Paychex Q3 revenue beats expectations on Paycor acquisition

Paychex

25/03/2026 12:41

Overview

US human capital management firm's fiscal Q3 revenue grew 20%, beating analyst expectations

Adjusted EPS for fiscal Q3 rose 15%, beating analyst expectations

Quarterly growth driven by Paycor acquisition and higher revenue per client

Outlook

Paychex expects fiscal 2026 interest on funds held for clients of $200 mln to $210 mln

Company maintains all other aspects of fiscal 2026 guidance from prior outlook

Paychex says changes in macroeconomic environment could alter its guidance

Result Drivers

PAYCOR ACQUISITION - Acquisition of Paycor drove Management Solutions revenue growth and increased client count

HIGHER REVENUE PER CLIENT - Higher revenue per client driven by Paycor's upmarket client base, price realization, and product penetration

PEO AND INSURANCE GROWTH - PEO and Insurance Solutions revenue increased due to growth in average PEO worksite employees and higher insurance revenues

Company press release: ID:nBw6b2b4ja

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
Beat
$1.81 bln
$1.79 bln (15 Analysts)
Q3 Adjusted EPS
Beat
$1.71
$1.67 (16 Analysts)
Q3 EPS
$1.56
Q3 Adjusted Net Income
Beat
$614.90 mln
$602.75 mln (13 Analysts)
Q3 Adjusted Operating Income
Beat
$863.20 mln
$834.84 mln (13 Analysts)
Q3 Adjusted Operating Margin
47.70%


Analyst Coverage

The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 15 "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 $114.00, about 25.8% above its March 24 closing price of $90.61

The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 20 three months ago

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