PAYCOM SOFTWARE, INC., 10-K filed on 2/16/2023
Annual Report
v3.22.4
Document and Entity Information - USD ($)
$ in Billions
 12 Months Ended
Dec. 31, 2022
Feb. 07, 2023
Jun. 30, 2022
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2022    
Document Fiscal Year Focus 2022    
Document Fiscal Period Focus FY    
Trading Symbol PAYC    
Entity Registrant Name Paycom Software, Inc.    
Entity Central Index Key 0001590955    
Current Fiscal Year End Date --12-31    
Entity Well-known Seasoned Issuer Yes    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Common Stock, Shares Outstanding   60,321,077  
Entity Public Float     $ 14.4
Title of 12(b) Security Common Stock, $0.01 par value    
Security Exchange Name NYSE    
Entity File Number 001-36393    
Entity Tax Identification Number 80-0957485    
Entity Address, Address Line One 7501 W. Memorial Road    
Entity Address, City or Town Oklahoma City    
Entity Address, State or Province OK    
Entity Incorporation, State or Country Code DE    
Entity Address, Postal Zip Code 73142    
City Area Code 405    
Local Phone Number 722-6900    
Entity Interactive Data Current Yes    
Document Annual Report true    
Document Transition Report false    
Auditor Firm ID 248    
Auditor Name GRANT THORNTON LLP    
Auditor Location Oklahoma City, Oklahoma    
Documents Incorporated by Reference

Portions of the registrant’s Definitive Proxy Statement on Schedule 14A to be furnished to stockholders in connection with its 2023 Annual Meeting of Stockholders are incorporated by reference in Part III, Items 10-14 of this Annual Report on Form 10-K.

    
v3.22.4
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Current assets:    
Cash and cash equivalents $ 400,730 $ 277,978
Accounts receivable 22,843 9,490
Prepaid expenses 34,056 23,729
Inventory 1,607 1,131
Income tax receivable 5,583 16,413
Deferred contract costs 96,378 76,724
Current assets before funds held for clients 561,197 405,465
Funds held for clients 2,202,975 1,846,573
Total current assets 2,764,172 2,252,038
Property and equipment, net 402,448 348,953
Intangible assets, net 54,017 58,028
Goodwill 51,889 51,889
Long-term deferred contract costs 567,974 461,852
Other assets 62,013 42,385
Total assets 3,902,513 3,215,145
Current liabilities:    
Accounts payable 16,054 5,772
Accrued commissions and bonuses 28,439 22,357
Accrued payroll and vacation 45,023 34,259
Deferred revenue 19,825 16,277
Current portion of long-term debt 0 1,775
Accrued expenses and other current liabilities 59,990 63,397
Current liabilities before client funds obligation 169,331 143,837
Client funds obligation 2,207,706 1,846,573
Total current liabilities 2,377,037 1,990,410
Deferred income tax liabilities, net 141,033 145,504
Long-term deferred revenue 97,591 85,149
Net long-term debt, less current portion 29,000 27,380
Other long-term liabilities 75,245 72,988
Total long-term liabilities 342,869 331,021
Total liabilities 2,719,906 2,321,431
Commitments and contingencies
Stockholders’ equity:    
Common stock, $0.01 par value (100,000 shares authorized, 62,518 and 62,298 shares issued at December 31, 2022 and December 31, 2021, respectively; 57,867 and 58,012 shares outstanding at December 31, 2022 and December 31, 2021, respectively) 625 623
Additional paid-in capital 576,622 465,594
Retained earnings 1,196,968 915,579
Accumulated other comprehensive earnings (loss) (3,703)  
Treasury stock, at cost (4,651 and 4,286 shares at December 31, 2022 and December 31, 2021, respectively) (587,905) (488,082)
Total stockholders’ equity 1,182,607 893,714
Total liabilities and stockholders’ equity $ 3,902,513 $ 3,215,145
v3.22.4
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 62,518,000 62,298,000
Common stock, shares outstanding 57,867,000 58,012,000
Treasury stock, shares 4,651,000 4,286,000
v3.22.4
Consolidated Statements of Comprehensive Income - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Revenues      
Total revenues $ 1,375,218 $ 1,055,524 $ 841,434
Cost of revenues      
Operating expenses 169,806 130,475 97,778
Depreciation and amortization 42,935 31,411 25,768
Total cost of revenues 212,741 161,886 123,546
Administrative expenses      
Sales and marketing 346,561 275,994 235,716
Research and development 148,343 118,426 90,244
General and administrative 239,130 209,840 178,200
Depreciation and amortization 49,764 35,811 27,605
Total administrative expenses 783,798 640,071 531,765
Total operating expenses 996,539 801,957 655,311
Operating income 378,679 253,567 186,123
Interest expense (2,536)   (19)
Other income (expense), net 13,435 2,395 (168)
Income before income taxes 389,578 255,962 185,936
Provision for income taxes 108,189 60,002 42,483
Net income $ 281,389 $ 195,960 $ 143,453
Earnings per share, basic $ 4.86 $ 3.39 $ 2.49
Earnings per share, diluted $ 4.84 $ 3.37 $ 2.46
Weighted average shares outstanding:      
Basic 57,928 57,885 57,620
Diluted 58,175 58,191 58,285
Comprehensive earnings (loss):      
Net income $ 281,389 $ 195,960 $ 143,453
Unrealized net gains (losses) on available-for-sale securities (4,757)    
Tax effect 1,054    
Other comprehensive income (loss), net of tax (3,703)    
Comprehensive earnings (loss) 277,686 195,960 143,453
Recurring [Member]      
Revenues      
Total revenues 1,351,856 1,036,691 825,856
Implementation and Other [Member]      
Revenues      
Total revenues $ 23,362 $ 18,833 $ 15,578
v3.22.4
Consolidated Statements of Shareholders' Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock [Member]
Additional Paid in Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Loss [Member]
Treasury Stock [Member]
Beginning balance, value at Dec. 31, 2019 $ 526,628 $ 613 $ 257,501 $ 576,166   $ (307,652)
Beginning balance, shares at Dec. 31, 2019   61,350       3,689
Vesting of restricted stock   $ 5 (5)      
Vesting of restricted stock, shares   511        
Stock-based compensation 100,412   100,412      
Repurchases of common stock (114,850)         $ (114,850)
Repurchases of common stock, shares           433
Net income 143,453     143,453    
Ending balance, value at Dec. 31, 2020 655,643 $ 618 357,908 719,619   $ (422,502)
Ending balance, shares at Dec. 31, 2020   61,861       4,122
Vesting of restricted stock   $ 5 (5)      
Vesting of restricted stock, shares   437        
Stock-based compensation 107,691   107,691      
Repurchases of common stock (65,580)         $ (65,580)
Repurchases of common stock, shares           164
Net income 195,960     195,960    
Ending balance, value at Dec. 31, 2021 893,714 $ 623 465,594 915,579   $ (488,082)
Ending balance, shares at Dec. 31, 2021   62,298       4,286
Vesting of restricted stock   $ 2 (2)      
Vesting of restricted stock, shares   220        
Stock-based compensation 111,030   111,030      
Repurchases of common stock (99,823)         $ (99,823)
Repurchases of common stock, shares           365
Net income 281,389     281,389    
Other comprehensive income (loss), net of tax (3,703)       $ (3,703)  
Ending balance, value at Dec. 31, 2022 $ 1,182,607 $ 625 $ 576,622 $ 1,196,968 $ (3,703) $ (587,905)
Ending balance, shares at Dec. 31, 2022   62,518       4,651
v3.22.4
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Cash flows from operating activities      
Net income $ 281,389 $ 195,960 $ 143,453
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 92,699 67,222 53,373
Accretion of discount on available-for-sale securities (1,020) (452) (1,563)
Non-cash marketing expense 1,734 1,051  
(Gain)/loss on disposition of property and equipment (150) 146  
Amortization of debt issuance costs 847 36 36
Stock-based compensation expense 94,898 97,506 90,108
Cash paid for derivative settlement 205 (741) (613)
(Gain)/loss on derivative (1,559) (662) 1,993
Deferred income taxes, net (3,210) 32,906 21,381
Other (206)    
Changes in operating assets and liabilities:      
Accounts receivable (13,353) (360) 168
Prepaid expenses (6,497) (5,875) (4,293)
Inventory (224) 481 (41)
Other assets (13,907) (7,862) (1,720)
Deferred contract costs (122,440) (103,356) (89,776)
Accounts payable 11,676 (660) 1,529
Income taxes, net 10,830 (5,966) (6,427)
Accrued commissions and bonuses 6,082 8,654 1,360
Accrued payroll and vacation 10,764 9,730 9,659
Deferred revenue 15,990 14,600 10,582
Accrued expenses and other current liabilities 555 17,004 (2,002)
Net cash provided by operating activities 365,103 319,362 227,207
Cash flows from investing activities      
Purchases of investments from funds held for clients (268,718) (398,819) (332,756)
Proceeds from investments from funds held for clients 382,230 267,341 308,981
Purchases of intangible assets (4,120) (5,500)  
Purchases of property and equipment (132,678) (120,692) (94,102)
Net cash used in investing activities (23,286) (257,670) (117,877)
Cash flows from financing activities      
Proceeds from the issuance of debt 29,000    
Repurchases of common stock (94,652)   (52,040)
Withholding taxes paid related to net share settlements (5,171) (65,580) (62,811)
Payments on long-term debt (29,287) (1,775) (1,775)
Net change in client funds obligation 361,133 233,079 (49,283)
Payment of debt issuance costs (6,436)    
Net cash provided by (used in) financing activities 254,587 165,724 (165,909)
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents 596,404 227,416 (56,579)
Cash, cash equivalents, restricted cash and restricted cash equivalents      
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period 1,812,691 1,585,275 1,641,854
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period 2,409,095 1,812,691 1,585,275
Cash and cash equivalents 400,730 277,978 151,710
Restricted cash included in funds held for clients 2,008,365 1,534,713 1,433,565
Supplemental disclosures of cash flow information:      
Cash paid for interest, net of amounts capitalized 507 2  
Cash paid for income taxes 100,578 33,068 27,530
Non-cash investing and financing activities:      
Purchases of property and equipment, accrued but not paid 5,899 7,581 837
Stock-based compensation for capitalized software 8,965 7,141 6,655
Right of use assets obtained in exchange for operating lease liabilities $ 21,467 $ 14,141 $ 9,693
v3.22.4
Organization and Description of Business
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Organization and Description of Business
1.
ORGANIZATION AND DESCRIPTION OF BUSINESS

Description of Business

Paycom Software, Inc. (“Software”) and its wholly-owned subsidiaries (collectively, the “Company”) is a leading provider of a comprehensive, cloud-based human capital management (“HCM”) solution delivered as Software-as-a-Service. Unless we state otherwise or the context otherwise requires, the terms “we,” “our,” “us” and the “Company” refer to Software and its consolidated subsidiaries.

We provide functionality and data analytics that businesses need to manage the complete employment lifecycle from recruitment to retirement. Our solution requires virtually no customization and is based on a core system of record maintained in a single database for all HCM functions, including talent acquisition, time and labor management, payroll, talent management and human resources (“HR”) management applications.
v3.22.4
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Our consolidated financial statements include the financial results of Software and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying consolidated financial statements include all adjustments necessary for the fair presentation for the periods presented.

Adoption of New Accounting Pronouncements

In January 2021, we adopted Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes” (“ASU 2019-12”) utilizing the prospective transition method. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income tax in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, “Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. Prior to August 24, 2022, our floating-to-fixed interest rate swap was outstanding to offset the rate variability associated with our outstanding indebtedness. As discussed in Note 7, the interest rate swap was terminated on August 24, 2022. As a result, the adoption of ASU 2020-04 had no material impact on our unaudited financial statements.

In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848) Scope” (“ASU 2021-01”), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that are affected by the discounting transition. ASU 2021-01 amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. As discussed in Note 7, the interest rate swap was terminated on August 24, 2022. As a result, the adoption of ASU 2021-01 had no material impact on our unaudited financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include income taxes, loss contingencies, the useful life of property and equipment and intangible assets, the life of our client relationships, the fair value of our stock-based awards and the fair value of our financial instruments, intangible assets and goodwill. These estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Actual results could materially differ from these estimates.

Segment Information

We operate in a single operating segment and a single reporting segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is also the chief executive officer, in deciding how to allocate resources and assessing performance. Our chief executive officer allocates

resources and assesses performance based upon financial information at the consolidated level. As we operate in one operating segment, all required financial segment information is presented in the consolidated financial statements.

Cash Equivalents

We consider all highly liquid instruments purchased with a maturity of three months or less and money market funds to be cash equivalents. We maintain cash and cash equivalents in demand deposit accounts, money market funds, and certificates of deposit, which may not be federally insured. The fair value of our cash and cash equivalents approximates carrying value. We have not experienced any losses in such accounts and do not believe there is exposure to any significant credit risk on such accounts.

Accounts Receivable

We generally collect revenues from our clients through an automatic deduction from the clients’ bank accounts at the time payroll processing occurs. Accounts receivable on our consolidated balance sheets generally consists of revenue-related receivables, including processing fees, interest income receivable, and revenue fees related to the last business day of the year, which are collected on the following business day. As accounts receivable are collected via automatic deduction on the following business day, the Company has not recognized an allowance for doubtful accounts.

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight line method over the estimated useful lives of the assets as follows:

 

Furniture, fixtures and equipment

5 years

Computer equipment

3 years

Software and capitalized software

3 years

Buildings

30 years

Leasehold improvements

5 years

Rental clocks

5 years

Land improvements

15 years

Vehicles

3 years

 

Costs incurred during construction of long-lived assets are recorded as construction in progress and are not depreciated until the asset is placed in service.

We capitalize interest costs incurred related to construction in progress. For the years ended December 31, 2022, 2021 and 2020, we incurred interest costs of $3.4 million, $1.4 million and $1.5 million, respectively. For the years ended December 31, 2022, 2021 and 2020, interest costs of $0.9 million, $1.4 million and $1.5 million, respectively, were capitalized.

Leases

Our leases primarily consist of noncancellable operating leases for office space. We recognize a right-of-use asset and operating lease liability on the lease commencement date based on the present value of the lease payments over the lease term. Operating lease liabilities are measured by discounting future lease payments at an estimated incremental borrowing rate. Right-of-use assets are amortized over the lease term and include adjustments related to prepaid rent.

Internal Use Software

Capitalized costs include services associated with developing or obtaining internal use computer software and certain payroll and payroll-related costs for employees who are directly associated with internal use computer software projects. The amount of payroll costs that are capitalized with respect to these employees is limited to the time directly spent on such projects. Expenditures for software purchases and software developed or obtained for internal use are capitalized and amortized over a three-year period on a straight-line basis. Costs associated with preliminary project stage activities, training, maintenance and all other post-implementation stage activities are expensed as incurred. We also expense internal costs related to minor upgrades and enhancements, as it is impractical to separate these costs from normal maintenance activities.

The total capitalized payroll costs related to internal use computer software projects were $66.4 million and $52.9 million during the years ended December 31, 2022 and 2021, respectively, and are included in property and equipment. Amortization expense of capitalized software costs were $47.3 million, $36.5 million and $27.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Derivatives

In December 2017, we entered into a floating-to-fixed interest rate swap agreement to limit the exposure to floating interest rate risk related to the 2017 Term Loans (as defined in Note 6). We do not hold derivative instruments for trading or speculative purposes. The interest rate swap agreement effectively converted a portion of the variable interest rate payments to fixed interest rate payments. We account for our derivatives under ASC Topic 815, “Derivatives and Hedging,” and recognize all derivative instruments in the consolidated balance sheets at fair value as either short-term or long-term assets or liabilities based on their anticipated settlement date. See Note 9, “Fair Value of Financial Instruments”. We have elected not to designate our interest rate swap as a hedge; therefore, changes in the fair value of the derivative instrument are recognized in our consolidated statements of comprehensive income within Other income (expense), net. As further discussed in Note 7, on August 24, 2022, we terminated the interest rate swap by settling the contract.

Goodwill and Other Intangible Assets

Goodwill is not amortized, but we are required to test the carrying value of goodwill for impairment at least annually, or earlier if, at the reporting unit level, an indicator of impairment arises. Our business is largely homogeneous and, as a result, goodwill is associated with one reporting unit. We have selected June 30 as our annual goodwill impairment testing date. A review of goodwill may be initiated before or after conducting the annual analysis if events or changes in circumstances indicate the carrying value of goodwill may no longer be recoverable. The Company performed a qualitative assessment to determine if it is more-likely-than-not that the fair value of the reporting unit had declined below its carrying value. In the qualitative assessment, we consider the macroeconomic conditions, including any deterioration of general economic conditions, industry and market conditions, including any deterioration in the environment where the reporting unit operates, changes in the products/services and regulator and political developments; cost of doing business; overall financial performance; other relevant reporting unit specific facts, such as changes in management or key personnel or pending litigation. Based on our assessment, there was no impairment recorded as of June 30, 2022. For the years ended December 31, 2022, 2021 and 2020, there were no indicators of impairment. Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives.

Impairment of Long-Lived Assets

Long-lived assets, including intangible assets with definite lives, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. We have determined that there was no impairment of long-lived assets including intangible assets with definite lives, for the years ended December 31, 2022, 2021 and 2020.

Funds Held for Clients and Client Funds Obligation

As part of our payroll and tax filing application, we (i) collect client funds to satisfy their respective federal, state and local employment tax obligations, (ii) remit such funds to the appropriate taxing authorities and accounts designated by our clients, and (iii) manage client tax filings and any related correspondence with taxing authorities. Amounts collected by us from clients for their federal, state and local employment taxes are invested by us, and we earn interest on these funds during the interval between receipt and disbursement.

