Paychex Q4 2025 slides: Revenue jumps 10% as Paycor acquisition closes

Paychex Inc . (NASDAQ:PAYX) reported strong fourth-quarter results for fiscal year 2025, with double-digit revenue growth driven by the recently completed Paycor (NASDAQ:PYCR) acquisition. The human capital management company shared its financial performance and strategic outlook in a presentation on June 25, 2025, highlighting significant growth across key metrics and an optimistic forecast for fiscal 2026.

Quarterly Performance Highlights

Paychex delivered robust financial results for the fourth quarter of fiscal 2025, with total revenue increasing 10% year-over-year to $1.43 billion, up from $1.30 billion in Q4 FY24. Adjusted operating income grew 11% to $577 million, while adjusted diluted earnings per share rose 6% to $1.19.

As shown in the following chart of quarterly financial performance:

The company’s revenue growth was driven primarily by its Management Solutions segment, which increased 12% to $1.04 billion. PEO & Insurance Solutions revenue grew 4% to $340 million, while interest on funds held for clients jumped 18% to $45 million. Notably, excluding the impact of the Paycor acquisition, Management Solutions revenue would have increased by approximately 3%, and interest on funds held for clients would have grown by about 5%.

The following revenue breakdown illustrates the contribution from each business segment:

For the full fiscal year 2025, Paychex reported total revenue of $5.57 billion, representing a 6% increase over the previous year. Adjusted diluted EPS for the full year grew 6% to $4.98, with adjusted operating margin expanding by 60 basis points year-over-year.

The company’s five-year financial performance demonstrates consistent growth:

Acquisition Impact and Integration Progress

A significant milestone in Q4 was the completion of the Paycor acquisition, which Paychex funded through a $4.2 billion bond offering. The company has already begun integrating Paycor’s operations and has raised its cost synergy expectations to approximately $90 million for fiscal 2026, up from previous estimates.

"We’ve integrated sales teams, optimized sales coverage, and provided training on the new offerings," the company noted in its presentation. "We’ve also completed key back-end integrations required to cross-sell into Paycor’s base."

The acquisition has strengthened Paychex’s market position by adding a second leading SaaS HCM platform to its portfolio. The company now serves approximately 800,000 clients and 2.5 million worksite employees, with a market capitalization exceeding $54 billion as of June 24, 2025.

Paychex continues to focus on innovation and digital transformation, as illustrated in its product and technology roadmap:

Financial Position and Shareholder Returns

The Paycor acquisition has significantly altered Paychex’s financial position. As of May 31, 2025, the company reported total debt (net of issuance costs) of $4.97 billion, compared to $817.3 million a year earlier. This shifted Paychex from a net cash position of $737.0 million to a net debt position of $3.26 billion, with a net leverage ratio of 1.3x.

Despite this increased leverage, Paychex maintained strong liquidity with $1.71 billion in cash, restricted cash, and total corporate investments. The company also generated robust operating cash flow of $1.95 billion for the fiscal year, slightly up from $1.90 billion in the previous year.

The following financial highlights provide a comprehensive view of the company’s financial position:

Paychex continued its commitment to shareholder returns, distributing $1.55 billion to shareholders during fiscal 2025, including $1.45 billion in dividends and $104 million in share repurchases. The company maintained a dividend coverage ratio of 1.2x and a strong return on equity of 42%.

The composition of Paychex’s revenue streams for fiscal 2025 shows diversification across multiple service offerings:

FY2026 Outlook and Strategic Direction

Looking ahead, Paychex provided an optimistic outlook for fiscal 2026, projecting total revenue growth between 16.5% and 18.5%, significantly higher than the 6% growth achieved in fiscal 2025. This acceleration is largely attributed to the full-year impact of the Paycor acquisition.

The company expects Management Solutions revenue to grow 20-22%, while PEO & Insurance Solutions revenue is projected to increase 6-8%. Interest on funds held for clients is forecast to reach $190-200 million. Adjusted diluted EPS is expected to grow 8.5-10.5%.

The detailed fiscal 2026 outlook is presented in the following table:

Paychex’s stock closed at $152.25 on June 24, 2025, up 0.66% for the day, and was trading slightly lower in premarket activity on June 25 at $152.00, down 0.16%. The stock has been performing well, trading near its 52-week high of $161.24, reflecting investor confidence in the company’s growth strategy and financial performance.

The company continues to receive industry recognition, including being named to Fortune’s America’s Most Innovative Companies list for the third consecutive year and being honored as one of the World’s Most Ethical Companies by Ethisphere for the 17th time.

As Paychex integrates Paycor and executes its growth strategy, investors will be watching closely to see if the company can deliver on its ambitious fiscal 2026 projections while managing its increased debt load and generating the expected synergies from its largest acquisition to date.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.