Watch Jim Cramer's full interview with Paychex CEO John Gibson

Financial Performance - Paychex reported a modest top and bottom line beat, raising the midpoint of the full-year earnings forecast for the second consecutive quarter [1] - The company had 18% revenue growth and earnings per share up 11% [3][4] - Free cash flow increased by 38% year-to-date [4] - Paychex raised earnings per share guidance for the second time this year [5] Strategic Initiatives and Acquisitions - Paychex acquired Pay Corps and fully integrated Paychex Enterprise business into the Pay Corps brand [7][8] - The company expects $100 million in cost synergies for the fiscal year from the Pay Corps integration, raised from an initial commitment of $80 million [9] - The acquisition of Pay Corps has expanded Paychex's market opportunity by $10 billion [10] Market and Industry Outlook - Paychex's full-service HR outsourcing business continues to perform exceptionally well [6] - The company believes it is well-positioned to capitalize on market opportunities, drive growth, expand margins, and strengthen its leadership position in the AI era for human capital management [6][7] - Small business job index has remained relatively stable in 2025, with continued moderation in wage inflation [16] - The company sees continued challenges in the small end of the market in finding qualified employees [17] - Paychex clients are not buying as many ancillary attachment products as expected, which led to some guidance discussions [18] - The company does not see any signs of recession and anticipates positive developments in 2026 with tax clarity and easing interest rates [18][19] - 70% of Paychex's clients are blue and gray-collar workers, and 95% are companies with less than 100 employees, making them less exposed to AI risks [13]