Financial Data and Key Metrics Changes - Total revenue increased by 17% year-over-year to $1.5 billion [14] - Adjusted diluted EPS grew by 5% to $1.22, while diluted EPS decreased by 10% to $1.06 [15] - Total expenses rose by 29% to $998 million, primarily due to the Paycor acquisition [15] - Cash flow from operations was $718 million for the first quarter [15] - The company returned $549 million to shareholders through dividends and share repurchases [15] Business Line Data and Key Metrics Changes - Management Solutions revenue increased by 21% to $1.2 billion, driven by the addition of Paycor and higher revenue per client [14] - PEO and Insurance Solutions revenue grew by 3% to $329 million, supported by an increase in average PEO worksite employees [14] - Interest on funds held for clients rose by 27% to $48 million due to the inclusion of Paycor balances [14] Market Data and Key Metrics Changes - The PEO business experienced mid-single-digit worksite employee growth, with strong demand and retention performance [11] - The small business employment environment remains stable, with no signs of recession and moderating wage inflation [11][12] Company Strategy and Development Direction - The integration of Paycor is on track, with targeted revenue synergies and cost synergies expected to exceed initial estimates [4][5] - The company is focusing on cross-selling opportunities, particularly in retirement, ASO, and PEO solutions to Paycor's client base [5][6] - The Partner Plus program for brokers has seen nearly double enrollment, indicating strong momentum in referral channels [7][8] - New product offerings, such as Bill Pay Powered by BILL, aim to enhance service delivery for small and mid-sized businesses [8][9] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the resilience of small businesses and expects renewed business confidence due to clarity on tariffs, taxes, and inflation [11][12] - The company anticipates total revenue growth for fiscal 2026 to be between 16.5% and 18.5%, with Management Solutions expected to grow by 20%-22% [16][17] - Adjusted operating income margin is projected to be approximately 43% [16] Other Important Information - The company has launched AI-driven tools to enhance client experiences and operational efficiency [9][10] - The integration of Paycor is expected to provide additional growth opportunities and improve overall service offerings [4][5] Q&A Session Summary Question: Update on demand environment and employer size segments - Demand remains consistent with historical trends, with increased activity and solid RPO bookings [20][21] Question: Paycor recurring revenue growth - Recurring revenue growth for Paycor is expected to be double digits for the full year, with Q1 performance in line with expectations [22][23] Question: PEO environment characterization - PEO continues to perform well with mid-single-digit worksite employee growth and record retention [25][26] Question: Direct expenses and SG&A comparison - Direct expenses showed strong leverage, while SG&A expenses were impacted by integration costs [31][32] Question: Paycor integration and recurring revenue - Integration is progressing well, with high retention rates and strong sales performance [38][39] Question: EPS increase drivers - EPS guidance was raised due to strong retention and confidence in achieving cost and revenue synergies [47][48] Question: PEO market competitiveness - The competitive environment remains stable, with a focus on value proposition rather than aggressive pricing [59][60] Question: Bill.com partnership and customer profile - The partnership aims to enhance payment capabilities for small businesses, integrating with existing platforms [65][66] Question: Regulatory environment impact - The company does not expect significant impacts from regulatory changes, with small businesses remaining resilient [82][83]

Financial Data and Key Metrics Changes - Total revenue increased by 17% year-over-year to $1.5 billion [13] - Management Solutions revenue rose by 21% to $1.2 billion, driven by the addition of Paycor and higher revenue per client [13] - PEO and Insurance Solutions revenue grew by 3% to $329 million, supported by an increase in average PEO worksite employees [13] - Total expenses increased by 29% to $998 million, primarily due to the Paycor acquisition [14] - Adjusted diluted EPS increased by 5% to $1.22, while diluted EPS decreased by 10% to $1.06 [14][15] Business Line Data and Key Metrics Changes - Management Solutions revenue growth was significantly influenced by Paycor, contributing approximately 17% to the