Paychex, Inc. PAYX
NasdaqBusiness servicesFinancials to Aug 31, 2026 · Updated Nov 11, 2026
Moat ranks
Balance sheet
| $B | May '25 | May '26 |
|---|---|---|
| Cash | 1.4 | 0.9 |
| Securities | 0.0 | 0.0 |
| Restricted cash | 0.0 | 0.1 |
| Debt | 5.0 | 4.6 |
| Net cash | -3.5 | -3.7 |
| Equity | 4.1 | 3.7 |
- Debt / EBITDA
- 1.52×
- Debt / equity
- 1.23×
- Leases (5/31/26)
- $74M
- Diluted shares
- 357M
- Book value / share
- $10.47
- Price / book
- 10.9×
- Net cash / share
- −$10.36
- Market cap
- $40.9B
- Enterprise value
- $44.5B
Per-share record
Key indicators
| Indicator | Latest | Vs year ago | Last 8 quarters |
|---|---|---|---|
| Revenue growth | 5.9% | -10.9 pts | |
| Operating margin | 38.0% | +2.8 pts | |
| FCF margin | 21.5% | -20.5 pts | |
| Capex / revenue | 3.9% | -0.7 pts | |
| Client funds at period end | $4.3B | -12% | |
| WISE early adopter businesses | ≥50,000 | – | – |
| WISE workforce conversations | ≥350,000 | – | – |
| Quarterly average client funds | $5.4B | +0% | |
| Quarterly client-funds earned yield | 3.7% | +0.2 pts |
Margins and growth from reported quarters; company KPIs as reported in results releases.
About PAYX
Paychex sells payroll, HR software, advice, retirement administration and PEO services to small and mid-sized employers. It reports one operating segment; these categories divide FY2026 revenue of $6.512 billion.
- Data Workflow Lockin
Payroll is the system of record.
- Service Field Network
Large HR advisory workforce complements software and improves retention for clients that value hands-on compliance and HR help.
- Switching Costs General
PEO relationships embed payroll, HR administration, and benefits processes; switching can be operationally disruptive, supporting retention.
- Float Prepayment
Clients pre-fund payroll and tax obligations, and Paychex invests the balances in liquid fixed-income instruments until disbursement.
- Oct 1, 2026
Paychex Europe appointed Jürgen Dauk as CEO and Karina Sundbæk as CFO to lead its HR, payroll and workforce software business. Europe supplies about 1% of group revenue, so the change has limited immediate effect on group earnings.
- Sep 23, 2026
Paychex launched WISE Hire for recruiting, available within its payroll platforms or separately; customer hiring decisions still require human control.
- Sep 23, 2026
Paychex raised FY2027 PEO and Insurance revenue growth guidance to 7% to 8% from 6% to 7%, and client-funds interest guidance to $200 million to $210 million from $195 million to $205 million.
- Aug 31, 2026 · One-off charge −$9M
Paycor deal and integration compensation, including replacement awards, severance and retention bonuses. This continues one acquisition integration programme, not a separate recurring annual adjustment. Acquired-intangible amortization remains in reported profit.
- Aug 31, 2026 · One-off charge −$100,000
Paycor deal and integration professional fees and other acquisition costs. This continues one acquisition integration programme, not a separate recurring annual adjustment. Acquired-intangible amortization remains in reported profit.
Ownership
Go deeper on PAYX
- Compare stock research toolsFundamentals, valuation and screening platforms for PAYX.19 tools
- See PAYX's price chartNo price chart here yet. See price history and indicators.17 tools
- Read PAYX's earnings callsTranscripts and audio of results calls, with management's own words.15 tools
- Investing tool dealsCurrent discounts on research, charting and tracking tools.89 deals
On this page
Financial record
| Fiscal year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | TTM | Trend | Change 2017–26 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Per share ($) | |||||||||||||
| Revenue | 8.70 | 9.34 | 10.43 | 11.19 | 11.20 | 12.70 | 13.82 | 14.58 | 15.39 | 18.09 | 18.52 | +8.5%/yr | |
| Cash flow | 2.65 | 3.53 | 3.51 | 3.99 | 3.48 | 4.38 | 4.71 | 5.24 | 5.25 | 7.10 | 6.31 | +11.6%/yr | |
| Earnings | 2.28 | 2.75 | 2.86 | 3.04 | 3.03 | 3.84 | 4.30 | 4.67 | 4.58 | 4.89 | 5.06 | +8.9%/yr | |
| Free cash flow | 2.36 | 2.99 | 3.16 | 3.61 | 3.13 | 3.98 | 4.29 | 4.71 | 4.64 | 6.33 | 5.56 | +11.6%/yr | |
| Capex | 0.28 | 0.54 | 0.36 | 0.38 | 0.35 | 0.40 | 0.42 | 0.53 | 0.61 | 0.77 | 0.76 | +11.7%/yr | |
