Paychex (NASDAQ:PAYX) Releases Quarterly Earnings Results, Beats Estimates By $0.03 EPS

Paychex (NASDAQ:PAYX) issued its earnings results on Friday. The business services provider reported $1.26 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.23 by $0.03, Zacks reports. Paychex had a net margin of 27.85% and a return on equity of 45.17%. The business had revenue of $1.56 billion during the quarter, compared to analysts’ expectations of $1.55 billion. During the same quarter in the prior year, the business posted $1.14 EPS. The company’s revenue for the quarter was up 18.3% on a year-over-year basis. Paychex updated its FY 2026 guidance to 5.480-5.530 EPS.

Here are the key takeaways from Paychex’s conference call:

• Delivered a strong Q2 with revenue up 18% to $1.6B, adjusted operating income +21%, adjusted diluted EPS up 11% to $1.26, and margin expansion driven by higher productivity.
• Paycor integration progressing — management now expects about $100 million in FY2026 cost synergies (up from $80M), says revenue-synergy targets are on track and Paycor contributed roughly 17 percentage points to management solutions growth.
• Accelerating AI initiatives: announced a patent-pending AI-powered Knowledge Mesh, launched GenAI compliance tools, and ran agentic AI pilots that autonomously handled thousands of payroll interactions with nearly 100% accuracy, which management expects will improve productivity, margins, and sales effectiveness.
• Reaffirmed FY2026 outlook but now expects revenue to land toward the low end of ranges for Management Solutions, PEO, and insurance; meanwhile raised adjusted diluted EPS guidance to 10–11% and expects interest on client funds at the high end of $190–$200M.
• PEO business showing strength with mid-single-digit worksite employee growth, solid retention and enrollment trends, but the insurance agency was a headwind this quarter due to weak workers’ comp rates and lower health/benefit volumes.

Paychex Stock Down 1.7%

Paychex stock opened at $112.28 on Friday. Paychex has a twelve month low of $108.00 and a twelve month high of $161.24. The stock has a 50 day moving average of $116.08 and a two-hundred day moving average of $131.81. The company has a current ratio of 1.27, a quick ratio of 1.27 and a debt-to-equity ratio of 1.15. The stock has a market capitalization of $40.41 billion, a price-to-earnings ratio of 25.46 and a beta of 0.91.

Paychex Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Wednesday, November 26th. Shareholders of record on Friday, November 7th were paid a dividend of $1.08 per share. The ex-dividend date of this dividend was Friday, November 7th. This represents a $4.32 annualized dividend and a yield of 3.8%. Paychex’s dividend payout ratio is currently 97.96%.

Wall Street Analysts Forecast Growth

PAYX has been the subject of several research analyst reports. Wolfe Research decreased their price objective on shares of Paychex from $130.00 to $115.00 and set an “underperform” rating for the company in a research note on Wednesday, December 10th. BMO Capital Markets reduced their target price on Paychex from $140.00 to $121.00 and set a “market perform” rating for the company in a report on Tuesday, December 9th. Robert W. Baird decreased their target price on Paychex from $153.00 to $148.00 and set a “neutral” rating for the company in a research report on Wednesday, October 1st. Royal Bank Of Canada cut their price target on Paychex from $150.00 to $125.00 and set a “sector perform” rating on the stock in a research report on Friday, December 5th. Finally, Cowen reiterated a “hold” rating on shares of Paychex in a research note on Monday, December 1st. Fourteen investment analysts have rated the stock with a Hold rating and three have issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Reduce” and a consensus target price of $130.60.

Institutional Investors Weigh In On Paychex

Several large investors have recently modified their holdings of PAYX. Voloridge Investment Management LLC acquired a new stake in shares of Paychex during the third quarter worth $117,809,000. Select Equity Group L.P. increased its stake in Paychex by 15.9% in the 2nd quarter. Select Equity Group L.P. now owns 4,051,413 shares of the business services provider’s stock valued at $589,319,000 after buying an additional 557,101 shares during the period. Amundi raised its position in Paychex by 29.2% during the 3rd quarter. Amundi now owns 1,761,962 shares of the business services provider’s stock worth $219,139,000 after buying an additional 398,696 shares during the last quarter. Man Group plc lifted its stake in shares of Paychex by 266.2% in the 3rd quarter. Man Group plc now owns 369,394 shares of the business services provider’s stock worth $46,824,000 after acquiring an additional 268,529 shares during the period. Finally, Alliancebernstein L.P. lifted its stake in shares of Paychex by 46.0% in the 3rd quarter. Alliancebernstein L.P. now owns 678,423 shares of the business services provider’s stock worth $85,997,000 after acquiring an additional 213,788 shares during the period. Hedge funds and other institutional investors own 83.47% of the company’s stock.

Trending Headlines about Paychex

Here are the key news stories impacting Paychex this week:

• Positive Sentiment: Q2 results beat expectations — EPS of $1.26 topped estimates and revenue rose 18.3% year-over-year, driven by management solutions and the recent Paycor contribution. Paychex Q2 Earnings & Revenues Surpass Estimates
• Positive Sentiment: Paycor acquisition helping scale revenue and lift the company’s profit outlook, supporting the stronger top-line and the raised FY26 EPS range. Paychex Scales Fast After Paycor Acquisition
• Positive Sentiment: Company raised FY2026 EPS guidance to $5.48–$5.53, slightly above consensus, signaling management confidence in earnings power despite near-term costs. Paychex Reports Second Quarter Results
• Neutral Sentiment: Analysts were active ahead of the release, with some revisions to estimates — reflecting varied views on growth durability and integration risk. Analysts Revise Forecasts Ahead Of Earnings
• Neutral Sentiment: Some brokerages remain cautious (example: Stifel maintained a hold), keeping a range of opinions on valuation and growth vs. execution risk. Stifel Maintains Hold
• Negative Sentiment: Higher quarterly expenses (integration, amortization, or operating costs) were highlighted as offsetting some of the upside and tempered investor reaction to the guidance raise. Reuters: Higher Quarterly Expenses Overshadow Forecast Raise

Paychex Company Profile

Paychex, Inc, founded in 1971 by B. Thomas “Tom” Golisano and headquartered in Rochester, New York, is a provider of payroll, human resources, and benefits outsourcing solutions for small- and medium-sized businesses. The company’s core services include payroll processing and tax filing, employee benefits administration, retirement services, and workers’ compensation administration, designed to simplify back-office operations and help clients comply with regulatory and tax requirements.

Paychex offers an integrated technology platform, marketed under the Paychex Flex brand, which delivers cloud-based payroll, HR, time and attendance, and reporting tools.