PAYCHEX (PAYX) Company Report

Paychex delivered 18% revenue growth to $1.6 billion and 21% adjusted operating income growth, with adjusted diluted EPS up 11% to $1.26.
Management solutions revenue rose 21% to $1.2 billion, PEO and insurance solutions revenue grew 6% to $337 million, and interest on funds held for clients increased 51% to $54 million.
Fiscal 2026 guidance was reaffirmed, with adjusted diluted EPS growth raised to 10–11%, interest on funds held now expected at the high end of $190–$200 million, and an effective tax rate of ~24%.
The Paycor acquisition integration is on track, with ~$100 million in cost synergies expected for FY 2026 and revenue synergies progressing; strategic AI initiatives include a patent-pending Knowledge Mesh and GenAI-powered platforms.
Operating cash flow was $445 million, with $514 million returned to shareholders; cash, restricted cash, and investments total $1.6 billion, debt of $5 billion, and 12-month ROE of 40%.

Dec 19, 2025, 2:30 PM

Transcript

Paychex reports Q2 2026 results

PAYX

Earnings

Guidance Update

M&A

In Q2, total revenue rose 18% to $1.6 billion, driven by management solutions up 21% to $1.2 billion and PEO & insurance solutions up 6% to $337 million.
Expenses increased 27% to $986 million, with adjusted operating margin expanding 80 bps YoY to 41.7% and adjusted diluted EPS up 11% to $1.26.
The company ended the quarter with $1.6 billion in cash/restricted cash and investments, $5 billion of borrowings, generated $445 million in operating cash flow, and returned $514 million to shareholders.
For FY 2026, Paychex reaffirmed its guidance, raised adjusted EPS growth to 10–11%, expects interest on client funds at the high end of $190–200 million, and sees $100 million in cost synergies from the Paycor integration.

Dec 19, 2025, 2:30 PM

Transcript

Paychex announces Q2 FY26 results

PAYX

Earnings

M&A

New Projects/Investments

Reported $1.558 B in total revenue, up 18% year-over-year; adjusted operating income of $649 M (+21%); adjusted diluted EPS of $1.26 (+11%).
PEO & Insurance Solutions revenue grew to $1.166 B, leading segment performance, while Management Solutions reached $337 M (+6% YoY).
Maintained strong liquidity with $1.6 B in cash and investments and a net leverage ratio of 1.2x, supporting capital returns.
Continued integration of Paycor drives client and revenue synergies; launched AI-driven payroll automation and GenAI HR platforms to enhance service capabilities.

Dec 19, 2025, 2:30 PM

Presentation

Paychex reports Q2 2026 results

PAYX

Earnings

Guidance Update

M&A

Paychex delivered 18% revenue growth to $1.6 billion and 21% adjusted operating income growth, achieving a 41.7% adjusted operating margin in Q2 FY2026.
Diluted EPS declined 4% to $1.10, while adjusted EPS increased 11% to $1.26.
Management Solutions revenue rose 21% to $1.2 billion, PEO & Insurance revenue grew 6% to $337 million, with Paycor contributing approximately 17 percentage points to MS growth; integration is on track for $100 million in FY2026 cost synergies.
Fiscal 2026 guidance reaffirmed, raising adjusted EPS growth to 10–11%, expecting revenue growth at the low end of prior ranges; Q3 guided to ~18% revenue growth and 47–48% adjusted operating margin.

Dec 19, 2025, 2:30 PM

Transcript

Paychex reports Q2 FY2026 results and raises earnings outlook

PAYX

Earnings

Guidance Update

Total revenue for Q2 FY2026 was $1.5576 billion, up 18% year-over-year.
Operating income was $571.9 million (+6%), and adjusted operating income was $649.0 million (+21%).
Diluted EPS came in at $1.10 (–4%), while adjusted diluted EPS was $1.26 (+11%).
Full-year adjusted diluted EPS growth guidance was raised to 10%–11% for fiscal 2026.

Dec 19, 2025, 1:36 PM

8-K

Paychex announces Q2 fiscal 2026 results

PAYX

Earnings

Guidance Update

Product Launch

Total revenue increased 18% to $1.56 billion in Q2 fiscal 2026 ended November 30, 2025.
Adjusted operating income rose 21% to $649.0 million, and adjusted EPS climbed 11% to $1.26, while GAAP diluted EPS was $1.10, down 4% year-over-year.
Raised full-year guidance, with adjusted diluted EPS now expected to grow 10–11% for fiscal 2026.
Unveiled AI-powered workforce management solutions, including agentic payroll automation and GenAI advisory tools.

Dec 19, 2025, 1:30 PM

Press Release

Paychex outlines AI roadmap and Paycor integration at Nasdaq Conference

PAYX

Product Launch

M&A

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

Earnings Transcripts

Quarterly earnings call transcripts for PAYCHEX.

Q2 2026

Dec 19, 2025

→

Q1 2026

Sep 30, 2025

→

Q4 2025

Jun 25, 2025

→

View All Transcripts

Ask Fintool AI Agent

Get instant answers from SEC filings, earnings calls & more

What did John Gibson say about margins?What are PAYCHEX's strategic priorities?How is PAYCHEX positioned vs competitors?How did PAYCHEX do last quarter?

PAYCHEX (PAYX)

Analyst Earnings Quarterly Reports

Q3 2025

Q2 2025

Q1 2025

Q4 2024

Executives

John Gibson

Adam Ante

Mason Argiropoulos

Robert Schrader

Ryan Bergstrom

Sipi Bhandari

Board Members

Joseph Doody

Joseph Tucci

Joseph Velli

Kara Wilson

Kevin Price

Martin Mucci

Pamela Joseph

Theresa Payton

Thomas Bonadio

Analyst Coverage

Scott Wurtzel

Tien-tsin Huang

Mark Marcon

Andrew Nicholas

Jason Kupferberg

Kartik Mehta

Samad Samana

Bryan Bergin

James Faucette

Bryan Keane

Ashish Sabadra

Jared Levine

Michael Infante

Ramsey El-Assal

Daniel Jester

David

Kevin McVeigh

Peter Christiansen

Will Chi

Andrew Owen Nicholas

Daniel Maxwell

Mark Steven Marcon

Samad Saleem Samana

Will Chee

Latest news

Earnings Transcripts

Q2 2026

Q1 2026

Q4 2025

Ask Fintool AI Agent