Paychex reported fiscal third‑quarter 2026 results that surpassed expectations, with adjusted diluted earnings per share of $1.71 versus a consensus estimate of $1.67 and total revenue of $1.81 billion against an estimate of $1.78 billion. The company’s earnings grew 15% year‑over‑year, while revenue rose 20% from $1.509 billion in the same quarter of the prior year.
Management Solutions revenue climbed to $1.35 billion, a 23% increase, with the Paycor acquisition contributing roughly 19 percentage points to that growth. The Professional Employer Organization and Insurance Solutions segment added $397.5 million, up 9% from the previous year’s $367.5 million.
Interest income on client funds reached $56.8 million, up 33% from $42.0 million in Q3 FY2025, reflecting higher average investment balances that followed the Paycor integration.
Adjusted operating margin expanded to 47.7%, an improvement that underscores effective cost control and the operational leverage gained as the company scales its services.
Management reaffirmed fiscal 2026 guidance, projecting total revenue growth of 16.5%–18.5% and adjusted diluted EPS growth of 10%–11%. The company also raised its interest‑on‑funds guidance to $200 million–$210 million, signaling confidence in continued balance‑sheet strength.
John Gibson, President and CEO, said the quarter’s performance was driven by strong execution and progress on strategic priorities, including the Paycor integration and AI initiatives. CFO Bob Schrader noted that the company’s organic growth accelerated in the second half of the year, with Management Solutions revenue growth largely attributable to Paycor’s contribution.
Investors reacted positively to the results, reflecting confidence in Paychex’s growth trajectory, margin resilience, and the strategic value of its recent acquisition and AI investments.
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