Paychex (PAYX) Q3 2026 earnings summary

Executive summary

• Achieved strong double-digit revenue and adjusted operating income growth in Q3 FY2026, driven by strategic execution, Paycor integration, robust demand for HCM and advisory solutions, and AI initiatives.

• Expanded client base to approximately 800,000, with industry-leading growth in HR outsourcing and PEO worksite employees.

• Continued investment in AI and technology platforms, enhancing operational efficiency and client experience.

• Returned over $1.5 billion to shareholders year-to-date through dividends and share repurchases.

• Recognized for ethical operations and technology leadership, receiving industry awards.

Financial highlights

• Q3 FY2026 total revenue rose 20% year-over-year to $1.81 billion; nine-month revenue up 18% to $4.91 billion.

• Q3 adjusted operating income up 22% to $863 million; Q3 operating income increased 14% to $792 million.

• Q3 adjusted diluted EPS up 15% to $1.71; diluted EPS up 9% to $1.56.

• Free cash flow for the fiscal year-to-date reached $1.81 billion, up 27% year-over-year.

• Returned $463 million in the quarter and over $1.5 billion year-to-date to shareholders via dividends and buybacks; 12-month ROE at 41%.

Outlook and guidance

• Fiscal 2026 guidance reaffirmed, with total revenue growth expected at 16.5%–18.5% and adjusted diluted EPS growth of 10%–11%.

• Interest on funds held for clients for FY2026 expected between $200 million and $210 million.

• Fourth quarter revenue growth expected at approximately 12% with adjusted operating margin of 41–42%.

• Management remains comfortable with current consensus models for fiscal 2027.