Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Paycom Software Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income	281,389)	195,960)	143,453)	180,576)	137,065)
Depreciation and amortization	92,699)	67,222)	53,373)	42,211)	29,657)
Accretion of discount on available-for-sale securities	(1,020)	(452)	(1,563)	(940)	(1,112)
Non-cash marketing expense	1,734)	1,051)	—)	—)	—)
(Gain) loss on disposition of property and equipment	(150)	146)	—)	—)	—)
Amortization of debt issuance costs	847)	36)	36)	35)	32)
Stock-based compensation expense	94,898)	97,506)	90,108)	47,268)	36,576)
Cash paid for derivative settlement	205)	(741)	(613)	(81)	(188)
(Gain) loss on derivative	(1,559)	(662)	1,993)	1,456)	(479)
Deferred income taxes, net	(3,210)	32,906)	21,381)	21,011)	21,077)
Other	(206)	—)	—)	—)	—)
Accounts receivable	(13,353)	(360)	168)	(5,884)	(1,838)
Prepaid expenses	(6,497)	(5,875)	(4,293)	(5,903)	(2,676)
Inventory	(224)	481)	(41)	(403)	(306)
Other assets	(13,907)	(7,862)	(1,720)	(3,555)	(762)
Deferred contract costs	(122,440)	(103,356)	(89,776)	(76,204)	(60,730)
Accounts payable	11,676)	(660)	1,529)	(221)	1,079)
Income taxes, net	10,830)	(5,966)	(6,427)	(58)	3,085)
Accrued commissions and bonuses	6,082)	8,654)	1,360)	1,672)	1,086)
Accrued payroll and vacation	10,764)	9,730)	9,659)	4,129)	3,726)
Deferred revenue	15,990)	14,600)	10,582)	11,593)	13,027)
Accrued expenses and other current liabilities	555)	17,004)	(2,002)	7,561)	6,498)
Changes in operating assets and liabilities	(100,524)	(73,610)	(80,961)	(67,273)	(37,811)
Adjustments to reconcile net income to net cash provided by operating activities	83,714)	123,402)	83,754)	43,687)	47,752)
Net cash provided by operating activities	365,103)	319,362)	227,207)	224,263)	184,817)
Purchases of investments from funds held for clients	(268,718)	(398,819)	(332,756)	(195,811)	(145,011)
Proceeds from investments from funds held for clients	382,230)	267,341)	308,981)	69,200)	155,500)
Net change in funds held for clients	—)	—)	—)	—)	112,037)
Purchases of intangible assets	(4,120)	(5,500)	—)	—)	—)
Purchases of property and equipment	(132,678)	(120,692)	(94,102)	(92,934)	(59,906)
Net cash (used in) provided by investing activities	(23,286)	(257,670)	(117,877)	(219,545)	62,620)
Proceeds from the issuance of debt	29,000)	—)	—)	—)	—)
Repurchases of common stock	(94,652)	—)	(52,040)	—)	(105,188)
Withholding taxes paid related to net share settlements	(5,171)	(65,580)	(62,811)	(42,528)	(20,248)
Payments on long-term debt	(29,287)	(1,775)	(1,775)	(1,775)	(888)
Net change in client funds obligation	361,133)	233,079)	(49,283)	694,991)	(121,414)
Payment of debt issuance costs	(6,436)	—)	—)	(16)	(58)
Net cash provided by (used in) financing activities	254,587)	165,724)	(165,909)	650,672)	(247,796)
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	596,404)	227,416)	(56,579)	655,390)	(359)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period	1,812,691)	1,585,275)	1,641,854)	986,464)	46,077)
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period	2,409,095)	1,812,691)	1,585,275)	1,641,854)	45,718)

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).

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Cash flow statement item	Description	The company
Net cash provided by operating activities	Amount of cash inflow (outflow) from operating activities, excluding discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities.	Paycom Software Inc. net cash provided by operating activities increased from 2020 to 2021 and from 2021 to 2022.
Net cash (used in) provided by investing activities	Amount of cash inflow (outflow) of investing activities, excluding discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets.	Paycom Software Inc. net cash (used in) provided by investing activities decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.
Net cash provided by (used in) financing activities	Amount of cash inflow (outflow) of financing activities, excluding discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.	Paycom Software Inc. net cash provided by (used in) financing activities increased from 2020 to 2021 and from 2021 to 2022.

Paycom Software Inc. (NYSE:PAYC)

Cash Flow Statement