Forensic Analysis · Software & SaaS · as of Nov 9, 2026
Paycom Software, Inc. (PAYC)
A forensic read on Paycom Software, Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
B · Sound & dependable
Forensic grade
Grey Zone
Financial health
2.2
Distress distance
Clean
Earnings quality
2
Forensic signals
27.4%
ROE
8.9%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Paycom Software, Inc. earns a B (Sound & dependable) forensic quality grade, and its balance-sheet distress test reads 2.2, placing it in the Grey zone. 2 forensic signals were flagged in its latest SEC filings, led by accruals ratio (% of NOA).
What the filings flag
+14.8%
FY2024→FY2025
Accruals ratio (% of NOA).Net operating assets grew +14.8% relative to their own average in FY2025 — scaled by NOA itself, not by total assets, which is what the Forensic Screens card's own accrual row divides by. Accruals are building faster than is comfortable — part of profit is sitting in the balance sheet rather than turning to cash. The build is led by payables paid down 72% against +3% in cost of sales and inventory up +21% against +3% in cost of sales. A cash-flow measure on the same base disagrees: reported earnings ran behind operating cash by 18% of net operating assets, against an accruals ratio of 14.8%. The two are computed differently: the accruals ratio is the change in net operating assets over average net operating assets, while the cash-flow figure is net income less operating cash flow over that same average. Read them as two results, not one.Accruals ratio: the year-over-year change in net operating assets, relative to their own average.NOA (net operating assets): the money tied up in running the business, operating assets minus operating liabilities.
101% of FCF
FY2025
Shareholder returns.Returned $410M to shareholders (buybacks + dividends) in FY2025 — 101% of free cash flow. That is $2M (0.6%) more than free cash flow covered. It came out of the balance sheet's own liquid holdings, not new debt: cash fell $32M over FY2025. That ratio has actually been EASING, not tightening further — down from ~120% of free cash flow two years back. Counting the $119M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 130%.
Key fundamentals
Latest Revenue$2.05B
Revenue Growth YoY+8.9%
Revenue CAGR (2yr)+10.1%
Net Margin22.1%
Free Cash Flow$408.0M
Return on Equity27.4%
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Paycom Software, Inc.'s actual 10-K/10-Q/8-K filings?