation and other revenues represent non-refundable conversion fees which are charged to new clients to offset the expense of new client set-up and revenues from the sale of time clocks as part of our employee time and attendance services. Because these conversion fees and sale of time clocks relate to our recurring revenues, we have evaluated such arrangements under the accounting guidance that governs multiple element arrangements. For arrangements with multiple elements, we evaluate whether each element represents a separate unit of accounting. In order to treat deliverables in a multiple element arrangement as separate units of accounting, the deliverables must have standalone value upon delivery. If the deliverables have stand-alone value upon delivery, we account for each deliverable separately and revenue is recognized for the respective deliverables as they are delivered. If one or more of the deliverables does not have stand-alone value upon delivery, the deliverables that do not have stand-alone value are generally combined with the final deliverable within the arrangement and treated as a single unit of accounting. When multiple deliverables included in an arrangement are separable into different units of accounting, the arrangement consideration is allocated to the identified separate units of accounting based on their relative selling price. Multiple deliverable arrangements accounting guidance provides a hierarchy to use when determining the relative selling price for each unit of accounting. Vendor-specific objective evidence (“VSOE”) of selling price, based on the price at which the item is regularly sold by the vendor on a stand-alone basis, should be used if it exists. If VSOE of selling price is not available, third-party evidence (“TPE”) of selling price is used to establish the selling price if it exists, and if not it would be based on our best estimate of selling price. For the years ended December 31, 2017, 2016 and 2015, we have determined that there is no stand-alone value associated with the upfront conversion fees as they do not have value to our clients on a stand-alone basis nor are they offered as an individual service; therefore, the conversion fees are deferred and recognized ratably over the estimated life of our clients, which we have estimated to be ten years. For the years ended December 31, 2017, 2016, and 2015, we have determined that the revenues from the employee time and attendance services, and the revenues from the sale of time clocks as part of our time and attendance services, have VSOE of selling price as they are sold on a stand-alone basis. Revenue is therefore recognized for the respective deliverables as they are delivered. |
Cost of Revenues | Cost of Revenues Our costs and expenses applicable to total revenues represent operating expenses and systems support and technology costs, including labor and related expenses, bank fees, shipping fees and costs of paper stock, envelopes, etc. In addition, costs included to derive gross margins are comprised of support labor and related expenses, related hardware costs and applicable depreciation and amortization costs. |
Advertising Costs | Advertising Costs Advertising costs are expensed the first time that advertising takes place. Advertising costs for the years ended December 31, 2017, 2016 and 2015 were $7.9 million, $4.9 million and $3.6 million, respectively. |
Sales Taxes | Sales Taxes We collect and remit sales tax on sales of time and attendance clocks and on payroll services in certain states. These taxes are shown on a net basis, and as such, excluded from revenues. For the years ended December 31, 2017, 2016 and 2015, sales taxes collected and remitted were $5.0 million, $4.3 million and $3.7 million, respectively. |
Employee Stock-Based Compensation | Employee Stock-Based Compensation Time-based stock compensation awards to employees are recognized pro rata over the applicable vesting period as compensation costs in the consolidated statements of income based on their fair values measured as of the date of grant. Market-based stock compensation awards to employees are recognized pro rata over the applicable estimated vesting period as compensation costs in the consolidated statements of income based on their fair value as of the date of the grant unless vesting occurs sooner at which time the remaining respective unrecognized compensation cost would be recognized. |
Employee Stock Purchase Plan | Employee Stock Purchase Plan An award issued under the Paycom Software, Inc., Employee Stock Purchase Plan (the “ESPP”) is classified as a share-based liability and recorded at the fair value of the award. Expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period. |
Income Taxes | Income Taxes Our consolidated financial statements include a provision for income taxes incurred for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Act”). Further information on the tax impacts of the Tax Act is included in Note 13 below. We file income tax returns in the United States and various state jurisdictions. We evaluate tax positions taken or expected to be taken in the course of preparing our tax returns and disallow the recognition of tax positions not deemed to meet a “more-likely-than-not” threshold of being sustained by the applicable tax authority. We do not believe there are any tax positions taken within the consolidated financial statements that would not meet this threshold. Our policy is to record interest and penalties, if any, related to uncertain tax positions as a component of general and administrative expenses. We are not aware of any open income tax examinations as of December 31, 2017. However, the tax years 2007 through 2017 remain open to examination for federal income tax purposes and by other major taxing jurisdictions. |
