Core Insights - Paycom Software, Inc. (PAYC) shares fell 8.5% after reporting lower-than-expected Q3 2025 results, with non-GAAP earnings of $1.94 per share, missing the Zacks Consensus Estimate of $1.96, although this represented a 16.2% year-over-year increase driven by higher revenues [1][10] Financial Performance - Paycom reported revenues of $493.3 million, exceeding the consensus estimate of $492.4 million, marking a 9.1% year-over-year increase due to sales momentum, international expansion, and AI integration [2][10] - Recurring revenues, which account for 94.6% of total revenues, rose 10.6% to $466.5 million, surpassing the estimate of $464.5 million [3] - Adjusted gross profits increased 11.9% year-over-year to $411.3 million, with the adjusted gross margin expanding by 210 basis points to 83.4% [4] - Adjusted EBITDA grew 13.4% year-over-year to $194.3 million, with the adjusted EBITDA margin improving from 37.9% to 39.4% [4][10] Cash Flow and Balance Sheet - As of September 30, 2025, Paycom had cash and cash equivalents of $375 million, down from $532.2 million in the previous quarter, and no debt [5] - In Q3, the company generated operating cash flow of approximately $177.8 million, paid $21.1 million in dividends, and repurchased $223.4 million of its common stock [6] - Paycom had $927 million remaining under its buyback authorization as of September 30, 2025, and declared a quarterly dividend of 37.5 cents per share payable on December 8, 2025 [7] Guidance - Paycom reiterated its 2025 revenue guidance, forecasting revenues between $2.045 billion and $2.055 billion, indicating an 8.9% year-over-year growth, with recurring revenues expected to grow 10% year-over-year [8] - The company maintains its adjusted EBITDA guidance for 2025 between $872 million and $882 million, translating to an approximate EBITDA margin of 43% at the midpoint [9][10]