These investments are shown in our consolidated balance sheets as funds held for clients, and the associated liability for the tax filings is shown as client funds obligation. The liability is recorded in the accompanying consolidated balance sheets at the time we obtain the funds from clients. The client funds obligation represents liabilities that will be repaid within one year of the consolidated balance sheet date. As of December 31, 2022 and December 31, 2021, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper and certificates of deposit. Additionally, as of December 31, 2022, the funds held for clients were invested in U.S. treasury securities with an original maturity of greater than one year. Short-term investments in commercial paper and certificates of deposit with an original maturity greater than three months are classified as available for-sale securities, and are also included within the funds held for clients line item in the consolidated balance sheets. U.S. treasury securities with an original maturity of greater than one year are also classified as available-for-sale securities and included within the funds held for clients line item in the consolidated balance sheets. These available-for-sale securities are recorded in the consolidated balance sheets at fair value, with the difference between the amortized cost and fair value of these available-for-sale securities recorded as unrealized net gains (losses) on available-for-sale securities and are included within comprehensive earnings (loss) in the consolidated statements of comprehensive income. Funds held for clients are classified as a current asset in the consolidated balance sheets because the funds are held solely to satisfy the client funds obligation. Additionally, the funds held for clients is classified as restricted cash and restricted cash equivalents and presented within the reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents on the consolidated statements of cash flows.

Stock Repurchase Plan

In May 2016, our Board of Directors authorized a stock repurchase plan allowing for the repurchase of shares of our common stock in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs. Since the initial authorization of the stock repurchase plan, our Board of Directors has amended and extended and authorized new stock repurchase plans from time to time. Most recently, in August 2022, our Board of Directors authorized the repurchase of up to $1.1 billion of our common stock. As of December 31, 2022 there was $1.1 billion available for repurchases under our stock repurchase plan. Our stock repurchase plan may be suspended or discontinued at any time. The actual timing, number and value of shares repurchased depends on a number of factors, including the market price of our common stock, general market and economic conditions, shares withheld for taxes associated with the vesting of restricted stock and other corporate considerations. The current stock repurchase plan will expire on August 15, 2024.

During the year ended December 31, 2022, we repurchased an aggregate of 364,667 shares of our common stock at an average cost of $273.74 per share, including 17,355 shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of restricted stock. During the year ended December 31, 2021, we repurchased an aggregate of 163,849 shares of our common stock at an average cost of $400.24 per share, all of which were shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of the restricted stock.

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our clients in an amount that reflects the consideration we expect to be entitled to for those goods or services. Substantially all of our revenues are comprised of revenue from contracts with clients. Sales taxes and other applicable taxes are excluded from revenues.

Recurring Revenues

Recurring revenues are derived primarily from our talent acquisition, time and labor management, payroll, talent management and HR management applications as well as fees charged for form filings and delivery of client payroll checks and reports. Talent acquisition includes our Applicant Tracking, Candidate Tracker, Enhanced Background Checks, Onboarding, E-Verify and Tax Credit Services applications. Time and labor management includes Time and Attendance, Scheduling/Schedule exchange, Time-Off Requests, Labor Allocation, Labor Management Reports/Push Reporting, Geofencing/Geotracking and Microfence tools and applications. Payroll includes Beti, Payroll and Tax Management, Vault Card, Paycom Pay, Expense Management, Mileage Tracker/FAVR, Garnishment Administration and GL Concierge applications. Talent management includes our Employee Self-Service, Compensation Budgeting, Performance Management, Position Management, My Analytics and Paycom Learning and Content Subscriptions applications. HR management includes our Manager on-the-Go, Direct Data Exchange, Ask Here, Documents and Checklists, Government and Compliance, Benefits Administration/Benefits to Carrier, Benefit Enrollment Service, COBRA Administration, Personnel Action Forms and Performance Discussion Forms, Surveys, Enhanced ACA and Clue applications.

The performance obligations related to recurring revenues are satisfied during each client’s payroll period, with the agreed-upon fee being charged and collected as part of our processing of the client’s payroll. Recurring revenues are recognized at the conclusion of processing of each client’s payroll period, when each respective payroll client is billed. Collectability is reasonably assured as the fees are collected through an automated clearing house as part of the client’s payroll cycle or through direct wire transfer, which minimizes the default risk.

The contract period for substantially all contracts associated with these revenues is one month due to the fact that both we and the client have the unilateral right to terminate a wholly unperformed contract without compensating the other party by providing 30 days’ notice of termination. Our payroll application is the foundation of our solution, and all of our clients are required to utilize this application in order to access our other applications. For clients who purchase multiple applications, due to the short-term nature of our contracts, we do not believe it is meaningful to separately assess and identify whether or not each application potentially represents its own, individual, performance obligation as the revenue generated from each application is recognized within the same month as the revenue from the core payroll application. Similarly, we do not believe it is meaningful to individually determine the standalone selling price for each application. We consider the total price charged to a client in a given period to be indicative of the standalone selling price, as the total amount charged is within a reasonable range of prices typically charged for our goods and services for comparable classes of client groups, which we periodically assess for price adjustments.

Interest income on funds held for clients is earned on funds that are collected from clients in advance of either the applicable due date for payroll tax submissions or the applicable disbursement date for employee payment services. The interest earned on these funds is included in recurring revenues in the consolidated statements of comprehensive income as the collection, holding, and remittance of these funds are essential components of providing these services.

Implementation and Other Revenues

Implementation and other revenues consist of nonrefundable upfront conversion fees which are charged to new clients to offset the expense of new client set-up as well as revenues from the sale of time clocks as part of our employee time and attendance services. Although these revenues are related to our recurring revenues, they represent distinct performance obligations.

Implementation activities primarily represent administrative activities that allow us to fulfill future performance obligations for our clients and do not represent services transferred to the client. However, the nonrefundable upfront fee charged to our clients results in an implied performance obligation in the form of a material right to the client related to the client’s option to renew at the end of each 30-day contract period. Further, given that all other services within the contract are sold at a total price indicative of the standalone selling price, coupled with the fact that the upfront fees are consistent with upfront fees charged in similar contracts that we have with clients, the standalone selling price of the client’s option to renew the contract approximates the dollar amount of the nonrefundable upfront fee. The nonrefundable upfront fee is typically included on the client’s first invoice, and is deferred and recognized ratably over the estimated renewal period (i.e., ten-year estimated client life).

Revenues from the sale of time clocks are recognized when control is transferred to the client upon delivery of the product. We estimate the standalone selling price for the time clocks by maximizing the use of observable inputs such as our specific pricing practices for time clocks.

Contract Balances

The timing of revenue recognition for recurring services is consistent with the invoicing of clients as they both occur during the respective client payroll period for which the services are provided. Therefore, we do not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing.

Changes in deferred revenue related to material rights for the years ended December 31, 2022 and 2021 were as follows:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

Balance, beginning of period

 

$

101,426

 

 

$

86,826

 

Recognition of revenue included in beginning of year balance

 

 

(15,949

)

 

 

(13,298

)

Contract balance, net of revenue recognized during the period

 

 

31,939

 

 

 

27,898

 

Balance, end of period

 

$

117,416

 

 

$

101,426

 

 

We expect to recognize $24.3 million of deferred revenue related to material rights in 2023, $18.5 million in 2024, and $74.6 million of such deferred revenue thereafter.

Assets Recognized from the Costs to Obtain and Costs to Fulfill Revenue Contracts

We recognize an asset for the incremental costs of obtaining a contract with a client if we expect the amortization period to be longer than one year. We also recognize an asset for the costs to fulfill a contract with a client if such costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. We have determined that substantially all costs related to implementation activities are administrative in nature and also meet the capitalization criteria under ASC 340-40. These capitalized costs to fulfill principally relate to upfront direct costs that are expected to be recovered through margin and that enhance our ability to satisfy future performance obligations.

The assets related to both costs to obtain, and costs to fulfill, contracts with clients are accounted for utilizing a portfolio approach, and are capitalized and amortized over the expected period of benefit, which we have determined to be the estimated client relationship of ten years. The expected period of benefit has been determined to be the estimated life of the client relationship primarily because we incur no new costs to obtain, or costs to fulfill, a contract upon renewal of such contract. Additional commission costs may be incurred when an existing client purchases additional applications; however, these commission costs relate solely to the additional applications purchased and are not related to contract renewal. Furthermore, additional fulfillment costs associated with existing clients purchasing additional applications are minimized by our seamless single-database platform. These assets are presented as deferred contract costs in the accompanying consolidated balance sheets. Amortization expense related to costs to obtain and costs to fulfill a contract are included in the “sales and marketing” and “general and administrative” line items in the accompanying consolidated statements of comprehensive income.

 

The following tables present the asset balances and related amortization expense for these contract costs:

 

 

 

As of and for the Year Ended December 31, 2022

 

 

 

Beginning

 

 

Capitalization

 

 

 

 

 

Ending

 

 

 

Balance

 

 

of Costs

 

 

Amortization

 

 

Balance

 

Costs to obtain a contract

 

$

272,919

 

 

$

97,978

 

 

$

(45,440

)

 

$

325,457

 

Costs to fulfill a contract

 

$

265,657

 

 

$

114,152

 

 

$

(40,914

)

 

$

338,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Year Ended December 31, 2021

 

 

 

Beginning

 

 

Capitalization

 

 

 

 

 

Ending

 

 

 

Balance

 

 

of Costs

 

 

Amortization

 

 

Balance

 

Costs to obtain a contract

 

$

232,583

 

 

$

77,644

 

 

$

(37,308

)

 

$

272,919

 

Costs to fulfill a contract

 

$

199,593

 

 

$

96,728

 

 

$

(30,664

)

 

$

265,657

 

 

Cost of Revenues

Our costs and expenses applicable to total revenues represent operating expenses and systems support and technology costs, including labor and related expenses, bank fees, shipping fees and costs of paper stock, envelopes, etc. In addition, costs included to derive gross margins are comprised of support labor and related expenses, related hardware costs and applicable depreciation and amortization costs.

Advertising Costs

Advertising costs are expensed the first time that advertising takes place. Advertising costs for the years ended December 31, 2022, 2021 and 2020 were $90.6 million, $71.6 million and $66.9 million, respectively.

Sales Taxes

We collect and remit sales tax on sales of time and attendance clocks and on payroll services in certain states. These taxes are recognized on a net basis, and therefore, excluded from revenues. For the years ended December 31, 2022, 2021 and 2020, sales taxes collected were $15.5 million, $11.9 million and $9.7 million, respectively.

Employee Stock-Based Compensation

Time-based stock compensation awards to employees are recognized on a straight-line basis over the applicable vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair values measured as of the date of grant. Market-based stock compensation awards to employees are recognized on a straight-line basis over the applicable estimated vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair value as of the date of the grant unless vesting occurs sooner at which time the remaining respective unrecognized compensation cost is recognized. Performance-based restricted stock compensation awards are recognized on a straight-line basis over the applicable vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair values measured as of the date of grant. Forfeitures related to our stock-based compensation awards are recognized as they occur.

Employee Stock Purchase Plan

An award issued under the Paycom Software, Inc. Employee Stock Purchase Plan (the “ESPP”) is classified as a share-based liability and recognized at the fair value of the award. Expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period.

Income Taxes

Our consolidated financial statements include a provision for income taxes incurred for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We recognize a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized.

We file income tax returns with the United States federal government and various state jurisdictions. We evaluate tax positions taken or expected to be taken in the course of preparing our tax returns and disallow the recognition of tax positions not deemed to meet a “more-likely-than-not” threshold of being sustained by the applicable tax authority. We do not believe there are any tax positions taken within the consolidated financial statements that do not meet this threshold. Our policy is to recognize interest and penalties, if any, related to uncertain tax positions as a component of general and administrative expenses. With few exceptions, we are no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2019.

Seasonality

Our revenues are seasonal in nature and generally we expect our first and fourth quarter recurring revenues to be higher than other quarters during the year. Recurring revenues include revenues relating to the annual processing of payroll tax filing forms and ACA form filing requirements, such as Form W-2, Form 1099, and Form 1095 and revenues from processing unscheduled payroll runs (such as bonuses) for our clients. As payroll tax forms are typically processed in the first quarter of the year, first quarter recurring revenues and margins are positively impacted. In addition, unscheduled payroll runs at the end of the year often result in increased recurring revenues in the fourth quarter. These seasonal fluctuations in revenues can also have an impact on gross profits. Historical results impacted by these seasonal trends should not be considered a reliable indicator of our future results of operations.
v3.22.4
Property and Equipment
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Property and Equipment
3.
PROPERTY AND EQUIPMENT

Property and equipment and accumulated depreciation and amortization were as follows:

 

 

 

December 31, 2022

 

 

December 31, 2021

 

Property and equipment

 

 

 

 

 

 

Software and capitalized software costs

 

$

270,645

 

 

$

199,470

 

Buildings

 

 

177,765

 

 

 

172,807

 

Computer equipment

 

 

133,715

 

 

 

102,509

 

Rental clocks

 

 

35,846

 

 

 

30,313

 

Furniture, fixtures and equipment

 

 

28,414

 

 

 

24,971

 

Other

 

 

17,321

 

 

 

16,397

 

 

 

 

663,706

 

 

 

546,467

 

Less: accumulated depreciation and amortization

 

 

(331,340

)

 

 

(242,652

)

 

 

 

332,366

 

 

 

303,815

 

Construction in progress

 

 

36,286

 

 

 

11,342

 

Land

 

 

33,796

 

 

 

33,796

 

Property and equipment, net

 

$

402,448

 

 

$

348,953

 

 

We capitalize computer software development costs related to software developed for internal use in accordance with ASC 350-40. For the years ended December 31, 2022 and 2021, we capitalized $66.4 million and $52.9 million, respectively, of computer software development costs related to software developed for internal use.

Rental clocks included in property and equipment, net represent time clocks issued to clients under month-to-month operating leases. As such, these items are transferred from inventory to property and equipment and depreciated over their estimated useful lives.

We capitalize interest incurred for indebtedness related to construction in progress. For the years ended December 31, 2022, 2021 and 2020, we incurred interest costs of $3.4 million, $1.4 million and $1.5 million, respectively. For the years ended December 31, 2022, 2021 and 2020, interest cost of $0.9 million, $1.4 million and $1.5 million, respectively, was capitalized. Included in the construction in progress balance at December 31, 2022 and 2021 is $2.0 million and $0.1 million in retainage, respectively.

Depreciation and amortization expense for property and equipment, net was $88.7 million, $64.7 million and $53.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.
v3.22.4
Goodwill and Intangible Assets, Net
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, Net
4.
GOODWILL AND INTANGIBLE ASSETS, NET

As of both December 31, 2022 and 2021, goodwill totaled $51.9 million. We have selected June 30 as our annual goodwill impairment testing date. We performed a qualitative impairment test of our goodwill and concluded that, as of June 30, 2022, it was more likely than not that the fair value exceeded the carrying value and therefore goodwill was not impaired. As of December 31, 2022 and 2021, there were no indicators of impairment.

In connection with our marketing initiatives, we purchased the naming rights to the downtown Oklahoma City arena that is home to the Oklahoma City Thunder National Basketball Association franchise. Under the terms of the naming rights agreement, we committed to make payments escalating annually from $4.0 million in 2021 to $6.1 million in 2035. We also made a $1.5 million one time payment in July 2021 to cover sponsorship rights leading up to the 2021- 2022 season. Upon the conclusion of the initial term, the agreement may be extended upon the mutual agreement of both parties for an additional five-year period. The cost of the naming rights has been recorded as an intangible asset with an offsetting liability as of the date of the contract. The intangible asset is being amortized over the life of the agreement on a straight line basis that commenced in June 2021. The difference between the present value of the offsetting liability and actual cash payments is being relieved through sales and marketing expense using the effective interest method over the life of the agreement.

All of our intangible assets other than goodwill are considered to have definite lives and, as such, are subject to amortization. The following tables present the components of intangible assets within our consolidated balance sheets:

 

 

 

December 31, 2022

 

 

 

Weighted Average Remaining

 

 

 

 

Accumulated

 

 

 

 

 

 

Useful Life

 

Gross

 

 

Amortization

 

 

Net

 

 

 

(Years)

 

 

 

 

 

 

 

 

 

Intangibles:

 

 

 

 

 

 

 

 

 

 

 

Naming rights

 

13.8

 

$

60,199

 

 

$

(6,182

)

 

$

54,017

 

Trade name

 

—

 

 

3,194

 

 

 

(3,194

)

 

 

—

 

Total

 

 

 

$

63,393

 

 

$

(9,376

)

 

$

54,017

 

 

 

 

December 31, 2021

 

 

 

Weighted Average Remaining

 

 

 

 

Accumulated

 

 

 

 

 

 

Useful Life

 

Gross

 

 

Amortization

 

 

Net

 

 

 

(Years)

 

 

 

 

 

 

 

 

 

Intangibles:

 

 

 

 

 

 

 

 

 

 

 

Naming rights

 

14.8

 

$

60,199

 

 

$

(2,278

)

 

$

57,921

 

Trade name

 

0.5

 

 

3,194

 

 

 

(3,087

)

 

 

107

 

Total

 

 

 

$

63,393

 

 

$

(5,365

)

 

$

58,028

 

 

Amortization of intangible assets for the years ended December 31, 2022, 2021 and 2020 was $4.0 million, $2.5 million and $0.2 million, respectively. We estimate the aggregate amortization expense will be $3.9 million in 2023, and $3.9 million for each of 2024, 2025, 2026 and 2027, respectively.
v3.22.4
Leases
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases
5.
LEASES

The Company’s leases primarily consist of noncancellable operating leases for office space with contractual terms expiring from 2023 to 2029. All of our leases are operating leases and, as a lessee, we have not entered into any sublease agreements. The lease term is defined as the fixed noncancellable term of the lease plus all periods, if any, for which failure to renew the lease imposes a penalty on us in an amount that appears, at the inception of the lease, to be reasonably assured. While some of our leases include an option to extend the lease up to five years, it is not reasonably certain that any such options will be exercised due, in part, to the dynamic nature of our sales force and rate of growth. Some of our leases contain a termination option that is not reasonably certain to be exercised. If a termination option is exercised, we remeasure the lease asset in the consolidated balance sheets using the updated lease period. None of our leases contain residual value guarantees, substantial restrictions or covenants.

The table below presents the lease assets and liabilities as of December 31, 2022 and December 31, 2021.

 

Balance Sheet location

 

December 31, 2022

 

 

December 31, 2021

 

Other assets

 

$

39,776

 

 

$

29,841

 

Lease liabilities:

 

 

 

 

 

 

Accrued expenses and other current liabilities

 

$

14,986

 

 

$

10,853

 

Other long-term liabilities

 

$

26,026

 

 

$

20,059

 

 

Rent expense under operating leases for the years ended December 31, 2022, 2021 and 2020 was $12.3 million, $11.9 million and $11.3 million, respectively. Cash paid for amounts relating to our operating leases was $14.4 million for the year ended December 31, 2022.

