Paychex (PAYX -8.29%) reported fourth quarter 2025 earnings on June 25, 2025, posting 10% total revenue growth in the fourth quarter, driven by the completed Paycor acquisition, 6% revenue growth for the full year, 6% adjusted diluted EPS growth for the year, and 60 basis points of adjusted operating income margin expansion despite significant ERTC headwinds. Integration progress outpaced management expectations, with cost synergy targets raised and guidance for fiscal 2026 projects total revenue growth of ...

Paychex (PAYX) Q4 2025 Earnings Call June 25, 2025 09:30 AM ET Company Participants Bob Schrader - CFO & Member of the Executive CommitteeJohn Gibson - President & CEOBryan Bergin - Managing DirectorSamad Samana - Managing DirectorJames Faucette - Managing DirectorKartik Mehta - Executive MD & Director of ResearchScott Wurtzel - SVP - Equity Research Conference Call Participants Mark Marcon - Senior Research AnalystTien-tsin Huang - Senior AnalystAndrew Nicholas - Equity Research AnalystAshish Sabadra - Inf ...

Financial Data and Key Metrics Changes - Total revenue for Q4 increased by 10% to $1.4 billion; excluding Paycor, total revenue increased by 3% [21] - For the full fiscal year 2025, total revenue grew by 6% to $5.6 billion [24] - Adjusted diluted earnings per share increased by 6% to $1.19 in Q4, while diluted earnings per share decreased by 22% to $0.82 [23] - Adjusted operating income margins for Q4 were 40.4%, an increase of approximately 20 basis points [23] Business Line Data and Key Metrics Changes - Management Solutions revenue increased by 12% to $1 billion in Q4, driven by the addition of Paycor and higher revenue per client [22] - PEO and Insurance Solutions revenue increased by 4% to $340 million, supported by growth in average PEO worksite employees [22] - Interest on funds held for clients increased by 18% to $45 million in Q4, primarily due to the inclusion of Paycor balances [22] Market Data and Key Metrics Changes - The number of clients served increased to approximately 800,000, with HR outsourcing worksite employees rising to 2.5 million [6] - Client retention rates improved year over year, indicating strong value provided to clients [5] Company Strategy and Development Direction - The company is focused on integrating Paycor and enhancing customer experience while maintaining industry-leading operating margins [5] - A strategic decision was made to accelerate investments for future growth, particularly in technology and sales capabilities [7][54] - The company aims to achieve approximately $90 million in cost synergies in fiscal year 2026, with additional synergy opportunities identified [6][90] Management's Comments on Operating Environment and Future Outlook - The management noted a mix of optimism and uncertainty in the market, with small businesses remaining fundamentally healthy despite external pressures [17] - The company expects total revenue growth in fiscal year 2026 to be between 16.5% and 18.5%, with Management Solutions projected to grow by 20% to 22% [27] - Management expressed confidence in navigating the current macro environment and emphasized the importance of operational efficiency [26][19] Other Important Information - The company has completed key integration activities post-Paycor acquisition and is now operating as one entity [4] - A comprehensive territory assessment and reassignment review across sales teams has been completed to align with market segments [9] Q&A Session Summary Question: Can you discuss the distractions related to the sales force integration and its impact on Q4? - Management acknowledged that the sales transformation was planned prior to the acquisition and all changes were made in Q4 to minimize future disruptions [33][34] Question: What are the expectations for organic growth versus cross-selling? - Management indicated a focus on 1% to 3% organic client growth while emphasizing product penetration and disciplined growth strategies [50] Question: How is the integration of Paycor's sales team progressing? - Management reported that they retained a significant portion of Paycor's sales and marketing organization and are fully staffed, with plans to continue investing in sales [62] Question: What is the outlook for Paycor's growth in fiscal year 2026? - Management expects Paycor to be a strong double-digit grower, with some conservatism in guidance to ensure deliverability [59] Question: How will the company balance capital allocation between shareholder returns and debt reduction? - Management stated that the primary focus remains on investing in the business, with dividends being the main method of returning excess cash to shareholders [76]

Paychex (PAYX) Q3 2025 Earnings Call March 26, 2025 09:30 AM ET Company Participants Bob Schrader - CFO & Member of the Executive CommitteeJohn Gibson - President and Chief Executive OfficerDaniel Maxwell - Equity Research AssociatePeter Christiansen - DirectorRamsey El-Assal - Managing DirectorJames Faucette - Managing DirectorWilliam Chi - Head, Credit - Large Commercial BankingKartik Mehta - Executive MD & Director of ResearchSamad Samana - Managing DirectorScott Wurtzel - SVP - Equity Research Conferenc ...