Paychex (PAYX) delivers double-digit 2026 growth and sets 2027 EPS outlook
Rhea-AI Filing Summary
Paychex reported strong fourth-quarter and full-year 2026 results, with double-digit growth in revenue and earnings. Fourth-quarter total revenue rose 12% to $1.61 billion, while diluted EPS increased 43% to $1.17 and adjusted diluted EPS grew 11% to $1.32. Operating income for the quarter rose 40% to $604.7 million and adjusted operating income increased 17% to $675.8 million, driven by revenue growth and lower acquisition-related costs after the Paycor integration.
For fiscal 2026, revenue grew 17% to $6.51 billion, operating income rose 14% to $2.51 billion, and diluted EPS increased 7% to $4.89, with adjusted EPS up 11% to $5.51. The company generated $2.56 billion in operating cash flow and returned $2.2 billion to shareholders through $1.6 billion of dividends and $611.0 million of share repurchases. For fiscal 2027, Paychex expects total revenue growth of 5%–6%, adjusted operating margin of about 44%, and adjusted EPS growth of 7%–9%.
Positive
- Strong growth and margins: Fiscal 2026 revenue rose 17% to $6.5 billion, adjusted diluted EPS increased 11% to $5.51, and adjusted EBITDA grew 19% to $3.02 billion, indicating robust operating performance and profitability expansion.
- Shareholder returns and cash flow: Paychex generated $2.56 billion in operating cash flow and returned $2.2 billion to shareholders via $1.6 billion of dividends and $611.0 million of buybacks, while maintaining a sizable cash and investments position.
Negative
- None.
Insights
Paychex delivered strong FY 2026 growth and issued solid FY 2027 guidance.
Paychex posted fiscal 2026 revenue of $6.5 billion, up 17%, with net income of $1.76 billion. Fourth-quarter diluted EPS rose 43% to $1.17, while adjusted diluted EPS grew 11% to $1.32, supported by higher Management Solutions and PEO revenue and improved margins.
Non-GAAP metrics were notable: adjusted operating income increased 19% to $2.81 billion and adjusted EBITDA rose 19% to $3.02 billion. The Paycor acquisition contributed to revenue growth but also to higher amortization and compensation costs; acquisition-related costs were $304.2 million for the year.
Cash generation remained strong, with operating cash flow of $2.56 billion. The company paid dividends totaling $1.6 billion and repurchased 5.6 million shares for $611.0 million. For the year ending May 31, 2027, management guides revenue growth of 5–6% and adjusted EPS growth of 7–9%, with an anticipated adjusted operating margin of about 44%.
8-K Event Classification
Key Figures
Key Terms
Adjusted operating income financial
EBITDA financial
Non-GAAP financial measures financial
PEO and Insurance Solutions financial
Earnings Snapshot
For fiscal 2027, Paychex projects total revenue growth of 5%–6%, PEO and Insurance Solutions revenue growth of 6%–7%, adjusted operating margin of approximately 44%, an effective tax rate of about 24%, and adjusted diluted EPS growth of 7%–9%.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On June 24, 2026, Paychex, Inc. (the "Company") issued a press release (the "Press Release") reporting its financial results for the three and twelve months ended May 31, 2026. A copy of the Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information provided pursuant to this Item 2.02, including Exhibit 99.1, is being "furnished" herewith and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under such section, nor shall the information be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically provided in such a filing.
Item 9.01 Financial Statements and Exhibits
(d.)