Seasonality | Seasonality Our revenues are seasonal in nature. Recurring revenues include revenues relating to the annual processing of payroll forms, such as Form W-2, Form 1099, and Form 1095 and revenues from processing unscheduled payroll runs (such as bonuses) for our clients. Because payroll forms are typically processed in the first quarter of the year, first quarter revenues and margins are generally higher than in subsequent quarters. These seasonal fluctuations in revenues can also have an impact on gross profits. Historical results impacted by these seasonal trends should not be considered a reliable indicator of our future results of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This authoritative guidance includes a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. ASU 2014-09 also includes ASC 340-40 which codifies the guidance on other assets and deferred costs relating to contracts with customers. ASC 340-40 specifies the accounting for costs an entity incurs to obtain and fulfill a contract to provide goods and services to customers. The FASB has since issued several additional amendments to ASU 2014-09. On July 9, 2015, the FASB approved a one-year deferral of the effective date of the new revenue recognition standard for public and non-public entities reporting under U.S. GAAP. The amended standard is effective for us beginning January 1, 2018. As of the date of this report, we have finalized our accounting assessment of the new standard, and we are nearly complete in determining the impacts of the disclosure requirements of the new standard. Additionally, we are in the process of updating our control framework for new internal controls, as well as changes to existing controls, as it relates to the new standard. We will be in a position to begin reporting under the new standard beginning with the first quarter of 2018. Furthermore, we determined to adopt the requirements of the new standard in the first quarter of 2018 utilizing the full retrospective method of transition. When compared to current U.S. GAAP, we have concluded that the provisions of the new standard do not materially impact the timing or amount of revenue recognized. As anticipated, the primary impact of adopting the new standard was on the manner in which we account for certain costs to obtain new contracts ( i.e i.e Furthermore, we concluded that the nonrefundable upfront fee charged to our clients results in an implied performance obligation in the form of a material right to the customer related to the customer’s option to renew. Further, management determined that the standalone selling price of the customer’s option to renew equals the amount of the nonrefundable upfront fee. As a result, there is no impact to revenues upon adoption of the new standard, as the nonrefundable upfront fee will continue to be deferred and recognized ratably over the ten-year estimated customer life, consistent with our current accounting policy. The following table presents a recast of selected consolidated statement of operations line items, after giving effect to the adoption of ASU No. 2014-09 (dollars in thousands, except per share amounts): Year Ended December 31, 2017 2016 Costs and expenses: Sales and marketing $ 110,846 $ 85,361 General and administrative $ 80,228 $ 59,174 Operating income $ 129,710 $ 101,740 Net income $ 123,486 $ 70,421 Earnings per share, basic $ 2.13 $ 1.21 Earnings per share, diluted $ 2.10 $ 1.19 The following table presents a recast of selected consolidated balance sheet line items, after giving effect to the adoption of ASU No. 2014-09 (dollars in thousands): December 31, 2017 Assets: Deferred contract costs $ 26,403 Long-term deferred contract costs $ 171,865 In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842).” The purpose of the guidance is to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet as well as providing additional disclosure requirements related to leasing arrangements. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, though early adoption is permitted. Full retrospective application is prohibited. We are in the preliminary stages of gathering data and assessing the impact of the new lease standard, however, we anticipate that the adoption of this accounting standard will materially affect our consolidated balance sheets and may require changes to the system and processes that we use to account for leases. We have not yet made any decision on the timing of adoption or method of adoption with respect to the optional practical expedients. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives | Depreciation is computed using the straight line method over the estimated useful lives of the assets as follows: Furniture, fixtures and equipment 5 years Computer equipment 3 years Software and capitalized software 3 years Buildings 30 years Leasehold improvements 3 - 5 years Rental clocks 5 years Vehicles 3 years |
Summary of Reflection of New Adopted Standards in Selected Consolidated Statements Line Items | The following table presents a recast of selected consolidated statement of operations line items, after giving effect to the adoption of ASU No. 2014-09 (dollars in thousands, except per share amounts): Year Ended December 31, 2017 2016 Costs and expenses: Sales and marketing $ 110,846 $ 85,361 General and administrative $ 80,228 $ 59,174 Operating income $ 129,710 $ 101,740 Net income $ 123,486 $ 70,421 Earnings per share, basic $ 2.13 $ 1.21 Earnings per share, diluted $ 2.10 $ 1.19 The following table presents a recast of selected consolidated balance sheet line items, after giving effect to the adoption of ASU No. 2014-09 (dollars in thousands): December 31, 2017 Assets: Deferred contract costs $ 26,403 Long-term deferred contract costs $ 171,865 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment and Associated Accumulated Depreciation and Amortization | Property and equipment and accumulated depreciation and amortization were as follows (dollars in thousands): December 31, 2017 2016 Property and equipment Buildings $ 60,441 $ 48,250 Software and capitalized software costs 41,996 23,879 Computer equipment 27,928 18,987 Rental clocks 13,131 10,669 Furniture, fixtures and equipment 7,528 6,695 Leasehold improvements 767 680 151,791 109,160 Less: accumulated depreciation and amortization (53,525 ) (35,833 ) 98,266 73,327 Construction in progress 40,446 14,528 Land 8,993 8,993 Property and equipment, net $ 147,705 $ 96,848 |
Goodwill and Intangible Asset25
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Components of Intangible Assets | All of the intangible assets other than goodwill are considered to have finite lives and, as such, are subject to amortization. The components of intangible assets are as follows (dollars in thousands): December 31, 2017 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Trade name 4.5 3,194 (2,236 ) 958 Total $ 3,194 $ (2,236 ) $ 958 December 31, 2016 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Customer relationships 0.5 $ 13,997 $ (13,297 ) $ 700 Trade name 5.5 3,194 (2,023 ) 1,171 Total $ 17,191 $ (15,320 ) $ 1,871 |
Schedule of Estimated Amortization Expense of Intangible Assets | Estimated amortization expense for our existing intangible assets for the next five years and thereafter is as follows (dollars in thousands): Year Ending December 31, Amortization 2018 $ 213 2019 213 2020 213 2021 213 2022 106 Total $ 958 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Our long-term debt consisted of the following (dollars in thousands): December 31, 2017 2016 Net term note to bank due September 7, 2025 $ 35,302 $ — Net term note to bank due May 30, 2021 — 24,950 Net term note to bank due August 31, 2023 — 4,874 Total long-term debt (including current portion) 35,302 29,824 Less: Current portion (888 ) (1,113 ) Total long-term debt, net $ 34,414 $ 28,711 |
