Paycom Software Inc (NYSE: PAYC) stock fell over 0.4% on Feb 11th, 2021 pre-market session (Source: Google finance) as the company posted lower than expected results for the fourth quarter of FY 20. Paycom has maintained an annual revenue retention rate of 93%, even with the pandemic causing some businesses to close and a reduction in employee headcount-related revenue at existing clients.
PAYC ended 2020 with approximately 31,000 clients, which represents a growth rate of 17% compared to 2019. On a parent-company-grouping basis, the company has ended the year with approximately 16,000 clients, representing a growth rate of 18% compared to 2019. Within total revenues, recurring revenue was $216.7 million for the fourth quarter of 2020, representing 98% of total revenues for the quarter and growing 14% from the comparable prior-year period. Total adjusted gross profit for the fourth quarter was $188.9 million, representing an adjusted gross margin of 85.5%, up 20 basis points compared to the prior-year period. The company has reported Non-GAAP net income for the fourth quarter of 2020 of $49.1 million versus $50.5 million in the prior-year period. The company expects noncash stock-based compensation for the first quarter of 2021 to be approximately $26 million. The company ended the year with cash and cash equivalents of $152 million and total debt of $30.9 million related to the construction at the corporate headquarters.
PAYC in the fourth quarter of FY 20 has reported the adjusted earnings per share of 84 cents, while reported the adjusted revenue growth of 14.2 percent to $220.95 billion in the fourth quarter of FY 20. Adjusted EBITDA was $84.2 million in the fourth quarter of 2020 or 38.1% of total revenues, compared to $78.6 million in the fourth quarter of 2019 or 40.6% of total revenues.
For the first quarter of 2021, the company expects total revenues to be in the range of $270 million to $272 million and Adjusted EBITDA to be in the range of $126 million to $128 million. PAYC expects adjusted EBITDA for the first quarter in the range of $126 million to $128 million, representing an adjusted EBITDA margin of approximately 47% at the midpoint of the range.
For fiscal 2021, the company expects total revenues to be in the range of $1.009 billion to $1.011 billion and Adjusted EBITDA to be in the range of $396 million to $398 million. PAYC expects adjusted EBITDA in the range of $396 million to $398 million, representing an adjusted EBITDA margin of approximately 39.3% at the midpoint of the range.