Exhibit No. |
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Description |
99.1 |
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Press Release of Paychex, Inc. dated June 24, 2026 |
104 |
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Cover Page Interactive File, embedded in Inline XBRL. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PAYCHEX, INC. |
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Date: |
June 24, 2026 |
By: |
/s/ Robert L. Schrader |
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Robert L. Schrader |
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Senior Vice President and Chief Financial Officer |
News Release
911 Panorama Trail South • Rochester, NY 14625 • paychex.com
Paychex Reports Fourth Quarter and Full-Year 2026 Results
Rochester, N.Y. (June 24, 2026) - Paychex (Nasdaq: PAYX), a leading provider of expert-enabled HR, payroll, and benefits, today reported results for the fiscal quarter ended May 31, 2026 (the "fourth quarter") of the fiscal year ended May 31, 2026 ("fiscal 2026"). Results compared to the same period last year were as follows:
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Twelve months ended |
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May 31, |
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May 31, |
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In millions, except per share amounts |
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2026 |
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2025 |
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Change(2) |
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2026 |
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2025 |
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Change(2) |
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Total revenue |
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$ |
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1,605.5 |
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$ |
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1,427.3 |
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12 |
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% |
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$ |
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6,512.0 |
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$ |
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5,571.7 |
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17 |
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% |
Operating income |
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$ |
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604.7 |
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$ |
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431.1 |
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40 |
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% |
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$ |
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2,510.5 |
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$ |
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2,207.7 |
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14 |
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% |
Adjusted operating income(1) |
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$ |
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675.8 |
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$ |
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576.7 |
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17 |
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% |
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$ |
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2,814.7 |
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$ |
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2,370.0 |
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19 |
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% |
Diluted earnings per share |
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$ |
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1.17 |
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$ |
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0.82 |
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43 |
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% |
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$ |
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4.89 |
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$ |
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4.58 |
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7 |
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% |
Adjusted diluted earnings per share(1) |
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$ |
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1.32 |
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$ |
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1.19 |
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11 |
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% |
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$ |
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5.51 |
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$ |
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4.98 |
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11 |
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% |
“We finished fiscal 2026 with strong momentum, delivering double-digit revenue and earnings growth while accelerating organic revenue growth throughout the year,” stated John Gibson, President and Chief Executive Officer. "These results reflect solid execution against two of our strategic priorities, the successful integration of Paycor to advance our upmarket expansion and AI innovation that further differentiates our HCM and advisory solutions. Our durable business model and strong cash generation enabled us to return $2.2 billion to shareholders this fiscal year while continuing to invest in innovation and future growth."
Gibson continued, “As businesses look for a trusted partner to help them manage increasing work and complexity, we believe Paychex is well positioned to deliver differentiated value through the combination of our AI-driven technology and deep advisory expertise. This quarter, we launched WISE, our AI-powered intelligence engine, across our HCM platforms and internal operations, enabling more proactive, autonomous execution. It leverages patent-pending technology to unlock insights from unstructured data to increase productivity and enhance client outcomes.”
1
Fourth Quarter Business Highlights
Fourth quarter results reflect a full quarter of revenue and expenses from Paycor HCM, Inc. (“Paycor”), acquired in April 2025, compared to a partial-quarter in the prior-year period.
Total revenue increased to $1.6 billion for the fourth quarter, representing growth of 12% over the prior year period. Highlights compared to the prior year period include:
Management Solutions revenue increased 14% to $1.2 billion for the fourth quarter. Paycor, acquired in April 2025, contributed approximately 8% to Management Solutions revenue growth year-over-year. Management Solutions revenue increased due to the following:
Professional Employer Organization ("PEO") and Insurance Solutions revenue increased 9% to $369.7 million for the fourth quarter, primarily due to the following:
Interest on funds held for clients increased 15% to $52.2 million for the fourth quarter due to higher average investment balances resulting from the acquisition of Paycor.
Total expenses were relatively flat for the fourth quarter, primarily impacted by the following:
Operating income increased 40% to $604.7 million for the fourth quarter. The increase in operating income primarily reflected revenue growth and lower acquisition-related costs compared to the prior year period. Adjusted operating income(1), which excludes acquisition-related costs included in selling, general and administrative expenses, grew 17% to $675.8 million for the fourth quarter. Operating margin (operating income as a percentage of total revenue) was 37.7% for the fourth quarter compared to 30.2% for the prior year period. Adjusted operating margin(1) (adjusted operating income as a percentage of total revenue) was 42.1% for the fourth quarter compared to 40.4% for the prior year period.
