PAYCHEX (PAYX) Company Report

Paychex will upgrade its three core platforms—SurePayroll (small market), Paychex Flex (mid-market), and Paycor (enterprise)—with AI-driven features in 2026, backed by a provisional patent for processing unstructured data and agentic AI tools that can automate payroll via email or voice commands.
The Paycor acquisition expands Paychex’s total addressable market by $10 billion to over $100 billion; integration is on track with $90 million in cost synergies already realized and 30–50 bps of targeted revenue synergies, driven by cross-selling advisory and embedded solutions to Paycor’s 50,000 clients.
The PEO segment is outperforming peers, fueled by ongoing sales and marketing investments, record retention, and data-driven targeting of Paychex’s 800,000-client base, with PEO penetration still low across the 6.5 million U.S. small businesses.
Capital allocation priorities include paying off $400 million of debt due in March 2026 to achieve <1.5× gross leverage, maintaining a 70–80% dividend payout ratio, and using free cash flow (30%+ margin) for continued tech investment, dividends, and share count offsetting.

Dec 10, 2025, 9:00 AM

Transcript

Paychex outlines AI product rollout and Paycor acquisition progress at Nasdaq Conference

PAYX

Product Launch

M&A

Paychex will update its three core platforms (SurePayroll, Paychex Flex, and Paycor) with AI-driven capabilities, including unstructured data analytics, agentic AI for payroll automation, and voice AI tools in early 2026.
The company sees labor supply constraints in the small-business segment, with underemployment and skill shortages resulting in more job openings than in the general economy.
The $5 billion acquisition of Paycor expands Paychex’s addressable market by $10 billion, is on track for $90 million in cost synergies, and targets 30–50 bps of revenue synergies via cross-selling to 50,000 acquired clients.
Superior PEO segment performance is driven by increased investment in sales and marketing, record retention, and leveraging an 800,000-client base with AI-powered targeting for upsells.
Capital allocation priorities include retiring $400 million of debt in March, reducing gross leverage below 1.5×, growing the dividend at a 70–80% payout ratio, and investing in technology, AI, and M&A.

Dec 10, 2025, 9:00 AM

Transcript

Paychex outlines AI-driven HCM enhancements and Paycor integration

PAYX

M&A

New Projects/Investments

At the Nasdaq Conference, Paychex committed to make its three core HCM platforms—SurePayroll, Paychex Flex and Paycor—fully AI-driven next year, unveiled a provisional patent for conversational AI guidance, and demonstrated agentic AI tools that can automate payroll via email and voice commands.
Paychex sees no imminent recession in the small-business sector, noting resilience in its small business index and moderation under 1%, but identifies labor supply constraints—driven by restrictive immigration, accelerated retirements and skill shortages—as the key challenge.
The Paycor acquisition expands Paychex’s total addressable market by ~$10 billion, with integration already delivering $90 million in cost synergies on track and targeting 30–50 bps of revenue synergies via AI-powered cross-sell to 50,000 Paycor clients.
Paychex’s PEO segment is outpacing its management solutions business, supported by increased sales & marketing investment, record retention rates and data-driven targeting across its 800,000-client base.
Post-Paycor, Paychex plans to retire $400 million of maturing debt in March, target gross leverage below 1.5×, sustain a 70–80% dividend payout ratio, prioritize investments in data, AI and go-to-market execution, and use share buybacks to offset dilution; M&A will remain opportunistic.

Dec 10, 2025, 9:00 AM

Transcript

Paychex unveils AI-driven workforce management solutions

PAYX

Product Launch

Paychex announced an AI-first transformation of its HCM platforms (Paychex Flex, Paycor, SurePayroll) to automate HR processes, anticipate client needs, and deliver actionable insights.
The company deployed agentic AI capabilities that process thousands of client payrolls via voice and email with near 100% accuracy, enabling service teams to focus on strategic advisory support.
Paychex introduced a patent-pending AI knowledge mesh for organizing unstructured data and launched GenAI platforms for employment law compliance and enhanced sales/service support.

Dec 8, 2025, 6:00 PM

Press Release

Paychex reports Q1 2026 earnings

PAYX

Earnings

Guidance Update

PAYX delivered $1.54 B total revenue, up 17% y/y, driven by 21% growth in Management Solutions and 3% in PEO & Insurance Solutions.
GAAP net income was $383.8 M, down 10%, with diluted EPS of $1.06, down 10%; on a non-GAAP basis, adjusted diluted EPS was $1.22, up 5%.
Strong liquidity with $1.72 B in cash and investments, a net leverage ratio of 1.2x, and free cash flow of $662.5 M, supporting a 1.7x dividend coverage ratio.
Fiscal 2026 guidance raised to 9–10% revenue growth and 11–12% adjusted EPS growth, up from prior ranges of 8–9% and 9–10%, respectively.

