In its first earnings report since going public in April, Oklahoma City-based Paycom Software Inc. reported a profit of $1.1 million for the first quarter, or 2 cents per share, down from $2.6 million or 5 cents per share, for the same period a year ago.
However, Paycom saw gross revenue grow to $37 million in the first quarter — a 34.1 percent increase from $27.6 million in the same period last year. Recurring revenue increased 34 percent from the same period a year ago.
In a conference call with investors after the market’s close, Paycom CEO Chad Richison said the company opened five new regional offices in the first quarter — two more than it had initially planned to open. Paycom specializes in cloud-based payroll and human resources products for midsize businesses.
“What we are finding is that the demand for our products is exceeding our expectations,” Richison said.
During the next year, the company plans to continue to hire new research and development and sales and marketing staff at a rapid pace to keep up with growth, as well as expand into new markets, Richison said.
“We have multiple vectors to drive sustainable growth,” Richison said.
At the end of March, Paycom’s total debt was $86.3 million. Paycom used the proceeds from its IPO and existing cash in April to retire $65 million of its outstanding debt.
Paycom’s IPO price was $15 a share, below an intial range of $18 to $20 a share. The stock closed at $14.29 on Thursday, up 1.56 percent or 22 cents on the day.
Despite the the company’s bumpy IPO, Canaccord Genuity analyst Richard Davis characterized Paycom in a report as a “well-run firm” that has potential for growth.
“Financially, PAYC (Paycom) does something that about 90 percent of the recent crop of IPOs have not figured out how to do – make money, and decent amounts of it,” Davis wrote.