(Reuters) -Payroll processor Paycom Software raised its forecast for annual revenue and profit on Wednesday, as the addition of AI features helps accelerate demand for its employee management services, sending its shares up 7% in extended trading.
The company now expects fiscal 2025 revenue of $2.05 billion to $2.06 billion, up from its previous projection of $2.02 billion to $2.04 billion. Analysts on average expect $2.03 billion, according to data compiled by LSEG.
Paycom has been integrating artificial intelligence features into its software with its ‘smart AI’ suite that automates tasks such as writing job descriptions and helps employers identify which employees are most at risk of leaving.
This has boosted demand for Paycom’s services as businesses look to simplify workforce management functions.
“We are well positioned to extend our product lead and eclipse the industry with even greater AI and automation,” CEO Chad Richison said in a statement.
Paycom expects 2025 core profit in the range of $872 million to $882 million, up from previous expectations of $843 million to $858 million.
The payroll processor reported revenue of $483.6 million for the second quarter ended June 30, beating analysts’ estimate of $472 million.
Adjusted core profit was $198.3 million, compared to $159.7 million in the same period last year.
Paycom’s expectation of strong growth comes despite a sharp deterioration in U.S. labor market conditions.
U.S. employment growth was weaker than expected in July, while the nonfarm payrolls count for the prior two months was revised down by 258,000 jobs, according to a Labor Department report.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Tasim Zahid)
Comments