Paychex Inc (NASDAQ:PAYX) reported fiscal fourth quarter results that exceeded Wall Street expectations, though shares slipped about 2% in early trading as investors focused on the company’s fiscal 2027 guidance.
For the quarter ended May 31, Paychex reported adjusted diluted earnings per share of $1.32, slightly ahead of analyst estimates of $1.31.
Revenue rose 12% year over year to $1.61 billion, also topping consensus expectations of $1.60 billion.
For fiscal 2026, revenue increased 17% to $6.51 billion, while adjusted diluted earnings per share rose 11% to $5.51.
Paychex said growth in the quarter was supported in part by its acquisition of Paycor HCM, completed in April 2025, which contributed roughly eight percentage points to Management Solutions revenue growth.
That segment rose 14% to $1.2 billion, while Professional Employer Organization (PEO) and Insurance Solutions revenue increased 9% to $369.7 million. Interest on funds held for clients climbed 15% to $52.2 million.
“We finished fiscal 2026 with strong momentum, delivering double-digit revenue and earnings growth while accelerating organic revenue growth throughout the year,” Paychex CEO John Gibson said in a statement.
He pointed to the integration of Paycor and continued investment in artificial intelligence, including the rollout of the company’s WISE AI-powered intelligence engine.
For 2027, Paychex expects total revenue to grow 5% to 6% in fiscal 2027, with Management Solutions revenue also rising 5% to 6% and PEO and Insurance Solutions revenue increasing 6% to 7%.
The company projects interest on funds held for clients of $195 million to $205 million and an effective tax rate of approximately 24%.
Adjusted operating margin is expected to be about 44%, while adjusted diluted earnings per share are projected to increase 7% to 9%, implying a range of roughly $5.90 to $6.01 per share.
The outlook was broadly in line with analyst expectations, though investors appeared cautious on the growth trajectory, contributing to the stock’s modest decline.