Aggregate Future Maturities of Long-Term Debt | Aggregate future maturities of long-term debt for the next five years and thereafter (including current portion) as of December 31, 2017 are as follows (dollars in thousands): Year Ending December 31, 2018 $ 888 2019 1,775 2020 1,775 2021 1,775 2022 1,775 Thereafter 27,512 Total $ 35,500 |
Fair Value of Financial Instr27
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Major Categories of Assets / (Liabilities) Measured at Fair Value on Recurring Basis | Included in the following table are the Company’s major categories of assets (liabilities) measured at fair value on a recurring basis as of December 31, 2017 (dollars in thousands): December 31, 2017 Level 1 Level 2 Level 3 Total Interest rate swap $ — $ (649 ) $ — $ (649 ) Total $ — $ (649 ) $ — $ (649 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 net earnings per share (dollars in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Numerator: Net income $ 66,807 $ 43,840 $ 20,945 Less: income allocable to participating securities (171 ) (333 ) (270 ) Income allocable to common shares $ 66,636 $ 43,507 $ 20,675 Add back: undistributed earnings allocable to participating securities 171 333 270 Less: undistributed earnings reallocated to participating securities (168 ) (333 ) (264 ) Numerator for diluted earnings per share $ 66,639 $ 43,507 $ 20,681 Denominator: Weighted average common shares outstanding 50,315,455 50,315,455 50,315,455 Weighted average common shares repurchased (1,526,930 ) (286,699 ) — Adjustment for vested restricted stock 9,050,630 7,521,448 6,179,715 Shares for calculating basic earnings per share 57,839,155 57,550,204 56,495,170 Dilutive effect of unvested restricted stock 950,864 1,417,895 1,424,530 Shares for calculating diluted earnings per share 58,790,019 58,968,099 57,919,700 Earnings per share: Basic $ 1.15 $ 0.76 $ 0.37 Diluted $ 1.13 $ 0.74 $ 0.36 |
Stockholders' Equity and Stoc29
Stockholders' Equity and Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Nonvested Restricted Stock Awards Activity | The following table summarizes restricted stock awards activity for the year ended December 31, 2017: 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, 2016 1,429,514 $ 20.56 738,425 $ 28.68 Granted 309,526 $ 60.00 314,021 $ 48.63 Vested (681,699 ) $ 6.67 (1,014,429 ) $ 34.44 Forfeited (168,661 ) $ 35.20 (38,017 ) $ 39.87 Unvested shares of restricted stock outstanding at December 31, 2017 888,680 $ 42.17 - $ - |
Non-cash Stock-based Compensation Resulting From Restricted Stock Awards | The following table presents non-cash stock-based compensation expense resulting from restricted stock awards, which is included in the following line items in the accompanying consolidated statements of income for the years ended December 31, 2017, 2016 and 2015 (dollars in thousands): Year Ended December 31, 2017 2016 2015 Operating expense $ 3,950 $ 2,217 $ 235 Sales and marketing 6,086 3,656 559 Research and development 1,912 836 104 General and administrative 26,565 15,837 2,112 Total non-cash stock-based compensation expense $ 38,513 $ 22,546 $ 3,010 |
Restricted Stock [Member] | |
Summary of Grant-Date Fair Values of Restricted Stock Granted and Related Assumptions | The following table presents a summary of the grant-date fair values of restricted stock granted during the years ended December 31, 2017, 2016 and 2015 and the related assumptions: Year Ended December 31, 2017 2016 2015 Grant-date fair value of restricted stock $46.78 - $60.67 $23.15 - $49.34 $21.76 - $33.33 Risk-free interest rates 1.85% 1.28% - 1.36% 2.2% Estimated volatility 23.0% 21.0% - 23.0% 26.0% Expected life (in years) 2.3 2.7 3.6 |
Market-based Restricted Stock [Member] | |
Summary of Market-based Restricted Stock Vesting Activity | The following table summarizes market-based restricted stock vesting activity during the year ended December 31, 2017, the associated compensation cost recognized in connection with the vesting event and the number of shares withheld to satisfy tax withholding obligations: Vesting Condition Date Vested Number of Shares Vested Compensation Cost Recognized Upon Vesting (in millions) Shares Withheld for Taxes 1 Market-based (TEV = $3.5 billion) May 13, 2017 229,075 $2.9 91,274 Market-based (TEV = $3.9 billion) June 20, 2017 248,250 $5.2 103,907 Market-based (TEV = $4.15 billion) August 25, 2017 153,764 $5.5 65,309 Market-based (TEV = $4.2 billion) September 7, 2017 244,850 $4.2 102,548 Market-based (TEV = $4.45 billion) October 13, 2017 138,490 $4.3 57,916 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Annual Minimum Lease Payments | Future annual minimum lease payments under noncancellable operating leases with initial or remaining terms of one year or more as of December 31, 2017 were as follows (dollars in thousands): Year Ending December 31, 2018 $ 6,833 2019 6,005 2020 3,494 2021 2,149 2022 1,626 Thereafter 852 Total minimum lease payments $ 20,959 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense | The items comprising income tax expense are as follows (dollars in thousands): Year Ended December 31, 2017 2016 2015 Provision for current income taxes Federal $ 10,136 $ 12,207 $ 11,308 State 1,791 3,044 2,292 Total provision for current income taxes 11,927 15,251 13,600 Provision (benefit) for deferred income taxes, net Federal 199 (1,476 ) (1,109 ) State (2,286 ) (372 ) 89 Total benefit for deferred income taxes, net (2,087 ) (1,848 ) (1,020 ) Total provision for income taxes $ 9,840 $ 13,403 $ 12,580 |
Reconciles Statutory Federal Tax Rate to Effective Income Tax Rate | The following schedule reconciles the statutory Federal tax rate to the effective income tax rate: Year Ended December 31, 2017 2016 2015 Federal statutory tax rate 35 % 35 % 35 % Increase (decrease) resulting from: State income taxes, net of Federal income tax benefit 4 % 4 % 4 % Nondeductible expenses 1 % 1 % 3 % Research credit, Federal benefit (3 %) (2 %) (1 %) Section 199 - Qualified production activities (2 %) (2 %) (3 %) Stock-based compensation (21 %) (12 %) 0 % Return to provision (1 %) 0 % 0 % Remeasurement of deferred tax assets 1 % 0 % 0 % Other (1 %) (1 %) 0 % Effective income tax rate 13 % 23 % 38 % |
Net Deferred Tax Assets and Liabilities | The significant components of our deferred tax assets and liabilities were as follows (dollars in thousands): December 31, 2017 2016 Deferred income tax assets (liabilities): Stock-based compensation $ 1,446 $ 2,658 Investment in Paycom Payroll Holdings, LLC 101 (1,487 ) Net operating losses 1,677 36 Federal tax credits 70 — Noncurrent deferred income tax assets, net $ 3,294 $ 1,207 |
Selected Quarterly Financial 32
