Operating Profit Margin
since 2014
Calculation
Paycom Software Inc., operating profit margin, long-term trends, calculation
| Operating profit margin | = | 100 | × | Operating income1 | ÷ | Revenues1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | 27.54% | = | 100 | × | 378,679) | ÷ | 1,375,218) |
| Dec 31, 2021 | 24.02% | = | 100 | × | 253,567) | ÷ | 1,055,524) |
| Dec 31, 2020 | 22.12% | = | 100 | × | 186,123) | ÷ | 841,434) |
| Dec 31, 2019 | 30.67% | = | 100 | × | 226,224) | ÷ | 737,671) |
| Dec 31, 2018 | 30.67% | = | 100 | × | 173,715) | ÷ | 566,336) |
| Dec 31, 2017 | 18.16% | = | 100 | × | 78,625) | ÷ | 433,047) |
| Dec 31, 2016 | 17.61% | = | 100 | × | 57,971) | ÷ | 329,141) |
| Dec 31, 2015 | 15.33% | = | 100 | × | 34,435) | ÷ | 224,653) |
| Dec 31, 2014 | 10.40% | = | 100 | × | 15,700) | ÷ | 150,929) |
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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 US$ in thousands
Between 2014 and 2022, a consistent expansion in both top-line revenue and operating income is observed, indicating strong scalable growth. Revenues increased from $150.9 million to approximately $1.38 billion, while operating income grew from $15.7 million to $378.7 million over the same period. This growth trajectory is accompanied by a generally improving operating profit margin, despite a period of volatility toward the end of the decade.
- Margin Expansion and Peak Performance
- From 2014 to 2017, the operating profit margin grew steadily from 10.40% to 18.16%. A significant acceleration in efficiency occurred in 2018, where the margin jumped to 30.67%, a level that was maintained through 2019. This indicates a period of high operational leverage where revenue growth significantly outpaced the growth of operating expenses.
- Operational Contraction and Recovery
- A notable decline in profitability is evident in 2020, as the operating profit margin dropped to 22.12%. This represents a significant contraction from the previous two-year peak, suggesting an increase in relative operating costs or external economic pressures during that fiscal year. However, a recovery trend followed in 2021 and 2022, with the margin climbing back to 24.02% and 27.54%, respectively.
- Long-term Profitability Trend
- Despite the 2020 dip, the long-term trend reflects a substantial improvement in the company's ability to convert revenue into operating profit. The margin in 2022 remained significantly higher than the levels seen between 2014 and 2017, suggesting that the structural efficiency gains achieved during the 2018-2019 period were largely retained.
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