Because no implicit discount rates for our leases could be readily determined, we elected to use an estimated incremental borrowing rate to determine the present value of our leases. The weighted average discount rate related to our portfolio of leases at December 31, 2022 was 3.7%. The average remaining lease term for our leases was 2.9 years as of December 31, 2022.

The undiscounted cash flows for the future annual maturities of our operating lease liabilities and the reconciliation of those total undiscounted cash flows to our lease liabilities as of December 31, 2022 were as follows:

 

2023

 

$

14,791

 

2024

 

 

9,587

 

2025

 

 

6,962

 

2026

 

 

5,192

 

2027

 

 

2,711

 

Thereafter

 

 

3,500

 

Total undiscounted cash flows

 

$

42,743

 

Present value discount

 

 

(1,731

)

Lease liabilities

 

$

41,012

 

 

The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced. As of December 31, 2022, the present value of the operating lease liabilities that had not yet commenced was $0.7 million.
v3.22.4
Long-Term Debt, Net
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Long-Term Debt, Net
6.
LONG-TERM DEBT, NET

Long-term debt consisted of the following:

 

 

 

December 31, 2022

 

 

December 31, 2021

 

July 2022 Revolving Credit Agreement due July 29, 2027

 

$

29,000

 

 

$

—

 

Net term note to bank due September 7, 2025

 

 

—

 

 

 

29,155

 

Total long-term debt, net (including current portion)

 

 

29,000

 

 

 

29,155

 

Less: Current portion

 

 

—

 

 

 

(1,775

)

Total long-term debt, net

 

$

29,000

 

 

$

27,380

 

 

On December 7, 2017, we entered into a senior secured term credit agreement (as amended from time to time, the “2017 Term Credit Agreement”), pursuant to which JPMorgan Chase Bank, N.A., Bank of America, N.A. and Kirkpatrick Bank made certain term loans to us (the “2017 Term Loans”). Our obligations under the 2017 Term Loans were secured by a mortgage and first priority security interest in our corporate headquarters property. The 2017 Term Loans were due to mature on September 7, 2025 and bore interest, at our option, at either (a) a prime rate plus 1.0% or (b) an adjusted LIBOR rate for the interest period in effect for such 2017 Term Loan plus 1.5%.

As discussed below, the 2017 Term Loans were repaid in full on May 4, 2022 and the 2017 Term Credit Agreement was terminated. At the time of payoff, unamortized debt issuance costs totaling $0.1 million were written off. On May 4, 2022 (the “May 2022 Facility Closing Date”), Paycom Payroll, LLC (the “Borrower”), Software, and certain other subsidiaries of Software (collectively, the “Guarantors,” and collectively with the Borrower, the “Loan Parties”), entered into a credit agreement (as amended from time to time, the “May 2022 Revolving Credit Agreement”) with Bank of America, N.A., as a lender, swingline lender and letters of credit issuer, the lenders from time to time party thereto and Bank of America, N.A., as the administrative agent.

The May 2022 Revolving Credit Agreement provided for a senior secured revolving credit facility (the “May 2022 Facility”) in the initial aggregate principal amount of up to $250.0 million, and the ability to request an incremental facility of up to an additional $100.0 million, subject to obtaining additional lender commitments and certain approvals and satisfying certain other conditions. The May 2022 Facility included a $25.0 million sublimit for swingline loans and a $2.5 million sublimit for letters of credit. On June 7, 2022, the aggregate commitments under the May 2022 Revolving Credit Agreement were increased from $250.0 million to $350.0 million. Our obligations under the May 2022 Facility were secured by a senior security interest in all personal property of the Loan Parties. The May 2022 Facility was scheduled to mature on May 4, 2027.

On the May 2022 Facility Closing Date, we borrowed $29.0 million under the May 2022 Facility to repay the 2017 Term Loans, along with accrued interest, expenses and fees. The loan on the May 2022 Facility Closing Date bore interest at the BSBY rate plus 1.125%. In connection with the repayment of the 2017 Term Loans, the 2017 Term Credit Agreement was terminated on May 4, 2022.

As discussed below, the May 2022 Facility was repaid in full on July 29, 2022 and the May 2022 Revolving Credit Agreement was terminated.

On July 29, 2022 (the “July 2022 Facility Closing Date”), the Borrower, Software, and certain other subsidiaries of Software entered into a new credit agreement (the “July 2022 Credit Agreement”) with JPMorgan Chase Bank, N.A., as a lender, swingline lender and issuing bank, the lenders from time to time party thereto (collectively with JPMorgan Chase Bank, N.A., the “July 2022 Lenders”), and JPMorgan Chase Bank, N.A., as the administrative agent.

The July 2022 Credit Agreement provides for a senior secured revolving credit facility (the “July 2022 Revolving Credit Facility”) in the aggregate principal amount of up to $650.0 million, and the ability to request an incremental facility of up to an additional $500.0 million, subject to obtaining additional lender commitments and certain approvals and satisfying certain other conditions. The July 2022 Credit Agreement includes a $25.0 million sublimit for swingline loans and a $6.5 million sublimit for letters of credit. The July 2022 Credit Agreement also provides for a senior secured delayed draw term loan (the “July 2022 Term Loan Facility”) in the aggregate amount of up to $750.0 million. All loans under the July 2022 Credit Agreement will mature on July 29, 2027 (the “Scheduled Maturity Date”). Unamortized debt issuance costs of $5.7 million as of December 31, 2022 are included in “Other assets” on our consolidated balance sheets.

The borrowings under the July 2022 Credit Agreement will bear interest at a rate per annum equal to (i) the Alternate Base Rate (“ABR”) plus an applicable margin (“ABR Loans”) or (ii) (x) the term Secured Overnight Financing Rate (“SOFR”) plus 0.10% (the “Adjusted Term SOFR Rate”) or (y) the daily SOFR plus 0.10%, in each case plus an applicable margin (“SOFR Rate Loans”). ABR is calculated as the highest of (i) the rate of interest last quoted by The Wall Street Journal in the United States as the prime rate in effect, (ii) the federal funds rate plus 0.5% and (iii) the Adjusted Term SOFR Rate for a one-month interest period plus 1.00%; provided that, if the ABR as determined pursuant to the foregoing would be less than 1.00%, such rate shall be deemed to be 1.00%. The applicable margin for ABR Loans is (i) 0.25% if the Company’s consolidated leverage ratio is less than 1.0 to 1.0; (ii) 0.50% if the Company’s consolidated leverage ratio is greater than or equal to 1.0 to 1.0 but less than 2.0 to 1.0; (iii) 0.75% if the Company’s consolidated leverage ratio is greater than or equal to 2.0 to 1.0 but less than 3.0 to 1.0; or (iv) 1.00% if the Company’s consolidated leverage ratio is greater than or equal to 3.0 to 1.0. The applicable margin for SOFR Rate Loans is (i) 1.25% if the Company’s consolidated leverage ratio is less than 1.0 to 1.0; (ii) 1.5% if the Company’s consolidated leverage ratio is greater than or equal to 1.0 to 1.0 but less than 2.0 to 1.0; (iii) 1.75% if the Company’s consolidated leverage ratio is greater than or equal to 2.0 to 1.0 but less than 3.0 to 1.0; or (iv) 2.00% if the Company’s consolidated leverage ratio is greater than or equal to 3.0 to 1.0. We are required to pay a quarterly commitment fee on the daily amount of the undrawn portion of the revolving commitments under the July 2022 Revolving Credit Facility and a quarterly ticking fee on the daily amount of the undrawn portion of the July 2022 Term Loan Facility, in each case at a rate per annum of (i) 0.20% if the Company’s consolidated leverage ratio is less than 1.0 to 1.0; (ii) 0.225% if the Company’s consolidated leverage ratio is greater than or equal to 1.0 to 1.0 but less than 2.0 to 1.0; (iii) 0.25% if the Company’s consolidated leverage ratio is greater than or equal to 2.0 to 1.0 but less than 3.0 to 1.0; or (iv) 0.275% if the Company’s consolidated leverage ratio is greater than or equal to 3.0 to 1.0. We are also required to pay customary letter of credit fees upon drawing any letter of credit.

The July 2022 Revolving Credit Facility provides for no scheduled principal amortization prior to the Scheduled Maturity Date. Subject to certain conditions set forth in the July 2022 Credit Agreement, we may borrow, prepay and reborrow under the July 2022 Revolving Credit Facility and terminate or reduce the July 2022 Lenders’ commitments at any time prior to the Scheduled Maturity Date.

We may make up to ten draws under the July 2022 Term Loan Facility at any time during the period from and after the July 2022 Facility Closing Date through twelve months after the July 2022 Facility Closing Date. Loans under the July 2022 Term Loan Facility will amortize in equal quarterly installments commencing with the first full fiscal quarter after the earlier of (x) the date on which the July 2022 Term Loan Facility has been fully drawn and (y) the expiration of the draw period, in an aggregate annual amount equal to 7.5% in year one (if applicable) and year two, and 10% thereafter.

The proceeds of the loans and letters of credit under the July 2022 Credit Agreement are to be used for ongoing working capital and general corporate purposes, permitted acquisitions, share repurchases and refinancing the May 2022 Facility. On the July 2022 Facility Closing Date, we borrowed $29.0 million under the July 2022 Revolving Credit Facility to repay the outstanding indebtedness under the May 2022 Facility, along with accrued interest, expenses and fees. The loan bears interest at the Adjusted Term SOFR Rate for the interest period in effect plus 1.25%. In connection with the repayment of the May 2022 Facility, the May 2022 Revolving Credit Agreement was terminated on July 29, 2022.

Under the July 2022 Credit Agreement, we are required to maintain as of the end of each fiscal quarter a consolidated interest ratio of not less than 3.0 to 1.0 and a consolidated leverage ratio of not greater than 3.75 to 1.0, stepping down to 3.0 to 1.0 at intervals thereafter. Additionally, the July 2022 Credit Agreement contains customary affirmative and negative covenants, including covenants limiting our ability to, among other things, grant liens, incur debt, effect certain mergers, make investments, dispose of assets, enter into certain transactions, including swap agreements and sale and leaseback transactions, pay dividends or distributions on our capital stock, and enter into transactions with affiliates, in each case subject to customary exceptions. As of December 31, 2022, we were in

compliance with these covenants. Our obligations under the July 2022 Credit Agreement are secured by a senior security interest in all personal property of the Loan Parties.

The events of default under the July 2022 Credit Agreement include, among others, payment defaults, breaches of covenants, defaults under the related loan documents, material misrepresentations, cross defaults with certain other material indebtedness, bankruptcy and insolvency events, judgment defaults, certain events related to plans subject to the Employee Retirement Income Security Act of 1974, as amended, invalidity of the July 2022 Credit Agreement or the related loan documents and change in control events. The occurrence of an event of default could result in the acceleration of our obligations under the July 2022 Credit Agreement, the requirement to post cash collateral with respect to letters of credit, the termination of the July 2022 Lenders’ commitments and a 2.0% increase in the rate of interest.

As of December 31, 2022 and 2021, the carrying value of our total long-term debt approximated its fair value as of such date. The fair value of our long-term debt is estimated based on the borrowing rates currently available to us for bank loans with similar terms and maturities. Aggregate future maturities of long-term debt for the next five years and thereafter (including current portion) as of December 31, 2022 are as follows:

 

Year Ending December 31,

 

 

 

2023

 

 

—

 

2024

 

 

—

 

2025

 

 

—

 

2026

 

 

—

 

2027

 

 

29,000

 

Thereafter

 

 

—

 

Total

 

$

29,000

 
v3.22.4
Derivative Instruments
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments
7.
DERIVATIVE INSTRUMENTS

In December 2017, we entered into a floating-to-fixed interest rate swap agreement to limit the exposure to floating interest rate risk related to the 2017 Term Loans. We do not hold derivative instruments for trading or speculative purposes. The interest rate swap agreement effectively converted a portion of the variable interest rate payments to fixed interest rate payments. We account for our derivatives under ASC Topic 815, “Derivatives and Hedging,” and recognize all derivative instruments in the consolidated balance sheets at fair value as either short-term or long-term assets or liabilities based on their anticipated settlement date. See Note 9, “Fair Value of Financial Instruments”. We have elected not to designate our interest rate swap as a hedge; therefore, changes in the fair value of the derivative instrument were recognized in our consolidated statements of comprehensive income within Other income (expense), net.

The objective of the interest rate swap was to reduce the variability in the forecasted interest payments of the 2017 Term Loans, which was based on a one-month USD LIBOR rate versus a fixed interest rate of 2.54% on a notional value of $35.5 million. Under the terms of the interest rate swap agreement, we received quarterly variable interest payments based on the LIBOR rate and paid interest at a fixed rate. As further discussed in Note 6, on May 4, 2022, we repaid the 2017 Term Loans and terminated the 2017 Term Credit Agreement. In connection with the repayment of the 2017 Term Loans, we borrowed funds under the May 2022 Facility. The interest rate swap agreement had a maturity date of September 7, 2025. On August 24, 2022, we terminated the interest rate swap by settling the contract, which resulted in a cash receipt of $0.5 million. The realized gain from the settlement of the interest rate swap contract is included in Other income (expense), net in the consolidated statements of comprehensive income.
v3.22.4
Corporate Investments and Funds Held for Clients
 12 Months Ended
Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]  
Corporate Investments and Funds Held for Clients
8.
CORPORATE INVESTMENTS AND FUNDS HELD FOR CLIENTS

The tables below present our cash and cash equivalents, the funds held for clients’ cash and cash equivalents as well as the investments that were included within funds held for clients on the consolidated balance sheets:

 

 

 

December 31, 2022

 

Type of issue

 

Amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses(1)

 

 

Fair value

 

Cash and cash equivalents

 

$

400,730

 

 

$

—

 

 

$

—

 

 

$

400,730

 

Funds held for clients’ cash and cash equivalents

 

 

2,008,365

 

 

 

—

 

 

 

—

 

 

 

2,008,365

 

Available-for-sale securities (2):

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Certificates of deposit

 

 

25,000

 

 

 

—

 

 

 

—

 

 

 

25,000

 

U.S. treasury securities

 

 

174,367

 

 

 

—

 

 

 

(4,757

)

 

 

169,610

 

Total investments

 

$

2,608,462

 

 

$

—

 

 

$

(4,757

)

 

$

2,603,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

Type of issue

 

Amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Fair value

 

Cash and cash equivalents

 

$

277,978

 

 

$

—

 

 

$

—

 

 

$

277,978

 

Funds held for clients’ cash and cash equivalents

 

 

1,534,894

 

 

 

—

 

 

 

—

 

 

 

1,534,894

 

Available-for-sale securities (2):

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

 

311,679

 

 

 

—

 

 

 

—

 

 

 

311,679

 

Certificates of deposit

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total investments

 

$

2,124,551

 

 

$

—

 

 

$

—

 

 

$

2,124,551

 

 

(1)
These securities have been in a gross unrealized loss position for a period of less than 12 months.
(2)
All available-for-sale securities were included within the funds held for clients.

We did not make any reclassification adjustments out of accumulated other comprehensive income for realized gains or losses on the sale or maturity of available-for-sale securities for the years ended December 31, 2022 or 2021. There were no realized gains or losses on the sale of available-for-sale securities for the years ended December 31, 2022 or 2021.

We regularly review the composition of our investment portfolio and did not recognize any credit impairment losses during the years ended December, 2022 or 2021. All of our commercial paper securities held an A-2 rating or better as of December 31, 2022 and the U.S. treasury securities held a rating of AAA as of December 31, 2022.

Expected maturities of available-for-sale securities at December 31, 2022 are as follows:

 

Expected maturity

 

Amortized cost

 

 

Fair value

 

One year or less

 

$

25,000

 

 

$

25,000

 

One year to five years

 

$

174,367

 

 

$

169,610

 

Total available-for-sale securities

 

$

199,367

 

 

$

194,610

 
v3.22.4
Fair Value of Financial Instruments
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments
9.
FAIR VALUE OF FINANCIAL INSTRUMENTS

Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients, client funds obligation and long-term debt. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients and client funds obligation approximates fair value due to the short-term nature of the instruments. See Note 6 for discussion of the fair value of our debt.

As discussed in Note 2, we invest the funds held for clients in money market funds, demand deposit accounts, commercial paper with a maturity of less than three months and certificates of deposit, and classify these items as cash and cash equivalents within the funds held for clients line item in the consolidated balance sheets. Short-term investments in commercial paper and certificates of deposit with an original maturity of greater than three months are classified as available-for-sale securities, and are also included within the funds held for clients line item. These available-for-sale securities are recognized in the consolidated balance sheets at fair value, with the difference between the amortized cost and fair value of these available-for-sale securities recorded as unrealized net

gains (losses) within comprehensive earnings (loss) in our consolidated statements of comprehensive income. See Note 8 for additional information.