Interest expense increased $1.0 million to $64.7 million for the fourth quarter, primarily due to the issuance of incremental debt in April 2025 to finance the acquisition of Paycor. The prior-year period also included acquisition-related financing costs.
Other income, net, decreased $7.7 million to $14.2 million for the fourth quarter, primarily as a result of lower average investment balances on our corporate investments resulting from the repayment of the Company's long-term private placement debt, Senior Notes, Series A, which matured in March 2026, and higher share repurchases in fiscal 2026.
Our effective income tax rate was 24.1% for the fourth quarter and 23.7% for the prior year period. Both periods were affected by the recognition of discrete tax impacts related to employee stock-based compensation payments.
2
Diluted earnings per share increased 43% to $1.17 per share and adjusted diluted earnings per share(1) increased 11% to $1.32 per share for the fourth quarter.
Fiscal Year Business Highlights
Highlights for fiscal 2026 as compared to the corresponding prior year period are as follows:
Financial Position and Liquidity
Our financial position and cash flow generation remained strong during fiscal 2026. As of May 31, 2026, we had:
Return to Stockholders During Fiscal 2026
Business Outlook
Our outlook for the fiscal year ending May 31, 2027 ("fiscal 2027") reflects current assumptions and market conditions. Changes in the macroeconomic environment could alter our guidance. Our updated business outlook is as follows:
(1) Adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share are not U.S. GAAP measures. Please refer to the "Non-GAAP Financial Measures" section of this press release for a discussion of non-GAAP measures. Forward-looking adjusted operating margin and adjusted diluted earnings per share exclude acquisition-related costs.
3
Non-GAAP Financial Measures
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Three months ended |
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Twelve months ended |
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May 31, |
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May 31, |
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$ in millions, except per share amounts |
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2026 |
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2025 |
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Change |
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2026 |
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2025 |
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Change |
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Operating income |
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$ |
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604.7 |
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$ |
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431.1 |
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40 |
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% |
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$ |
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2,510.5 |
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$ |
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2,207.7 |
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14 |
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% |
Non-GAAP adjustments: |
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Acquisition-related costs(1) |
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71.1 |
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145.6 |
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304.2 |
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162.3 |
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Adjusted operating income |
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$ |
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675.8 |
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$ |
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576.7 |
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17 |
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% |
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$ |
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2,814.7 |
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$ |
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2,370.0 |
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19 |
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% |
Adjusted operating margin |
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42.1 |
% |
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40.4 |
% |
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43.2 |
% |
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42.5 |
% |
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Net income |
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$ |
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420.6 |
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$ |
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297.2 |
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41 |
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% |
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$ |
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1,760.1 |
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$ |
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1,657.3 |
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6 |
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% |
Non-GAAP adjustments: |
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Acquisition-related costs(1) |
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71.1 |
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166.4 |
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304.2 |
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196.3 |
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Income tax benefit for acquisition-related costs |
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(17.1 |
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(33.3 |
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(73.3 |
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(40.6 |
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Discrete tax shortfall/(windfall) related to employee stock-based compensation payments(2) |
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0.0 |
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(0.7 |
) |
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(6.2 |
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(10.1 |
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Adjusted net income |
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$ |
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474.6 |
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$ |
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429.6 |
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10 |
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% |
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$ |
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1,984.8 |
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$ |
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1,802.9 |
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10 |
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% |
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Diluted earnings per share(3) |
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$ |
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1.17 |
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$ |
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0.82 |
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43 |
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% |
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$ |
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4.89 |
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$ |
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4.58 |
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7 |
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% |
Non-GAAP adjustments: |
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Acquisition-related costs(1) |
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0.20 |
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0.46 |
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0.84 |
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0.54 |
