Paychex (PAYX) Q4 2026 earnings summary

Executive summary

• Achieved double-digit revenue and earnings growth for both Q4 and full-year fiscal 2026, with accelerating organic revenue growth each quarter and successful Paycor integration exceeding synergy targets.

• Launched WISE, an AI-powered intelligence engine, enhancing operational efficiency, productivity, and client outcomes, now powering 600+ features and agents.

• Outperformed industry benchmarks in PEO worksite employee growth and maintained record client retention in ASO and PEO segments.

• Returned $2.2 billion to shareholders through dividends and share repurchases in FY26.

• Entering fiscal 2027 with aligned teams, modernized infrastructure, and strong momentum.

Financial highlights

• Q4 total revenue increased 12% year-over-year to $1.61 billion; full-year revenue up 17% to $6.51 billion.

• Q4 Management Solutions revenue grew 14% to $1.2 billion; PEO and Insurance Solutions up 9% to $370 million.

• Q4 operating income margin rose 750 bps to 37.7%; adjusted margin up 170 bps to 42.1%.

• Q4 diluted EPS up 43% to $1.17; adjusted diluted EPS up 11% to $1.32.

• Full-year operating income margin 38.6%; adjusted margin 43.2%. Full-year diluted EPS up 7% to $4.89; adjusted EPS up 11% to $5.51.

• Operating cash flow for the year increased 35% to $2.6 billion; free cash flow up 36% to $2.32 billion.

• Returned $2.2 billion to shareholders via $1.6 billion in dividends and $611 million in share repurchases.

Outlook and guidance

• Fiscal 2027 total revenue growth expected at 5%-6%; Management Solutions revenue growth also 5%-6%; PEO and Insurance Solutions 6%-7%.

• Adjusted operating income margin expected at ~44%; effective tax rate ~24%.

• Adjusted diluted EPS growth projected at 7%-9%.

• Interest on funds held for clients expected to decline year-over-year to $195-$205 million due to lower rates and lapping one-time gains.

• Q1 revenue growth expected to align with full-year guidance; adjusted operating margin 41%-42%.