Company: PAYC
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000950170-25-024136
Chunk: 60

Company: Paycom Software, Inc.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 1A
Chunk 60
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 organizations;

•the extent to which we retain existing clients and the expansion or contraction of our relationships with them;

•the mix of applications sold during a period;

•changes in our pricing policies or those of our competitors;

•seasonal factors affecting payroll processing, demand for our applications or potential clients’ purchasing decisions;

•the amount and timing of operating expenses, including those related to the maintenance and expansion of our business, operations and infrastructure;

•the timing and success of new applications introduced by us and the timing of expenses related to the development of new applications and technologies;

•the timing and success of current and new competitive products and services offered by our competitors;

•economic conditions affecting our clients, including their ability to outsource HCM solutions and hire employees;

•changes in laws, regulations or policies affecting our clients’ legal obligations and, as a result, demand for certain applications;

•changes in the competitive dynamics of our industry, including consolidation among competitors or clients;

•our ability to manage our existing business and future growth, including expenses related to our data centers and the expansion of such data centers and the addition of new offices;

•the effects and expenses of acquisition of third-party technologies or businesses and any potential future charges for impairment of goodwill resulting from those acquisitions;

•business disruptions caused by widespread public health crises, natural disasters, such as tornadoes, hurricanes, fires, earthquakes and floods (including as a result of climate change), acts of war, terrorism, or other catastrophic events;

•network outages or security breaches; and

•general economic, industry and market conditions.

Certain of our operating results and financial metrics may be difficult to predict as a result of seasonality.

We have historically experienced seasonality in our revenues. A significant portion of our recurring revenues relate to the annual processing of payroll tax filing forms such as Form W-2 and Form 1099 and the annual processing and filing of ACA-related forms. These forms are typically processed in the first quarter of the year and, as a result, positively impact first quarter recurring revenues. In addition, unscheduled payroll runs at the end of the year (such as bonuses) have a positive impact on our recurring 

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revenues in the fourth quarter. Although we expect the magnitude of seasonal fluctuations in our revenues to decrease in the future to the extent clients utilize more of our non-payroll applications, seasonal fluctuations in certain of our operating results and financial metrics may make such results and metrics difficult to predict.

We are subject to certain operating and financial covenants that may restrict our