# Paychex Inc. (PAYX) — Financial Analysis

**Exchange:** NASDAQ  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-13  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/PAYX/thesis · /stocks/PAYX/memo

## Financial Snapshot

---
ticker: PAYX
step: 04
generated: 2026-05-12
source: quick-research
---

### Paychex Inc. (PAYX) — Financial Snapshot

#### Income Statement Summary

*Note: Paychex fiscal year ends May 31. FY2025 = June 2024–May 2025; Paycor acquired April 2025 (2 months contribution in FY2025).*

| Metric | FY2023 | FY2024 | FY2025 | YoY |
|--------|--------|--------|--------|-----|
| Revenue | $5.01B | $5.28B | $5.57B | +5.6% |
| Gross Margin | ~72% | ~72% | ~72% | flat |
| Operating Margin | ~40% | ~40% | ~40% | flat |
| Net Income | ~$1.60B | ~$1.72B | ~$1.70B | -1% |
| EPS (diluted) | ~$4.42 | ~$4.83 | ~$4.80 | -1% |

*FY2025 EPS slightly lower due to Paycor integration/transaction costs. Full-year FY2026 guidance calls for 16.5–18.5% revenue growth (full Paycor contribution + $150M synergy target) and adj. EPS recovery.*

#### Cash Flow & Balance Sheet (FY2025)

| Metric | Value |
|--------|-------|
| Free Cash Flow | ~$1.71B |
| FCF Margin | ~31% |
| Cash & Equivalents | ~$1.0B |
| Total Debt | ~$5.5B (includes Paycor financing) |
| Client Funds Held | ~$4–5B (generates float income) |

#### Key Ratios (approximate)
- P/E: ~20x (adj. FY2026E) | FCF Yield: ~5%
- EV/EBITDA: ~18x | Operating Margin: ~40%
- Float Income: ~$300–400M/year at current interest rates (~6–8% of revenue)
- Dividend Yield: ~3.2% | 10+ consecutive years of dividend increases

#### Growth Profile
Paychex is a high-quality compounder — organic revenue growth of 5–7% through a combination of SMB employment growth, ARPU expansion, and client adds. The FY2026 step-up to 16.5–18.5% revenue growth is almost entirely Paycor contribution. Structurally, the business generates ~40% operating margins and ~31% FCF margins with minimal capex — a hallmark of software-adjacent recurring revenue businesses. Float income adds ~$300–400M in near-100% margin revenue at current interest rates.

#### Forward Estimates
- **FY2026 (ending May 2026)**: Revenue guidance +16.5–18.5% (→ ~$6.5–$6.6B); adj. EPS recovery target; $150M synergies from Paycor
- **FY2026 Outlook**: 17% revenue growth posted for quarter ended Aug 2025; full-year FY2026 earnings outlook raised
- **Rate sensitivity**: Every 25bps Fed rate cut reduces float income by ~$30–40M (~$0.08 EPS headwind)

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/PAYX/fundamental

## Navigation

- Overview: /stocks/PAYX
- Financials (this page): /stocks/PAYX/financials
- Thesis: /stocks/PAYX/thesis
- Investment Memo: /stocks/PAYX/memo
- Coverage universe: /stocks