Paycom Software Inc (NYSE: PAYC) stock rose over 9.7% on 6th Feb, 2019 (as of 10:45 am GMT-5 ; Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 18. Cash from operations was $39 million for the fourth quarter. The average daily balance of funds held on behalf of clients was approximately $1 billion in the fourth quarter of 2018.
PAYC in the fourth quarter of FY 18 has reported the adjusted earnings per share of 61 cents, while adjusted revenue growth of 32 percent to $150.3 million in the fourth quarter of FY 18. Recurring revenues of $147.9 million increased 32% from the comparable prior year period, and constituted 98% of total revenues. The revenue growth continues to be primarily driven by new business wins. Total adjusted gross profit for the fourth quarter was $126.7 million, representing an adjusted gross margin of 84%. Adjusted sales and marketing expense for the fourth quarter of 2018 was $40.5 million. Adjusted R&D expense was $12.5 million in the fourth quarter of 2018 or 8% of total revenues.
Turning to other areas of expansion, the company is excited to announce that PAYC will soon break ground on the Texas operation center in Grapevine, Texas. Late last year, the company finalized the agreement with the city of Grapevine, which includes a $5 million tax incentive. The company anticipate PAYC will break ground on this new project in the first half of 2019, and that it should take 18 to 24 months to complete. The company expect this 14-acre campus will eventually house 1,000 jobs.
The company is increasing the target adjusted gross margin range to 83% to 85%. The company expect non-cash stock-based compensation for the first quarter of 2019 to be approximately $21 million. For the full year, the company expect non-cash stock-based compensation would be approximately $47 million.
For the first quarter of 2019, the company expect total revenues to be in the range of $194 million to $196 million. The company expect adjusted EBITDA for the first quarter in the range of $97 million to $99 million. For fiscal 2019, the company expect revenue in the range of $710 million to $712 million. The company expect adjusted EBITDA in the range of $288 million to $290 million.