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Income tax benefit for acquisition-related costs |
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(0.05 |
) |
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(0.09 |
) |
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(0.20 |
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(0.11 |
) |
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Discrete tax shortfall/(windfall) related to employee stock-based compensation payments(2) |
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0.00 |
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(0.00 |
) |
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(0.02 |
) |
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(0.03 |
) |
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Adjusted diluted earnings per share |
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$ |
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1.32 |
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$ |
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1.19 |
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11 |
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% |
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$ |
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5.51 |
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$ |
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4.98 |
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11 |
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% |
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Net income |
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$ |
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420.6 |
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$ |
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297.2 |
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41 |
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% |
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$ |
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1,760.1 |
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$ |
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1,657.3 |
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6 |
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% |
Non-GAAP adjustments: |
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Interest expense |
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64.7 |
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63.7 |
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269.5 |
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105.4 |
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Interest income on corporate investments |
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(13.0 |
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(20.5 |
) |
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(63.4 |
) |
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(72.8 |
) |
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Income taxes |
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133.6 |
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92.1 |
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550.8 |
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518.6 |
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Depreciation and amortization expense |
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113.2 |
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85.7 |
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442.6 |
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209.5 |
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EBITDA |
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$ |
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719.1 |
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$ |
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518.2 |
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39 |
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% |
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$ |
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2,959.6 |
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$ |
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2,418.0 |
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22 |
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% |
Non-GAAP adjustments: |
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Acquisition-related costs(1) |
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10.6 |
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104.9 |
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62.2 |
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121.6 |
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Adjusted EBITDA |
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$ |
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729.7 |
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$ |
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623.1 |
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17 |
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% |
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$ |
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3,021.8 |
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$ |
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2,539.6 |
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19 |
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% |
In addition, acquisition-related costs for the three and twelve months ended May 31, 2025 include $20.8 million and $34.0 million, respectively, reflecting the amortization of financing fees related to debt instruments associated with the financing of the Paycor acquisition and the excluded component of the initial fair value of the interest rate swaption contracts that are included in Interest expense in the Company's Consolidated Statements of Income.
4
In addition to reporting operating income, operating margin, net income, and diluted earnings per share, which are U.S. GAAP measures, we present adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, earnings before interest, taxes, depreciation, and amortization ("EBITDA"), and adjusted EBITDA which are non-GAAP measures. We believe these additional measures are indicators of the performance of our core business operations period over period. Adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, EBITDA, and adjusted EBITDA are not calculated through the application of U.S. GAAP and are not required forms of disclosure by the Securities and Exchange Commission ("SEC"). As such, they should not be considered a substitute for the U.S. GAAP measures of operating income, operating margin, net income, and diluted earnings per share, and, therefore, they should not be used in isolation but in conjunction with the U.S. GAAP measures. The use of any non-GAAP measure may produce results that vary from the U.S. GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.
Annual Report on Form 10-K ("Form 10-K")
We anticipate filing our Form 10-K before the end of July 2026. Once filed, the report will be accessible via our Investor Relations portal at https://investor.paychex.com. This press release should be read in conjunction with the Form 10-K and the related Notes to Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in that Form 10-K.
Webcast Details
The Company will host an Earnings Conference Call on June 24, 2026 at 9:30 a.m. Eastern Time, to discuss these results. The live webcast will be available for replay on our Investor Relations portal at https://investor.paychex.com, where news releases, current financial information, and investor presentations are also accessible.
Contacts
Investor Relations: |
Media Relations: |
Rachel White |
Tracy Volkmann |
Head of Investor Relations |
Manager, Public Relations |
(513) 954-7388 |
(585) 387-6705 |
investors@paychex.com |
tvolkmann@paychex.com |
About Paychex
Paychex, Inc. (Nasdaq: PAYX) provides a comprehensive suite of expert-enabled technology and advisory solutions that help businesses manage HR, payroll, and benefits. Serving approximately 800,000 clients and paying 1 in 11 U.S. private sector workers, Paychex combines scale, trusted expertise, and innovation to help businesses succeed. Built on more than 50 years of workforce experience and one of the industry’s largest proprietary HR datasets, Paychex’s WISE agentic AI platform embeds intelligence directly into workflows to improve productivity, enhance decision-making, and deliver better outcomes. Learn more at paychex.com.
