EarningsQ1 2027 Earnings Report
MX:PAYX Q1 2027 EPS Results
Actual EPS$24.09
Consensus EPS$23.73
Beat/MissBeat by +$0.36
One Year Ago EPS$21.94
MX:PAYX Q1 2027 Revenue Results
Actual Revenue$29.32B
Expected Revenue$29.25B
Beat/MissBeat by +$71.00M
YoY Revenue Growth+5.88%
Earnings Announcement Details
QuarterQ1 2027
Date09/23/2026
TimeBefore Open
Conference CallWednesday, September 23, 2026
MX:PAYX Upcoming Earnings
Paychex's next earnings date is estimated for December 17, 2026, based on past reporting schedules.
Q1 2027 Earnings Call Audio
MX:PAYX Q1 2027 Earnings Call
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Q1 2027 Earnings Slide Deck
Q1 2027 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly positive. Paychex reported solid revenue, earnings and margin growth; raised PEO and Insurance Solutions guidance; achieved record PEO retention; and described strong momentum in advisory solutions, bookings, referrals, AI deployment and revenue synergies. The main cautions were a Management Solutions result slightly below expectations due to the favorable mix shift into PEO, a difficult second-quarter comparison, flat employment levels, health-care renewal uncertainty and continued heavy AI investment. Management remained confident in the strategy and full-year outlook.Company Guidance
Solid First-Quarter Financial Performance
Total revenue increased 6% to $1.6 billion. Operating income and earnings per share grew at double-digit rates, diluted EPS increased 14% to $1.21, and adjusted diluted EPS increased 10% to $1.34.
Strong Operating Margin Expansion
Operating margin increased 280 basis points to 38%, while adjusted operating margin increased approximately 130 basis points to 42%, driven by productivity and cost discipline while Paychex continued investing in strategic priorities.
Advisory Solutions and PEO Growth
PEO and Insurance Solutions revenue increased 12% to $368 million, primarily driven by strong PEO worksite employee growth and increased PEO insurance volumes. All three advisory solutions—ASO, PEO and retirement—delivered strong revenue growth.
High Single-Digit PEO Worksite Employee Growth and Record Retention
PEO delivered industry-leading high single-digit worksite employee growth, described as very high single digits and just shy of double digits, while achieving record retention that exceeded the prior year's record.
Strong ASO-to-PEO Upgrades and Referrals
ASO-to-PEO conversions were double expectations and up significantly year-over-year. Referral activity from HCM sales teams into PEO increased almost 50% year-over-year, while broker referrals increased 43%.
Enterprise and Broker Bookings Momentum
Enterprise bookings increased double digits, with particular strength in broker bookings, higher average deal sizes and strong ancillary attachment. Paychex signed its third national broker partnership in six months with IMA Financial Group.
Management Solutions Revenue Growth
Management Solutions revenue grew 4% to $1.2 billion, driven by product penetration and price realization. Management Solutions organic growth was approximately 5% in the prior quarter, and the full-year growth assumption remains roughly split between pricing and ancillary attachment.
Continued Price Realization, Retention and Product Penetration
Paychex continued to achieve price realization targets, retention continued to improve, and product penetration continued to meet expectations. The company said competitive discounting and market conditions had not materially changed.
WISE Payroll Error Prevention
In a pilot involving more than 50,000 businesses, WISE helped prevent approximately 90% of the top payroll errors through Intelligent Pay Cycle. Paychex is expanding those capabilities across additional use cases.
Expansion of AI Deployment and Automation
Paychex now has more than 2,000 AI agents and features deployed across the business, up from approximately 600 active agents a quarter earlier. AI tools have been deployed to more than 10,000 employees, and agentic payroll increased automated payroll processing by nearly 20% from January through August while maintaining high service quality and accuracy rates.
New WISE AI Product Launches
Paychex announced WISE Hire, an agentic recruiting solution for SMBs that helps source candidates, screen applicants, manage outreach and schedule interviews while retaining employer control and access to human recruiting expertise. The company also launched Paycor WISE Pro and continues extending WISE into applications such as Microsoft.
Paycor Perks Adoption Exceeding Expectations
The Perks product reached more than 450,000 employees, representing double-digit growth. It was launched to the Paycor platform's approximately 2.5 million employees, and first-month Paycor adoption was outpacing the first month of the Flex launch. Paycor employees were buying approximately 3 to 3.5 products compared with approximately 2 products in Flex.
Revenue Synergy Progress
Revenue synergies were described as progressing well, with the company maintaining its prior full-year expectation of approximately 70 to 75 basis points. Referral strength and continued growth in ASO, PEO and retirement contributed to the progress.
Strong Cash Generation and Shareholder Returns
Cash flow from operations was $414 million. Paychex returned $424 million to shareholders through cash dividends, held approximately $1 billion in cash, restricted cash and corporate investments, and reported a 12-month rolling return on equity of 47%.
Raised PEO and Insurance Solutions Growth Guidance
Fiscal 2027 PEO and Insurance Solutions revenue growth guidance was raised to 7% to 8% from the prior outlook due to continued strength in PEO. Total fiscal-year revenue guidance was reaffirmed at 5% to 6%, and the company said PEO and Insurance Solutions could trend toward the high end of the updated range if first-quarter upsell and referral strength continues.
Stable Employment Environment and Improved Loss Trends
Management said employment and hiring trends had not significantly changed during the fiscal year, with an environment characterized as low fire, little hire. Out-of-business and financial stress losses improved during the quarter, and management said it was still not seeing signs of a recession.
Strong Brand and Product Recognition
Paychex was named to TIME's World's Best Companies and Newsweek's America's Greatest Companies lists. Its human capital management platforms were also recognized by Nucleus Research and NelsonHall for innovation and capability in talent and workforce management, while WISE was named one of HR Tech's top HR products for 2026.
MX:PAYX Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed