Key Takeaways PAYX is set to report 2Q26 results on Dec. 19, with revenues estimated to rise 18% y/y to $1.6 billion.PAYX's Management Solutions revenues are projected at $1.2 billion, reflecting gains from Paycor additions.PAYX earnings are expected to grow 8.8% from the prior-year quarter to $1.24 per share.Paychex, Inc. (PAYX) will release second-quarter fiscal 2026 results on Dec. 19, before market open.PAYX’s earnings outperformed the Zacks Consensus Estimate in four preceding quarters, with an average ...

Core Insights - Paychex reported revenue of $1.54 billion for the quarter ended August 2025, reflecting a year-over-year increase of 16.8% and a slight revenue surprise of +0.22% over the Zacks Consensus Estimate [1] - The earnings per share (EPS) for the quarter was $1.22, up from $1.16 in the same quarter last year, resulting in an EPS surprise of +0.83% compared to the consensus estimate of $1.21 [1] Revenue Breakdown - Management Solutions revenue was $1.16 billion, slightly below the average estimate of $1.17 billion from six analysts, but showed a year-over-year increase of +21% [4] - Interest on funds held for clients generated $47.6 million, exceeding the estimated $43.75 million, with a year-over-year change of +26.9% [4] - Total service revenue reached $1.49 billion, slightly below the $1.5 billion estimate, marking a +16.5% increase year-over-year [4] - PEO and Insurance Services revenue was $329.1 million, compared to the average estimate of $333.29 million, reflecting a +3.1% year-over-year change [4] Stock Performance - Paychex shares have returned -7.8% over the past month, contrasting with the Zacks S&P 500 composite's +3.2% change, indicating potential underperformance in the near term [3]

Core Insights - Paychex, Inc. (PAYX) is set to release its first-quarter fiscal 2026 results on September 30, before market open, with expectations of a decent earnings surprise based on past performance [1][10] Revenue Expectations - The consensus estimate for Paychex's first-quarter fiscal 2026 revenues is $1.5 billion, reflecting a 16.6% increase from the same quarter last year, driven by strong segmental growth [2][10] - Management Solutions revenues are projected at $1.1 billion, indicating a 20.2% year-over-year rise, supported by the addition of Paycor and higher revenues per client [3][10] - PEO and insurance solution revenues are expected to reach $339 million, representing a 6.2% increase from the prior year, attributed to robust growth in average PEO worksite employees [4] - Interest on funds held for clients is anticipated to be $41.2 million, implying a 10% rise from the year-ago quarter, bolstered by the inclusion of Paycor balance [4] Earnings Expectations - The Zacks Consensus Estimate for earnings is pegged at $1.21 per share, suggesting a 4.3% increase from the year-ago quarter, likely due to margin expansion [5] - The current model does not predict a definitive earnings beat for Paychex, with an Earnings ESP of +0.12% and a Zacks Rank of 4 (Sell) [6]

Financial Performance - Total revenue for Q4 FY25 reached $1.427 billion, a 10% increase compared to $1.295 billion in Q4 FY24 [7, 10] - Adjusted operating income for Q4 FY25 was $577 million, an 11% increase from $521 million in Q4 FY24 [7] - Adjusted diluted EPS for Q4 FY25 was $1.19, a 6% increase compared to $1.12 in Q4 FY24 [7] - For the full fiscal year 2025, total revenue grew by 6% to $5.5717 billion [32] - Adjusted diluted EPS for the full fiscal year 2025 increased by 6% to $4.98 [17, 32] Revenue Breakdown and Key Drivers - Management Solutions revenue in Q4 FY25 increased by 12% to $1.042 billion [10] - PEO & Insurance Solutions revenue in Q4 FY25 increased by 4% to $340 million [10] - Interest on Funds Held for Clients revenue in Q4 FY25 increased by 18% to $45 million [10] Fiscal Year 2026 Outlook - The company anticipates total revenue growth of 16.5% - 18.5% for fiscal year 2026 [30] - Management Solutions revenue is expected to grow by 20% - 22% in fiscal year 2026 [30] - PEO & Insurance Solutions revenue is projected to increase by 6% - 8% in fiscal year 2026 [30] - Interest on Funds Held for Clients revenue is estimated to be between $190 million and $200 million for fiscal year 2026 [30]

Group 1 - Paychex is set to announce earnings at the end of June, with a consensus forecast of approximately $1.20 per share, up from $1.12 in the same quarter last year, and revenues projected to rise by about 6.5% year-over-year to $1.38 billion [1] - The growth is expected to be driven by the strength in Management Solutions and Professional Employer Organization (PEO) services, with operating margins likely trending upward due to technology and data analytics [1] - The company has a current market capitalization of $57 billion, with revenue over the past twelve months at $5.4 billion, operating profits of $2.3 billion, and net income of $1.7 billion [2] Group 2 - Historical data shows that Paychex has recorded 20 earnings data points over the past five years, with 11 positive and 9 negative one-day (1D) returns, resulting in positive 1D returns approximately 55% of the time [5] - This percentage increases to 58% when considering data from the last 3 years, with a median of 3.6% for positive returns and -4.2% for negative returns [5] - The correlation between 1D, 5D, and 21D historical returns can provide insights for traders, particularly if the 1D and 5D returns exhibit high correlation [3][4]