Paychex Inc (NASDAQ:PAYX) reported fiscal third quarter 2026 results that exceeded expectations, sending shares of the human capital management firm almost 4% higher before Wednesday’s opening bell.
For the quarter ended February 28, adjusted EPS rose 15% year-over-year to $1.71, beating estimates of $1.67, while total revenue increased 20% to $1.81 billion, topping expectations of $1.78 billion, driven by growth across its core business segments.
Operating income grew 14% to $792 million, and adjusted operating income rose 22% to $863.2 million. Diluted EPS came in at $1.56, up 9% from the prior year period.
Paychex CEO John Gibson said the company delivered “strong double-digit growth in revenue and operating income,” adding that demand for its HR, advisory, and benefits solutions remains supported by a complex regulatory environment.
Management Solutions revenue climbed 23% to $1.4 billion, aided in part by the Paycor acquisition, while Professional Employer Organization and Insurance Solutions revenue rose 9% to $397.5 million.
Interest on funds held for clients increased 33% to $56.8 million, driven by higher average investment balances following the Paycor acquisition.
The company also noted it has returned more than $1.5 billion to shareholders fiscal year-to-date.