Chief Financial Officer at Paycom Software
Before I review our Third Quarter 2021 results and our outlook for the Fourth Quarter and full-year 2021, I would like to remind everyone that my comments related to certain financial measures will be on a non-GAAP basis.
We're very pleased with our Third Quarter results with total revenues of $256.2 million representing growth of 30.4% over the comparable prior-year period, driven primarily by strong new client revenue growth. Within total revenues, recurring revenue was $251.3 million for the Third Quarter of 2021, representing 98% of total revenues for the quarter and growing 30.4% from the comparable prior-year period. Total adjusted gross profit for the
Third Quarter was $214.8 million, representing an adjusted gross margin of 83.8%. Third quarter margins were impacted by both our return to office and our aggressive hiring of the individuals needed to service our current and future growth. For 2021, we expect to deliver a very strong adjusted gross margin of approximately 85%. Adjusted total administrative expenses were $142.5 million for the third quarter as compared to $113.3 million in the third quarter of 2020.
Adjusted sales and marketing expense for the third quarter of 2021 was $66.3 million or 25.9% of revenues. Our marketing strategy continues to generate strong demo leads and we plan to continue to invest in advertising given the strong return on our investment we are seeing. As Chad suggested, growth remains a top priority and advertising is a productive lever that we have continued to deploy to drive revenue growth.
Adjusted R&D expense was $29.3 million in the Third Quarter of 2021 or 11.4% of total revenues. Adjusted total R&D costs, including the capitalized portion for $40.7 million in the Third Quarter of 2021 compared to $29.8 million in the prior-year period. Even in this tight labor market, we're having good success attracting and retaining talent. Adjusted EBITDA was $89.7 million in the Third Quarter of 2021, or 35% of total revenues compared to $67.5 million in the Third Quarter of 2020, or 34.3% of total revenues.
Our GAAP Net Income for the Third Quarter was $30.4 million or $0.52 per diluted share versus 27.5 million or $0.47 per diluted share in the prior-year period based on approximately 58 million shares in both periods. Non-GAAP Net Income for the Third Quarter of 2021 was $53.6 million or $0.92 per diluted share versus $40.6 million or $0.70 per diluted share in the prior-year period. We expect non-cash stock-based compensation for the Fourth Quarter of 2021 to be approximately 22 million to 24 million.
For the full year we anticipate non-cash stock-based compensation will be approximately 98 million to 100 million. For 2021 we anticipate our full-year effective income tax rate to be 23% to 25% on a GAAP basis, on a non-GAAP basis, we anticipate our full-year effective income tax rate to be 25 to 27%. Turning to the balance sheet, we ended the third quarter of 2021 with cash and cash equivalents of $230.9 million in total debt of $29.6 million. Cash from operations was $83.2 million for the third quarter, reflecting our strong revenue performance in the profitability of our business model.
The average daily balance of funds-held on behalf of clients was approximately $1.6 billion in the third quarter of 2021. During the third quarter of 2021, we've repurchased approximately 61,000 shares for a total of roughly $29 million. Through September 30th of 2021, Paycom has repurchased nearly 4.3 million shares since 2016 for a total of approximately $484 million. And we currently have roughly $271 million remaining in our buyback program.
Shifting to guidance, we are pleased to provide strong fourth quarter guidance that reflects the robust performance year-to-date and we are raising our full-year 2021 outlook as a result. Our Q4 and full-year guidance are as follows. For the Fourth Quarter of 2021, we expect total revenues in the range of $274.5 to $276.5 million, representing a growth rate over the comparable prior-year period of approximately 25% at the midpoint of the range.
We expect adjusted EBITDA for the Fourth Quarter in the range of $103 to $105 million representing an adjusted EBITDA margin of approximately 37.7% at the midpoint of the range. For fiscal 2021, we are raising our expected revenue range to $1.045 billion to $1.047 billion, up from $1.036 billion to $1.038 billion or approximately 24% year-over-year growth at the midpoint of the range, we expect full-year adjusted EBITDA in the range of 413 to 415 million, representing an adjusted EBITDA margin of approximately 39.6% at the midpoint of the range.
To conclude, we are very pleased with the performance in the quarter and how the full-year has been shaping up. Product differentiation, outstanding customer service, and our use of effective advertising and sales levers are all contributing to our strong results and we have a long runway ahead of us to continue to deliver rapid growth for years to come.
With that, we will open the line for questions. Operator.