overall growth [13] - PEO business showed mid-single-digit worksite employee growth, with strong demand and record retention [11][25] - Interest on funds held for clients increased by 27% to $48 million due to the inclusion of Paycor balances [14] Market Data and Key Metrics Changes - The small business employment environment remains stable, with no signs of recession and moderate wage inflation [11][12] - The demand environment is consistent, with increased activity and solid RPO bookings, particularly in the micro segment [19] Company Strategy and Development Direction - The integration of Paycor is on track, with targeted revenue synergies and cost synergies expected to reach approximately $90 million [4][14] - The company is focusing on cross-selling opportunities, particularly in retirement, ASO, and PEO solutions to Paycor's client base [5] - New marketing campaigns and partnerships, such as the CPA Partner Pro portal and BillPay powered by Bill.com, are aimed at expanding service offerings [8][9] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the macro environment, citing renewed business confidence due to clarity on tariffs, taxes, and inflation [12] - The company expects total revenue growth for fiscal 2026 to be between 16.5% and 18.5%, with adjusted diluted EPS growth now expected to be between 9% and 11% [15][16] - The PEO model is seen as a key growth driver, allowing small businesses to offer competitive benefits [11] Other Important Information - The company has launched AI-driven tools to enhance client experiences and operational efficiency, including generative AI solutions for HR guidance [10][92] - Paychex was recognized by Newsweek as one of America's greatest companies and most admired workplaces, highlighting the importance of company culture [12] Q&A Session Summary Question: Update on demand environment and employer size segments - Demand remains consistent with historical trends, with increased activity and solid RPO bookings across segments [19] Question: Paycor recurring revenue growth expectations - Recurring revenue for Paycor is expected to grow in double digits for the full year, aligning with expectations [21] Question: PEO environment characterization - The PEO business continues to perform well, with mid-single-digit worksite employee growth and record retention [25][26] Question: Direct expenses and operating expenses outlook - Direct expenses showed strong leverage, with ongoing operating expenses expected to remain consistent with current trends [32] Question: Impact of regulatory environment on business - The small business market remains resilient, with stability in employment and wage inflation below 3% [104]

Core Insights - Paychex reported mixed fiscal first-quarter 2026 results, with a year-over-year sales growth of 17% to $1.540 billion, slightly exceeding analyst expectations [1] - The company experienced strong revenue growth in Management Solutions, which rose 21% year-over-year to $1.2 billion, driven by an increase in clients and worksite employees [1][2] - Adjusted EPS of $1.22 surpassed the analyst consensus estimate of $1.21, while operating income declined by 1% to $541.9 million, with a margin contraction of 630 basis points to 35.2% [3] Revenue Breakdown - Professional Employer Organization (PEO) and Insurance Solutions revenue increased by 3% year-over-year to $329.1 million, supported by growth in the average number of PEO worksite employees and increased insurance revenues [3] - Adjusted operating income grew by 15% to $626.7 million, although the margin declined by 80 basis points to 40.7% [4] - Adjusted EBITDA rose by 16% to $680.0 million, indicating strong operational performance [4] Strategic Initiatives - The CEO highlighted strong double-digit revenue growth driven by demand for human capital management solutions and successful integration of Paycor, which has led to early realization of cost and revenue synergies [5] - Ongoing investments in AI and technology are enhancing client experience and operational efficiency [6] Financial Outlook - Paychex raised its fiscal 2026 adjusted EPS guidance to a range of $5.43-$5.53, compared to the previous range of $5.40-$5.50, aligning closely with analyst expectations [7] - The company reaffirmed its fiscal 2026 sales guidance of $6.491 billion-$6.602 billion, slightly below the analyst consensus estimate of $6.538 billion [7]

HR software provider Paychex on Tuesday reported higher expenses in the first quarter overshadowing a lift to its annual earnings forecast, and dragging the company's shares down 6.2% in early trading... ...

