Paychex misses Q2 revenue estimates, raises profit outlook

Paychex

19/12/2025 13:39

Overview

HCM company reported fiscal Q2 revenue up 18%, slightly missing analyst expectations

Adjusted EPS for fiscal Q2 beat analyst expectations, rising 11%

Company raised full-year earnings outlook

Outlook

Paychex raises full-year earnings outlook with adjusted EPS growth expected at 10%-11%

Company maintains other fiscal 2026 guidance unchanged

Result Drivers

PAYCOR ACQUISITION - Management Solutions revenue grew 21%, with Paycor contributing approximately 17% to this growth

AI TECHNOLOGIES - Expansion of AI capabilities improved operational efficiency and client satisfaction

INTEREST INCOME - Interest on funds held for clients increased 51% due to higher average investment balances

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Revenue
Slight Miss*
$1.56 bln
$1.57 bln (13 Analysts)
Q2 Adjusted EPS
Beat
$1.26
$1.23 (15 Analysts)
Q2 EPS
$1.10
Q2 Adjusted Net Income
Slight Beat*
$454.60 mln
$450.56 mln (12 Analysts)
Q2 Adjusted Operating Income
Beat
$649 mln
$638.01 mln (12 Analysts)
Q2 Adjusted Operating Margin
41.70%


*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 14 "hold" and 3 "sell" or "strong sell"

The average consensus recommendation for the employment services peer group is "buy."

Wall Street's median 12-month price target for Paychex Inc is $125.22, about 9.6% above its December 18 closing price of $114.24

The stock recently traded at 20 times the next 12-month earnings vs. a P/E of 25 three months ago

Press Release: ID:nBw67T8C9a

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact RefinitivNewsSupport@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)