5
Cautionary Note Regarding Forward-Looking Statements
Certain written statements in this press release may contain, and members of management may from time to time make or discuss statements which constitute, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by such words and phrases as "expect," "outlook," "will," "guidance," "projections," "strategy," "anticipate," "believe," "can," "continue," "could," "future," "may," "possible," "potential," "should," "see," and other similar words or phrases. Forward-looking statements include, without limitation, all matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding operating performance, events, or developments that we expect or anticipate will occur in the future, including statements relating to our outlook, revenue growth, earnings, earnings-per-share growth, and similar projections.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to known and unknown uncertainties, risks, changes in circumstances, and other factors that are difficult to predict, many of which are outside our control. Our actual performance and outcomes, including without limitation, our actual results and financial condition, may differ materially from those indicated in or suggested by the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
6
Any of these factors, as well as such other factors as discussed in our SEC filings, could cause our actual results to differ materially from our anticipated results. The information provided in this document is based upon the facts and circumstances known as of the date of this press release, and any forward-looking statements made by us in this document speak only as of the date on which they are made. Except as required by law, we undertake no obligation to update these forward-looking statements after the date of issuance of this press release to reflect events or circumstances after such date, or to reflect the occurrence of unanticipated events.
7
PAYCHEX, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In millions, except per share amounts)
|
|
Three months ended |
|
|
|
|
|
|
Twelve months ended |
|
|
|
|
|
||||||||||||||||
|
|
May 31, |
|
|
|
|
|
|
May 31, |
|
|
|
|
|
||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Change(2) |
|
2026 |
|
|
2025 |
|
|
Change(2) |
||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Management Solutions |
|
$ |
|
1,183.6 |
|
|
$ |
|
1,041.8 |
|
|
|
14 |
|
% |
|
$ |
|
4,867.9 |
|
|
$ |
|
4,067.1 |
|
|
|
20 |
|
% |
PEO and Insurance Solutions |
|
|
|
369.7 |
|
|
|
|
340.3 |
|
|
|
9 |
|
% |
|
|
|
1,433.2 |
|
|
|
|
1,342.9 |
|
|
|
7 |
|
% |
Total service revenue |
|
|
|
1,553.3 |
|
|
|
|
1,382.1 |
|
|
|
12 |
|
% |
|
|
|
6,301.1 |
|
|
|
|
5,410.0 |
|
|
|
16 |
|
% |
Interest on funds held for clients(1) |
|
|
|
52.2 |
|
|
|
|
45.2 |
|
|
|
15 |
|
% |
|
|
|
210.9 |
|
|
|
|
161.7 |
|
|
|
30 |
|