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Performance - Total revenue increased by 17% to $1.54 billion in Q1 FY26, compared to $1.319 billion in Q1 FY25 [7] - Adjusted diluted EPS increased by 5% to $1.22 in Q1 FY26, compared to $1.16 in Q1 FY25 [7] - Adjusted operating income increased by 15% to $627 million in Q1 FY26, compared to $547 million in Q1 FY25 [7] - Management Solutions revenue increased by 21% to $1.163 billion in Q1 FY26, compared to $962 million in Q1 FY25, with Paycor contributing approximately 17% of the total revenue growth [10] - PEO & Insurance Solutions revenue increased by 3% to $329 million in Q1 FY26, compared to $319 million in Q1 FY25 [10] - Interest on Funds Held for Clients increased by 27% to $48 million in Q1 FY26, compared to $38 million in Q1 FY25 [10] Financial Position - The company has a strong liquidity position with $1.7 billion in cash and corporate investments as of August 31, 2025 [4, 26] - The company returned $549 million to shareholders during the quarter, including $389 million in dividends and $160 million through share repurchases [13] Fiscal 2026 Outlook - The company anticipates total revenue growth of 16.5% - 18.5% for fiscal year 2026 [22] - The company anticipates adjusted diluted EPS growth of 9% - 11% for fiscal year 2026 [22]

Core Viewpoint - Paychex, Inc. has raised its adjusted earnings growth guidance for fiscal 2026 while maintaining its annual revenue growth outlook [1] Group 1: Earnings Guidance - For fiscal 2026, the company projects adjusted earnings per share growth in the range of 9 to 11 percent, an increase from the previous range of 8.5 to 10.5 percent [1] - The guidance implies adjusted earnings in a range of $5.43 to $5.53 per share based on adjusted earnings of $4.98 per share reported for fiscal 2025 [2] Group 2: Revenue Outlook - The company continues to expect total revenue growth of 16.5 to 18.5 percent for fiscal 2026 [1] - Total revenues for fiscal 2026 are projected to be between $6.49 billion and $6.60 billion [2] Group 3: Analyst Expectations - Analysts currently expect the company to report earnings of $5.47 per share with revenue growth of 17.66 percent, totaling approximately $6.56 billion for the year [3]

[First Quarter Fiscal 2026 Results Overview](index=1&type=section&id=First%20Quarter%20Fiscal%202026%20Results%20Overview) Paychex delivered robust double-digit revenue growth in the first quarter of fiscal 2026, driven by the Paycor acquisition and strong segment performance, leading to increased adjusted operating income and an updated full-year earnings outlook [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Paychex reported a strong start to fiscal 2026 with robust double-digit revenue growth, driven by the integration of Paycor and sustained demand for HCM solutions. The company also raised its full-year earnings outlook | In millions, except per share amounts | August 31, 2025 | August 31, 2024 | Change | | :---------------------------------- | :-------------- | :-------------- | :----- | | Total revenue | $1,540.0 | $1,318.5 | 17 % | | Operating income | $541.9 | $546.7 | (1) % | | Adjusted operating income | $626.7 | $546.7 | 15 % | | Diluted earnings per share | $1.06 | $1.18 | (10) % | | Adjusted diluted earnings per share | $1.22 | $1.16 | 5 % | - CEO John Gibson highlighted **robust double-digit revenue growth** and continued progress in integrating Paycor, noting early realization of cost and revenue synergies and significant cross-selling potential[2](index=2&type=chunk) - Strategic investments in AI and technology are driving innovation, elevating client experience, and delivering operational efficiency, positioning Paychex to navigate the complex labor and regulatory landscape[2](index=2&type=chunk) - Delivered **Strong Double-Digit Revenue Growth** in the First Quarter[3](index=3&type=chunk) - Raises Full Year Earnings Outlook[3](index=3&type=chunk) - Successfully Completed Key Paycor Integration Milestones[3](index=3&type=chunk) [Segmental Revenue Performance](index=1&type=section&id=Segmental%20Revenue%20Performance) Revenue growth was primarily driven by Management Solutions, significantly boosted by the Paycor acquisition, alongside steady growth in PEO and Insurance