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Company Research6 Feb 2024
Paychex: From $3,000 and a Vision to Market Leader
Explore Paychex's growth since its inception in 1971 to a leading HCM provider, serving 740,000 SMBs globally and achieving a 1,300x return since its IPO.
Paychex (PAYX) investor relations material
Paychex Q1 2026 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.Q1 2026 earnings summary30 Sep, 2025
Executive summary
Achieved 17% year-over-year revenue growth in Q1 FY26, reaching $1.54 billion, driven by the Paycor acquisition and strong demand across core business lines.
Adjusted diluted EPS increased 5% to $1.22, while GAAP diluted EPS declined 10% to $1.06 due to acquisition-related costs and higher interest expense.
Completed key integration milestones for the Paycor acquisition, realizing early cost and revenue synergies and expanding AI-driven HCM solutions.
Returned $549 million to shareholders in Q1 through $389 million in dividends and $160 million in share repurchases.
Recognized for innovation, workplace excellence, and ethics by Newsweek, Fortune, and Ethisphere.
Financial highlights
Total revenue rose 17% year-over-year to $1.54 billion in Q1 FY26.
Management Solutions revenue grew 21% to $1.16 billion, with Paycor contributing 17% to this growth.
PEO and Insurance Solutions revenue increased 3% to $329 million, driven by worksite employee growth and insurance revenues.
Adjusted operating income rose 15% to $626.7 million, while operating income decreased 1% to $541.9 million due to acquisition costs.
Interest on funds held for clients grew 27% to $48 million.
Outlook and guidance
Fiscal 2026 revenue expected to grow 16.5%–18.5%; adjusted diluted EPS guidance raised to 9%–11% growth.
Management Solutions revenue guidance: 20%–22% growth; PEO and Insurance Solutions: 6%–8%.
Adjusted operating income margin expected at ~43%.
Q2 revenue growth anticipated at ~18% with adjusted operating margin of ~41%.
Investment portfolio for FY26 expected to average $7.4 billion, with 40% in short-term and 60% in AFS securities.
Paycor's net impact on Q1 operating profit?
What is the outlook for operating margins?
Debt reduction strategy and timeline?
What Paycor client segments show most cross-sell upside?
How is PEO balancing risk vs. growth in Florida?
How is agentic AI measured for productivity gains?
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Next Paychex earnings date
Q2 202618 Dec, 2025
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Frequently asked questions
Payroll, HR, Benefits, and More
Paychex, Inc. is an American company that specializes in integrated solutions for HR, payroll, benefits, and similar matters. Primarily serving small to medium-sized businesses, Paychex offers a comprehensive suite of products and services that help employers manage their workforce effectively and in line with employees' expectations, as well as with regulatory standards. The company is headquartered in Rochester, New York, and its shares are traded on the Nasdaq.
Started with $3,000
Paychex was founded in 1971 by B. Thomas Golisano. He started the company with just $3,000 and a vision to make payroll outsourcing easy and affordable for small businesses. Initially operating out of a small office in Rochester, New York, Paychex focused on providing payroll services to small businesses.
This market was largely underserved by larger payroll service providers at the time, allowing the company to grow rapidly. By the late 1970s, Paychex had expanded its operations nationwide. Over the years, Paychex evolved its service offerings, incorporating HR, benefits, and insurance services, adapting to the changing needs of its growing client base. Over the years, Paychex has established itself as a major player in human capital management solutions together with names such as ADP, Workday, and Intuit.
Payrolls and HR
At its core, Paychex specializes in payroll processing services, simplifying and automating payroll tasks, tax preparation, and filing for businesses. This includes managing employee payment options like direct deposit and electronic paycards.
Beyond payroll, Paychex also offers a broad spectrum of human resource (HR) services. This encompasses handling essential functions, streamlining the employee onboarding process, and offering comprehensive HR administration and compliance support to ensure businesses comply with labor laws and regulations.
Further reading: Paychex: From $3,000 and a Vision to Market Leader
Other Services
In addition to its payroll services, Paychex provides performance management tools and resources, aiding businesses in evaluating employee performance in conjunction with their strategic goals. The company also offers robust training and development programs, improving employees’ skills and ensuring compliance with industry standards. Recruitment and applicant tracking solutions are another critical aspect of their offerings, optimizing the hiring process and giving recruiters useful tips.
Furthermore, Paychex also offers solutions in benefits administration, including health insurance and retirement plan management, helping businesses construct and offer competitive employee benefits.
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