Paychex, Inc. has reported its financial results for the fourth quarter and full year 2025, showcasing significant growth and changes compared to the prior year period.
In the fourth quarter of 2025, Paychex reported total revenue of $1,427.3 million, representing a 10% increase from the same period in 2024. Operating income for the same period decreased by 11% to $431.1 million, while adjusted operating income grew by 11% to $576.7 million. The operating margin was 30.2% for the fourth quarter, down from 37.2% in the prior year period. Adjusted operating margin expanded to 40.4% from 40.2% in the same period last year. Diluted earnings per share decreased by 22% to $0.82, but adjusted diluted earnings per share increased by 6% to $1.19.
For the full fiscal year 2025, Paychex reported a 6% increase in total revenue, reaching $5,571.7 million. Operating income increased by 2% to $2,207.7 million, and adjusted operating income grew by 7% to $2,370.0 million. Operating margin was 39.6% for the full year, down from 41.2% in the prior year, while adjusted operating margin expanded to 42.5% from 41.9% in the same period last year. Diluted earnings per share decreased by 2% to $4.58, and adjusted diluted earnings per share increased by 6% to $4.98.
The company highlighted that total revenue in the fourth quarter was driven by a 12% increase in management solutions revenue to $1.0 billion, primarily attributed to the acquisition of Paycor and higher revenue per client. Additionally, interest on funds held for clients increased by 18% to $45.2 million, primarily due to the acquisition of Paycor.
Paychex also provided its business outlook for the fiscal year ending May 31, 2026, forecasting a total revenue growth in the range of 16.5% to 18.5% and adjusted diluted earnings per share growth in the range of 8.5% to 10.5%. The company anticipates the adjusted operating margin to be approximately 43% for fiscal 2026.
In terms of financial position and liquidity, Paychex reported $1.7 billion in cash, restricted cash, and total corporate investments as of May 31, 2025. The company’s cash flow from operations was $2.0 billion for the fiscal year, while it used $3.7 billion in cash from investing activities, primarily related to acquisitions.
Paychex also returned value to its stockholders during fiscal 2025 by paying cumulative dividends of $4.02 per share totaling $1.4 billion and repurchasing 828,855 shares of its common stock for $104.0 million.
In addition to reporting GAAP measures, the company presented non-GAAP financial measures, including adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, EBITDA, and adjusted EBITDA. These measures are considered indicators of the performance of Paychex’s core business operations.
The market has reacted to these announcements by moving the company's shares 0.66% to a price of $152.25. Check out the company's full 8-K submission here.