Solutions and increased interest on client funds | Revenue Segment | August 31, 2025 | August 31, 2024 | Change | | :------------------------------ | :-------------- | :-------------- | :----- | | Management Solutions | $1.2 billion | | 21 % | | PEO and Insurance Solutions | $329.1 million | | 3 % | | Interest on funds held for clients | $47.6 million | | 27 % | - Management Solutions revenue increased **21% to $1.2 billion**, with Paycor contributing approximately **17%** to this growth, driven by an increase in clients (primarily from Paycor) and higher revenue per client due to Paycor's upmarket base, price realization, and product penetration[4](index=4&type=chunk) - PEO and Insurance Solutions revenue increased **3% to $329.1 million**, attributed to growth in average PEO worksite employees and an increase in PEO insurance revenues[9](index=9&type=chunk) - Interest on funds held for clients increased **27% to $47.6 million**, primarily due to higher average investment balances resulting from the Paycor acquisition[9](index=9&type=chunk) [Expense and Profitability Analysis](index=2&type=section&id=Expense%20and%20Profitability%20Analysis) Total expenses rose significantly due to the Paycor acquisition and strategic investments, leading to a slight GAAP operating income decrease but a substantial adjusted operating income increase. Interest expense also surged due to acquisition financing, while the effective tax rate slightly decreased | Metric | August 31, 2025 | August 31, 2024 | Change | | :-------------------------- | :-------------- | :-------------- | :----- | | Total expenses | $998.1 million | | 29 % | | Operating income | $541.9 million | $546.7 million | (1) % | | Adjusted operating income | $626.7 million | $546.7 million | 15 % | | Operating margin | 35.2% | 41.5% | | | Adjusted operating margin | 40.7% | 41.5% | | | Interest expense | $68.2 million | $9.6 million | n/m | | Effective income tax rate | 22.9% | 23.3% | | | Diluted earnings per share | $1.06 | $1.18 | (10) % | | Adjusted diluted earnings per share | $1.22 | $1.16 | 5 % | - Total expenses increased **29% to $998.1 million**, primarily due to compensation-related expenses, amortization of intangible assets, and higher technology, selling, and marketing investments, all driven by the Paycor acquisition and strategic initiatives[5](index=5&type=chunk)[9](index=9&type=chunk) - Adjusted operating income, excluding **$84.1 million** of Paycor acquisition-related costs, grew **15% to $626.7 million**, demonstrating core business strength despite a **1% GAAP operating income decrease**[5](index=5&type=chunk) - Interest expense increased significantly by **$58.6 million to $68.2 million**, mainly due to incremental debt issued to finance the Paycor acquisition[6](index=6&type=chunk) [Financial Position and Capital Allocation](index=2&type=section&id=Financial%20Position%20and%20Capital%20Allocation) The company maintained a strong financial position with substantial cash flow, while strategically utilizing borrowings for acquisitions and returning capital to shareholders through dividends and share repurchases [Liquidity and Balance Sheet](index=2&type=section&id=Liquidity%20and%20Balance%20Sheet) Paychex maintained a strong financial position and cash flow generation, with substantial cash and investments, alongside increased borrowings primarily for the Paycor acquisition - Cash, restricted cash, and total corporate investments: **$1.7 billion** as of August 31, 2025[10](index=10&type=chunk) - Short-term and long-term borrowings, net of debt issuance costs: **$5.0 billion** as of August 31, 2025[10](index=10&type=chunk) - Cash flow from operations: **$718.4 million** for the first quarter[10](index=10&type=chunk) [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) The company returned capital to stockholders through cumulative dividends and share repurchases during the first quarter - Paid cumulative dividends of **$1.08 per share**, totaling **$389.1 million**[10](index=10&type=chunk) - Repurchased **1.1 million shares** of common stock for **$160.1 million**[10](index=10&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Paychex provides non-GAAP financial measures to offer additional insights into core business performance