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Selected Quarterly Statements of Income Data | The following tables set forth selected quarterly statements of income data for the periods indicated (dollars in thousands, except share and per share amounts): Quarter Ended December September 30, 2017 June 30, 2017 March 31, 2017 Revenues $ 114,025 $ 101,287 $ 98,227 $ 119,508 Operating income $ 19,434 $ 11,437 $ 9,089 $ 38,665 Net income $ 12,905 $ 14,067 $ 14,221 $ 25,614 Earnings per share, basic $ 0.22 $ 0.24 $ 0.24 $ 0.44 Earnings per share, diluted $ 0.22 $ 0.24 $ 0.24 $ 0.43 Weighted average shares outstanding: Basic 58,100,141 58,003,222 57,898,914 57,307,187 Diluted 58,850,271 58,873,502 58,816,442 58,525,980 Quarter Ended December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 Revenues $ 87,810 $ 77,325 $ 73,880 $ 90,126 Operating income $ 12,681 $ 582 $ 16,004 $ 28,704 Net income $ 8,633 $ 6,198 $ 10,421 $ 18,588 Earnings per share, basic $ 0.15 $ 0.11 $ 0.18 $ 0.32 Earnings per share, diluted $ 0.15 $ 0.10 $ 0.18 $ 0.31 Weighted average shares outstanding: Basic 57,652,531 57,819,734 57,591,556 57,132,909 Diluted 58,882,966 58,907,281 58,697,229 58,362,040 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Additional Information (Detail) | Oct. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Feb. 08, 2017USD ($) | Dec. 31, 2017USD ($)Segment$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($) |
Summary Of Significant Accounting Policy [Line Items] | ||||||
Number of operating segments | Segment | 1 | |||||
Interest costs incurred | $ 1,700,000 | $ 1,300,000 | $ 1,300,000 | |||
Interest costs capitalized | 800,000 | 400,000 | ||||
Total capitalized payroll costs related to internal use software projects | 15,800,000 | 8,800,000 | ||||
Amortization expense related to capitalized software costs | 7,000,000 | 3,600,000 | 1,800,000 | |||
Goodwill impairment amount | $ 0 | 0 | 0 | 0 | ||
Impairment of intangible assets with finite lives | 0 | 0 | 0 | |||
Impairment of long-lived assets | $ 0 | 0 | 0 | |||
Conversion fees, deferred revenue recognition period | 10 years | |||||
Advertising costs | $ 7,900,000 | 4,900,000 | 3,600,000 | |||
Sales taxes | $ 5,000,000 | $ 4,300,000 | 3,700,000 | |||
Stock Repurchase Plan [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Stock repurchase plan expiration date | Oct. 30, 2019 | Jan. 31, 2019 | ||||
Stock repurchase plan period | 24 months | |||||
Number of common stocks repurchased during the period | shares | 1,238,577 | 1,112,261 | ||||
Stock repurchased, average costs per share | $ / shares | $ 72.45 | $ 44.52 | ||||
Stock Repurchase Plan [Member] | Restricted Stock [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Shares withheld to satisfy tax withholding obligations | shares | 464,302 | 302,424 | ||||
Internal use Software [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Capitalized and amortized period | 3 years | |||||
Customer Relationships [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Capitalized and amortized period | 6 months | |||||
Expected period of client relationships | 10 years | |||||
Maximum [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Interest costs capitalized | $ 100,000 | |||||
Maximum [Member] | Stock Repurchase Plan [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Stock repurchase plan, authorization amount | $ 75,000,000 | $ 50,000,000 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Estimated Useful Lives (Detail) | 12 Months Ended |
Dec. 31, 2017 | |
Furniture, Fixtures and Equipment [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Computer Equipment [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Software and Capitalized Software Costs [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Buildings [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 30 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Rental Clocks [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Vehicles [Member] | |
Property and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Summary of Reflection of New Adopted Standards in Selected Consolidated Statement of Operations Line Items (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Costs and expenses: | |||||||||||
Sales and marketing | $ 150,512 | $ 119,258 | $ 92,554 | ||||||||
General and administrative | 91,647 | 69,046 | 47,826 | ||||||||
Operating income | $ 19,434 | $ 11,437 | $ 9,089 | $ 38,665 | $ 12,681 | $ 582 | $ 16,004 | $ 28,704 | 78,625 | 57,971 | 34,435 |
Net income | $ 66,807 | $ 43,840 | $ 20,945 | ||||||||
Earnings per share, basic | $ 0.22 | $ 0.24 | $ 0.24 | $ 0.44 | $ 0.15 | $ 0.11 | $ 0.18 | $ 0.32 | $ 1.15 | $ 0.76 | $ 0.37 |
Earnings per share, diluted | $ 0.22 | $ 0.24 | $ 0.24 | $ 0.43 | $ 0.15 | $ 0.10 | $ 0.18 | $ 0.31 | $ 1.13 | $ 0.74 | $ 0.36 |
Accounting Standards Update 2014-09 [Member] | |||||||||||
Costs and expenses: | |||||||||||
Sales and marketing | $ 110,846 | $ 85,361 | |||||||||
General and administrative | 80,228 | 59,174 | |||||||||
Operating income | 129,710 | 101,740 | |||||||||
Net income | $ 123,486 | $ 70,421 | |||||||||
Earnings per share, basic | $ 2.13 | $ 1.21 | |||||||||
Earnings per share, diluted | $ 2.10 | $ 1.19 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Summary of Reflection of New Adopted Standards in Selected Consolidated Balance Sheet Line Items (Detail) - Accounting Standards Update 2014-09 [Member] $ in Thousands | Dec. 31, 2017USD ($) |
Assets | |
Deferred contract costs | $ 26,403 |
Long-term deferred contract costs | $ 171,865 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment and Associated Accumulated Depreciation and Amortization (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 151,791 | $ 109,160 |
Less: accumulated depreciation and amortization | (53,525) | (35,833) |
Property and equipment, net | 147,705 | 96,848 |
Buildings [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 60,441 | 48,250 |
Software and Capitalized Software Costs [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 41,996 | 23,879 |
Computer Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 27,928 | 18,987 |
Rental Clocks [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 13,131 | 10,669 |
Furniture, Fixtures and Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 7,528 | 6,695 |
Leasehold Improvements [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 767 | 680 |
Excluded Land and Construction in Process [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 98,266 | 73,327 |
Land [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 8,993 | 8,993 |
Construction in Progress [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | $ 40,446 | $ 14,528 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment [Line Items] | |||
