Paycom Software, Inc. · NYSE:PAYC

Paycom Software — FY2017 Earnings Presentation

22 slides from Paycom Software's earnings presentation, Feb 6, 2018

1. Slide 1: ASC 606 Transition

   ASC 606 Transition Exhibit 99.2

2. Slide 2: Non-GAAP financial measures notice

   To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we consider and have included certain non-GAAP financial measures in this presentation, including Adjusted EBITDA and non-GAAP net income. Management uses Adju

3. Slide 3: Table of Contents

   Table of Contents I. Summary 4 II. Financial Impact of ASC 606 Transition 6 III. Recast Financial Statements and Non-GAAP Reconciliations 15

4. Slide 4: Summary

   Summary

5. Slide 5: Adoption Highlights

   Adoption Highlights Full retrospective adoption 2016 and 2017 historical financial statements recast to reflect adoption of new standard Cumulative catch-up adjustment to equity at 1/1/16 of $103.4M Financial impact No impact to revenues Continue current practice of recognizing implementation fees o

6. Slide 6: Financial Impact of ASC 606 Transition

   Financial Impact of ASC 606 Transition

7. Slide 7: Financial Impact (Unaudited) Revenues

   Financial Impact (Unaudited) Revenues

8. Slide 8: Financial Impact (Unaudited) Operating expenses

   Financial Impact (Unaudited) Operating expenses

9. Slide 9: Financial Impact (Unaudited) Non-cash stock-based compensation expense

   Financial Impact (Unaudited) Non-cash stock-based compensation expense

10. Slide 10: Financial Impact (Unaudited) Selected balance sheets

    Financial Impact (Unaudited) Selected balance sheets

11. Slide 11: 2016 and 2017 Financial Measure Impact Adjusted EBITDA

    2016 and 2017 Financial Measure Impact Adjusted EBITDA (in millions)

12. Slide 12: 2017 Quarterly Financial Measure Impact Adjusted EBITDA

    2017 Quarterly Financial Measure Impact Adjusted EBITDA (in millions)

13. Slide 13: 2016 and 2017 Financial Measure Impact Non-GAAP Net Income

    2016 and 2017 Financial Measure Impact Non-GAAP Net Income (in millions)

14. Slide 14: 2017 Quarterly Financial Measure Impact Non-GAAP Net Income

    2017 Quarterly Financial Measure Impact Non-GAAP Net Income (in millions)

15. Slide 15: Recast Financial Statements and Non-GAAP Reconciliations

    Recast Financial Statements and Non-GAAP Reconciliations

16. Slide 16: 2016 and 2017 Balance Sheets (Unaudited)

    2016 and 2017 Balance Sheets (Unaudited) December 31, December 31, December 31, December 31, December 31, December 31, 2017 2017 2017 2016 2016 2016 In thousands ASC 605 ASC 606 Impact ASC 605 ASC 606 Impact Assets Current assets: Cash and cash equivalents 46,077 $ 46,077 $ - $ 60,158 $ 60,158 $ - $

17. Slide 17: 2016 and 2017 Income Statements (Unaudited)

    2016 and 2017 Income Statements (Unaudited) 2017 2017 2017 2016 2016 2016 In thousands, except per share data ASC 605 ASC 606 Impact ASC 605 ASC 606 Impact Revenues Recurring 425,424 $ 425,424 $ - $ 323,548 $ 323,548 $ - $ Implementation and other 7,623 7,623 - 5,593 5,593 - Total revenues 433,047 4

18. Slide 18: 2017 Quarterly Income Statements (Unaudited)

    2017 Quarterly Income Statements (Unaudited) 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 In thousands, except per share data ASC 605 ASC 606 Impact ASC 605 ASC 606 Impact ASC 605 ASC 606 Impact ASC 605 ASC 606 Impact Revenues Recurring 117,914 $ 117,914 $ - $ 96,351 $ 96,351 $ - $ 99

19. Slide 19: 2016 and 2017 Adjusted EBITDA (Unaudited)

    2016 and 2017 Adjusted EBITDA (Unaudited) 2016 2016 2016 In thousands ASC 605 ASC 606 Impact Net income to Adjusted EBITDA: Net income 43,840 $ 70,421 $ 26,581 $ Interest expense 1,036 1,036 - Provision for income taxes 13,403 30,591 17,188 Depreciation and amortization 13,632 13,632 - EBITDA 71,911

20. Slide 20: 2017 Quarterly Adjusted EBITDA (Unaudited)

    2017 Quarterly Adjusted EBITDA (Unaudited) 2017 2017 2017 2017 2017 2017 In thousands ASC 605 ASC 606 Impact ASC 605 ASC 606 Impact Net income to Adjusted EBITDA: Net income 25,614 $ 33,694 $ 8,080 $ 14,221 $ 20,016 $ 5,795 $ Interest expense 257 257 - 281 281 - Provision for income taxes 12,889 18,

21. Slide 21: 2016 and 2017 Non-GAAP Net Income (Unaudited)

    2016 and 2017 Non-GAAP Net Income (Unaudited) 2016 2016 2016 In thousands, except per share data ASC 605 ASC 606 Impact Net income to non-GAAP net income: Net income 43,840 $ 70,421 $ 26,581 $ Non-cash stock-based compensation expense 22,546 20,796 (1,750) Loss on early repayment of debt - - - Chang

22. Slide 22: 2017 Quarterly Non-GAAP Net Income (Unaudited)

    2017 Quarterly Non-GAAP Net Income (Unaudited) 2017 2017 2017 2017 2017 2017 In thousands, except per share data ASC 605 ASC 606 Impact ASC 605 ASC 606 Impact Net income to non-GAAP net income: Net income 25,614 $ 33,694 $ 8,080 $ 14,221 $ 20,016 $ 5,795 $ Non-cash stock-based compensation expense 3

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