The accounting standard for fair value measurements establishes a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

•
Level 1 – Observable inputs such as quoted prices in active markets
•
Level 2 – Inputs other than quoted prices in active markets for identical assets or liabilities that are observable either directly or indirectly or quoted prices that are not active
•
Level 3 – Unobservable inputs in which there is little or no market data

Included in the following tables are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021:

 

 

 

December 31, 2022

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Certificates of deposit

 

$

—

 

 

$

25,000

 

 

$

—

 

 

$

25,000

 

U.S. treasury securities

 

$

—

 

 

$

169,610

 

 

$

—

 

 

$

169,610

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

$

—

 

 

$

311,679

 

 

$

—

 

 

$

311,679

 

Certificates of deposit

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap

 

$

—

 

 

$

1,335

 

 

$

—

 

 

$

1,335

 
v3.22.4
Employee Savings Plan and Employee Stock Purchase Plan
 12 Months Ended
Dec. 31, 2022
Compensation Related Costs [Abstract]  
Employee Savings Plan and Employee Stock Purchase Plan
10.
EMPLOYEE SAVINGS PLAN AND EMPLOYEE STOCK PURCHASE PLAN

Employees over the age of 18 who have completed ninety days of service are eligible to participate in our 401(k) plan. We have made a Qualified Automatic Contribution Arrangement (“QACA”) election, whereby the Company matches the contribution of our employees equal to 100% of the first 1% of salary deferrals and 50% of salary deferrals between 2% and 6%, up to a maximum matching contribution of 3.5% of an employee’s salary each plan year. We are allowed to make additional discretionary matching contributions and discretionary profit sharing contributions. Employees are 100% vested in amounts attributable to salary deferrals and rollover contributions. The QACA matching contributions as well as the discretionary matching and profit sharing contributions vest 100% after two years of employment from the date of hire. Matching contributions were $12.7 million, $11.6 million and $8.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The ESPP has overlapping offering periods, with each offering period lasting approximately 24 months. At the beginning of each offering period, eligible employees may elect to contribute, through payroll deductions, up to 10% of their compensation, subject to an annual per employee maximum of $25,000. Eligible employees purchase shares of the Company’s common stock at a price equal to 85% of the fair market value of the shares on the exercise date. The maximum number of shares that may be purchased by a participant during each offering period is 2,000 shares, subject to limits specified by the Internal Revenue Service. The shares reserved for purposes of the ESPP are shares we purchase in the open market. The maximum aggregate number of shares of the Company’s common stock that may be purchased by all participants under the ESPP is 2.0 million shares. During the years ended December 31, 2022, 2021 and 2020, eligible employees purchased 54,059, 40,699 and 51,407 shares, respectively, of the Company’s common stock under the ESPP. Compensation expense related to the ESPP is recognized on a straight-line basis over the requisite service period. Our

compensation expense related to the ESPP was $2.8 million, $2.7 million and $2.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.
v3.22.4
Earnings Per Share
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Earnings Per Share
11.
EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share is computed in a similar manner to basic earnings per share after assuming the issuance of shares of common stock for all potentially dilutive shares of restricted stock whether or not they are vested.

The following is a reconciliation of net income and the shares of common stock used in the computation of basic and diluted earnings per share:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Numerator:

 

 

 

 

 

 

 

 

 

Net income

 

$

281,389

 

 

$

195,960

 

 

$

143,453

 

Denominator:

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

57,928

 

 

 

57,885

 

 

 

57,620

 

Dilutive effect of unvested restricted stock

 

 

247

 

 

 

306

 

 

 

665

 

Diluted weighted average shares outstanding

 

 

58,175

 

 

 

58,191

 

 

 

58,285

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

4.86

 

 

$

3.39

 

 

$

2.49

 

Diluted

 

$

4.84

 

 

$

3.37

 

 

$

2.46

 
v3.22.4
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation
12.
STOCK-BASED COMPENSATION

Restricted Stock Awards

We have historically issued shares of restricted stock under the Paycom Software, Inc. 2014 Long-Term Incentive Plan (as amended, the “LTIP”) that are subject to either time-based vesting conditions (“Time-Based Shares”) or market-based vesting conditions (“Market-Based Shares”). The maximum number of shares that may be delivered pursuant to awards under the LTIP is 13,350,881 shares. The market-based vesting conditions are based on the Company’s total enterprise value (“TEV”) or volume weighted average stock price over a specific period exceeding certain specified thresholds. Compensation expense related to the issuance of Time-Based Shares is measured based on the fair value of the award on the grant date and recognized over the requisite service period on a straight-line basis. Compensation expense related to the issuance of Market-Based Shares is measured based upon the fair value of the award on the grant date and recognized on a straight-line basis over the vesting period based upon the probability that the vesting conditions will be met.

During the year ended December 31, 2022, we issued an aggregate of 451,737 restricted shares of common stock under the LTIP, consisting of 59,503 Market-Based Shares and 392,234 Time-Based Shares. Market-Based Shares will vest 50% on the first date, if any, that the arithmetic average of the Company’s volume weighted average price on each of the twenty consecutive trading days immediately preceding such date (the “VWAP Value”) equals or exceeds $484 per share and 50% on the first date, if any, that the Company’s VWAP Value equals or exceeds $559 per share, in each case provided that (i) such date occurs on or before the eighth anniversary of the grant date and (ii) the recipient is employed by, or providing services to, the Company on the applicable vesting date, and subject to the terms and conditions of the LTIP and the applicable restricted stock award agreement. The Time-Based Shares granted to non-executive employees will vest over periods ranging from three to five years, provided that the recipient is employed by, or providing services to, the Company on the applicable vesting date, and subject to the terms and conditions of the LTIP and the applicable restricted stock award agreement.

The 392,234 Time-Based Shares mentioned above include an aggregate of 5,210 Time-Based Shares issued to the non-employee members of our Board of Directors in May 2022, all of which will cliff-vest on May 9, 2023, provided that such director is providing services to the Company through the applicable vesting date, and subject to the terms and conditions of the LTIP and the applicable restricted stock award agreement.

On April 14, 2022, the Company announced the departure of Jon Evans from the position of Chief Operating Officer of the Company, effective April 14, 2022. Justin Long, the Company’s Executive Vice President of Operations, assumed Mr. Evans’s responsibilities. In connection with Mr. Evans’s departure, 5,663 of the Time-Based Shares previously granted to Mr. Evans accelerated in vesting.

The following table presents a summary of the grant-date fair values of restricted stock granted during the years ended December 31, 2022, 2021 and 2020 and the related assumptions:

 

 

 

Year Ended December 31,

 

 

2022

 

2021

 

2020

Grant-date fair value of restricted stock

 

$259.65 - $348.19

 

$315.95 - $521.17

 

$99.56 - $377.68

Risk-free interest rate

 

1.75%

 

0.95%

 

0.52% - 1.44%

Estimated volatility

 

40.0%

 

33.0%

 

30.0% - 32.0%

Expected life (in years)

 

2.5

 

2.3

 

4.4

 

The following table summarizes restricted stock awards activity for the year ended December 31, 2022:

 

 

 

Time-Based

 

 

Market-Based

 

 

 

Restricted Stock Awards

 

 

Restricted Stock Awards

 

 

 

Shares

 

 

Weighted Average
Grant Date Fair
Value

 

 

Shares

 

 

Weighted Average
Grant Date Fair
Value

 

Unvested shares of restricted stock outstanding at December 31, 2021

 

 

369.6

 

 

$

259.94

 

 

 

1,628.3

 

 

$

111.87

 

Granted

 

 

392.2

 

 

$

304.28

 

 

 

59.5

 

 

$

269.00

 

Vested

 

 

(219.8

)

 

$

202.40

 

 

 

(0.1

)

 

$

347.62

 

Forfeited

 

 

(62.9

)

 

$

317.73

 

 

 

(10.7

)

 

$

279.87

 

Unvested shares of restricted stock outstanding at December 31, 2022

 

 

479.1

 

 

$

315.04

 

 

 

1,677.0

 

 

$

116.36

 

 

The following table presents the aggregate fair value of awards that vested during the indicated period.

 

 

 

2022

 

 

2021

 

 

2020

 

Time-Based Restricted Stock Awards

 

$

63,970

 

 

$

97,242

 

 

$

76,653

 

Market-Based Restricted Stock Awards

 

$

—

 

 

$

76,153

 

 

$

90,122

 

 

Restricted Stock Units

In February 2022, the Compensation Committee of the Board of Directors authorized the granting of performance-based restricted stock units (“PSUs”) to certain executive officers pursuant to the LTIP (the “2022 PSU Awards”). Each PSU granted under the LTIP represents a notional share of the Company’s common stock. The 2022 PSU Awards represented an aggregate of 51,494 target units that may increase to an aggregate of 128,735 awarded units based upon the Company’s performance over two separate performance periods: (i) a two-year performance period commencing on January 1, 2022 and ending on December 31, 2023 (the “Two-Year Performance Period”); and (ii) a three-year performance period commencing on January 1, 2022 and ending on December 31, 2024 (the “Three Year Performance Period”). Up to 25% of the PSUs will be eligible to vest no later than February 29, 2024, for the Two-Year Performance Period, and up to 75% of the PSUs will be eligible to vest no later than March 1, 2025, for the Three-Year Performance Period, provided that the grantee remains employed by or providing services to the Company on the applicable vesting date, and subject to the terms and conditions of the LTIP and the Restricted Stock Unit Award Agreement – Performance Based Vesting (the “PSU Award Agreement”). The number of PSUs that will vest and be converted into shares of common stock will depend on the Company’s relative total stockholder return (“Relative TSR”), expressed as a percentile ranking of the Company’s total stockholder return (“TSR”) as compared to the Company’s peer group set forth in the PSU Award Agreement.

For purposes of the 2022 PSU Awards, TSR is determined by dividing (i) the sum of (A) the average daily volume weighted average price (or “VWAP” as defined in the PSU Award Agreement) of a share of the Company’s common stock or the common stock of a peer company, as applicable, during the final 60 trading day period of the applicable performance period, less (B) the average VWAP of a share of the Company’s common stock or the common stock of a peer company, as applicable, during the 60 trading day period ending on December 31, 2021, plus (C) the sum of all dividends which are paid by the Company (or the member of the peer group) to its stockholders, assuming such dividends are reinvested in the applicable company through the applicable performance period, by (ii) the average VWAP of a share of the Company’s common stock or the common stock of a peer company, as applicable, during the 60 trading day period ending on December 31, 2021. The Company’s peer group includes 35 publicly traded companies, which were reflective of the S&P 500 Software & Services index on the grant date.

In connection with the departure of Jon Evans described above, the PSUs granted to Mr. Evans in 2021 and 2022 will remain eligible for vesting based on the Company’s actual performance, but pro-rated for the number of days Mr. Evans was employed during the applicable two-year performance periods and three-year performance periods.

During the year ended December 31, 2022, we issued 500 time-based restricted stock units (“Time RSUs”) under the LTIP. The Time RSUs will vest over four years, provided that the recipient is employed by, or providing services to, the Company on the applicable vesting date, and subject to the terms and conditions of the LTIP and the applicable Time RSU award agreement.

The following table summarizes restricted stock unit activity for the year ended December 31, 2022:

 

 

 

Year Ended December 31,

 

 

2022

 

2021

 

2020

Grant-date fair value of restricted stock

 

$252.16 - $377.01

 

$382.78 - $587.97

 

—

Risk-free interest rate

 

1.25% - 1.51%

 

0.11% - 0.34%

 

—

Estimated volatility

 

49.2%

 

50.3% - 51.2%

 

—

Expected life (in years)

 

2.7

 

2.6

 

—

 

 

 

Time RSUs

 

 

PSUs

 

 

 

Units

 

 

Weighted Average
Grant Date Fair
Value Per Unit

 

 

Units

 

 

Weighted Average
Grant Date Fair
Value Per Unit

 

Unvested restricted stock units outstanding at December 31, 2021

 

 

—

 

 

$

—

 

 

 

37.1

 

 

$

556.50

 

Granted

 

 

0.5

 

 

$

377.01

 

 

 

51.5

 

 

$

296.07

 

Vested

 

 

—

 

 

$

—

 

 

 

—

 

 

$

—

 

Forfeited

 

 

—

 

 

$

—

 

 

 

(10.8

)

 

$

376.69

 

Unvested restricted stock units outstanding at December 31, 2022 (1)

 

 

0.5

 

 

$

377.01

 

 

 

77.8

 

 

$

409.13

 

 

(1)
A maximum of 194,478 shares could be delivered upon settlement of PSUs based upon Paycom’s Relative TSR over the applicable performance periods.

The following table presents the unrecognized compensation cost and the related weighted average recognition period associated with unvested restricted stock awards and unvested restricted stock unit awards as of December 31, 2022:

 

 

 

Restricted Stock

 

 

Restricted Stock

 

 

 

Awards

 

 

Units

 

Unrecognized compensation cost

 

$

217,409

 

 

$

13,210

 

Weighted average period for recognition (years)

 

 

3.0

 

 

 

1.5

 

 

 

The following table presents our total non-cash stock-based compensation expense resulting from restricted stock awards and restricted stock unit awards in the aggregate, which is included in the following line items in the accompanying consolidated statements of comprehensive income:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Operating expenses

 

$

4,671

 

 

$

4,570

 

 

$

5,185

 

Sales and marketing

 

 

18,659

 

 

 

13,801

 

 

 

14,376

 

Research and development

 

 

11,063

 

 

 

7,527

 

 

 

9,107

 

General and administrative

 

 

60,505

 

 

 

71,608

 

 

 

61,440

 

Total non-cash stock-based compensation expense

 

$

94,898

 

 

$

97,506

 

 

$

90,108

 

 

We capitalized stock-based compensation costs related to software developed for internal use of $9.0 million, $7.1 million and $6.7 million for the years ended December 31, 2022, 2021 and 2020, respectively.
v3.22.4
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
13.
COMMITMENTS AND CONTINGENCIES

Employment Agreements

We have employment agreements with certain of our executive officers. The agreements allow for annual compensation, participation in executive benefit plans, and performance-based cash bonuses.

Legal Proceedings

We are involved in various legal proceedings in the ordinary course of business. Although we cannot predict the outcome of these proceedings, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of these matters could have a material adverse effect on our business, financial condition, results of operations and cash flows.
v3.22.4
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes
14.
INCOME TAXES

The items comprising income tax expense are as follows:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Provision for current income taxes

 

 

 

 

 

 

 

 

 

Federal

 

$

81,348

 

 

$

17,557

 

 

$

14,680

 

State

 

 

30,051

 

 

 

9,539

 

 

 

6,422

 

Total provision for current income taxes

 

 

111,399

 

 

 

27,096

 

 

 

21,102

 

Provision for deferred income taxes

 

 

 

 

 

 

 

 

 

Federal

 

 

(2,823

)

 

 

26,579

 

 

 

15,204

 

State

 

 

(387

)

 

 

6,327

 

 

 

6,177

 

Total provision for deferred income taxes

 

 

(3,210

)

 

 

32,906

 

 

 

21,381

 

Total provision for income taxes

 

$

108,189

 

 

$

60,002

 

 

$

42,483

 

 

The following schedule reconciles the statutory Federal tax rate to the effective income tax rate:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Federal statutory tax rate

 

 

21

%

 

 

21

%

 

 

21

%

Increase (decrease) resulting from:

 

 

 

 

 

 

 

 

 

State income taxes, net of Federal income tax benefit

 

 

6

%

 

 

8

%

 

 

8

%

Nondeductible expenses

 

 

4

%

 

 

6

%

 

 

6

%

Research credit, Federal benefit

 

 

(2

%)

 

 

(3

%)

 

 

(3

%)

Stock-based compensation

 

 

(1

%)

 

 

(7

%)

 

 

(9

%)

Remeasurement of state deferred tax liabilities

 

 

(0

%)

 

 

(2

%)

 

 

0

%

Effective income tax rate

 

 

28

%

 

 

23

%

 

 

23

%

 

 

Our effective income tax rate was 28% and 23% for the years ended December 31, 2022 and 2021, respectively. The higher effective income tax rate for the year ended December 31, 2022 primarily resulted from a decrease of excess tax benefits from shares that vested in 2022.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of our deferred tax assets and liabilities were as follows:

 

 

 

December 31,

 

 

 

2022

 

 

2021

 

Deferred income tax assets (liabilities):

 

 

 

 

 

 

Mark-to-market investments - OCI

 

$

1,260

 

 

$

—

 

Stock-based compensation

 

 

4,425

 

 

 

1,541

 

Investment in Paycom Payroll Holdings, LLC

 

 

(146,907

)

 

 

(147,659

)

Net operating losses

 

 

189

 

 

 

614

 

Noncurrent deferred income tax liabilities, net

 

$

(141,033

)

 

$

(145,504

)

 

At December 31, 2022, we had net operating loss carryforwards for state income tax purposes of approximately $0.2 million, which are available to offset future state taxable income that begin expiring in 2032.

At December 31, 2022 and 2021, we had no material unrecognized tax benefits related to uncertain tax positions.

We file income tax returns with the United States federal government and various state jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2019.

On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law, which, among other things, implements a 15% minimum tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. Based on our current analysis of the provisions, we do not believe this legislation will have a material impact on our consolidated financial statements
v3.22.4
Subsequent Events
 12 Months Ended
Dec. 31, 2022
Subsequent Events [Abstract]  
Subsequent Events
15.
SUBSEQUENT EVENTS

On February 4, 2023, we issued an aggregate of 302,015 restricted shares of common stock to certain non-executive employees under the LTIP, consisting of 87,618 Market-Based Shares and 214,397 Time-Based Shares. Market-Based Shares for non-executive employees will vest 50% on the first date, if any, that the Company’s VWAP Value equals or exceeds $404 per share and 50% on the first date, if any, that the Company’s VWAP Value equals or exceeds $466 per share, in each case provided that (i) such date occurs on or before the eighth anniversary of the grant date and (ii) the recipient is employed by, or providing services to, the Company on the applicable vesting date. Of the 214,397 Time-Based Shares granted to non-executive employees, 213,397 will vest 21% on a specified initial vesting date, 21% on the first anniversary of such initial vesting date, 25% on the second anniversary of such initial vesting date, and 33% on the third anniversary of such initial vesting date, provided that the recipient is employed by, or providing services to, the Company on the applicable vesting date.

Effective February 6, 2023, we issued, in the aggregate, 5,232 shares of common stock upon the vesting of PSUs awarded to certain executive officers in February 2021. The number of shares delivered upon vesting of the PSUs was determined based on the Company’s achievement of a Relative TSR performance goal, which compared the Company’s TSR to the TSR of a peer group of 34 publicly traded companies for the two-year performance period that commenced on January 1, 2021 and ended on December 31, 2022.

v3.22.4
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

Our consolidated financial statements include the financial results of Software and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying consolidated financial statements include all adjustments necessary for the fair presentation for the periods presented.
Recently Adopted / Issued Accounting Pronouncements

Adoption of New Accounting Pronouncements

In January 2021, we adopted Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes” (“ASU 2019-12”) utilizing the prospective transition method. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income tax in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, “Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. Prior to August 24, 2022, our floating-to-fixed interest rate swap was outstanding to offset the rate variability associated with our outstanding indebtedness. As discussed in Note 7, the interest rate swap was terminated on August 24, 2022. As a result, the adoption of ASU 2020-04 had no material impact on our unaudited financial statements.