Retainage amount included in construction in progress | $ 2,000 | $ 1,100 | |
Depreciation and amortization | 9,805 | 7,834 | $ 5,738 |
Property and Equipment [Member] | |||
Property and Equipment [Line Items] | |||
Depreciation and amortization | $ 18,500 | $ 12,000 | $ 7,800 |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets, Net - Additional Information (Detail) - USD ($) | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Goodwill | $ 51,889,000 | $ 51,889,000 | ||
Goodwill impairment amount | $ 0 | 0 | 0 | $ 0 |
Amortization of intangible assets | $ 900,000 | $ 1,600,000 | $ 1,600,000 |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets, Net - Components of Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 3,194 | $ 17,191 |
Accumulated Amortization | (2,236) | (15,320) |
Net | $ 958 | $ 1,871 |
Trade Name [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 4 years 6 months | 5 years 6 months |
Gross | $ 3,194 | $ 3,194 |
Accumulated Amortization | (2,236) | (2,023) |
Net | $ 958 | $ 1,171 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 6 months | |
Gross | $ 13,997 | |
Accumulated Amortization | (13,297) | |
Net | $ 700 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets, Net - Schedule of Estimated Amortization Expense of Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 213 | |
2,019 | 213 | |
2,020 | 213 | |
2,021 | 213 | |
2,022 | 106 | |
Net | $ 958 | $ 1,871 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Total long-term debt (including current portion) | $ 35,302 | $ 29,824 |
Less: Current portion | (888) | (1,113) |
Total long-term debt, net | 34,414 | 28,711 |
2025 Consolidated Loan [Member] | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Term note to bank | $ 35,302 | |
2021 Consolidated Loan [Member] | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Term note to bank | 24,950 | |
2023 Consolidated Loan [Member] | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Term note to bank | $ 4,874 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | Dec. 07, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Debt extinguishment costs | $ 823,000 | ||
New Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, restrictive covenants | maintain a fixed charge coverage ratio of not less than 1.25 to 1.0 and a funded indebtedness to EBITDA ratio of not greater than 2.0 to 1.0. | ||
New Credit Agreement [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Fixed charge coverage ratio required by covenants | 125.00% | ||
New Credit Agreement [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Funded indebtedness to EBITDA ratio required by covenants | 200.00% | ||
New Credit Agreement [Member] | Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument maturity date | Sep. 7, 2025 | ||
Term loan, maturity date description | The Term Loans mature on September 7, 2025. The Term Loans bear interest, at our option, at either (a) a prime rate plus 1.0% or (b) an adjusted LIBOR rate for the interest period in effect for such Term Loan plus 1.5%. | ||
New Credit Agreement [Member] | Term Loan [Member] | Prime Rate [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument basis spread on variable rate | 1.00% | ||
New Credit Agreement [Member] | Term Loan [Member] | Adjusted London Interbank Offered Rate LIBOR [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument basis spread on variable rate | 1.50% | ||
New Credit Agreement [Member] | Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Loan, principal amount | $ 60,000,000 | ||
Unamortized debt issuance cost | $ 200,000 | $ 100,000 | |
Remaining borrowing capacity | 24,500 | ||
Existing Credit Agreements [Member] | |||
Debt Instrument [Line Items] | |||
Remaining borrowing capacity | $ 57,600,000 | ||
Existing Credit Agreements [Member] | Other Income, Net [Member] | |||
Debt Instrument [Line Items] | |||
Debt extinguishment costs | $ 800,000 |
Long-Term Debt - Aggregate Futu
Long-Term Debt - Aggregate Future Maturities of Long-Term Debt (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 888 |
2,019 | 1,775 |
2,020 | 1,775 |
2,021 | 1,775 |
2,022 | 1,775 |
Thereafter | 27,512 |
Total long-term debt | $ 35,500 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - Term Loan [Member] - Interest Rate Swap [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Derivative [Line Items] | |
Debt instrument maturity date | Sep. 7, 2025 |
Description of variable rate basis | one-month LIBOR |
Debt Instrument, Interest Rate, Stated Percentage | 2.54% |
Derivative Instrument, notional value | $ 35.5 |
Interest rate payment description | The objective of the interest rate swap is to reduce the variability in the forecasted interest payments of the Term Loans, which is based on a one-month LIBOR rate versus a fixed interest rate of 2.54% on a notional value of $35.5 million. Under the terms of the interest rate swap agreement, the Company will receive quarterly variable interest payments based on the LIBOR rate and will pay interest at a fixed rate. |
Derivative instrument loss under fair value | $ 0.6 |
Fair Value of Financial Instr46
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial instruments measured on recurring basis | $ 0 | $ 0 |
Fair Value of Financial Instr47
Fair Value of Financial Instruments - Schedule of Major Categories of Assets / (Liabilities) Measured at Fair Value on Recurring Basis (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Interest rate swap | $ (649) |
Level 2 [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Interest rate swap | (649) |
Interest Rate Swap [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Interest rate swap | (649) |
Interest Rate Swap [Member] | Level 2 [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Interest rate swap | $ (649) |
Employee Savings Plan and Emplo
Employee Savings Plan and Employee Stock Purchase Plan - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan Disclosure [Line Items] | |||
401(k) eligibility minimum service period | 90 days | ||
401(k) description of plan contributions | Contribution for 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. | ||
Employee vested percentage in salary deferrals and roll over contributions | 100.00% | ||
Minimum period for vesting 100% contributions | 2 years | ||
Minimum period for vesting of discretionary contributions | 2 years | ||
Matching contribution amount | $ 4,100 | $ 3,500 | $ 2,400 |
Employee stock purchase plan overlapping offering period | 24 months | ||
Compensation expense related to ESPP | $ 38,513 | 22,546 | 3,010 |
Employee Stock Purchase Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employees Company's common stock shares purchase limit percentage | 10.00% | ||
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 | 76,728 | ||
