Paychex (PAYX) Q4 2026: Revenue Growth Accelerates, Earnings Surge — Positive Outlook

Paychex (Nasdaq: PAYX) reported its fourth quarter results for fiscal 2026, showcasing a robust performance that exceeded the prior year's figures. Total revenue for the quarter reached $1.6 billion, reflecting an increase of $174 million or 12% compared to the same period last year. This growth is attributed to strong contributions from Management Solutions and Professional Employer Organization (PEO) services, alongside the full integration of Paycor HCM, Inc., which was acquired in April 2025.

Key Financial Metrics:

• Total Revenue: $1.6 billion, up 12% YoY
• Management Solutions Revenue: $1.2 billion, up 14% YoY
• PEO and Insurance Solutions Revenue: $369.7 million, up 9% YoY
• Operating Income: $604.7 million, up 40% YoY
• Diluted Earnings Per Share (EPS): $1.17, up 43% YoY
• Adjusted Diluted EPS: $1.32, up 11% YoY

Analyst View:

This quarter is a positive outcome for shareholders, driven by significant revenue growth and a notable increase in earnings. The company's ability to expand its revenue base while managing costs effectively, as evidenced by a 40% increase in operating income, indicates strong operational execution. The integration of Paycor has not only contributed to revenue growth but has also enhanced Paychex's market position in the HR and payroll services sector.

The company returned $2.2 billion to shareholders in fiscal 2026, which included $1.6 billion in cumulative dividends and $611 million in share repurchases. This commitment to returning capital to shareholders, alongside a solid cash flow from operations of $2.6 billion, underscores Paychex's strong financial health and shareholder-friendly policies.

Dividend and Share Buyback:

• Cumulative Dividends Paid: $4.43 per share, totaling $1.6 billion
• Shares Repurchased: 5.6 million shares for $611 million

Guidance and Future Outlook:

Looking ahead, Paychex anticipates total revenue growth in the range of 5% to 6% for fiscal 2027. Management Solutions revenue is expected to grow similarly, while PEO and Insurance Solutions revenue is projected to increase by 6% to 7%. The company also expects adjusted diluted EPS to grow by 7% to 9%.

Investors should keep an eye on the continued integration of Paycor and the rollout of new AI-driven solutions, such as the recently launched WISE Workforce Intelligence Engine. This innovation is expected to enhance productivity and client outcomes, positioning Paychex favorably in a competitive landscape.

Conclusion:

Overall, Paychex's fourth quarter results reflect a strong finish to fiscal 2026, with significant revenue and earnings growth. The company's strategic initiatives, including the integration of Paycor and advancements in AI technology, are likely to drive future growth. Investors should monitor the company's performance in the upcoming quarters, particularly in relation to its guidance and the impact of its new technology offerings.

Here are the requested tables from the press release:

Note: All amounts in the following tables are in millions.

PAYCHEX, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Quarter Ended May 31, 2026	Quarter Ended May 31, 2025	Year Ended May 31, 2026	Year Ended May 31, 2025
Total revenue	$1,603.0	$1,433.4	$6,538.8	$5,591.8
Operating expenses	$(998.3)	$(1,022.7)	$(4,038.1)	$(3,498.1)
Operating income	$604.7	$410.7	$2,500.7	$2,093.7
Interest expense	$(64.7)	$(63.7)	$(257.3)	$(251.2)
Other income, net	$14.2	$21.9	$116.0	$75.3
Income before taxes	$554.2	$368.9	$2,359.4	$1,917.8
Income tax expense	$(133.0)	$(87.6)	$(567.8)	$(494.0)
Net income	$421.2	$281.3	$1,791.6	$1,423.8
Earnings per share	$1.17	$0.82	$4.89	$4.56
Adjusted earnings per share	$1.32	$1.19	$5.51	$4.97

PAYCHEX, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)

	May 31, 2026	May 31, 2025
ASSETS
Cash and cash equivalents	$1,088.2	$1,628.6
Restricted cash	$52.8	$47.9
Corporate investments	$36.3	$34.5
Interest receivable	$36.1	$27.9
Accounts receivable, net of allowance for credit losses	$1,507.6	$1,330.5
PEO unbilled receivables, net	$664.2	$616.6
Prepaid income taxes	$11.2	$38.9
Prepaid expenses and other current assets	$384.7	$378.3
Current assets before funds held for clients	$3,781.1	$4,103.2
Funds held for clients	$4,832.2	$4,813.3
Total current assets	$8,613.3	$8,916.5
Property and equipment, net of accumulated depreciation	$588.9	$511.5
Operating lease right-of-use assets, net of accumulated amortization	$63.9	$63.8
Intangible assets, net of accumulated amortization	$1,684.0	$1,947.3
Goodwill	$4,527.4	$4,514.1
Long-term deferred costs	$555.8	$482.4
Other long-term assets	$141.2	$128.5
Total assets	$16,174.5	$16,564.1
LIABILITIES
Accounts payable	$154.8	$129.8
Accrued corporate compensation and related items	$162.1	$183.9
Accrued worksite employee compensation and related items	$844.8	$735.8
Short-term debt	$—	$18.6
Long-term debt, net, current portion	$—	$399.8
Accrued income taxes	$87.8	$—
Deferred revenue	$69.4	$69.4
Other current liabilities	$637.1	$552.0
Current liabilities before client fund obligations	$1,956.0	$2,089.3
Client fund obligations	$4,884.6	$4,867.0
Total current liabilities	$6,840.6	$6,956.3
Accrued income taxes	$140.5	$119.0
Deferred income taxes	$543.3	$444.7
Long-term debt, net	$4,556.1	$4,548.4
Operating lease liabilities	$52.2	$55.5
Other long-term liabilities	$306.7	$312.2
Total liabilities	$12,439.4	$12,436.1
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value; Authorized: 600.0 shares; Issued and outstanding: 355.6 shares as of May 31, 2026 and 360.5 shares as of May 31, 2025	$3.6	$3.6
Additional paid-in capital	$1,975.6	$1,901.1
Retained earnings	$1,805.8	$2,277.0
Accumulated other comprehensive loss	$(49.9)	$(53.7)
Total stockholders’ equity	$3,735.1	$4,128.0
Total liabilities and stockholders’ equity	$16,174.5	$16,564.1

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