In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848) Scope” (“ASU 2021-01”), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that are affected by the discounting transition. ASU 2021-01 amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. As discussed in Note 7, the interest rate swap was terminated on August 24, 2022. As a result, the adoption of ASU 2021-01 had no material impact on our unaudited financial statements.
Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include income taxes, loss contingencies, the useful life of property and equipment and intangible assets, the life of our client relationships, the fair value of our stock-based awards and the fair value of our financial instruments, intangible assets and goodwill. These estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Actual results could materially differ from these estimates.
Segment Information

Segment Information

We operate in a single operating segment and a single reporting segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is also the chief executive officer, in deciding how to allocate resources and assessing performance. Our chief executive officer allocates

resources and assesses performance based upon financial information at the consolidated level. As we operate in one operating segment, all required financial segment information is presented in the consolidated financial statements.
Cash Equivalents

Cash Equivalents

We consider all highly liquid instruments purchased with a maturity of three months or less and money market funds to be cash equivalents. We maintain cash and cash equivalents in demand deposit accounts, money market funds, and certificates of deposit, which may not be federally insured. The fair value of our cash and cash equivalents approximates carrying value. We have not experienced any losses in such accounts and do not believe there is exposure to any significant credit risk on such accounts.
Accounts Receivable

Accounts Receivable

We generally collect revenues from our clients through an automatic deduction from the clients’ bank accounts at the time payroll processing occurs. Accounts receivable on our consolidated balance sheets generally consists of revenue-related receivables, including processing fees, interest income receivable, and revenue fees related to the last business day of the year, which are collected on the following business day. As accounts receivable are collected via automatic deduction on the following business day, the Company has not recognized an allowance for doubtful accounts.
Property and Equipment

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight line method over the estimated useful lives of the assets as follows:

 

Furniture, fixtures and equipment

5 years

Computer equipment

3 years

Software and capitalized software

3 years

Buildings

30 years

Leasehold improvements

5 years

Rental clocks

5 years

Land improvements

15 years

Vehicles

3 years

 

Costs incurred during construction of long-lived assets are recorded as construction in progress and are not depreciated until the asset is placed in service.

We capitalize interest costs incurred related to construction in progress. For the years ended December 31, 2022, 2021 and 2020, we incurred interest costs of $3.4 million, $1.4 million and $1.5 million, respectively. For the years ended December 31, 2022, 2021 and 2020, interest costs of $0.9 million, $1.4 million and $1.5 million, respectively, were capitalized.
Leases

Leases

Our leases primarily consist of noncancellable operating leases for office space. We recognize a right-of-use asset and operating lease liability on the lease commencement date based on the present value of the lease payments over the lease term. Operating lease liabilities are measured by discounting future lease payments at an estimated incremental borrowing rate. Right-of-use assets are amortized over the lease term and include adjustments related to prepaid rent.
Internal Use Software

Internal Use Software

Capitalized costs include services associated with developing or obtaining internal use computer software and certain payroll and payroll-related costs for employees who are directly associated with internal use computer software projects. The amount of payroll costs that are capitalized with respect to these employees is limited to the time directly spent on such projects. Expenditures for software purchases and software developed or obtained for internal use are capitalized and amortized over a three-year period on a straight-line basis. Costs associated with preliminary project stage activities, training, maintenance and all other post-implementation stage activities are expensed as incurred. We also expense internal costs related to minor upgrades and enhancements, as it is impractical to separate these costs from normal maintenance activities.

The total capitalized payroll costs related to internal use computer software projects were $66.4 million and $52.9 million during the years ended December 31, 2022 and 2021, respectively, and are included in property and equipment. Amortization expense of capitalized software costs were $47.3 million, $36.5 million and $27.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Derivatives

Derivatives

In December 2017, we entered into a floating-to-fixed interest rate swap agreement to limit the exposure to floating interest rate risk related to the 2017 Term Loans (as defined in Note 6). We do not hold derivative instruments for trading or speculative purposes. The interest rate swap agreement effectively converted a portion of the variable interest rate payments to fixed interest rate payments. We account for our derivatives under ASC Topic 815, “Derivatives and Hedging,” and recognize all derivative instruments in the consolidated balance sheets at fair value as either short-term or long-term assets or liabilities based on their anticipated settlement date. See Note 9, “Fair Value of Financial Instruments”. We have elected not to designate our interest rate swap as a hedge; therefore, changes in the fair value of the derivative instrument are recognized in our consolidated statements of comprehensive income within Other income (expense), net. As further discussed in Note 7, on August 24, 2022, we terminated the interest rate swap by settling the contract.
Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill is not amortized, but we are required to test the carrying value of goodwill for impairment at least annually, or earlier if, at the reporting unit level, an indicator of impairment arises. Our business is largely homogeneous and, as a result, goodwill is associated with one reporting unit. We have selected June 30 as our annual goodwill impairment testing date. A review of goodwill may be initiated before or after conducting the annual analysis if events or changes in circumstances indicate the carrying value of goodwill may no longer be recoverable. The Company performed a qualitative assessment to determine if it is more-likely-than-not that the fair value of the reporting unit had declined below its carrying value. In the qualitative assessment, we consider the macroeconomic conditions, including any deterioration of general economic conditions, industry and market conditions, including any deterioration in the environment where the reporting unit operates, changes in the products/services and regulator and political developments; cost of doing business; overall financial performance; other relevant reporting unit specific facts, such as changes in management or key personnel or pending litigation. Based on our assessment, there was no impairment recorded as of June 30, 2022. For the years ended December 31, 2022, 2021 and 2020, there were no indicators of impairment. Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives.
Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Long-lived assets, including intangible assets with definite lives, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. We have determined that there was no impairment of long-lived assets including intangible assets with definite lives, for the years ended December 31, 2022, 2021 and 2020.
Funds Held for Clients and Client Funds Obligation

Funds Held for Clients and Client Funds Obligation

As part of our payroll and tax filing application, we (i) collect client funds to satisfy their respective federal, state and local employment tax obligations, (ii) remit such funds to the appropriate taxing authorities and accounts designated by our clients, and (iii) manage client tax filings and any related correspondence with taxing authorities. Amounts collected by us from clients for their federal, state and local employment taxes are invested by us, and we earn interest on these funds during the interval between receipt and disbursement.

These investments are shown in our consolidated balance sheets as funds held for clients, and the associated liability for the tax filings is shown as client funds obligation. The liability is recorded in the accompanying consolidated balance sheets at the time we obtain the funds from clients. The client funds obligation represents liabilities that will be repaid within one year of the consolidated balance sheet date. As of December 31, 2022 and December 31, 2021, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper and certificates of deposit. Additionally, as of December 31, 2022, the funds held for clients were invested in U.S. treasury securities with an original maturity of greater than one year. Short-term investments in commercial paper and certificates of deposit with an original maturity greater than three months are classified as available for-sale securities, and are also included within the funds held for clients line item in the consolidated balance sheets. U.S. treasury securities with an original maturity of greater than one year are also classified as available-for-sale securities and included within the funds held for clients line item in the consolidated balance sheets. These available-for-sale securities are recorded in the consolidated balance sheets at fair value, with the difference between the amortized cost and fair value of these available-for-sale securities recorded as unrealized net gains (losses) on available-for-sale securities and are included within comprehensive earnings (loss) in the consolidated statements of comprehensive income. Funds held for clients are classified as a current asset in the consolidated balance sheets because the funds are held solely to satisfy the client funds obligation. Additionally, the funds held for clients is classified as restricted cash and restricted cash equivalents and presented within the reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents on the consolidated statements of cash flows.
Stock Repurchase Plan

Stock Repurchase Plan

In May 2016, our Board of Directors authorized a stock repurchase plan allowing for the repurchase of shares of our common stock in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs. Since the initial authorization of the stock repurchase plan, our Board of Directors has amended and extended and authorized new stock repurchase plans from time to time. Most recently, in August 2022, our Board of Directors authorized the repurchase of up to $1.1 billion of our common stock. As of December 31, 2022 there was $1.1 billion available for repurchases under our stock repurchase plan. Our stock repurchase plan may be suspended or discontinued at any time. The actual timing, number and value of shares repurchased depends on a number of factors, including the market price of our common stock, general market and economic conditions, shares withheld for taxes associated with the vesting of restricted stock and other corporate considerations. The current stock repurchase plan will expire on August 15, 2024.

During the year ended December 31, 2022, we repurchased an aggregate of 364,667 shares of our common stock at an average cost of $273.74 per share, including 17,355 shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of restricted stock. During the year ended December 31, 2021, we repurchased an aggregate of 163,849 shares of our common stock at an average cost of $400.24 per share, all of which were shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of the restricted stock.
Revenue Recognition

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our clients in an amount that reflects the consideration we expect to be entitled to for those goods or services. Substantially all of our revenues are comprised of revenue from contracts with clients. Sales taxes and other applicable taxes are excluded from revenues.

Recurring Revenues

Recurring revenues are derived primarily from our talent acquisition, time and labor management, payroll, talent management and HR management applications as well as fees charged for form filings and delivery of client payroll checks and reports. Talent acquisition includes our Applicant Tracking, Candidate Tracker, Enhanced Background Checks, Onboarding, E-Verify and Tax Credit Services applications. Time and labor management includes Time and Attendance, Scheduling/Schedule exchange, Time-Off Requests, Labor Allocation, Labor Management Reports/Push Reporting, Geofencing/Geotracking and Microfence tools and applications. Payroll includes Beti, Payroll and Tax Management, Vault Card, Paycom Pay, Expense Management, Mileage Tracker/FAVR, Garnishment Administration and GL Concierge applications. Talent management includes our Employee Self-Service, Compensation Budgeting, Performance Management, Position Management, My Analytics and Paycom Learning and Content Subscriptions applications. HR management includes our Manager on-the-Go, Direct Data Exchange, Ask Here, Documents and Checklists, Government and Compliance, Benefits Administration/Benefits to Carrier, Benefit Enrollment Service, COBRA Administration, Personnel Action Forms and Performance Discussion Forms, Surveys, Enhanced ACA and Clue applications.

The performance obligations related to recurring revenues are satisfied during each client’s payroll period, with the agreed-upon fee being charged and collected as part of our processing of the client’s payroll. Recurring revenues are recognized at the conclusion of processing of each client’s payroll period, when each respective payroll client is billed. Collectability is reasonably assured as the fees are collected through an automated clearing house as part of the client’s payroll cycle or through direct wire transfer, which minimizes the default risk.

The contract period for substantially all contracts associated with these revenues is one month due to the fact that both we and the client have the unilateral right to terminate a wholly unperformed contract without compensating the other party by providing 30 days’ notice of termination. Our payroll application is the foundation of our solution, and all of our clients are required to utilize this application in order to access our other applications. For clients who purchase multiple applications, due to the short-term nature of our contracts, we do not believe it is meaningful to separately assess and identify whether or not each application potentially represents its own, individual, performance obligation as the revenue generated from each application is recognized within the same month as the revenue from the core payroll application. Similarly, we do not believe it is meaningful to individually determine the standalone selling price for each application. We consider the total price charged to a client in a given period to be indicative of the standalone selling price, as the total amount charged is within a reasonable range of prices typically charged for our goods and services for comparable classes of client groups, which we periodically assess for price adjustments.

Interest income on funds held for clients is earned on funds that are collected from clients in advance of either the applicable due date for payroll tax submissions or the applicable disbursement date for employee payment services. The interest earned on these funds is included in recurring revenues in the consolidated statements of comprehensive income as the collection, holding, and remittance of these funds are essential components of providing these services.

Implementation and Other Revenues

Implementation and other revenues consist of nonrefundable upfront conversion fees which are charged to new clients to offset the expense of new client set-up as well as revenues from the sale of time clocks as part of our employee time and attendance services. Although these revenues are related to our recurring revenues, they represent distinct performance obligations.

Implementation activities primarily represent administrative activities that allow us to fulfill future performance obligations for our clients and do not represent services transferred to the client. However, the nonrefundable upfront fee charged to our clients results in an implied performance obligation in the form of a material right to the client related to the client’s option to renew at the end of each 30-day contract period. Further, given that all other services within the contract are sold at a total price indicative of the standalone selling price, coupled with the fact that the upfront fees are consistent with upfront fees charged in similar contracts that we have with clients, the standalone selling price of the client’s option to renew the contract approximates the dollar amount of the nonrefundable upfront fee. The nonrefundable upfront fee is typically included on the client’s first invoice, and is deferred and recognized ratably over the estimated renewal period (i.e., ten-year estimated client life).

Revenues from the sale of time clocks are recognized when control is transferred to the client upon delivery of the product. We estimate the standalone selling price for the time clocks by maximizing the use of observable inputs such as our specific pricing practices for time clocks.

Contract Balances

The timing of revenue recognition for recurring services is consistent with the invoicing of clients as they both occur during the respective client payroll period for which the services are provided. Therefore, we do not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing.

Changes in deferred revenue related to material rights for the years ended December 31, 2022 and 2021 were as follows:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

Balance, beginning of period

 

$

101,426

 

 

$

86,826

 

Recognition of revenue included in beginning of year balance

 

 

(15,949

)

 

 

(13,298

)

Contract balance, net of revenue recognized during the period

 

 

31,939

 

 

 

27,898

 

Balance, end of period

 

$

117,416

 

 

$

101,426

 

 

We expect to recognize $24.3 million of deferred revenue related to material rights in 2023, $18.5 million in 2024, and $74.6 million of such deferred revenue thereafter.

Assets Recognized from the Costs to Obtain and Costs to Fulfill Revenue Contracts

We recognize an asset for the incremental costs of obtaining a contract with a client if we expect the amortization period to be longer than one year. We also recognize an asset for the costs to fulfill a contract with a client if such costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. We have determined that substantially all costs related to implementation activities are administrative in nature and also meet the capitalization criteria under ASC 340-40. These capitalized costs to fulfill principally relate to upfront direct costs that are expected to be recovered through margin and that enhance our ability to satisfy future performance obligations.

The assets related to both costs to obtain, and costs to fulfill, contracts with clients are accounted for utilizing a portfolio approach, and are capitalized and amortized over the expected period of benefit, which we have determined to be the estimated client relationship of ten years. The expected period of benefit has been determined to be the estimated life of the client relationship primarily because we incur no new costs to obtain, or costs to fulfill, a contract upon renewal of such contract. Additional commission costs may be incurred when an existing client purchases additional applications; however, these commission costs relate solely to the additional applications purchased and are not related to contract renewal. Furthermore, additional fulfillment costs associated with existing clients purchasing additional applications are minimized by our seamless single-database platform. These assets are presented as deferred contract costs in the accompanying consolidated balance sheets. Amortization expense related to costs to obtain and costs to fulfill a contract are included in the “sales and marketing” and “general and administrative” line items in the accompanying consolidated statements of comprehensive income.

 

The following tables present the asset balances and related amortization expense for these contract costs:

 

 

 

As of and for the Year Ended December 31, 2022

 

 

 

Beginning

 

 

Capitalization

 

 

 

 

 

Ending

 

 

 

Balance

 

 

of Costs

 

 

Amortization

 

 

Balance

 

Costs to obtain a contract

 

$

272,919

 

 

$

97,978

 

 

$

(45,440

)

 

$

325,457

 

Costs to fulfill a contract

 

$

265,657

 

 

$

114,152

 

 

$

(40,914

)

 

$

338,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Year Ended December 31, 2021

 

 

 

Beginning

 

 

Capitalization

 

 

 

 

 

Ending

 

 

 

Balance

 

 

of Costs

 

 

Amortization

 

 

Balance

 

Costs to obtain a contract

 

$

232,583

 

 

$

77,644

 

 

$

(37,308

)

 

$

272,919

 

Costs to fulfill a contract

 

$

199,593

 

 

$

96,728

 

 

$

(30,664

)

 

$

265,657

 
Cost of Revenues

Cost of Revenues

Our costs and expenses applicable to total revenues represent operating expenses and systems support and technology costs, including labor and related expenses, bank fees, shipping fees and costs of paper stock, envelopes, etc. In addition, costs included to derive gross margins are comprised of support labor and related expenses, related hardware costs and applicable depreciation and amortization costs.
Advertising Costs

Advertising Costs

Advertising costs are expensed the first time that advertising takes place. Advertising costs for the years ended December 31, 2022, 2021 and 2020 were $90.6 million, $71.6 million and $66.9 million, respectively.
Sales Taxes

Sales Taxes

We collect and remit sales tax on sales of time and attendance clocks and on payroll services in certain states. These taxes are recognized on a net basis, and therefore, excluded from revenues. For the years ended December 31, 2022, 2021 and 2020, sales taxes collected were $15.5 million, $11.9 million and $9.7 million, respectively.
Employee Stock-Based Compensation

Employee Stock-Based Compensation

Time-based stock compensation awards to employees are recognized on a straight-line basis over the applicable vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair values measured as of the date of grant. Market-based stock compensation awards to employees are recognized on a straight-line basis over the applicable estimated vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair value as of the date of the grant unless vesting occurs sooner at which time the remaining respective unrecognized compensation cost is recognized. Performance-based restricted stock compensation awards are recognized on a straight-line basis over the applicable vesting period as compensation costs in the consolidated statements of comprehensive income based on their fair values measured as of the date of grant. Forfeitures related to our stock-based compensation awards are recognized as they occur.
Employee Stock Purchase Plan

Employee Stock Purchase Plan

An award issued under the Paycom Software, Inc. Employee Stock Purchase Plan (the “ESPP”) is classified as a share-based liability and recognized at the fair value of the award. Expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period.
Income Taxes

Income Taxes

Our consolidated financial statements include a provision for income taxes incurred for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We recognize a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized.

