A month has gone by since the last earnings report for Paycom Software (PAYC Quick QuotePAYC - Free Report) . Shares have added about 1.3% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Paycom due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Paycom Software, Inc. before we dive into how investors and analysts have reacted as of late.

Paycom Software Q3 Earnings Miss Estimates, Revenues Rise Y/Y

Paycom Software reported lower-than-expected third-quarter 2025 results. The online payroll and human resource technology provider reported non-GAAP earnings of $1.94 per share, which missed the Zacks Consensus Estimate of $1.96. However, the bottom line increased 16.2% year over year, mainly driven by higher revenues.

Paycom reported revenues of $493.3 million, which outpaced the consensus mark of $492.4 million. The top line increased 9.1% year over year, primarily benefiting from increased sales momentum, international expansion and artificial intelligence (AI) integration in its products.

Paycom’s Q3 Results in Detail

Paycom’s Recurring revenues (representing 94.6% of the total revenues) improved 10.6% to $466.5 million in the third quarter. Our estimate for the company’s Recurring revenues was pegged at $464.5 million.

Paycom’s revenues from the Implementation and Other segment decreased to $26.8 million from $30.1 million in the year-ago quarter and contributed 5.4% to total sales. Our estimate for the segment’s revenues was pegged at $27.1 million.

Adjusted gross profits increased 11.9% from the year-ago period to $411.3 million. Moreover, the adjusted gross margin expanded 210 basis points (bps) on a year-over-year basis to 83.4%.

Paycom’s adjusted EBITDA rose 13.4% year over year to $194.3 million. The adjusted EBITDA margin improved from 37.9% to 39.4%.

Paycom’s Balance Sheet & Cash Flow

Paycom exited the third quarter with cash and cash equivalents of $375 million compared with $532.2 million recorded in the previous quarter. The company had no debt as of Sept. 30, 2025.

In the third quarter, PAYC generated operating cash flow of approximately $177.8 million, paid out $21.1 million in dividends and bought back $223.4 million worth of its common stock. During the first nine months of 2025, it generated operating cash flow of $482.8 million, paid out $64.1 million in dividends and bought back $218.9 million worth of its common stock.

The company had $927 million remaining under its buyback authorization as of Sept. 30, 2025. Earlier on Nov. 3, Paycom declared its upcoming quarterly dividend of 37.5 cents per share, payable on Dec. 8, 2025.

Paycom Updates 2025 Guidance

Paycom reiterates its revenue guidance for 2025. It still forecasts revenues to be in the band of $2.045-$2.055 billion.

The company now projects recurring revenues to grow 10% year over year, up from 9% forecasted earlier. However, it still forecasts revenues from interest on funds held for clients to be $113 million.

Paycom still expects its 2025 adjusted EBITDA between $872 million and $882 million, translating to an EBITDA margin of approximately 43% at the midpoint.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

At this time, Paycom has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Paycom has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Paycom is part of the Zacks Internet - Software industry. Over the past month, Pinterest (PINS Quick QuotePINS - Free Report) , a stock from the same industry, has gained 3.6%. The company reported its results for the quarter ended September 2025 more than a month ago.

Pinterest reported revenues of $1.05 billion in the last reported quarter, representing a year-over-year change of +16.8%. EPS of $0.38 for the same period compares with $0.40 a year ago.

Pinterest is expected to post earnings of $0.68 per share for the current quarter, representing a year-over-year change of +21.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -7%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Pinterest. Also, the stock has a VGM Score of C.