Overview

• U.S. HR and payroll provider's fiscal Q4 revenue rose 12%, slightly beating analyst expectations

• Adjusted EPS for fiscal Q4 rose 11% and beat analyst expectations

• Company returned $2.2 bln to shareholders in fiscal 2026 via dividends and buybacks

Outlook

• Paychex expects fiscal 2027 total revenue to grow 5% to 6%

• Company anticipates fiscal 2027 adjusted diluted EPS growth of 7% to 9%

• Paychex sees fiscal 2027 adjusted operating margin at approximately 44%

Result Drivers

• PAYCOR ACQUISITION - Full-quarter contribution from Paycor drove Management Solutions revenue growth

• HR SOLUTIONS AND PRICING - Higher product penetration, growth in client worksite employees, and price realization supported Management Solutions revenue

• PEO AND INSURANCE GROWTH - Increased average PEO worksite employees and higher PEO insurance revenues boosted segment revenue

Company press release: ID:nGNX2pmDFx

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q4 Revenue	Slight Beat*	$1.61 bln	$1.60 bln (15 Analysts)
Q4 Adjusted EPS	Beat	$1.32	$1.30 (16 Analysts)
Q4 EPS		$1.17
Q4 Adjusted Net Income	Beat	$474.60 mln	$468.14 mln (13 Analysts)
Q4 Adjusted Operating Income	Beat	$675.80 mln	$657.09 mln (13 Analysts)
Q4 Adjusted Operating Margin		42.10%

*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 2 "strong buy" or "buy", 13 "hold" and 4 "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 $102.00, about 4.1% above its June 23 closing price of $97.99

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 16 three months ago

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