% |
Total revenue |
|
|
|
1,605.5 |
|
|
|
|
1,427.3 |
|
|
|
12 |
|
% |
|
|
|
6,512.0 |
|
|
|
|
5,571.7 |
|
|
|
17 |
|
% |
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of service revenue |
|
|
|
417.3 |
|
|
|
|
393.9 |
|
|
|
6 |
|
% |
|
|
|
1,674.5 |
|
|
|
|
1,540.4 |
|
|
|
9 |
|
% |
Selling, general and administrative expenses |
|
|
|
583.5 |
|
|
|
|
602.3 |
|
|
|
(3 |
) |
% |
|
|
|
2,327.0 |
|
|
|
|
1,823.6 |
|
|
|
28 |
|
% |
Total expenses |
|
|
|
1,000.8 |
|
|
|
|
996.2 |
|
|
|
0 |
|
% |
|
|
|
4,001.5 |
|
|
|
|
3,364.0 |
|
|
|
19 |
|
% |
Operating income |
|
|
|
604.7 |
|
|
|
|
431.1 |
|
|
|
40 |
|
% |
|
|
|
2,510.5 |
|
|
|
|
2,207.7 |
|
|
|
14 |
|
% |
Interest expense |
|
|
|
(64.7 |
) |
|
|
|
(63.7 |
) |
|
n/m |
|
|
|
|
|
(269.5 |
) |
|
|
|
(105.4 |
) |
|
n/m |
|
|
||
Other income, net(1) |
|
|
|
14.2 |
|
|
|
|
21.9 |
|
|
|
(35 |
) |
% |
|
|
|
69.9 |
|
|
|
|
73.6 |
|
|
|
(5 |
) |
% |
Income before income taxes |
|
|
|
554.2 |
|
|
|
|
389.3 |
|
|
|
42 |
|
% |
|
|
|
2,310.9 |
|
|
|
|
2,175.9 |
|
|
|
6 |
|
% |
Income taxes |
|
|
|
133.6 |
|
|
|
|
92.1 |
|
|
|
45 |
|
% |
|
|
|
550.8 |
|
|
|
|
518.6 |
|
|
|
6 |
|
% |
Net income |
|
$ |
|
420.6 |
|
|
$ |
|
297.2 |
|
|
|
41 |
|
% |
|
$ |
|
1,760.1 |
|
|
$ |
|
1,657.3 |
|
|
|
6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per share |
|
$ |
|
1.18 |
|
|
$ |
|
0.82 |
|
|
|
44 |
|
% |
|
$ |
|
4.90 |
|
|
$ |
|
4.60 |
|
|
|
7 |
|
% |
Diluted earnings per share |
|
$ |
|
1.17 |
|
|
$ |
|
0.82 |
|
|
|
43 |
|
% |
|
$ |
|
4.89 |
|
|
$ |
|
4.58 |
|
|
|
7 |
|
% |
Weighted-average common shares outstanding |
|
|
|
357.6 |
|
|
|
|
360.3 |
|
|
|
|
|
|
|
|
358.9 |
|
|
|
|
360.2 |
|
|
|
|
|
||
Weighted-average common shares outstanding, assuming dilution |
|
|
|
358.2 |
|
|
|
|
362.3 |
|
|
|
|
|
|
|
|
360.0 |
|
|
|
|
362.0 |
|
|
|
|
|
||
n/m – not meaningful
8
PAYCHEX, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except per share amounts)
|
|
May 31, |
|
|||||||
|
|
2026 |
|
|
2025 |
|
||||
ASSETS |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
1,088.2 |
|
|
$ |
|
1,628.6 |
|
Restricted cash |
|
|
|
52.8 |
|
|
|
|
47.9 |
|
Corporate investments |
|
|
|
36.3 |
|
|
|
|
34.5 |
|
Interest receivable |
|
|
|
36.1 |
|
|
|
|
27.9 |
|
Accounts receivable, net of allowance for credit losses |
|
|
|
1,507.6 |
|
|
|
|
1,330.5 |
|
PEO unbilled receivables, net of advance collections |
|
|
|
664.2 |
|
|
|
|
616.6 |
|
Prepaid income taxes |
|
|
|
11.2 |
|
|
|
|
38.9 |
|
Prepaid expenses and other current assets |
|
|
|
384.7 |
|
|
|
|
378.3 |
|
Current assets before funds held for clients |
|
|
|
3,781.1 |
|
|
|
|
4,103.2 |
|
Funds held for clients |
|
|
|
4,832.2 |
|
|
|
|
4,813.3 |
|
Total current assets |
|
|
|
8,613.3 |
|
|
|
|
8,916.5 |
|
Property and equipment, net of accumulated depreciation |
|
|
|
588.9 |
|
|
|
|
511.5 |
|
