Paycom Software (PAYC), Super Micro Computer (SMCI) Posted Beating Results, Expecting Growths Ahead


Paycom Software Inc. (NYSE: PAYC) issued positive report for the third quarter of 2020. Revenue of the developer of payroll and human resources software increased 12.3 percent to $196.5 million in the quarter ended September 30, 2020. Cash and cash equivalents improved to $156.4 million.

The company currently holds just under 5 per cent of the IT market for human capital management, according to Paycom. But the company expects its stake to expand and maintain long-term growth.

Cloud-based HR solutions are offered by Paycom to hunt heads, optimize human resources, calculate wages, etc. Paycom monetizes its solutions provided to organizations charging them per employee basis, so layoffs during the COVID-19 period put pressure on its business in many organizations. However, the performance of Paycom may accelerate growth as the economy recovers and the work-from-home market grows.

Paycom expects revenue of $212-$214 million and adjusted EBITDA in the range of $76-$78 for the current quarter which will end on December 31, 2020.

For the first quarter of fiscal 2021, Super Micro Computer, Inc. (Nasdaq: SMCI) reported incredibly positive results. In the context of COVID-19, despite a slight decline in revenue, the company exceeded profit expectations and approved a new share buyback program.

Super Micro Computer’s revenue decreased 4.7 percent year-on-year to $762.25 million while EPS remained $0.59 per share beating Wall Street expectations for both indicators. Gross margin rose to 17 percent, with $121 million in cash flow in the last quarter.

SMCI manufactures corporate and personal data storage, computer equipment, and server software. In the wake of COVID-19, corporate clients are expected to be reducing the cost of upgrading their IT infrastructure, but client activity is now recovering. Management at Super Micro Computer expects rapid growth through the end of fiscal 2021, in which the company expects sales of $780-$880 million and non-GAAP profit in the range of $0.35-$0.58. A new share repurchase program worth up to $50 million has been approved by the company’s Board of Directors.

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