by excluding acquisition-related costs and certain tax benefits, complementing GAAP results [Reconciliation and Explanation](index=3&type=section&id=Reconciliation%20and%20Explanation) Paychex provides non-GAAP financial measures, including adjusted operating income, net income, diluted EPS, and EBITDA, to offer additional insights into core business performance by excluding acquisition-related costs and certain tax benefits. These measures are not GAAP substitutes but are used in conjunction with GAAP results | $ in millions, except per share amounts | August 31, 2025 | August 31, 2024 | Change | | :-------------------------------------- | :-------------- | :-------------- | :----- | | Operating income | $541.9 | $546.7 | (1) % | | Acquisition-related costs | 84.8 | — | | | Adjusted operating income | $626.7 | $546.7 | 15 % | | Adjusted operating margin | 40.7% | 41.5% | | | Net income | $383.8 | $427.4 | (10) % | | Acquisition-related costs | 84.8 | — | | | Income tax benefit for acquisition-related costs | (20.6) | — | | | Excess tax benefits related to employee stock-based compensation payments | (7.2) | (6.2) | | | Adjusted net income | $440.8 | $421.2 | 5 % | | Diluted earnings per share | $1.06 | $1.18 | (10) % | | Acquisition-related costs | 0.23 | — | | | Income tax benefit for acquisition-related costs | (0.06) | — | | | Excess tax benefits related to employee stock-based compensation payments | (0.02) | (0.02) | | | Adjusted diluted earnings per share | $1.22 | $1.16 | 5 % | | EBITDA | $656.3 | $585.8 | 12 % | | Acquisition-related costs | 23.7 | — | | | Adjusted EBITDA | $680.0 | $585.8 | 16 % | - Acquisition-related costs for the first quarter totaled **$84.8 million**, including **$61.1 million** in amortization of acquired intangibles, **$18.7 million** in compensation costs, and **$5.0 million** in other professional service fees related to the Paycor acquisition[11](index=11&type=chunk) - Non-GAAP measures are presented as indicators of core business performance and should not be considered substitutes for U.S. GAAP measures[11](index=11&type=chunk)[12](index=12&type=chunk) [Business Outlook and Corporate Information](index=4&type=section&id=Business%20Outlook%20and%20Corporate%20Information) Paychex updated its fiscal 2026 guidance, raising adjusted diluted EPS expectations, and provides comprehensive investor resources and company information [Fiscal 2026 Guidance Update](index=4&type=section&id=Fiscal%202026%20Guidance%20Update) Paychex has updated its business outlook for fiscal 2026, raising the anticipated growth range for adjusted diluted earnings per share, while other guidance aspects remain unchanged - Adjusted diluted earnings per share is now anticipated to grow in the range of **9% to 11%** for fiscal 2026[15](index=15&type=chunk) - Other aspects of the fiscal 2026 guidance remain unchanged[15](index=15&type=chunk) - The business outlook incorporates current assumptions and market conditions and excludes acquisition-related costs, with potential alterations due to macroeconomic environment changes[13](index=13&type=chunk) [Investor Resources](index=4&type=section&id=Investor%20Resources) Paychex provides access to its financial reports, earnings call webcasts, and investor information through its investor relations portal - Anticipates filing Form 10-Q for the first quarter within the next couple of days, available at https://investor.paychex.com[13](index=13&type=chunk) - Earnings Conference Call webcast scheduled for September 30, 2025, at 9:30 a.m. Eastern Time, accessible at https://investor.paychex.com, with replay available[14](index=14&type=chunk) - Investor Relations contact: Rachel White at **(513) 954-7388** or investors@paychex.com[16](index=16&type=chunk) - Media Relations contact: Tracy Volkmann at **(585) 387-6705** or tvolkmann@paychex.com[16](index=16&type=chunk) [About Paychex](index=5&type=section&id=About%20Paychex) Paychex, Inc. is a leading human capital management (HCM) company, offering comprehensive, flexible, and innovative HR solutions to approximately 800,000 customers in the U.S. and Europe, serving one out of every 11 American private sector workers - Paychex is a digitally driven HR leader reimagining how companies address workforce