Paycom Soft (PAYC)

Pretax margin

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before tax but after interest (EBT)	US$ in thousands	649,000	472,399	389,578	255,962	185,936
Revenue	US$ in thousands	1,883,200	1,693,670	1,375,220	1,055,520	841,434
Pretax margin		34.46%	27.89%	28.33%	24.25%	22.10%

December 31, 2024 calculation

Pretax margin = EBT ÷ Revenue
= $649,000K ÷ $1,883,200K
= 34.46%

Based on the provided data, Paycom Soft has demonstrated a consistent improvement in its pretax margin over the years. The pretax margin measures the company's profitability before taxes relative to its total revenue.

In December 31, 2020, the pretax margin stood at 22.10%, showing a decent initial profitability level. However, the company's efficiency in generating profits improved significantly in the subsequent years, with the margin increasing to 24.25% by December 31, 2021, and further to 28.33% by December 31, 2022.

Although there was a slight decrease in the pretax margin to 27.89% by December 31, 2023, it rebounded strongly in the following year, reaching an impressive 34.46% by December 31, 2024. This substantial increase indicates that Paycom Soft has been effectively managing its costs and expenses, resulting in higher profitability relative to its revenues.

Overall, the upward trend in the pretax margin reflects positively on Paycom Soft's financial performance and efficiency in generating profits, showcasing the company's ability to deliver strong financial results to its stakeholders.