Operating lease right-of-use assets, net of accumulated amortization |
|
|
|
63.9 |
|
|
|
|
63.8 |
|
Intangible assets, net of accumulated amortization |
|
|
|
1,684.0 |
|
|
|
|
1,947.3 |
|
Goodwill |
|
|
|
4,527.4 |
|
|
|
|
4,514.1 |
|
Long-term deferred costs |
|
|
|
555.8 |
|
|
|
|
482.4 |
|
Other long-term assets |
|
|
|
141.2 |
|
|
|
|
128.5 |
|
Total assets |
|
$ |
|
16,174.5 |
|
|
$ |
|
16,564.1 |
|
|
|
|
|
|
|
|
|
|
||
LIABILITIES |
|
|
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
154.8 |
|
|
$ |
|
129.8 |
|
Accrued corporate compensation and related items |
|
|
|
162.1 |
|
|
|
|
183.9 |
|
Accrued worksite employee compensation and related items |
|
|
|
844.8 |
|
|
|
|
735.8 |
|
Short-term debt |
|
|
|
— |
|
|
|
|
18.6 |
|
Long-term debt, net, current portion |
|
|
|
— |
|
|
|
|
399.8 |
|
Accrued income taxes |
|
|
|
87.8 |
|
|
|
|
— |
|
Deferred revenue |
|
|
|
69.4 |
|
|
|
|
69.4 |
|
Other current liabilities |
|
|
|
637.1 |
|
|
|
|
552.0 |
|
Current liabilities before client fund obligations |
|
|
|
1,956.0 |
|
|
|
|
2,089.3 |
|
Client fund obligations |
|
|
|
4,884.6 |
|
|
|
|
4,867.0 |
|
Total current liabilities |
|
|
|
6,840.6 |
|
|
|
|
6,956.3 |
|
Accrued income taxes |
|
|
|
140.5 |
|
|
|
|
119.0 |
|
Deferred income taxes |
|
|
|
543.3 |
|
|
|
|
444.7 |
|
Long-term debt, net |
|
|
|
4,556.1 |
|
|
|
|
4,548.4 |
|
Operating lease liabilities |
|
|
|
52.2 |
|
|
|
|
55.5 |
|
Other long-term liabilities |
|
|
|
306.7 |
|
|
|
|
312.2 |
|
Total liabilities |
|
|
|
12,439.4 |
|
|
|
|
12,436.1 |
|
|
|
|
|
|
|
|
|
|
||
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
||
Common stock, $0.01 par value; Authorized: 600.0 shares; |
|
|
|
3.6 |
|
|
|
|
3.6 |
|
Additional paid-in capital |
|
|
|
1,975.6 |
|
|
|
|
1,901.1 |
|
Retained earnings |
|
|
|
1,805.8 |
|
|
|
|
2,277.0 |
|
Accumulated other comprehensive loss |
|
|
|
(49.9 |
) |
|
|
|
(53.7 |
) |
Total stockholders’ equity |
|
|
|
3,735.1 |
|
|
|
|
4,128.0 |
|
Total liabilities and stockholders’ equity |
|
$ |
|
16,174.5 |
|
|
$ |
|
16,564.1 |
|
9
PAYCHEX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
|
|
Twelve months ended |
|
|||||||
|
|
May 31, |
|
|||||||
|
|
2026 |
|
|
2025 |
|
||||
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
||
Net income |
|
$ |
|
1,760.1 |
|
|
$ |
|
1,657.3 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
442.6 |
|
|
|
|
209.5 |
|
Amortization of discounts and premiums on available-for-sale securities, net |
|
|
|
(7.6 |
) |
|
|
|
23.4 |
|
Amortization of deferred contract costs |
|
|
|
249.2 |
|
|
|
|
236.5 |
|
Stock-based compensation costs |
|
|
|
96.1 |
|
|
|
|
111.8 |
|
Provision for/(Benefit from) deferred income taxes |
|
|
|
103.7 |
|
|
|
|
(15.8 |
) |
Provision for allowance for credit losses |
|
|
|
38.1 |
|
|
|
|
24.2 |
|
Net realized (gains)/losses on sales of available-for-sale securities |
|
|
|
(7.6 |
) |
|
|
|