needs with comprehensive, flexible, and innovative HCM solutions for organizations of all sizes[17](index=17&type=chunk) - The company pays **one out of every 11 American private sector workers** and serves approximately **800,000 customers** in the U.S. and Europe[17](index=17&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section outlines the forward-looking nature of certain statements, emphasizing inherent risks and uncertainties that could cause actual results to differ materially from projections [Nature of Forward-Looking Statements](index=5&type=section&id=Nature%20of%20Forward-Looking%20Statements) This section clarifies that certain statements in the press release are forward-looking, based on current beliefs and expectations, and are subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are identified by words like "expect," "outlook," "will," "guidance," and similar phrases, covering matters not historical facts, such as Paycor integration, operating performance, revenue growth, and earnings projections[18](index=18&type=chunk) - These statements are not assurances of future performance and are subject to known and unknown uncertainties, risks, and changes in circumstances, many outside the company's control, meaning actual outcomes may differ materially[19](index=19&type=chunk) [Key Risk Factors](index=5&type=section&id=Key%20Risk%20Factors) The company identifies several factors that could materially affect its actual results, including technological changes, software defects, cybersecurity risks, acquisition integration challenges, regulatory compliance, and macroeconomic impacts - Ability to keep pace with technology changes or provide timely enhancements to solutions[19](index=19&type=chunk) - Software defects, undetected errors, and development delays[20](index=20&type=chunk) - Cyberattacks, security vulnerabilities, data security/privacy leaks, and business interruptions[20](index=20&type=chunk) - Risks related to acquisitions and business integration, specifically Paycor[20](index=20&type=chunk) - Changes in health insurance and workers' compensation rates and claim trends[20](index=20&type=chunk) - Impact of macroeconomic factors on the U.S. and global economy, especially small- and medium-sized business clients[21](index=21&type=chunk) - Volatility in the political and economic environment, including inflation and interest rate changes[21](index=21&type=chunk) - Ability to comply with U.S. and foreign laws and regulations, including data privacy and artificial intelligence laws[21](index=21&type=chunk) [Unaudited Consolidated Financial Statements](index=7&type=section&id=Unaudited%20Consolidated%20Financial%20Statements) The unaudited consolidated financial statements detail the company's income, financial position, and cash flows, reflecting revenue growth, increased expenses, and strategic capital movements [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) The unaudited consolidated statements of income show a 17% increase in total revenue for the three months ended August 31, 2025, compared to the prior year, driven by Management Solutions and interest on funds held for clients. However, net income and diluted EPS decreased due to higher expenses and interest costs | In millions, except per share amounts | August 31, 2025 | August 31, 2024 | Change | | :---------------------------------- | :-------------- | :-------------- | :----- | | Revenue: | | | | | Management Solutions | $1,163.3 | $961.7 | 21 % | | PEO and Insurance Solutions | 329.1 | 319.3 | 3 % | | Total service revenue | 1,492.4 | 1,281.0 | 17 % | | Interest on funds held for clients | 47.6 | 37.5 | 27 % | | Total revenue | 1,540.0 | 1,318.5 | 17 % | | Expenses: | | | | | Cost of service revenue | 413.8 | 380.0 | 9 % | | Selling, general and administrative expenses | 584.3 | 391.8 | 49 % | | Total expenses | 998.1 | 771.8 | 29 % | | Operating income | 541.9 | 546.7 | (1) % | | Interest expense | (68.2) | (9.6) | n/m | | Other income, net | 23.8 | 20.0 | 19 % | | Income before income taxes | 497.5 | 557.1 | (11) % | | Income taxes | 113.7 | 129.7 | (12) % | | Net income | $383.8 | $427.4 | (10) % | | Basic earnings per share | $1.07 | $1.19 | (10) % | | Diluted earnings per share | $1.06 | $1.18 | (10) % | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) The unaudited consolidated balance sheets as of August 31, 2025, show an increase in total assets, primarily driven by corporate investments and goodwill, while total liabilities also increased, notably in long-term borrowings and client fund obligations | In millions, except per share amounts | August 31, 2025 | May 31, 2025 | | :---------------------------------- | :-------------- | :----------- | | ASSETS | | | | Cash and cash equivalents | $809.0 | $1,628.6 | | Corporate investments | 861.9 | 34.5 | | Funds held for clients | 4,927.4 | 4,813.3 | | Total current assets | 9,040.0 | 8,916.5 | | Intangible assets, net | 1,886.8 | 1,947.3 | | Goodwill | 4,523.6 | 4,514.1 | | Total assets | $16,663.0 | $16,564.1 | | LIABILITIES | | | | Client fund obligations | 4,948.4 | 4,867.0 | | Total current liabilities | 7,128.7 | 6,956.3 | | Long-term borrowings, net | 4,550.3 | 4,548.4 | | Total liabilities | 12,692.4 | 12,436.1 | | Total stockholders' equity | 3,970.6 | 4,128.0 | | Total liabilities and stockholders' equity | $16,663.0 | $16,564.1 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The unaudited consolidated statements of cash flows indicate strong cash provided by operating activities, but significant cash used in investing activities due to purchases of available-for-sale securities and cash used in financing activities for dividends and share repurchases, resulting in a net decrease in cash, restricted cash, and equivalents | In millions | August 31, 2025 | August 31, 2024 | | :---------------------------------------- | :-------------- | :-------------- | | OPERATING ACTIVITIES | | | | Net cash provided by operating activities | $718.4 | $546.1 | | INVESTING ACTIVITIES | | | | Purchases of AFS securities | (3,731.9) | (1,029.7) | | Proceeds from sales and maturities of AFS securities | 2,547.3 | 1,013.0 | | Net cash used in investing activities | (1,302.7) | (110.0) | | FINANCING ACTIVITIES | | | | Net change in client fund obligations | 81.4 | (25.1) | | Dividends paid | (389.1) | (353.4) | | Repurchases of common shares | (160.1) | (104.0) | | Net cash used in financing activities | (515.4) | (485.0) | | Net change in cash, restricted cash, and equivalents | (1,099.7) | (48.9) | | Cash, restricted cash, and equivalents, end of period | $1,634.6 | $1,848.1 |

Market Overview - Stock prices increased on Monday, marking a second consecutive day of gains, despite an impending government shutdown deadline [3] - The S&P 500 index rose by 0.3%, the Nasdaq Composite by 0.5%, and the Dow Jones Industrial Average by 0.2% [5] - However, stock futures for the S&P 500, Nasdaq 100, and Dow Jones are down ahead of Tuesday's market open, with S&P 500 futures down 0.2%, Nasdaq 100 futures down 0.1%, and Dow Jones futures down 0.3% [5] Political Context - A meeting between Republican and Democratic leaders ended without a deal, increasing the likelihood of a government shutdown on Wednesday at 12:01 a.m. ET [3] - Democrats are advocating for permanent health care subsidies related to the Affordable Care Act (ACA), which are set to expire this year, while Republicans are resistant to healthcare concessions [4] Economic Indicators - Job Openings and Labor Turnover Survey (JOLTS) reported July job openings at 7.2 million, with an expected decrease to 7.1 million for August [7] - The Consumer Confidence Index fell by 1.3 points to 97.4 in August, with an expected September value of 96 [7] - Nike is projected to report earnings per share (EPS) of $0.27 for the August quarter, down from $0.70 in the prior year [7] - Paychex is expected to report an EPS of $1.20 for the August quarter, a slight increase from $1.16 in the previous year [7]

Paychex, Inc. (NASDAQ: PAYX) will release earnings results for the first quarter before the opening bell on Tuesday, Sept. 30. Analysts expect the company to report quarterly earnings at $1.20 per share, up from $1.16 per share in the year-ago period. Paychex projects quarterly revenue of $1.54 billion, compared to $1.32 billion in the same quarter a year earlier, according to data from Benzinga Pro. On September 22, Stifel analyst David Grossman maintained a Hold rating on Paychex and lowered the price t ...