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Sunday 11 October 2026 Export all PAYX data to Excel Powerpack

Paychex, Inc.

PAYX Technology Software Application

Paychex, Inc.’s revenue for fiscal 2026 (year ended May 2026) was $6.5 billion, up 16.9% from fiscal 2025. In the quarter to August 2026, revenue grew 5.88%, EPS grew 13.1%, free cash flow fell 46.1% and total debt fell 8.27%, each against the same quarter a year earlier. Member of the S&P 500 and Nasdaq 100; dividend growth for ten consecutive years, revenue growth for ten, operating cash flow growth for five; insiders bought in the last twelve months.

103.98 0.48 −0.46%
Market cap
$37.2B
P/E
20.6×
Fwd P/E
17.9×
Dividend yield
4.37%
F-score
6/9
Altman Z
2.88
Beneish M
−2.65
Dividend safety
60/100
Overview Business Profile Financial Analysis Income Statement Balance Sheet Cash Flow Metrics & Ratios Filings 10-Q 10-K

Paychex, Inc. (PAYX) Financial Analysis

Updated · Covers results through Q1 FY2027 · Sources · How this is made

Snapshot

As of September 24, 2026, Paychex had a market capitalisation of $36.1 billion. Revenue was $6.5 billion in FY2026, up from $5.6 billion in FY2025, while net income was $1.8 billion in FY2026, compared with $1.7 billion in FY2025. Operating income reached $2.5 billion in FY2026, and free cash flow was $2.3 billion in FY2026.

The latest reported period, Q1 FY2027, ended August 31, 2026. Revenue was $1.6 billion in Q1 FY2027, gross profit was $1.2 billion in Q1 FY2027 and operating income was $619.2 million in Q1 FY2027. Net income was $429.7 million and diluted EPS was $1.21 in Q1 FY2027.

Growth

Revenue increased 16.9% in FY2026 against FY2025, reaching $6.5 billion in FY2026. Revenue compound annual growth was 9.15% in FY2023–FY2026 and 9.93% in FY2021–FY2026. Diluted EPS was $4.89 in FY2026 and grew 6.77% in FY2026 against FY2025; its compound annual growth was 4.38% in FY2023–FY2026 and 10.0% in FY2021–FY2026. Free cash flow was $2.3 billion in FY2026, growing 35.8% in FY2026 against FY2025.

Revenue was $1.6 billion in Q1 FY2027, increasing 1.56% against Q4 FY2026 and 5.88% against Q1 FY2026. Diluted EPS was $1.21 in Q1 FY2027, up 2.99% against Q4 FY2026 and 13.7% against Q1 FY2026. Free cash flow was $357.4 million in Q1 FY2027, down 30.6% against Q4 FY2026 and down 46.1% against Q1 FY2026.

Profitability

Gross margin was 74.3% in FY2026, an increase of 1.9 percentage points in FY2025–FY2026 and 5.6 percentage points in FY2021–FY2026. Operating margin was 38.6% in FY2026, down 1.1 percentage points in FY2025–FY2026 but up 2.5 percentage points in FY2021–FY2026. Pre-tax margin was 35.5% in FY2026, down 3.6 percentage points in FY2025–FY2026, while net margin was 27.0% in FY2026, down 2.7 percentage points in FY2025–FY2026.

Return on equity was 44.8% in FY2026, compared with 41.8% in FY2025. Return on assets was 10.8% in FY2026, compared with 12.3% in FY2025, and return on invested capital was 22.1% in FY2026, compared with 18.7% in FY2025. Industry median profitability measures are not reported.

Balance sheet

Total debt was $4.6 billion in FY2026, lower than $5.0 billion in FY2025, while net debt was $3.4 billion in FY2026, compared with $3.3 billion in FY2025. Cash and short-term investments were $1.2 billion in FY2026, against $1.7 billion in FY2025. Shareholders’ equity was $3.7 billion in FY2026, compared with $4.1 billion in FY2025, and working capital was $1.8 billion in FY2026.

Net debt was $3.6 billion in Q1 FY2027, an increase of $190.0 million against Q4 FY2026 and $321.4 million against Q1 FY2026. The current ratio was 1.3× and debt to equity was 1.2× in Q1 FY2027. Management says it can borrow on unsecured credit facilities or use corporate liquidity for short-term client-fund obligations when necessary.

Cash flow & capital return

Operating cash flow was $2.6 billion in FY2026, increasing 34.5% in FY2026 against FY2025. Capital expenditure was $234.9 million in FY2026, compared with $191.8 million in FY2025. Free cash flow was $2.3 billion in FY2026, and free cash flow as a share of net income was 131.9% in FY2026. Free cash flow compound annual growth was 13.7% in FY2023–FY2026 and 15.2% in FY2021–FY2026.

Dividends paid were $1.6 billion in FY2026, while net share repurchases were $611.0 million in FY2026. Capital returned to shareholders was $2.2 billion in FY2026. Weighted average shares were 358.9 million shares in FY2026, and the share count changed by −0.28% in FY2021–FY2026. Weighted average shares were 355.8 million shares in Q1 FY2027, down −0.86% against Q4 FY2026.

Valuation

As of September 24, 2026, the P/E was 20.1×, below the five-year median of 25.6× over the five fiscal years to FY2026 and below the ten-year median of 25.9× over the ten fiscal years to FY2026. The P/S was 5.5× as of September 24, 2026, below the five-year median of 8.2× and ten-year median of 7.9× over their respective periods to FY2026. The P/B was 9.8× as of September 24, 2026, below its five-year median of 11.4× and ten-year median of 11.1× over their respective periods to FY2026.

EV/Sales was 6.1× as of September 24, 2026, below its five-year median of 8.1× and ten-year median of 7.7× over their respective periods to FY2026. EV/Cash flow was 19.9× as of September 24, 2026, below its five-year median of 24.5× and ten-year median of 24.4× over their respective periods to FY2026. Industry median valuation multiples are not reported.

What changed since last quarter

Revenue was $1.6 billion in Q1 FY2027, up 1.56% against Q4 FY2026 and up 5.88% against Q1 FY2026. Management attributes the year-over-year revenue increase in Q1 FY2027 primarily to higher Management Solutions revenue, PEO and Insurance Solutions revenue, and interest on funds held for clients. Operating income was $619.2 million in Q1 FY2027, and operating margin was 38.0% in Q1 FY2027, up 0.3 percentage points against Q4 FY2026 and 2.8 percentage points against Q1 FY2026.

Diluted EPS was $1.21 in Q1 FY2027, up 2.99% against Q4 FY2026 and 13.7% against Q1 FY2026. Management attributes the year-over-year EPS increase in Q1 FY2027 to higher net income and lower weighted-average diluted shares outstanding. Free cash flow was $357.4 million in Q1 FY2027, down 30.6% against Q4 FY2026 and 46.1% against Q1 FY2026. Management identifies changes in accrued interest, client refunds, accrued compensation, prepaid income taxes, receivable purchases and client-fund obligations as cash-flow drivers for Q1 FY2027.

Open questions

  • How much of the latest revenue growth came from each operating area?
  • What explains the decline in free cash flow in the latest quarter beyond the cited working-capital drivers?
  • How will interest-rate changes affect income from client funds and investment portfolios?
  • What factors drove the decline in shareholders’ equity during the latest fiscal year?

Sources

This page is for information only. It is not investment advice, a recommendation or an offer to buy or sell any security. Figures come from the sources listed above and may contain errors; verify against the company's filings.