PAYCHEX INC (PAYX) Reports 17% Revenue Growth in Fiscal 2026

By Ahmed Jamerson • Wednesday, June 24 10:52 • Permanent Link

Paychex finished fiscal 2026 with revenue of $6.51 billion, up 17% from $5.57 billion a year earlier, as the company said the full-year results reflected a full year of Paycor contribution versus only a partial period in the prior year.

In the fourth quarter, revenue rose 12% to $1.61 billion from $1.43 billion. Management solutions revenue increased 14% to about $1.2 billion, with Paycor contributing roughly 8 percentage points of that growth. PEO and insurance solutions revenue climbed 9% to $369.7 million, while interest on funds held for clients rose 15% to $52.2 million.

Operating income jumped 40% in the quarter to $604.7 million from $431.1 million, while adjusted operating income rose 17% to $675.8 million from $576.7 million. The company’s operating margin widened to 37.7% from 30.2%, and adjusted operating margin increased to 42.1% from 40.4%.

Fourth-quarter diluted earnings per share increased 43% to $1.17 from $0.82. Adjusted diluted earnings per share rose 11% to $1.32 from $1.19.

For the full year, operating income increased 14% to $2.51 billion from $2.21 billion, and adjusted operating income climbed 19% to $2.81 billion from $2.37 billion. Full-year operating margin slipped to 38.6% from 39.6%, while adjusted operating margin improved to 43.2% from 42.5%.

Full-year diluted earnings per share rose 7% to $4.89 from $4.58, and adjusted diluted earnings per share increased 11% to $5.51 from $4.98.

Cash flow from operations reached $2.6 billion in fiscal 2026. Paychex ended the year with $1.2 billion in cash, restricted cash, and corporate investments, alongside $4.6 billion in short-term and long-term borrowings, net of debt issuance costs.

The company returned $2.2 billion to shareholders during the year, including $1.6 billion in dividends, equal to $4.43 per share, and $611 million in share repurchases of 5.6 million shares.

Looking ahead to fiscal 2027, Paychex said it expects total revenue growth of 5% to 6%, management solutions revenue growth of 5% to 6%, PEO and insurance revenue growth of 6% to 7%, and adjusted diluted earnings per share growth of 7% to 9%. Following these announcements, the company's shares moved -3.48%, and are now trading at a price of $94.575. For more information, read the company's full 8-K submission here.

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