We file income tax returns with the United States federal government and various state jurisdictions. We evaluate tax positions taken or expected to be taken in the course of preparing our tax returns and disallow the recognition of tax positions not deemed to meet a “more-likely-than-not” threshold of being sustained by the applicable tax authority. We do not believe there are any tax positions taken within the consolidated financial statements that do not meet this threshold. Our policy is to recognize interest and penalties, if any, related to uncertain tax positions as a component of general and administrative expenses. With few exceptions, we are no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2019.
Seasonality

Seasonality

Our revenues are seasonal in nature and generally we expect our first and fourth quarter recurring revenues to be higher than other quarters during the year. Recurring revenues include revenues relating to the annual processing of payroll tax filing forms and ACA form filing requirements, such as Form W-2, Form 1099, and Form 1095 and revenues from processing unscheduled payroll runs (such as bonuses) for our clients. As payroll tax forms are typically processed in the first quarter of the year, first quarter recurring revenues and margins are positively impacted. In addition, unscheduled payroll runs at the end of the year often result in increased recurring revenues in the fourth quarter. These seasonal fluctuations in revenues can also have an impact on gross profits. Historical results impacted by these seasonal trends should not be considered a reliable indicator of our future results of operations.
v3.22.4
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Estimated Useful Lives Depreciation is computed using the straight line method over the estimated useful lives of the assets as follows:

Furniture, fixtures and equipment

5 years

Computer equipment

3 years

Software and capitalized software

3 years

Buildings

30 years

Leasehold improvements

5 years

Rental clocks

5 years

Land improvements

15 years

Vehicles

3 years

 
Summary of Changes in Deferred Revenue Related to Material Rights

Changes in deferred revenue related to material rights for the years ended December 31, 2022 and 2021 were as follows:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

Balance, beginning of period

 

$

101,426

 

 

$

86,826

 

Recognition of revenue included in beginning of year balance

 

 

(15,949

)

 

 

(13,298

)

Contract balance, net of revenue recognized during the period

 

 

31,939

 

 

 

27,898

 

Balance, end of period

 

$

117,416

 

 

$

101,426

 
Summary of Asset Balances and Related Amortization Expense For Contract Costs

The following tables present the asset balances and related amortization expense for these contract costs:

 

 

 

As of and for the Year Ended December 31, 2022

 

 

 

Beginning

 

 

Capitalization

 

 

 

 

 

Ending

 

 

 

Balance

 

 

of Costs

 

 

Amortization

 

 

Balance

 

Costs to obtain a contract

 

$

272,919

 

 

$

97,978

 

 

$

(45,440

)

 

$

325,457

 

Costs to fulfill a contract

 

$

265,657

 

 

$

114,152

 

 

$

(40,914

)

 

$

338,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Year Ended December 31, 2021

 

 

 

Beginning

 

 

Capitalization

 

 

 

 

 

Ending

 

 

 

Balance

 

 

of Costs

 

 

Amortization

 

 

Balance

 

Costs to obtain a contract

 

$

232,583

 

 

$

77,644

 

 

$

(37,308

)

 

$

272,919

 

Costs to fulfill a contract

 

$

199,593

 

 

$

96,728

 

 

$

(30,664

)

 

$

265,657

 
v3.22.4
Property and Equipment (Tables)
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment and Accumulated Depreciation and Amortization

Property and equipment and accumulated depreciation and amortization were as follows:

 

 

 

December 31, 2022

 

 

December 31, 2021

 

Property and equipment

 

 

 

 

 

 

Software and capitalized software costs

 

$

270,645

 

 

$

199,470

 

Buildings

 

 

177,765

 

 

 

172,807

 

Computer equipment

 

 

133,715

 

 

 

102,509

 

Rental clocks

 

 

35,846

 

 

 

30,313

 

Furniture, fixtures and equipment

 

 

28,414

 

 

 

24,971

 

Other

 

 

17,321

 

 

 

16,397

 

 

 

 

663,706

 

 

 

546,467

 

Less: accumulated depreciation and amortization

 

 

(331,340

)

 

 

(242,652

)

 

 

 

332,366

 

 

 

303,815

 

Construction in progress

 

 

36,286

 

 

 

11,342

 

Land

 

 

33,796

 

 

 

33,796

 

Property and equipment, net

 

$

402,448

 

 

$

348,953

 
v3.22.4
Goodwill and Intangible Assets, Net (Tables)
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets

All of our intangible assets other than goodwill are considered to have definite lives and, as such, are subject to amortization. The following tables present the components of intangible assets within our consolidated balance sheets:

 

 

 

December 31, 2022

 

 

 

Weighted Average Remaining

 

 

 

 

Accumulated

 

 

 

 

 

 

Useful Life

 

Gross

 

 

Amortization

 

 

Net

 

 

 

(Years)

 

 

 

 

 

 

 

 

 

Intangibles:

 

 

 

 

 

 

 

 

 

 

 

Naming rights

 

13.8

 

$

60,199

 

 

$

(6,182

)

 

$

54,017

 

Trade name

 

—

 

 

3,194

 

 

 

(3,194

)

 

 

—

 

Total

 

 

 

$

63,393

 

 

$

(9,376

)

 

$

54,017

 

 

 

 

December 31, 2021

 

 

 

Weighted Average Remaining

 

 

 

 

Accumulated

 

 

 

 

 

 

Useful Life

 

Gross

 

 

Amortization

 

 

Net

 

 

 

(Years)

 

 

 

 

 

 

 

 

 

Intangibles:

 

 

 

 

 

 

 

 

 

 

 

Naming rights

 

14.8

 

$

60,199

 

 

$

(2,278

)

 

$

57,921

 

Trade name

 

0.5

 

 

3,194

 

 

 

(3,087

)

 

 

107

 

Total

 

 

 

$

63,393

 

 

$

(5,365

)

 

$

58,028

 
v3.22.4
Leases (Tables)
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Summary of Lease Assets and Liabilities

The table below presents the lease assets and liabilities as of December 31, 2022 and December 31, 2021.

 

Balance Sheet location

 

December 31, 2022

 

 

December 31, 2021

 

Other assets

 

$

39,776

 

 

$

29,841

 

Lease liabilities:

 

 

 

 

 

 

Accrued expenses and other current liabilities

 

$

14,986

 

 

$

10,853

 

Other long-term liabilities

 

$

26,026

 

 

$

20,059

 

 
Schedule of Undiscounted Cash Flows for Future Annual Maturities of Operating Lease Liabilities

The undiscounted cash flows for the future annual maturities of our operating lease liabilities and the reconciliation of those total undiscounted cash flows to our lease liabilities as of December 31, 2022 were as follows:

 

2023

 

$

14,791

 

2024

 

 

9,587

 

2025

 

 

6,962

 

2026

 

 

5,192

 

2027

 

 

2,711

 

Thereafter

 

 

3,500

 

Total undiscounted cash flows

 

$

42,743

 

Present value discount

 

 

(1,731

)

Lease liabilities

 

$

41,012

 

 
v3.22.4
Long-Term Debt, Net (Tables)
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Schedule of Long-Term Debt

Long-term debt consisted of the following:

 

 

 

December 31, 2022

 

 

December 31, 2021

 

July 2022 Revolving Credit Agreement due July 29, 2027

 

$

29,000

 

 

$

—

 

Net term note to bank due September 7, 2025

 

 

—

 

 

 

29,155

 

Total long-term debt, net (including current portion)

 

 

29,000

 

 

 

29,155

 

Less: Current portion

 

 

—

 

 

 

(1,775

)

Total long-term debt, net

 

$

29,000

 

 

$

27,380

 
Aggregate Future Maturities of Long-Term Debt

Year Ending December 31,

 

 

 

2023

 

 

—

 

2024

 

 

—

 

2025

 

 

—

 

2026

 

 

—

 

2027

 

 

29,000

 

Thereafter

 

 

—

 

Total

 

$

29,000

 
v3.22.4
Corporate Investments and Funds Held for Clients (Tables)
 12 Months Ended
Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]  
Cash and Cash Equivalents and Investments

The tables below present our cash and cash equivalents, the funds held for clients’ cash and cash equivalents as well as the investments that were included within funds held for clients on the consolidated balance sheets:

 

 

 

December 31, 2022

 

Type of issue

 

Amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses(1)

 

 

Fair value

 

Cash and cash equivalents

 

$

400,730

 

 

$

—

 

 

$

—

 

 

$

400,730

 

Funds held for clients’ cash and cash equivalents

 

 

2,008,365

 

 

 

—

 

 

 

—

 

 

 

2,008,365

 

Available-for-sale securities (2):

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Certificates of deposit

 

 

25,000

 

 

 

—

 

 

 

—

 

 

 

25,000

 

U.S. treasury securities

 

 

174,367

 

 

 

—

 

 

 

(4,757

)

 

 

169,610

 

Total investments

 

$

2,608,462

 

 

$

—

 

 

$

(4,757

)

 

$

2,603,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

Type of issue

 

Amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Fair value

 

Cash and cash equivalents

 

$

277,978

 

 

$

—

 

 

$

—

 

 

$

277,978

 

Funds held for clients’ cash and cash equivalents

 

 

1,534,894

 

 

 

—

 

 

 

—

 

 

 

1,534,894

 

Available-for-sale securities (2):

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

 

311,679

 

 

 

—

 

 

 

—

 

 

 

311,679

 

Certificates of deposit

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total investments

 

$

2,124,551

 

 

$

—

 

 

$

—

 

 

$

2,124,551

 

 

(1)
These securities have been in a gross unrealized loss position for a period of less than 12 months.
(2)
All available-for-sale securities were included within the funds held for clients.
Summary of Expected Maturities of Available for Sale Securities

Expected maturities of available-for-sale securities at December 31, 2022 are as follows:

 

Expected maturity

 

Amortized cost

 

 

Fair value

 

One year or less

 

$

25,000

 

 

$

25,000

 

One year to five years

 

$

174,367

 

 

$

169,610

 

Total available-for-sale securities

 

$

199,367

 

 

$

194,610

 
v3.22.4
Fair Value of Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Schedule of Major Categories of Assets and Liabilities Measured at Fair Value on Recurring Basis

Included in the following tables are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021:

 

 

 

December 31, 2022

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Certificates of deposit

 

$

—

 

 

$

25,000

 

 

$

—

 

 

$

25,000

 

U.S. treasury securities

 

$

—

 

 

$

169,610

 

 

$

—

 

 

$

169,610

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

$

—

 

 

$

311,679

 

 

$

—

 

 

$

311,679

 

Certificates of deposit

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap

 

$

—

 

 

$

1,335

 

 

$

—

 

 

$

1,335

 
v3.22.4
Earnings Per Share (Tables)
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Computation of Basic and Diluted Net Earnings Per Share

The following is a reconciliation of net income and the shares of common stock used in the computation of basic and diluted earnings per share:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Numerator:

 

 

 

 

 

 

 

 

 

Net income

 

$

281,389

 

 

$

195,960

 

 

$

143,453

 

Denominator:

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

57,928

 

 

 

57,885

 

 

 

57,620

 

Dilutive effect of unvested restricted stock

 

 

247

 

 

 

306

 

 

 

665

 

Diluted weighted average shares outstanding

 

 

58,175

 

 

 

58,191

 

 

 

58,285

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

4.86

 

 

$

3.39

 

 

$

2.49

 

Diluted

 

$

4.84

 

 

$

3.37

 

 

$

2.46

 
v3.22.4
Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2022
Summary of Restricted Stock Unit and PSU Activity

The following table summarizes restricted stock awards activity for the year ended December 31, 2022:

 

 

 

Time-Based

 

 

Market-Based

 

 

 

Restricted Stock Awards

 

 

Restricted Stock Awards

 

 

 

Shares

 

 

Weighted Average
Grant Date Fair
Value

 

 

Shares

 

 

Weighted Average
Grant Date Fair
Value

 

Unvested shares of restricted stock outstanding at December 31, 2021

 

 

369.6

 

 

$

259.94

 

 

 

1,628.3

 

 

$

111.87

 

Granted

 

 

392.2

 

 

$

304.28

 

 

 

59.5

 

 

$

269.00

 

Vested

 

 

(219.8

)

 

$

202.40

 

 

 

(0.1

)

 

$

347.62

 

Forfeited

 

 

(62.9

)

 

$

317.73

 

 

 

(10.7

)

 

$

279.87

 

Unvested shares of restricted stock outstanding at December 31, 2022

 

 

479.1

 

 

$

315.04

 

 

 

1,677.0

 

 

$

116.36

 

 

 

Time RSUs

 

 

PSUs

 

 

 

Units

 

 

Weighted Average
Grant Date Fair
Value Per Unit

 

 

Units

 

 

Weighted Average
Grant Date Fair
Value Per Unit

 

Unvested restricted stock units outstanding at December 31, 2021

 

 

—

 

 

$

—

 

 

 

37.1

 

 

$

556.50

 

Granted

 

 

0.5

 

 

$

377.01

 

 

 

51.5

 

 

$

296.07

 

Vested

 

 

—

 

 

$

—

 

 

 

—

 

 

$

—

 

Forfeited

 

 

—

 

 

$

—

 

 

 

(10.8

)

 

$

376.69

 

Unvested restricted stock units outstanding at December 31, 2022 (1)

 

 

0.5

 

 

$

377.01

 

 

 

77.8

 

 

$

409.13

 

 

(1)
A maximum of 194,478 shares could be delivered upon settlement of PSUs based upon Paycom’s Relative TSR over the applicable performance periods.
Summary of Aggregate Fair Value of Awards

The following table presents the aggregate fair value of awards that vested during the indicated period.

 

 

 

2022

 

 

2021

 

 

2020

 

Time-Based Restricted Stock Awards

 

$

63,970

 

 

$

97,242

 

 

$

76,653

 

Market-Based Restricted Stock Awards

 

$

—

 

 

$

76,153

 

 

$

90,122

 
Summary of Unrecognized Compensation Cost and Related Weighted Average Recognition Period Associated with Unvested restricted Stock Awards and Unvested Restricted Stock Units

The following table presents the unrecognized compensation cost and the related weighted average recognition period associated with unvested restricted stock awards and unvested restricted stock unit awards as of December 31, 2022:

 

 

 

Restricted Stock

 

 

Restricted Stock

 

 

 

Awards

 

 

Units

 

Unrecognized compensation cost

 

$

217,409

 

 

$

13,210

 

Weighted average period for recognition (years)

 

 

3.0

 

 

 

1.5

 

 

 
Non-cash Stock-based Compensation Resulting From Restricted Stock Awards and Restricted Stock Units Awards

The following table presents our total non-cash stock-based compensation expense resulting from restricted stock awards and restricted stock unit awards in the aggregate, which is included in the following line items in the accompanying consolidated statements of comprehensive income:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Operating expenses

 

$

4,671

 

 

$

4,570

 

 

$

5,185

 

Sales and marketing

 

 

18,659

 

 

 

13,801

 

 

 

14,376

 

Research and development

 

 

11,063

 

 

 

7,527

 

 

 

9,107

 

General and administrative

 

 

60,505

 

 

 

71,608

 

 

 

61,440

 

Total non-cash stock-based compensation expense

 

$

94,898

 

 

$

97,506

 

 

$

90,108

 
Restricted Stock [Member]  
Summary of Grant-Date Fair Values of Restricted Stock / PSUs Granted and Related Assumptions

The following table presents a summary of the grant-date fair values of restricted stock granted during the years ended December 31, 2022, 2021 and 2020 and the related assumptions:

 

 

 

Year Ended December 31,

 

 

2022

 

2021

 

2020

Grant-date fair value of restricted stock

 

$259.65 - $348.19

 

$315.95 - $521.17

 

$99.56 - $377.68

Risk-free interest rate

 

1.75%

 

0.95%

 

0.52% - 1.44%

Estimated volatility

 

40.0%

 

33.0%

 

30.0% - 32.0%

Expected life (in years)

 

2.5

 

2.3

 

4.4

 

 

Year Ended December 31,

 

 

2022

 

2021

 

2020

Grant-date fair value of restricted stock

 

$252.16 - $377.01

 

$382.78 - $587.97

 

—

Risk-free interest rate

 

1.25% - 1.51%

 

0.11% - 0.34%

 

—

Estimated volatility

 

49.2%

 

50.3% - 51.2%

 

—

Expected life (in years)

 

2.7

 

2.6

 

—
v3.22.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Components of Income Tax Expense

The items comprising income tax expense are as follows:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Provision for current income taxes

 

 

 

 

 

 

 

 

 

Federal

 

$

81,348

 

 

$

17,557

 

 

$

14,680

 

State

 

 

30,051

 

 

 

9,539

 

 

 

6,422

 

Total provision for current income taxes

 

 

111,399

 

 

 

27,096

 

 

 

21,102

 

Provision for deferred income taxes

 

 

 

 

 

 

 

 

 

Federal

 

 

(2,823

)

 

 

26,579

 

 

 

15,204

 

State

 

 

(387

)

 

 

6,327

 

 

 

6,177

 

Total provision for deferred income taxes

 

 

(3,210

)

 

 

32,906

 

 

 

21,381

 

Total provision for income taxes

 

$

108,189

 

 

$

60,002

 

 

$

42,483

 
Income Tax Rate Reconciliation

The following schedule reconciles the statutory Federal tax rate to the effective income tax rate:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Federal statutory tax rate

 

 

21

%

 

 

21

%

 

 

21

%

Increase (decrease) resulting from:

 

 

 

 

 

 

 

 

 

State income taxes, net of Federal income tax benefit

 

 

6

%

 

 

8

%

 

 

8

%

Nondeductible expenses

 

 

4

%

 

 

6

%

 

 

6

%

Research credit, Federal benefit

 

 

(2

%)

 

 

(3

%)

 

 

(3

%)

Stock-based compensation

 

 

(1

%)

 

 

(7

%)

 

 

(9

%)

Remeasurement of state deferred tax liabilities

 

 

(0

%)

 

 

(2

%)

 

 

0

%

Effective income tax rate

 

 

28

%

 

 

23

%

 

 

23

%

 
Schedule of Net Deferred Tax Assets and Liabilities The significant components of our deferred tax assets and liabilities were as follows:

 

 

 

December 31,

 

 

 

2022

 

 

2021

 

Deferred income tax assets (liabilities):

 

 

 

 

 

 

Mark-to-market investments - OCI

 

$

1,260

 

 

$

—

 

Stock-based compensation

 

 

4,425

 

 

 

1,541

 

Investment in Paycom Payroll Holdings, LLC

 

 

(146,907

)

 

 

(147,659

)

Net operating losses

 

 

189

 

 

 

614

 

Noncurrent deferred income tax liabilities, net

 

$

(141,033

)

 

