PAYC · Research
Paycom: Buy as Beti Self-Service Payroll Re-Accelerates With 30.3% GAAP Operating Margin
Paycom pairs 83.7% gross margin, 30.3% GAAP operating margin, and $580.2M of TTM owner cash with an 18.1% revenue rebound, yet at $142.19 shares trade below even our $157.88 bear-case DCF value.
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Self-service payroll cannibalization priced like terminal decline
- TTM revenue
- $2.19B
- GAAP operating margin
- 30.3%
- Gross margin
- 83.7%
- 1-Yr R&D payback
- 0.65x
When Paycom rolled out Beti to let employees audit their own paychecks prior to payroll submission, it eliminated the manual payroll-correction and rerun billings that previously padded service revenue, slowing top-line growth from 23.2% in FY2023 to 8.9% in FY2025. Trailing twelve-month revenue through September 30, 2026 has now re-accelerated to $2.19B (+18.1% year over year) as GONE time-off automation and up-market client additions lapped the fee reset. [1] [2]
Equity markets continue to price Paycom as an impaired legacy processor rather than a high-margin system of record. Trailing GAAP operating income reached
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Paylocity expanded GAAP operating margin 930 bps to 23.4% while cutting absolute SBC dollars three straight years, tripling annual Owner FCF to $358.4M and leaving shares at $142.14 at a 40% discount to our $236.62 base DCF.