Name: Paycom Software Inc. (NYSE:PAYC) | Liabilities and Stockholders’ Equity
Creator: Stock Analysis on Net

Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

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Paycom Software Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Accounts payable	16,054)	5,772)	6,787)	5,051)	6,288)
Accrued commissions and bonuses	28,439)	22,357)	13,703)	12,343)	10,671)
Accrued payroll and vacation	45,023)	34,259)	24,529)	14,870)	10,741)
Deferred revenue	19,825)	16,277)	13,567)	11,105)	8,980)
Current portion of long-term debt	—)	1,775)	1,775)	1,775)	1,775)
Accrued expenses and other current liabilities	59,990)	63,397)	44,175)	45,600)	22,440)
Current liabilities before client funds obligation	169,331)	143,837)	104,536)	90,744)	60,895)
Client funds obligation	2,207,706)	1,846,573)	1,613,494)	1,662,778)	967,787)
Current liabilities	2,377,037)	1,990,410)	1,718,030)	1,753,522)	1,028,682)
Deferred income tax liabilities, net	141,033)	145,504)	112,598)	91,217)	70,206)
Long-term deferred revenue	97,591)	85,149)	73,259)	65,139)	55,671)
Net long-term debt, less current portion	29,000)	27,380)	29,119)	30,858)	32,614)
Other long-term liabilities	75,245)	72,988)	19,263)	19,553)	—)
Long-term liabilities	342,869)	331,021)	234,239)	206,767)	158,491)
Total liabilities	2,719,906)	2,321,431)	1,952,269)	1,960,289)	1,187,173)
Common stock, $0.01 par value	625)	623)	618)	613)	607)
Additional paid-in capital	576,622)	465,594)	357,908)	257,501)	203,680)
Retained earnings	1,196,968)	915,579)	719,619)	576,166)	395,590)
Accumulated other comprehensive loss	(3,703)	—)	—)	—)	—)
Treasury stock, at cost	(587,905)	(488,082)	(422,502)	(307,652)	(265,124)
Stockholders’ equity	1,182,607)	893,714)	655,643)	526,628)	334,753)
Total liabilities and stockholders’ equity	3,902,513)	3,215,145)	2,607,912)	2,486,917)	1,521,926)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The balance sheet exhibits a period of significant expansion from 2018 to 2022, with total liabilities and stockholders' equity growing from 1.52 billion to 3.90 billion. This growth is primarily driven by a substantial increase in current liabilities and a simultaneous strengthening of the equity position through retained earnings.

Current Liability Composition: The most prominent feature of the liability structure is the growth of client funds obligations, which increased from 967.8 million in 2018 to 2.21 billion in 2022. This component represents the vast majority of current liabilities, indicating a significant increase in the volume of funds managed on behalf of clients. Other current liabilities, including accrued payroll and vacation and accrued commissions and bonuses, show a consistent upward trajectory, with payroll and vacation obligations increasing more than fourfold over the five-year period.
Long-Term Obligations and Debt: Long-term liabilities grew from 158.5 million in 2018 to 342.9 million in 2022. This increase is attributed largely to a rise in other long-term liabilities and long-term deferred revenue. In contrast, net long-term debt remained relatively stable, showing a slight downward trend from 32.6 million in 2018 to 29.0 million in 2022, suggesting a strategy of maintaining minimal long-term borrowing relative to overall growth.
Equity and Capital Management: Stockholders' equity expanded from 334.8 million in 2018 to 1.18 billion in 2022. A primary driver of this increase is the growth in retained earnings, which rose from 395.6 million to 1.20 billion, signaling sustained profitability. Simultaneously, there is a notable increase in treasury stock at cost, growing from 265.1 million to 587.9 million, which indicates an aggressive share repurchase program that has partially offset the growth in total equity.
Deferred Revenue Trends: Both current and long-term deferred revenue exhibit steady growth. Current deferred revenue increased from 9.0 million to 19.8 million, while long-term deferred revenue rose from 55.7 million to 97.6 million. This upward trend suggests a growing pipeline of prepaid services and future revenue recognition.

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