$

(145,504

)
v3.22.4
Summary of Significant Accounting Policies - Additional Information (Detail)
 12 Months Ended
Jun. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
Segment
$ / shares
shares
Dec. 31, 2021
USD ($)
$ / shares
shares
Dec. 31, 2020
USD ($)
Aug. 31, 2022
USD ($)
Summary Of Significant Accounting Policy [Line Items]          
Number of operating segments | Segment   1      
Interest costs incurred   $ 3,400,000 $ 1,400,000 $ 1,500,000  
Interest costs capitalized   900,000 1,400,000 1,500,000  
Computer software development costs capitalized   66,400,000 52,900,000    
Amortization expense of capitalized software costs   47,300,000 36,500,000 27,100,000  
Goodwill impairment amount $ 0        
Impairment of intangible assets with definite lives   0 0 0  
Impairment of long-lived assets   0 0 0  
Advertising costs   90,600,000 71,600,000 66,900,000  
Sales taxes   15,500,000 $ 11,900,000 $ 9,700,000  
Stock Repurchase Plan [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Available authorized repurchase amount   $ 1,100,000,000      
Shares withheld to satisfy tax withholding obligations | shares   364,667 163,849    
Stock repurchased, average costs per share | $ / shares   $ 273.74 $ 400.24    
Stock Repurchase Plan [Member] | Certain Employees [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Shares withheld to satisfy tax withholding obligations | shares   17,355      
Maximum [Member] | Stock Repurchase Plan [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Stock repurchase plan, authorized amount         $ 1,100,000,000
Internal use Software [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Capitalized and amortized period   3 years      
Accounting Standards Update 2019-12 [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Accounting standards update, adoption date   Jan. 01, 2022      
Accounting standards update, adopted   true      
Accounting standards update, immaterial effect   true      
Accounting Standards Update 2018-15 [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Accounting standards update, adoption date   Jan. 01, 2021      
Accounting standards update, adopted   true      
Accounting standards update, immaterial effect   true      
v3.22.4
Summary of Significant Accounting Policies - Estimated Useful Lives (Detail)
 12 Months Ended
Dec. 31, 2022
Furniture, Fixtures and Equipment [Member]  
Property and Equipment [Line Items]  
Property and equipment useful life 5 years
Computer Equipment [Member]  
Property and Equipment [Line Items]  
Property and equipment useful life 3 years
Software and Capitalized Software Costs [Member]  
Property and Equipment [Line Items]  
Property and equipment useful life 3 years
Buildings [Member]  
Property and Equipment [Line Items]  
Property and equipment useful life 30 years
Leasehold Improvements [Member]  
Property and Equipment [Line Items]  
Property and equipment useful life 5 years
Rental Clocks [Member]  
Property and Equipment [Line Items]  
Property and equipment useful life 5 years
Vehicles [Member]  
Property and Equipment [Line Items]  
Property and equipment useful life 3 years
Land Improvements [Member]  
Property and Equipment [Line Items]  
Property and equipment useful life 15 years
v3.22.4
Summary of Significant Accounting Policies - Summary of Changes in Deferred Revenue Related to Material Rights (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Revenue from Contract with Customer [Abstract]    
Balance, beginning of period $ 101,426 $ 86,826
Recognition of revenue included in beginning of year balance (15,949) (13,298)
Contract balance, net of revenue recognized during the period 31,939 27,898
Balance, end of period $ 117,416 $ 101,426
v3.22.4
Summary of Significant Accounting Policies - Additional Information (Detail1)
$ in Millions
Dec. 31, 2022
USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01  
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]  
Deferred revenue expect to recognize amount $ 24.3
Deferred revenue expect to recognize period 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01  
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]  
Deferred revenue expect to recognize amount $ 18.5
Deferred revenue expect to recognize period
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01  
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]  
Deferred revenue expect to recognize amount $ 74.6
Deferred revenue expect to recognize period
v3.22.4
Summary of Significant Accounting Policies - Summary of Asset Balances and Related Amortization Expense For Contract Costs (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Costs to Obtain a Contract [Member]    
Capitalized Contract Cost [Line Items]    
Beginning Balance $ 272,919 $ 232,583
Capitalization of Costs 97,978 77,644
Amortization (45,440) (37,308)
Ending Balance 325,457 272,919
Costs to Fulfill a Contract [Member]    
Capitalized Contract Cost [Line Items]    
Beginning Balance 265,657 199,593
Capitalization of Costs 114,152 96,728
Amortization (40,914) (30,664)
Ending Balance $ 338,895 $ 265,657
v3.22.4
Property and Equipment - Schedule of Property and Equipment and Accumulated Depreciation and Amortization (Detail) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Property and Equipment [Line Items]    
Property and equipment, gross $ 663,706 $ 546,467
Less: accumulated depreciation and amortization (331,340) (242,652)
Property and equipment, net 402,448 348,953
Software and Capitalized Software Costs [Member]    
Property and Equipment [Line Items]    
Property and equipment, gross 270,645 199,470
Buildings [Member]    
Property and Equipment [Line Items]    
Property and equipment, gross 177,765 172,807
Computer Equipment [Member]    
Property and Equipment [Line Items]    
Property and equipment, gross 133,715 102,509
Rental Clocks [Member]    
Property and Equipment [Line Items]    
Property and equipment, gross 35,846 30,313
Furniture, Fixtures and Equipment [Member]    
Property and Equipment [Line Items]    
Property and equipment, gross 28,414 24,971
Other [Member]    
Property and Equipment [Line Items]    
Property and equipment, gross 17,321 16,397
Property and Equipment, net, Excluding Land and Construction in Progress [Member]    
Property and Equipment [Line Items]    
Property and equipment, net 332,366 303,815
Construction in Progress [Member]    
Property and Equipment [Line Items]    
Property and equipment, net 36,286 11,342
Land [Member]    
Property and Equipment [Line Items]    
Property and equipment, net $ 33,796 $ 33,796
v3.22.4
Property and Equipment - Additional Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Property and Equipment [Line Items]      
Computer software development costs capitalized $ 66,400 $ 52,900  
Interest costs incurred 3,400 1,400 $ 1,500
Interest costs capitalized 900 1,400 1,500
Retainage amount included in construction in progress 2,000 100  
Depreciation and amortization 49,764 35,811 27,605
Property and Equipment [Member]      
Property and Equipment [Line Items]      
Depreciation and amortization $ 88,700 $ 64,700 $ 53,200
v3.22.4
Goodwill and Intangible Assets, Net - Additional Information (Detail) - USD ($)
 12 Months Ended
Jun. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Line Items]        
Goodwill   $ 51,889,000 $ 51,889,000  
Goodwill impairment amount $ 0      
Amortization of intangible assets   4,000,000.0 2,500,000 $ 200,000
Estimated remaining amortization expense in 2023   3,900,000    
Estimated remaining amortization expense in 2024   3,900,000    
Estimated remaining amortization expense in 2025   3,900,000    
Estimated remaining amortization expense in 2026   3,900,000    
Estimated remaining amortization expense in 2027   3,900,000    
Sponsorship Rights [Member]        
Goodwill and Intangible Assets Disclosure [Line Items]        
One-time payment for intangible asset agreement   1,500,000    
Naming Rights [Member] | Minimum [Member]        
Goodwill and Intangible Assets Disclosure [Line Items]        
Annual payments for intangible asset agreement   4,000,000.0    
Naming Rights [Member] | Maximum [Member]        
Goodwill and Intangible Assets Disclosure [Line Items]        
Annual payments for intangible asset agreement   6,100,000    
Goodwill [Member]        
Goodwill and Intangible Assets Disclosure [Line Items]        
Goodwill   $ 51,900,000 $ 51,900,000  
v3.22.4
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Finite Lived Intangible Assets [Line Items]    
Gross $ 63,393 $ 63,393
Accumulated Amortization (9,376) (5,365)
Net 54,017 58,028
Naming Rights [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross 60,199 60,199
Accumulated Amortization (6,182) (2,278)
Net $ 54,017 $ 57,921
Weighted average remaining useful life 13 years 9 months 18 days 14 years 9 months 18 days
Trade Name [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross $ 3,194 $ 3,194
Accumulated Amortization $ (3,194) (3,087)
Net   $ 107
Weighted average remaining useful life   6 months
v3.22.4
Leases - Additional Information (Detail) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Lessee Lease Description [Line Items]      
Operating lease rent expense $ 12.3 $ 11.9 $ 11.3
Cash paid for operating leases $ 14.4    
Weighted average discount rate of operating leases 3.70%    
Average remaining operating lease term 2 years 10 months 24 days    
Operating lease liabilities, leases not yet commenced, description As of December 31, 2022, the present value of the operating lease liabilities that had not yet commenced was $0.7 million.    
Operating lease liabilities, leases not yet commenced $ 0.7    
Minimum [Member]      
Lessee Lease Description [Line Items]      
Operating lease expiration year Dec. 31, 2023    
Maximum [Member]      
Lessee Lease Description [Line Items]      
Operating lease expiration year Dec. 31, 2029    
Operating lease option to extend five years    
v3.22.4
Leases - Summary of Lease Assets and Liabilities (Detail) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Lessee Lease Description [Line Items]    
Lease assets $ 39,776 $ 29,841
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Other assets Other assets
Lease liabilities:    
Lease liabilities $ 41,012  
Accrued Expenses and Other Current Liabilities [Member]    
Lease liabilities:    
Lease liabilities 14,986 $ 10,853
Other Long-term Liabilities [Member]    
Lease liabilities:    
Lease liabilities $ 26,026 $ 20,059
v3.22.4
Leases - Schedule of Undiscounted Cash Flows for Future Annual Maturities of Operating Lease Liabilities (Detail)
$ in Thousands
Dec. 31, 2022
USD ($)
Leases [Abstract]  
2023 $ 14,791
2024 9,587
2025 6,962
2026 5,192
2027 2,711
Thereafter 3,500
Total undiscounted cash flows 42,743
Present value discount (1,731)
Lease liabilities $ 41,012
v3.22.4
Long-Term Debt, Net - Schedule of Long-Term Debt (Detail) - USD ($)
Dec. 31, 2022
Jul. 29, 2022
Dec. 31, 2021
Debt Instrument [Line Items]      
Total long-term debt, net (including current portion) $ 29,000,000   $ 29,155,000
Less: Current portion 0   (1,775,000)
Total long-term debt, net 29,000,000   27,380,000
July 2022 Revolving Credit Agreement [Member]      
Debt Instrument [Line Items]      
Line of credit $ 29,000,000 $ 29,000,000.0  
Net Term Note to Bank Due September 7, 2025 [Member]      
Debt Instrument [Line Items]      
Term note to bank     $ 29,155,000
v3.22.4
Long-Term Debt, Net - Schedule of Long-Term Debt (Parenthetical) (Detail)
 12 Months Ended
Dec. 31, 2022
Net Term Note to Bank Due September 7, 2025 [Member]  
Debt Instrument [Line Items]  
Debt instrument maturity date Sep. 07, 2025
July 2022 Revolving Credit Agreement [Member]  
Debt Instrument [Line Items]  
Line of credit facility, maturity date Jul. 29, 2027
v3.22.4
Long-Term Debt, Net - Additional Information (Detail) - USD ($)
 12 Months Ended
Jul. 29, 2022
May 04, 2022
Dec. 31, 2022
Jun. 07, 2022
2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Agreement termination date     Jul. 29, 2022  
Additional credit facility capacity, subject to certain conditions   $ 100,000,000.0    
Line of credit   29,000,000.0    
Line of credit facility, maximum borrowing capacity   $ 250,000,000.0    
Line of credit facility, maturity date   May 04, 2027    
Line of credit facility, borrowings outstanding   $ 29,000,000.0    
July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate 1.25%      
Additional credit facility capacity, subject to certain conditions $ 500,000,000.0      
Line of credit 29,000,000.0   $ 29,000,000  
Unamortized debt issuance cost     5,700,000  
Line of credit facility, maximum borrowing capacity $ 650,000,000.0      
Line of credit facility, maturity date Jul. 29, 2027      
Line of credit facility increase in rate of interest in event of default 2.00%      
Line of credit facility, borrowings outstanding $ 29,000,000.0   29,000,000  
Minimum [Member] | 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Line of credit facility, maximum borrowing capacity       $ 250,000,000.0
Maximum [Member] | 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Line of credit facility, maximum borrowing capacity       $ 350,000,000.0
Federal Funds Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate 0.50%      
SOFR Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate 0.10%      
SOFR Rate Plus One [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate 1.00%      
Term Loan [Member] | Secured Revolving Line Of Credit [Member]        
Debt Instrument [Line Items]        
Unamortized debt issuance costs written off     $ 100,000  
2017 Term Credit Agreement [Member]        
Debt Instrument [Line Items]        
Line of credit facility agreement date     Dec. 07, 2017  
Agreement termination date     May 04, 2022  
2017 Term Credit Agreement [Member] | Line of Credit [Member]        
Debt Instrument [Line Items]        
Debt instrument maturity date     Sep. 07, 2025  
2017 Term Credit Agreement [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Agreement termination date Jul. 29, 2022      
2017 Term Credit Agreement [Member] | Prime Rate [Member] | Line of Credit [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate     1.00%  
2017 Term Credit Agreement [Member] | Adjusted London Interbank Offered Rate LIBOR [Member] | Line of Credit [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate     1.50%  
Leverage Ratio Is Less Than 1.0 To 1.0 [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Quarterly commitment fee 0.20%      
Leverage Ratio Is Less Than 1.0 To 1.0 [Member] | SOFR Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Borrowings basis spread on variable rate 1.25%      
Leverage Ratio Is Less Than 1.0 To 1.0 [Member] | ABR Loans [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate 0.25%      
Leverage Ratio Is Greater Than Or Equal to 1.0 To 1.0 But Less Than 2.0 to 1.0 [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Quarterly commitment fee 0.225%      
Leverage Ratio Is Greater Than Or Equal to 1.0 To 1.0 But Less Than 2.0 to 1.0 [Member] | SOFR Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Borrowings basis spread on variable rate 1.50%      
Leverage Ratio Is Greater Than Or Equal to 1.0 To 1.0 But Less Than 2.0 to 1.0 [Member] | ABR Loans [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate 0.50%      
Leverage Ratio Is Greater Than Or Equal to 2.0 To 1.0 But Less Than 3.0 to 1.0 [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Quarterly commitment fee 0.25%      
Leverage Ratio Is Greater Than Or Equal to 2.0 To 1.0 But Less Than 3.0 to 1.0 [Member] | SOFR Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Borrowings basis spread on variable rate 1.75%      
Leverage Ratio Is Greater Than Or Equal to 2.0 To 1.0 But Less Than 3.0 to 1.0 [Member] | ABR Loans [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate 0.75%      
Leverage Ratio Is Greater Than Or Equal to 3.0 To 1.0 [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Quarterly commitment fee 0.275%      
Leverage Ratio Is Greater Than Or Equal to 3.0 To 1.0 [Member] | SOFR Rate Plus [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Borrowings basis spread on variable rate 2.00%      
Leverage Ratio Is Greater Than Or Equal to 3.0 To 1.0 [Member] | ABR Loans [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate 1.00%      
Term Loan [Member] | BSBY Rate Plus [Member] | 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Debt instrument basis spread on variable rate   1.125%    
Letters of Credit [Member] | 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Line of credit facility, maximum borrowing capacity   $ 2,500,000    
Letters of Credit [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Line of credit facility, maximum borrowing capacity $ 6,500,000      
Swingline Loans [Member] | 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Line of credit facility, maximum borrowing capacity   $ 25,000,000.0    
Swingline Loans [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Line of credit facility, maximum borrowing capacity $ 25,000,000.0      
2022 Term Loan Facility [Member]        
Debt Instrument [Line Items]        
Number of draws made ten      
2022 Term Loan Facility [Member] | July 2022 Revolving Credit Agreement [Member]        
Debt Instrument [Line Items]        
Line of credit facility, maximum borrowing capacity $ 750,000,000.0      
2022 Term Loan Facility [Member] | Debt Instrument, Redemption, Period Two [Member]        
Debt Instrument [Line Items]        
Percentage of aggregate annual amount 7.50%      
2022 Term Loan Facility [Member] | Debt Instrument Redemption Period After Year Two [Member]        
Debt Instrument [Line Items]        
Percentage of aggregate annual amount 10.00%      
v3.22.4
Long-Term Debt, Net - Aggregate Future Maturities of Long-Term Debt (Detail)
$ in Thousands
Dec. 31, 2022
USD ($)
Debt Disclosure [Abstract]  
2027 $ 29,000
Total long-term debt $ 29,000
v3.22.4
Derivative Instruments - Additional Information (Details) - Interest Rate Swap [Member] - USD ($)
$ in Millions
 12 Months Ended
Aug. 24, 2022
Dec. 31, 2022
Derivative [Line Items]    
Derivative maturity date   Sep. 07, 2025
Derivative rate received   one-month USD LIBOR
Derivative rate paid, percent   2.54%
Derivative Instrument, notional value   $ 35.5
Cash receipt from settlement of interest rate swap contract $ 0.5  
v3.22.4
Corporate Investments and Funds Held for Clients - Cash and Cash Equivalents and Investments (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Corporate Investments And Funds Held For Clients [Line Items]      
Cash and cash equivalents, amortized cost $ 400,730 $ 277,978  
Funds held for clients' cash and cash equivalents, amortized cost 2,008,365 1,534,894  
Amortized cost 199,367    
Investments Amortized Cost, Total 2,608,462 2,124,551  
Gross unrealized losses [1] (4,757)    
Cash and cash equivalents, fair value 400,730 277,978 $ 151,710
Funds held for clients' cash and cash equivalents, fair value 2,008,365 1,534,894  
Fair value 194,610    
Total investments, fair value 2,603,705 2,124,551  
Available-for-sale Securities [Member] | Commercial Paper [Member]      
Corporate Investments And Funds Held For Clients [Line Items]      
Amortized cost [2]   311,679  
Fair value [2]   $ 311,679  
Available-for-sale Securities [Member] | U.S. Treasury Securities [Member]      
Corporate Investments And Funds Held For Clients [Line Items]      
Amortized cost [2] 174,367    
Gross unrealized losses [1],[2] (4,757)    
Fair value [2] 169,610    
Available-for-sale Securities [Member] | Certificates of Deposit [Member]      
Corporate Investments And Funds Held For Clients [Line Items]      
Amortized cost [2] 25,000    
Fair value [2] $ 25,000    
[1] These securities have been in a gross unrealized loss position for a period of less than 12 months.
[2] All available-for-sale securities were included within the funds held for clients.
v3.22.4
Corporate Investments and Funds Held for Clients - Additional Information (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]    
Debt securities, Available-for-sale, Realized Gain (Loss) $ 0 $ 0
Credit impairment losses $ 0 $ 0
v3.22.4
Corporate Investments and Funds Held for Clients - Summary of Expected Maturities of Available for Sale Securities (Details) (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Debt Securities, Available-for-Sale, Amortized Cost, Fiscal Year Maturity [Abstract]  
Amortized cost, One year or less $ 25,000
One year to five years 174,367
Amortized cost 199,367
Fair value, One year or less 25,000
Fair value, One year to five years 169,610
Fair value, Total available-for-sale securities $ 194,610
v3.22.4
Fair Value of Financial Instruments - Schedule of Major Categories of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Commercial Paper [Member]    
Assets:    
Assets   $ 311,679
Certificates of Deposit [Member]    
Assets:    
Assets $ 25,000  
US Treasury Securities [Member]    
Assets:    