Compensation expense related to ESPP | $ 800 | $ 600 | $ 400 |
After Two Years Of Employment [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Matching contributions, vesting percentage | 100.00% | ||
One Hundred Percent Match For Percent Of Participants Contribution [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contribution percentage | 100.00% | ||
Percentage of salary deferrals | 1.00% | ||
50% Matching Contribution [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contribution percentage | 50.00% | ||
Minimum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
401(k) eligible age of employee | 18 years | ||
Minimum [Member] | 50% Matching Contribution [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of salary deferrals | 2.00% | ||
Maximum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of salary deferrals | 3.50% | ||
Maximum [Member] | Employee Stock Purchase Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Purchase price of common stock expressed as a percentage of its fair market value | 85.00% | ||
Maximum [Member] | 50% Matching Contribution [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of salary deferrals | 6.00% |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Net Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||||||||||
Net income | $ 66,807 | $ 43,840 | $ 20,945 | ||||||||
Less: income allocable to participating securities | (171) | (333) | (270) | ||||||||
Income allocable to common shares | 66,636 | 43,507 | 20,675 | ||||||||
Add back: undistributed earnings allocable to participating securities | 171 | 333 | 270 | ||||||||
Less: undistributed earnings reallocated to participating securities | (168) | (333) | (264) | ||||||||
Numerator for diluted earnings per share | $ 66,639 | $ 43,507 | $ 20,681 | ||||||||
Denominator: | |||||||||||
Weighted average common shares outstanding | 50,315,455 | 50,315,455 | 50,315,455 | ||||||||
Weighted average common shares repurchased | (1,526,930) | (286,699) | |||||||||
Adjustment for vested restricted stock | 9,050,630 | 7,521,448 | 6,179,715 | ||||||||
Shares for calculating basic earnings per share | 58,100,141 | 58,003,222 | 57,898,914 | 57,307,187 | 57,652,531 | 57,819,734 | 57,591,556 | 57,132,909 | 57,839,155 | 57,550,204 | 56,495,170 |
Dilutive effect of unvested restricted stock | 950,864 | 1,417,895 | 1,424,530 | ||||||||
Shares for calculating diluted earnings per share | 58,850,271 | 58,873,502 | 58,816,442 | 58,525,980 | 58,882,966 | 58,907,281 | 58,697,229 | 58,362,040 | 58,790,019 | 58,968,099 | 57,919,700 |
Earnings per share: | |||||||||||
Basic | $ 0.22 | $ 0.24 | $ 0.24 | $ 0.44 | $ 0.15 | $ 0.11 | $ 0.18 | $ 0.32 | $ 1.15 | $ 0.76 | $ 0.37 |
Diluted | $ 0.22 | $ 0.24 | $ 0.24 | $ 0.43 | $ 0.15 | $ 0.10 | $ 0.18 | $ 0.31 | $ 1.13 | $ 0.74 | $ 0.36 |
Stockholders' Equity and Stoc50
Stockholders' Equity and Stock-Based Compensation - Summary of Grant-Date Fair Values of Restricted Stock Granted and Related Assumptions (Detail) - Restricted Stock [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Risk-free interest rates | 1.85% | 2.20% | |
Risk-free interest rates, Minimum | 1.28% | ||
Risk-free interest rates, Maximum | 1.36% | ||
Estimated volatility | 23.00% | 26.00% | |
Estimated volatility, Minimum | 21.00% | ||
Estimated volatility, Maximum | 23.00% | ||
Expected life (in years) | 2 years 3 months 19 days | 2 years 8 months 12 days | 3 years 7 months 6 days |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Grant-date fair value of restricted stock | $ 46.78 | $ 23.15 | $ 21.76 |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Grant-date fair value of restricted stock | $ 60.67 | $ 49.34 | $ 33.33 |
Stockholders' Equity and Stoc51
Stockholders' Equity and Stock-Based Compensation - Summary of Nonvested Restricted Stock Awards Activity (Detail) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Time-Based Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Unvested shares of restricted stock outstanding at beginning of period | shares | 1,429,514 |
Restricted stock awards granted | shares | 309,526 |
Restricted stock awards vested | shares | (681,699) |
Restricted stock awards forfeited | shares | (168,661) |
Unvested shares of restricted stock outstanding at end of period | shares | 888,680 |
Unvested shares of restricted stock outstanding, Weighted Average Grant Date Fair Value, at beginning of period | $ / shares | $ 20.56 |
Granted, Weighted-Average Grant Date Fair Value | $ / shares | 60 |
Vested, Weighted-Average Grant Date Fair Value | $ / shares | 6.67 |
Forfeited, Weighted-Average Grant Date Fair Value | $ / shares | 35.20 |
Unvested shares of restricted stock outstanding, Weighted Average Grant Date Fair Value, at end of period | $ / shares | $ 42.17 |
Market-Based Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Unvested shares of restricted stock outstanding at beginning of period | shares | 738,425 |
Restricted stock awards granted | shares | 314,021 |
Restricted stock awards vested | shares | (1,014,429) |
Restricted stock awards forfeited | shares | (38,017) |
Unvested shares of restricted stock outstanding, Weighted Average Grant Date Fair Value, at beginning of period | $ / shares | $ 28.68 |
Granted, Weighted-Average Grant Date Fair Value | $ / shares | 48.63 |
Vested, Weighted-Average Grant Date Fair Value | $ / shares | 34.44 |
Forfeited, Weighted-Average Grant Date Fair Value | $ / shares | $ 39.87 |
Stockholders' Equity and Stoc52
Stockholders' Equity and Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | May 01, 2017 | Apr. 26, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Compensation expense related to ESPP | $ 38,513 | $ 22,546 | $ 3,010 | ||
Software and Capitalized Software Costs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Capitalized compensation cost | 3,300 | 1,800 | $ 200 | ||
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Compensation expense related to ESPP | 38,500 | $ 22,500 | |||
Total unrecognized compensation cost related to unvested restricted stock | $ 30,300 | ||||
Unrecognized compensation expected to be recognized | 2 years 1 month 6 days | ||||
Restricted Stock [Member] | LTIP [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Restricted shares of common stock issued | 9,870 | 613,677 | |||
Restricted Stock [Member] | Vest 50% if Company's total enterprise value equals or exceeds $4.15 billion [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Market-based vesting percentage, restricted shares | 50.00% | ||||
Total enterprise value | $ 4,150,000 | ||||
Restricted Stock [Member] | Vest 50% if Company's total enterprise value equals or exceeds $4.45 billion [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Market-based vesting percentage, restricted shares | 50.00% | ||||