Sep 30, 2025, 1:30 PM

Presentation

Paychex reports Q1 2026 results

PAYX

Earnings

Guidance Update

M&A

Total revenue grew 17% to $1.5 billion, with adjusted diluted EPS up 5% to $1.22 (diluted EPS $1.06, –10%) in Q1 2026.
Fiscal 2026 guidance reaffirmed revenue growth of 16.5–18.5%, adjusted operating margin of ~43%, and raised adjusted EPS growth target to 9–11%, with Q2 revenue expected +18% and ~41% margin.
Paycor integration is on track, achieving cost synergy run‐rate of ~$90 million and initial revenue synergies, while building a robust cross‐sell pipeline.
Continued product innovation and service expansion with the launch of BillPay by Bill.com in Paychex Flex, new AI‐driven HR tools, and PEO growth delivering mid single-digit worksite employee growth and record retention.

Sep 30, 2025, 1:30 PM

Transcript

Paychex reports Q1 FY2026 results

PAYX

Earnings

Guidance Update

M&A

Paychex delivered 17% revenue growth to $1.54 billion for the quarter ended August 31, 2025.
Operating income was $541.9 million (–1%), adjusted operating income was $626.7 million (+15%); diluted EPS was $1.06 (–10%), adjusted EPS was $1.22 (+5%).
Integration of Paycor reached key milestones, contributing 17% to Management Solutions revenue growth.
Raised full-year adjusted diluted EPS growth guidance to 9–11%.
Returned $549.2 million to shareholders via dividends of $389.1 million and share repurchases of $160.1 million.

Sep 30, 2025, 12:41 PM

8-K

Paychex reports mixed Q3 results

PAYX

Earnings

Revenue Acceleration/Inflection

M&A

Paychex delivered 16.8% year-over-year revenue growth to $1.54 billion, meeting expectations, with non-GAAP EPS of $1.22 slightly above estimates.
The operating margin fell to 35.2% from 41.5%, while the free cash flow margin rose to 43%.
Five-year sales growth stands at a 7.8% CAGR, two-year growth at 6.7%, and analysts project a 14.4% revenue increase over the next 12 months.
Revenue gains were driven by the Paycor acquisition, which expanded the client base and increased revenue per client through price realization and deeper product penetration.
The company maintains a strong liquidity position with $1.7 billion in cash and investments and earned recognition as one of America’s Most Innovative Companies (third consecutive year) and World’s Most Ethical Companies (17th time).

Sep 29, 2025, 4:02 PM

WSJ

Paychex Highlights Strategic Growth and AI Investments in Special Call

PAYX

M&A

Dividends

New Projects/Investments

Healthy SME labor market observed with no recessionary signs and strong employee retention as small businesses continue to rely on Paychex’s comprehensive HR solutions.
Strategic expansion was emphasized through the acquisition of Paycor, which extended the total addressable market to $100 billion and enhanced upmarket capabilities.
Investment in AI and technology is driving both cost efficiency and new revenue opportunities, with initiatives ranging from automated customer service to advanced compensation analytics.

May 13, 2025, 2:51 PM

Transcript

Paychex Completes Acquisition of Paycor

PAYX

M&A

Paychex has successfully completed its all-cash acquisition of Paycor HCM, Inc. at $22.50 per share, representing an enterprise value of approximately $4.1 billion.
The merger positions Paycor as a wholly owned subsidiary with expected annual cost synergies of over $80 million in fiscal 2026 and anticipated EPS accretion in the same period.

Apr 14, 2025, 12:00 AM

8-K

Earnings Transcripts

Quarterly earnings call transcripts for PAYCHEX.

Q1 2026

Sep 30, 2025

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Q4 2025

Jun 25, 2025

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Q3 2025

Mar 26, 2025

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PAYCHEX (PAYX)

Analyst Earnings Quarterly Reports

Q3 2025

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Executives

John Gibson

Adam Ante

Mason Argiropoulos

Robert Schrader

Ryan Bergstrom

Sipi Bhandari

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Joseph Doody

Joseph Tucci

Joseph Velli

Kara Wilson

Kevin Price

Martin Mucci

Pamela Joseph

Theresa Payton

Thomas Bonadio

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Jared Levine

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Ramsey El-Assal

Daniel Jester

David

Kevin McVeigh

Peter Christiansen

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Daniel Maxwell

Mark Steven Marcon

Samad Saleem Samana

Will Chi

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