0.4 |
|
Net realized losses on disposal of assets |
|
|
|
6.2 |
|
|
|
|
3.7 |
|
Premiums paid on cash flow hedges |
|
|
|
— |
|
|
|
|
(19.2 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
||
Interest receivable |
|
|
|
(8.2 |
) |
|
|
|
(3.8 |
) |
Accounts receivable and PEO unbilled receivables, net |
|
|
|
(105.8 |
) |
|
|
|
(130.7 |
) |
Prepaid expenses and other current assets |
|
|
|
40.0 |
|
|
|
|
(12.0 |
) |
Accounts payable and other current liabilities |
|
|
|
291.4 |
|
|
|
|
42.3 |
|
Deferred costs |
|
|
|
(342.5 |
) |
|
|
|
(246.5 |
) |
Net change in other long-term assets and liabilities |
|
|
|
3.9 |
|
|
|
|
21.9 |
|
Net change in operating lease right-of-use assets and liabilities |
|
|
|
(2.9 |
) |
|
|
|
(2.1 |
) |
Net cash provided by operating activities |
|
|
|
2,556.7 |
|
|
|
|
1,900.9 |
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
||
Purchases of available-for-sale securities |
|
|
|
(12,226.2 |
) |
|
|
|
(14,302.9 |
) |
Proceeds from sales and maturities of available-for-sale securities |
|
|
|
11,517.6 |
|
|
|
|
14,292.5 |
|
Net change in purchased receivables |
|
|
|
(166.1 |
) |
|
|
|
(157.3 |
) |
Purchases of property and equipment |
|
|
|
(234.9 |
) |
|
|
|
(191.8 |
) |
Acquisition of businesses, net of cash acquired |
|
|
|
(0.4 |
) |
|
|
|
(2,967.5 |
) |
Purchases of other assets |
|
|
|
(42.4 |
) |
|
|
|
(29.8 |
) |
Net cash used in investing activities |
|
|
|
(1,152.4 |
) |
|
|
|
(3,356.8 |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
||
Net change in client fund obligations |
|
|
|
17.6 |
|
|
|
|
(290.7 |
) |
Net proceeds from short-term borrowings |
|
|
|
(18.8 |
) |
|
|
|
— |
|
Payments on long-term debt |
|
|
|
(400.0 |
) |
|
|
|
— |
|
Proceeds from the issuance of corporate bonds |
|
|
|
— |
|
|
|
|
4,180.9 |
|
Dividends paid |
|
|
|
(1,589.6 |
) |
|
|
|
(1,448.5 |
) |
Repurchases of common shares |
|
|
|
(611.0 |
) |
|
|
|
(104.5 |
) |
Debt issuance costs |
|
|
|
— |
|
|
|
|
(47.8 |
) |
Activity related to equity-based plans |
|
|
|
(52.0 |
) |
|
|
|
3.8 |
|
Net cash (used in)/provided by financing activities |
|
|
|
(2,653.8 |
) |
|
|
|
2,293.2 |
|
Net change in cash, restricted cash, and equivalents |
|
|
|
(1,249.5 |
) |
|
|
|
837.3 |
|
Cash, restricted cash, and equivalents, beginning of fiscal year |
|
|
|
2,734.3 |
|
|
|
|
1,897.0 |
|
Cash, restricted cash, and equivalents, end of fiscal year |
|
$ |
|
1,484.8 |
|
|
$ |
|
2,734.3 |
|
|
|
|
|
|
|
|
|
|
||
Reconciliation of cash, restricted cash and equivalents |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
1,088.2 |
|
|
$ |
|
1,628.6 |
|
Restricted cash |
|
|
|
52.8 |
|
|
|
|
47.9 |
|
Restricted cash and restricted cash equivalents included in funds held for clients |
|
|
|
343.8 |
|
|
|
|
1,057.8 |
|
Total cash, restricted cash, and equivalents |
|
$ |
|
1,484.8 |
|
|
$ |
|
2,734.3 |
|
10