Total enterprise value | $ 4,450,000 | ||||
Restricted Stock [Member] | Market-based Vesting Conditions [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Restricted common stock, expiration period | 6 years | ||||
Restricted Stock [Member] | Time-based Vesting Conditions [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Share-based compensation award vesting period | 2 years | ||||
Restricted Stock [Member] | Time-based Vesting Conditions [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Share-based compensation award vesting period | 5 years |
Stockholders' Equity and Stoc53
Stockholders' Equity and Stock-Based Compensation - Summary of Market-based Restricted Stock Vesting Activity (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Compensation Cost Recognized Upon Vesting (in millions) | $ 38,513 | $ 22,546 | $ 3,010 |
Market-based Restricted Stock [Member] | Market-based Vesting Conditions [Member] | Vest Date May 13, 2017 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Date Vested | May 13, 2017 | ||
Number of Shares Vested | 229,075 | ||
Compensation Cost Recognized Upon Vesting (in millions) | $ 2,900 | ||
Shares withheld to satisfy tax withholding obligations | 91,274 | ||
Market-based Restricted Stock [Member] | Market-based Vesting Conditions [Member] | Vest Date June 20, 2017 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Date Vested | Jun. 20, 2017 | ||
Number of Shares Vested | 248,250 | ||
Compensation Cost Recognized Upon Vesting (in millions) | $ 5,200 | ||
Shares withheld to satisfy tax withholding obligations | 103,907 | ||
Market-based Restricted Stock [Member] | Market-based Vesting Conditions [Member] | Vest Date August 25, 2017 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Date Vested | Aug. 25, 2017 | ||
Number of Shares Vested | 153,764 | ||
Compensation Cost Recognized Upon Vesting (in millions) | $ 5,500 | ||
Shares withheld to satisfy tax withholding obligations | 65,309 | ||
Market-based Restricted Stock [Member] | Market-based Vesting Conditions [Member] | Vest Date September 7, 2017 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Date Vested | Sep. 7, 2017 | ||
Number of Shares Vested | 244,850 | ||
Compensation Cost Recognized Upon Vesting (in millions) | $ 4,200 | ||
Shares withheld to satisfy tax withholding obligations | 102,548 | ||
Market-based Restricted Stock [Member] | Market-based Vesting Conditions [Member] | Vest Date October 13, 2017 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Date Vested | Oct. 13, 2017 | ||
Number of Shares Vested | 138,490 | ||
Compensation Cost Recognized Upon Vesting (in millions) | $ 4,300 | ||
Shares withheld to satisfy tax withholding obligations | 57,916 |
Stockholders' Equity and Stoc54
Stockholders' Equity and Stock-Based Compensation - Summary of Market-based Restricted Stock Vesting Activity (Parenthetical) (Detail) - Market-based Restricted Stock [Member] - Market-based [Member] $ in Millions | Dec. 31, 2017USD ($) |
Vest Date May 13, 2017 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
TEV | $ 3,500 |
Vest Date June 20, 2017 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
TEV | 3,900 |
Vest Date August 25, 2017 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
TEV | 4,150 |
Vest Date September 7, 2017 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
TEV | 4,200 |
Vest Date October 13, 2017 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
TEV | $ 4,450 |
Stockholders' Equity and Stoc55
Stockholders' Equity and Stock-based Compensation - Non-cash Stock-based Compensation Resulting From Restricted Stock Awards (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Non-cash stock-based compensation expense | $ 38,513 | $ 22,546 | $ 3,010 |
Operating Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Non-cash stock-based compensation expense | 3,950 | 2,217 | 235 |
Sales and Marketing Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Non-cash stock-based compensation expense | 6,086 | 3,656 | 559 |
Research and Development Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Non-cash stock-based compensation expense | 1,912 | 836 | 104 |
General and Administrative Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Non-cash stock-based compensation expense | $ 26,565 | $ 15,837 | $ 2,112 |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Detail) - 417 Oakbend, LP [Member] - USD ($) $ in Millions | 4 Months Ended | 12 Months Ended |
Apr. 30, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Payments for rent | $ 0.1 | $ 0.4 |
Chief Sales Officer [Member] | ||
Related Party Transaction [Line Items] | ||
General partnership ownership interest in related party, percentage | 0.01% | |
Limited partnership interest in related party, percentage | 10.49% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Commitments [Line Items] | |||
Liability for deferred rent | $ 1.3 | $ 1.1 | |
Operating lease rent expense | $ 6.1 | $ 5.6 | $ 4.4 |
Minimum [Member] | |||
Other Commitments [Line Items] | |||
Operating lease expiration year | 2,018 | ||
Maximum [Member] | |||
Other Commitments [Line Items] | |||
Operating lease expiration year | 2,024 |
Commitments and Contingencies58
Commitments and Contingencies - Schedule of Future Annual Minimum Lease Payments (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Leases [Abstract] | |
2,018 | $ 6,833 |
2,019 | 6,005 |
2,020 | 3,494 |
2,021 | 2,149 |
2,022 | 1,626 |
Thereafter | 852 |
Total minimum lease payments | $ 20,959 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Provision for current income taxes | |||
Federal | $ 10,136 | $ 12,207 | $ 11,308 |
State | 1,791 | 3,044 | 2,292 |
Total provision for current income taxes | 11,927 | 15,251 | 13,600 |
Provision (benefit) for deferred income taxes, net | |||
Federal | 199 | (1,476) | (1,109) |
State | (2,286) | (372) | 89 |
Total benefit for deferred income taxes, net | (2,087) | (1,848) | (1,020) |
Total provision for income taxes | $ 9,840 | $ 13,403 | $ 12,580 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Tax Rate to Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of Federal income tax benefit | 4.00% | 4.00% | 4.00% |
Nondeductible expenses | 1.00% | 1.00% | 3.00% |
Research credit, Federal benefit | (3.00%) | (2.00%) | (1.00%) |
Section 199 - Qualified production activities | (2.00%) | (2.00%) | (3.00%) |
Stock-based compensation | (21.00%) | (12.00%) | (0.00%) |
Return to provision | (1.00%) | (0.00%) | (0.00%) |
Remeasurement of deferred tax assets | 1.00% | 0.00% | 0.00% |
Other | (1.00%) | (1.00%) | 0.00% |
Effective income tax rate | 13.00% | 23.00% | 38.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax [Line Items] | ||||
Effective income tax rate | 13.00% | 23.00% | 38.00% | |
US federal corporate tax rate | 35.00% | 35.00% | 35.00% | |