Assets 169,610  
Interest Rate Swap [Member]    
Liabilities:    
Liabilities   1,335
Level 2 [Member] | Commercial Paper [Member]    
Assets:    
Assets   311,679
Level 2 [Member] | Certificates of Deposit [Member]    
Assets:    
Assets 25,000  
Level 2 [Member] | US Treasury Securities [Member]    
Assets:    
Assets $ 169,610  
Level 2 [Member] | Interest Rate Swap [Member]    
Liabilities:    
Liabilities   $ 1,335
v3.22.4
Employee Savings Plan and Employee Stock Purchase Plan - Additional Information (Detail) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Defined Contribution Plan Disclosure [Line Items]      
401(k) minimum age of eligibility for participation 18 years    
401(k) eligibility minimum service period 90 days    
Employee vested percentage in salary deferrals and roll over contributions 100.00%    
Minimum period for vesting 100% contributions 2 years    
Minimum period for vesting of discretionary contributions 2 years    
Matching contribution $ 12,700,000 $ 11,600,000 $ 8,600,000
Employee stock purchase plan overlapping offering period 24 months    
Compensation expense related to ESPP $ 94,898,000 $ 97,506,000 $ 90,108,000
Employee Stock Purchase Plan [Member]      
Defined Contribution Plan Disclosure [Line Items]      
Employees Company's common stock shares purchase limit percentage 10.00%    
Employees Company's common stock shares purchase limit amount $ 25,000    
Purchase price of common stock expressed as a percentage of its fair market value 85.00%    
Maximum number of shares that may be purchased by a participant 2,000    
Share of common stock purchase maximum 2,000,000.0    
Purchase of shares of common stock 54,059 40,699 51,407
Compensation expense related to ESPP $ 2,800,000 $ 2,700,000 $ 2,300,000
After Two Years Of Employment [Member]      
Defined Contribution Plan Disclosure [Line Items]      
Matching contributions, vesting percentage 100.00%    
One Hundred Percent Match For Percent Of Participants Contribution [Member]      
Defined Contribution Plan Disclosure [Line Items]      
Employer contribution percentage 100.00%    
Percentage of salary deferrals 1.00%    
50% Matching Contribution [Member]      
Defined Contribution Plan Disclosure [Line Items]      
Employer contribution percentage 50.00%    
Minimum [Member] | 50% Matching Contribution [Member]      
Defined Contribution Plan Disclosure [Line Items]      
Percentage of salary deferrals 2.00%    
Maximum [Member]      
Defined Contribution Plan Disclosure [Line Items]      
Percentage of salary deferrals 3.50%    
Maximum [Member] | 50% Matching Contribution [Member]      
Defined Contribution Plan Disclosure [Line Items]      
Percentage of salary deferrals 6.00%    
v3.22.4
Earnings Per Share - Computation of Basic and Diluted Net Earnings Per Share (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Numerator:      
Net income $ 281,389 $ 195,960 $ 143,453
Denominator:      
Basic weighted average shares outstanding 57,928 57,885 57,620
Dilutive effect of unvested restricted stock 247 306 665
Diluted weighted average shares outstanding 58,175 58,191 58,285
Earnings Per Share Reconciliation [Abstract]      
Earnings per share, basic $ 4.86 $ 3.39 $ 2.49
Earnings per share, diluted $ 4.84 $ 3.37 $ 2.46
v3.22.4
Stock-Based Compensation - Additional Information (Detail)
$ / shares in Units, $ in Thousands
 1 Months Ended 12 Months Ended
May 31, 2022
shares
Apr. 14, 2022
shares
Feb. 28, 2022
TradingDay
Company
shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
Company
Dec. 31, 2020
USD ($)
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Capitalized compensation cost | $       $ 8,965 $ 7,141 $ 6,655
Software and Capitalized Software Costs [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Capitalized compensation cost | $       $ 9,000 $ 7,100 $ 6,700
LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Maximum number of shares authorized       13,350,881    
Time-Based Shares [Member] | Chief Operating Officer [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Number of shares vested in period   5,663        
Time-based Restricted Stock Units [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Restricted shares of common stock issued       500    
Restricted Stock [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Restricted shares of common stock issued       451,737    
Restricted Stock [Member] | VWAP Value Equals or Exceeds $484 Per Share [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
VWAP value of share | $ / shares       $ 484    
Vesting percentage, restricted shares       50.00%    
Restricted Stock [Member] | VWAP Value Equals or Exceeds $559 Per Share [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
VWAP value of share | $ / shares       $ 559    
Vesting percentage, restricted shares       50.00%    
Restricted Stock [Member] | Market-Based Shares [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Restricted shares of common stock issued       59,503    
Restricted Stock [Member] | Time-Based Shares [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period     4 years      
Restricted shares of common stock issued       392,234    
Restricted Stock [Member] | Time-Based Shares [Member] | Non Executive Employees [Member] | Minimum [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period       3 years    
Restricted Stock [Member] | Time-Based Shares [Member] | Non Executive Employees [Member] | Maximum [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period       5 years    
Restricted Stock [Member] | Time-Based Shares [Member] | Non-Employee Members [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Restricted shares of common stock issued 5,210          
Share-based compensation arrangement by share-based payment award, award vesting rights       all of which will cliff-vest on May 9, 2023, provided that such director is providing services to the Company through the applicable vesting date, and subject to the terms and conditions of the LTIP and the applicable restricted stock award agreement.    
Performance-Based Restricted Stock Units [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Restricted shares of common stock issued       51,500    
Performance-Based Restricted Stock Units [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Number of trading day | TradingDay     60      
Number of publicly traded companies | Company     35      
Performance-Based Restricted Stock Units [Member] | Executive Officers [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Performance share units     51,494      
Performance period commencement date       Jan. 01, 2021    
Performance period maturity date       Dec. 31, 2022    
Number of publicly traded companies | Company         34  
Performance-Based Restricted Stock Units [Member] | Executive Officers [Member] | Maximum [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Performance share units     128,735      
Performance-Based Restricted Stock Units [Member] | Two-Year Performance Period [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Performance period commencement date     Jan. 01, 2022      
Performance period maturity date     Dec. 31, 2023      
Percentage of PSUs eligible to vest     25.00%      
Deadline for vesting of shares     Feb. 29, 2024      
Performance-Based Restricted Stock Units [Member] | Three-Year Performance Period [Member] | LTIP [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]            
Performance period maturity date     Dec. 31, 2024      
Percentage of PSUs eligible to vest     75.00%      
Deadline for vesting of shares     Mar. 01, 2025      
v3.22.4
Stock-Based Compensation - Summary of Grant-Date Fair Values of Restricted Stock Granted and Related Assumptions (Detail) - $ / shares
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Restricted Stock [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Risk-free interest rate 1.75% 0.95%  
Risk-free interest rate, minimum     0.52%
Risk-free interest rate, maximum     1.44%
Estimated volatility 40.00% 33.00%  
Estimated volatility, minimum     30.00%
Estimated volatility, maximum     32.00%
Expected life (in years) 2 years 6 months 2 years 3 months 18 days 4 years 4 months 24 days
Restricted Stock [Member] | Minimum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Grant-date fair value $ 259.65 $ 315.95 $ 99.56
Restricted Stock [Member] | Maximum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Grant-date fair value $ 348.19 $ 521.17 $ 377.68
Restricted Stock Units (RSUs) [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Risk-free interest rate, minimum 1.25% 0.11%  
Risk-free interest rate, maximum 1.51% 0.34%  
Estimated volatility 49.20%    
Estimated volatility, minimum   50.30%  
Estimated volatility, maximum   51.20%  
Expected life (in years) 2 years 8 months 12 days 2 years 7 months 6 days  
Restricted Stock Units (RSUs) [Member] | Minimum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Grant-date fair value $ 252.16 $ 382.78  
Restricted Stock Units (RSUs) [Member] | Maximum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Grant-date fair value $ 377.01 $ 587.97  
v3.22.4
Stock-Based Compensation - Summary of Restricted Stock Unit and PSU Activity (Detail)
 12 Months Ended
Dec. 31, 2022
$ / shares
shares
Time-Based Restricted Stock Awards [Member]  
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]  
Unvested shares of restricted stock and restricted stock units outstanding at beginning of period | shares 369,600
Restricted Stock Awards and restricted stock units, Granted | shares 392,200
Restricted Stock Awards and restricted stock units, Vested | shares (219,800)
Restricted Stock Awards and restricted stock units, Forfeited | shares (62,900)
Unvested shares of restricted stock and restricted stock units outstanding at end of period | shares 479,100
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at beginning of period | $ / shares $ 259.94
Granted, Weighted Average Grant Date Fair Value Per Share | $ / shares 304.28
Vested, Weighted Average Grant Date Fair Value Per Share | $ / shares 202.40
Forfeited, Weighted Average Grant Date Fair Value Per Share | $ / shares 317.73
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | $ / shares $ 315.04
Time-based Restricted Stock Units [Member]  
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]  
Restricted Stock Awards and restricted stock units, Granted | shares 500
Unvested shares of restricted stock and restricted stock units outstanding at end of period | shares 0.5 [1]
Granted, Weighted Average Grant Date Fair Value Per Share | $ / shares $ 377.01
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | $ / shares $ 377.01 [1]
Market-Based Restricted Stock Awards [Member]  
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]  
Unvested shares of restricted stock and restricted stock units outstanding at beginning of period | shares 1,628,300
Restricted Stock Awards and restricted stock units, Granted | shares 59,500
Restricted Stock Awards and restricted stock units, Vested | shares (100)
Restricted Stock Awards and restricted stock units, Forfeited | shares (10,700)
Unvested shares of restricted stock and restricted stock units outstanding at end of period | shares 1,677,000.0
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at beginning of period | $ / shares $ 111.87
Granted, Weighted Average Grant Date Fair Value Per Share | $ / shares 269.00
Vested, Weighted Average Grant Date Fair Value Per Share | $ / shares 347.62
Forfeited, Weighted Average Grant Date Fair Value Per Share | $ / shares 279.87
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | $ / shares $ 116.36
Performance-Based Restricted Stock Units [Member]  
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]  
Unvested shares of restricted stock and restricted stock units outstanding at beginning of period | shares 37,100
Restricted Stock Awards and restricted stock units, Granted | shares 51,500
Restricted Stock Awards and restricted stock units, Forfeited | shares (10,800)
Unvested shares of restricted stock and restricted stock units outstanding at end of period | shares 77,800 [1]
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at beginning of period | $ / shares $ 556.50
Granted, Weighted Average Grant Date Fair Value Per Share | $ / shares 296.07
Vested, Weighted Average Grant Date Fair Value Per Share | $ / shares 376.69
Unvested shares of restricted stock and restricted stock units outstanding, Weighted Average Grant Date Fair Value Per Share, at end of period | $ / shares $ 409.13 [1]
[1] A maximum of 194,478 shares could be delivered upon settlement of PSUs based upon Paycom’s Relative TSR over the applicable performance periods.
v3.22.4
Stock-Based Compensation - Summary of Restricted Stock Unit and PSU Activity (Parenthetical) (Detail)
 12 Months Ended
Dec. 31, 2022
shares
Performance-Based Restricted Stock Units [Member] | Maximum [Member]  
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]  
Units that could be delivered upon settlement of PSUs based upon relative TSR over applicable performance periods 194,478
v3.22.4
Stock-Based Compensation - Summary of Aggregate Fair Value of Awards (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Time-Based Restricted Stock Awards [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Aggregate fair value of awards $ 63,970 $ 97,242 $ 76,653
Market-Based Restricted Stock Awards [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Aggregate fair value of awards   $ 76,153 $ 90,122
v3.22.4
Stock-Based Compensation - Summary of Unrecognized Compensation Cost and Related Weighted Average Recognition Period Associated with Unvested restricted Stock Awards and Unvested Restricted Stock Units (Detail)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
Restricted Stock Awards [Member]  
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]  
Unrecognized compensation cost $ 217,409
Weighted average period for recognition (years) 3 years
Restricted Stock Units (RSUs) [Member]  
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]  
Unrecognized compensation cost $ 13,210
Weighted average period for recognition (years) 1 year 6 months
v3.22.4
Stock-based Compensation - Non-cash Stock-based Compensation Resulting From Restricted Stock Awards and Restricted Stock Units Awards (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Share-Based Payment Arrangement, Expense $ 94,898 $ 97,506 $ 90,108
Operating Expenses [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Share-Based Payment Arrangement, Expense 4,671 4,570 5,185
Sales and Marketing Expense [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Share-Based Payment Arrangement, Expense 18,659 13,801 14,376
Research and Development Expense [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Share-Based Payment Arrangement, Expense 11,063 7,527 9,107
General and Administrative Expense [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Share-Based Payment Arrangement, Expense $ 60,505 $ 71,608 $ 61,440
v3.22.4
Income Taxes - Components of Income Tax Expense (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Provision for current income taxes      
Federal $ 81,348 $ 17,557 $ 14,680
State 30,051 9,539 6,422
Total provision for current income taxes 111,399 27,096 21,102
Provision for deferred income taxes      
Federal (2,823) 26,579 15,204
State (387) 6,327 6,177
Total provision for deferred income taxes (3,210) 32,906 21,381
Total provision for income taxes $ 108,189 $ 60,002 $ 42,483
v3.22.4
Income Taxes - Income Tax Rate Reconciliation (Detail)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Federal statutory tax rate 21.00% 21.00% 21.00%
State income taxes, net of Federal income tax benefit 6.00% 8.00% 8.00%
Nondeductible expenses 4.00% 6.00% 6.00%
Research credit, Federal benefit (2.00%) (3.00%) (3.00%)
Stock-based compensation (1.00%) (7.00%) (9.00%)
Remeasurement of state deferred tax liabilities 0.00% (2.00%) 0.00%
Effective income tax rate 28.00% 23.00% 23.00%
v3.22.4
Income Taxes - Additional Information (Detail) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Aug. 16, 2022
Income Tax [Line Items]        
Effective income tax rate 28.00% 23.00% 23.00%  
Unrecognized tax benefits $ 0 $ 0    
Inflation Reduction Act 2022 [Member]        
Income Tax [Line Items]        
Percentage of minimum tax on book income       15.00%
Percentage of excise tax on net stock repurchases       1.00%
State Income Tax [Member]        
Income Tax [Line Items]        
Net operating loss carryforwards for state income tax $ 200,000      
Net operating loss carryforwards expiration year Dec. 31, 2032      
v3.22.4
Income Taxes - Schedule of Net Deferred Tax Assets and Liabilities (Detail) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Deferred income tax assets (liabilities):    
Mark-to-market investments - OCI $ 1,260  
Stock-based compensation 4,425 $ 1,541
Investment in Paycom Payroll Holdings, LLC (146,907) (147,659)
Net operating losses 189 614
Noncurrent deferred income tax liabilities, net $ (141,033) $ (145,504)
v3.22.4
Subsequent Events - Additional Information (Detail)
 1 Months Ended 12 Months Ended
Feb. 06, 2023
shares
Feb. 04, 2023
$ / shares
shares
Feb. 28, 2022
Company
Dec. 31, 2022
shares
Dec. 31, 2021
Company
Restricted Stock [Member] | LTIP [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Restricted shares of common stock issued       451,737  
Restricted Stock [Member] | LTIP [Member] | Market-Based Shares [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Restricted shares of common stock issued       59,503  
Restricted Stock [Member] | LTIP [Member] | Time-Based Shares [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Restricted shares of common stock issued       392,234  
Performance-Based Restricted Stock Units [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Restricted shares of common stock issued       51,500  
Performance-Based Restricted Stock Units [Member] | LTIP [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Number of publicly traded companies | Company     35    
Performance-Based Restricted Stock Units [Member] | LTIP [Member] | Executive Officers [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Number of publicly traded companies | Company         34
Performance period commencement date       Jan. 01, 2021  
Performance period maturity date       Dec. 31, 2022  
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Non-executive Employees [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Restricted shares of common stock issued   302,015      
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Market-Based Shares [Member] | Non-executive Employees [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Restricted shares of common stock issued   87,618      
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | VWAP Value Equals or Exceeds $404 Per Share [Member] | Non-executive Employees [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Vesting percentage, restricted shares   50.00%      
VWAP value of share | $ / shares   $ 404      
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | VWAP Value Equals or Exceeds $466 Per Share [Member] | Non-executive Employees [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Vesting percentage, restricted shares   50.00%      
VWAP value of share | $ / shares   $ 466      
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Shares [Member] | Non-executive Employees [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Restricted shares of common stock issued   214,397      
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Vesting First Portion [Member] | Non-executive Employees [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Restricted shares of common stock issued   213,397      
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Vesting First Portion Tranche One [Member] | Non-executive Employees [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Vesting percentage, restricted shares   21.00%      
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Vesting First Portion Tranche Two [Member] | Non-executive Employees [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Vesting percentage, restricted shares   21.00%      
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Vesting First Portion Tranche Three [Member] | Non-executive Employees [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Vesting percentage, restricted shares   25.00%      
Subsequent Event [Member] | Restricted Stock [Member] | LTIP [Member] | Time-Based Vesting First Portion Tranche Four [Member] | Non-executive Employees [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Vesting percentage, restricted shares   33.00%      
Subsequent Event [Member] | Performance-Based Restricted Stock Units [Member] | LTIP [Member] | Executive Officers [Member]          
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]          
Number of units vested 5,232