ROCHESTER, New York, June 24, 2026, 10:05 EDT
- Paychex (PAYX) fell 3.8% in early trading as the company reported fiscal Q4 numbers and issued its 2027 outlook.
- Adjusted EPS came in at $1.32, beating the Street by a penny. Revenue reached $1.61 billion, ahead of the $1.60 billion forecast.
- Paychex expects fiscal 2027 revenue to rise 5% to 6% and sees adjusted EPS up 7% to 9%.
Paychex shares dropped almost 4% Wednesday. The payroll and HR services firm laid out a fiscal 2027 growth forecast that was slower than the growth it reported for the last year. Quarterly earnings came in just ahead of Wall Street’s estimates.
Shares last changed hands at $94.31, off 3.8% in delayed trading. Automatic Data Processing, the bigger payroll competitor, edged down 0.1%. Paylocity was flat, while Paycom tacked on 1.2%.
Paychex said revenue hit $1.61 billion for the quarter ended May 31, a 12% increase from last year. Operating income climbed 40% to $604.7 million. Adjusted EPS came in at $1.32, up from $1.19. That figure excludes acquisition-related expenses and certain tax items.
MarketBeat said analysts were looking for EPS of $1.31 and revenue of $1.60 billion.
Paychex CEO John Gibson said the company finished fiscal 2026 with “strong momentum” and “double-digit revenue and earnings growth.” Gibson said the Paycor integration and new AI tools helped drive results this year. Paychex, Inc.
Paycor, which Paychex bought in April 2025, contributed a full quarter of revenue and expenses this year instead of the partial quarter a year ago. Management Solutions revenue was up 14% to $1.18 billion, with Paycor making up about 8 points of that gain. Professional Employer Organization and Insurance Solutions, the HR and insurance outsourcing unit, climbed 9% to $369.7 million.
Paychex reported a 15% jump in interest earned on client funds, reaching $52.2 million. The company holds these funds before passing them on for payroll, tax, and benefit payouts. Paychex linked the increase to higher average investment balances following the Paycor acquisition.
Paychex posted a 17% jump in revenue to $6.51 billion for fiscal 2026, with adjusted EPS up 11% to $5.51. The company said it gave back $2.2 billion to shareholders in dividends and buybacks over the year.
Paychex gave a more cautious forecast for next year. The company sees total revenue rising 5% to 6%. Management Solutions is also guided to 5% to 6% growth. PEO and Insurance Solutions are pegged for 6% to 7% growth. Interest on client funds is expected between $195 million and $205 million.
Stifel’s David Grossman said before the release that messaging ahead of the quiet period pointed to “continued comfort” with revenue growth in the mid-single digits, about 5%, and some margin expansion, Investing.com reported. TD Cowen’s Bryan Bergin noted AI adoption is on the rise in human capital management, which covers payroll and HR software. Investing.com UK
Guidance isn’t set if clients pull back on hiring, Paycor expenses stick around, insurance claims grow in the PEO segment, or lower interest rates cut what Paychex makes on client funds. Paychex also named AI, cybersecurity, its vendors, regulation, and macro pressures as other risks that could hit its outlook.