Income tax expense recorded due to remeasurement of deferred tax balance | $ 400,000 | |||
Unrecognized tax benefits | $ 0 | $ 0 | ||
Earliest Tax Year [Member] | ||||
Income Tax [Line Items] | ||||
Year of income tax returns open to examination | 2,007 | |||
Latest Tax Year [Member] | ||||
Income Tax [Line Items] | ||||
Year of income tax returns open to examination | 2,017 | |||
State Income Tax [Member] | ||||
Income Tax [Line Items] | ||||
Net operating loss carryforwards for state income tax | $ 1,700,000 | |||
Scenario, Forecast [Member] | ||||
Income Tax [Line Items] | ||||
US federal corporate tax rate | 21.00% |
Income Taxes - Net Deferred Tax
Income Taxes - Net Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred income tax assets (liabilities): | ||
Stock-based compensation | $ 1,446 | $ 2,658 |
Investment in Paycom Payroll Holdings, LLC | 101 | (1,487) |
Net operating losses | 1,677 | 36 |
Federal tax credits | 70 | |
Noncurrent deferred income tax assets, net | $ 3,294 | $ 1,207 |
Selected Quarterly Financial 63
Selected Quarterly Financial Data (unaudited) - Schedule of Selected Quarterly Statements of Income Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 114,025 | $ 101,287 | $ 98,227 | $ 119,508 | $ 87,810 | $ 77,325 | $ 73,880 | $ 90,126 | $ 433,047 | $ 329,141 | $ 224,653 |
Operating income | 19,434 | 11,437 | 9,089 | 38,665 | 12,681 | 582 | 16,004 | 28,704 | $ 78,625 | $ 57,971 | $ 34,435 |
Net income | $ 12,905 | $ 14,067 | $ 14,221 | $ 25,614 | $ 8,633 | $ 6,198 | $ 10,421 | $ 18,588 | |||
Earnings per share, basic | $ 0.22 | $ 0.24 | $ 0.24 | $ 0.44 | $ 0.15 | $ 0.11 | $ 0.18 | $ 0.32 | $ 1.15 | $ 0.76 | $ 0.37 |
Earnings per share, diluted | $ 0.22 | $ 0.24 | $ 0.24 | $ 0.43 | $ 0.15 | $ 0.10 | $ 0.18 | $ 0.31 | $ 1.13 | $ 0.74 | $ 0.36 |
Weighted average shares outstanding: | |||||||||||
Basic | 58,100,141 | 58,003,222 | 57,898,914 | 57,307,187 | 57,652,531 | 57,819,734 | 57,591,556 | 57,132,909 | 57,839,155 | 57,550,204 | 56,495,170 |
Diluted | 58,850,271 | 58,873,502 | 58,816,442 | 58,525,980 | 58,882,966 | 58,907,281 | 58,697,229 | 58,362,040 | 58,790,019 | 58,968,099 | 57,919,700 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) | Feb. 13, 2018 | Feb. 12, 2018 | Jan. 26, 2018 | Oct. 30, 2017 | May 01, 2017 | Apr. 26, 2017 | Feb. 08, 2017 |
Stock Repurchase Plan [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock repurchase plan expiration date | Oct. 30, 2019 | Jan. 31, 2019 | |||||
Stock Repurchase Plan [Member] | Maximum [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock repurchase plan, authorization amount | $ 75,000,000 | $ 50,000,000 | |||||
Revolving Credit Agreement [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Line of credit facility agreement date | Feb. 12, 2018 | ||||||
Line of credit facility, maturity date | Feb. 12, 2020 | ||||||
Line of credit facility, drawn amount | $ 0 | ||||||
Revolving Credit Agreement [Member] | Prime Rate [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Line of credit facility, outstanding borrowings interest | 1.00% | ||||||
Revolving Credit Agreement [Member] | LIBOR [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Line of credit facility, outstanding borrowings interest | 1.50% | ||||||
Subsequent Event [Member] | Stock Repurchase Plan [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock repurchase plan expiration date | Feb. 12, 2020 | ||||||
Subsequent Event [Member] | Stock Repurchase Plan [Member] | Maximum [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock repurchase plan, authorization amount | $ 100,000,000 | ||||||
Subsequent Event [Member] | Revolving Credit Agreement [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Loan, principal amount | $ 50,000,000 | ||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | ||||||
Line of credit facility, interest rate description | Borrowings under the Facility will generally bear interest at a prime rate plus 1.0% or, at our option, an adjusted LIBOR rate for the interest period in effect for such borrowing plus 1.5%. | ||||||
Restricted Stock [Member] | Vest 50% if Company's total enterprise value equals or exceeds $4.15 billion [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Market-based vesting percentage, restricted shares | 50.00% | ||||||
Total enterprise value | $ 4,150,000,000 | ||||||
Restricted Stock [Member] | Vest 50% if Company's total enterprise value equals or exceeds $4.45 billion [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Market-based vesting percentage, restricted shares | 50.00% | ||||||
Total enterprise value | $ 4,450,000,000 | ||||||
Restricted Stock [Member] | LTIP [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Restricted shares of common stock issued | 9,870 | 613,677 | |||||
Restricted Stock [Member] | Subsequent Event [Member] | Non Executive Employees [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | first three anniversaries | ||||||
Restricted Stock [Member] | Subsequent Event [Member] | Executive Officers [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | three equal annual tranches beginning on a specified initial vesting date and thereafter on the first and second anniversaries | ||||||
Restricted Stock [Member] | Subsequent Event [Member] | Market-based Vesting Conditions [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares vested | 283,674 | ||||||
Restricted Stock [Member] | Subsequent Event [Member] | Time-based Vesting Conditions [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares vested | 226,799 | ||||||
Restricted Stock [Member] | Subsequent Event [Member] | Vest 50% if Company's total enterprise value equals or exceeds $4.15 billion [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Market-based vesting percentage, restricted shares | 50.00% | ||||||
Total enterprise value | $ 5,900,000,000 | ||||||
Restricted Stock [Member] | Subsequent Event [Member] | Vest 50% if Company's total enterprise value equals or exceeds $4.45 billion [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Market-based vesting percentage, restricted shares | 50.00% | ||||||
Total enterprise value | $ 6,200,000,000 | ||||||
Restricted Stock [Member] | Subsequent Event [Member] | Tranche One [Member] | Non Executive Employees [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Market-based vesting percentage, restricted shares | 25.00% | ||||||
Restricted Stock [Member] | Subsequent Event [Member] | Tranche Two [Member] | Non Executive Employees [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Market-based vesting percentage, restricted shares | 25.00% | ||||||
Restricted Stock [Member] | Subsequent Event [Member] | LTIP [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Restricted shares of common stock issued | 510,473 |