| Dividends | 1.83 | 2.05 | 2.29 | 2.46 | 2.51 | 2.75 | 3.24 | 3.63 | 4.00 | 4.42 | 4.56 | +10.3%/yr | |
| Book value | 6.14 | 6.52 | 7.24 | 7.70 | 8.14 | 8.50 | 9.64 | 10.50 | 11.40 | 10.38 | 10.39 | +6.0%/yr | |
| Diluted shares (M) | 363 | 362 | 362 | 361 | 362 | 363 | 362 | 362 | 362 | 360 | 357 | -0.1%/yr | |
| Totals ($B) | |||||||||||||
| Revenue | 3.2 | 3.4 | 3.8 | 4.0 | 4.1 | 4.6 | 5.0 | 5.3 | 5.6 | 6.5 | 6.6 | +8.4%/yr | |
| Operating income | 1.3 | 1.3 | 1.4 | 1.5 | 1.5 | 1.8 | 2.0 | 2.2 | 2.2 | 2.5 | 2.6 | +8.0%/yr | |
| Net income | 0.8 | 1.0 | 1.0 | 1.1 | 1.1 | 1.4 | 1.6 | 1.7 | 1.7 | 1.8 | 1.8 | +8.8%/yr | |
| Free cash flow | 0.9 | 1.1 | 1.1 | 1.3 | 1.1 | 1.4 | 1.6 | 1.7 | 1.7 | 2.3 | 2.0 | +11.5%/yr | |
| Buybacks | 0.2 | 0.1 | 0.1 | 0.2 | 0.2 | 0.1 | 0.0 | 0.2 | 0.1 | 0.6 | 0.5 | +15.6%/yr | |
| Dividends | 0.7 | 0.7 | 0.8 | 0.9 | 0.9 | 1.0 | 1.2 | 1.3 | 1.4 | 1.6 | 1.6 | +10.2%/yr | |
| Net cash | 0.8 | 0.7 | -0.3 | 0.0 | 0.1 | 0.3 | 0.5 | 0.5 | -3.5 | -3.7 | – | −$4.5B | |
| Margins & returns (%) | |||||||||||||
| Gross margin | 70.8 | 69.9 | 68.8 | 68.3 | 68.7 | 70.6 | 71.0 | 72.0 | 72.4 | 74.3 | 74.4 | +3.4 pts | |
| Operating margin | 39.8 | 38.2 | 36.3 | 36.1 | 36.0 | 39.9 | 40.6 | 41.2 | 39.6 | 38.6 | 39.2 | -1.2 pts | |
| Net margin | 26.2 | 29.4 | 27.4 | 27.2 | 27.1 | 30.2 | 31.1 | 32.0 | 29.7 | 27.0 | 27.4 | +0.8 pts | |
| FCF margin | 27.2 | 32.1 | 30.3 | 32.3 | 27.9 | 31.3 | 31.0 | 32.3 | 30.1 | 35.0 | 30.0 | +7.8 pts | |
| ROIC | 50.7 | 50.3 | 36.6 | 40.3 | 39.1 | 51.3 | 52.1 | 50.9 | 22.2 | 26.0 | – | -24.7 pts | |
| Return on equity | 37.1 | 42.2 | 39.5 | 39.5 | 37.2 | 45.1 | 44.6 | 44.5 | 40.1 | 47.1 | 48.7 | +10.0 pts | |
| Stock pay % of revenue | 1.1 | 1.3 | 1.2 | 1.2 | 1.3 | 1.1 | 1.3 | 1.2 | 2.0 | 1.5 | 1.3 | +0.4 pts | |
| Capex % of revenue | 3.3 | 5.7 | 3.4 | 3.4 | 3.1 | 3.1 | 3.1 | 3.6 | 4.0 | 4.3 | 4.1 | +1.0 pts | |
Change uses 2017 and 2026 only: compound annual growth for amounts, points for margins and returns, and the change in amount for net cash. A dash means no 2017 base. Trend shows the fiscal years.
Moat
Moat scorecard
- Strength
- Confidence
- Structure
- Competitive
- Durability
- durable
- Trajectory
- stable
- Pricing power
- moderate
- Management Solutions74.8%2 claims
- PEO and Insurance Solutions22.0%1 claim
- Client funds float (interest on funds held for clients)3.2%1 claim
Moat claims
- Applies to
- Management Solutions
- Confidence
- Durability
- durable
- Trajectory
- stableas of Oct 9, 2026
Payroll is the system of record. Paychex uses payroll data in adjacent HR and retirement modules, which raises workflow switching costs and supports retention.
Payroll retention stayed at 82% to 83% through FY2026. WISE now reaches Microsoft 365 and Teams, but its early adoption has not yet shown better retention or sustained organic growth.
- Payroll client retention (lower bound)≥82.0%0.0 pts
- Payroll client retention (upper bound)≤83.0%0.0 pts
- Payroll clients~800,0000%
- Retirement plans130,000+5%
- WISE early adopter businesses≥50,000
- WISE identified payroll errors corrected before run day≤90.0%
- Management Solutions revenue$1.2B+4%
- Low-friction cloud onboarding and open APIs reduce switching costs
- SMB churn / business closures
- Price-led competition from low-cost payroll SaaS
- FilingADP FY2026 Form 10-K: revenue retention and competing payroll workflowsAug 5, 2026
- FilingPaychex FY2027 Q1 Form 10-QSep 24, 2026
- FilingPaychex FY2026 Form 10-K - Integrated HCM workflowsJul 17, 2026
- SourcePaychex expands WISE into Microsoft 365 and TeamsAug 3, 2026
- Applies to
- Management Solutions
- Confidence
- Durability
- medium
- Trajectory
- stableas of Oct 9, 2026
Large HR advisory workforce complements software and improves retention for clients that value hands-on compliance and HR help.
More than 650 HR advisers still support clients. WISE has handled more than 350,000 service conversations, but neither headcount nor initial automation results establish a widening service advantage against rivals.
- Payroll client retention (lower bound)≥82.0%0.0 pts
- Payroll client retention (upper bound)≤83.0%0.0 pts
- HR outsourcing worksite employees2,600,000+6%
- HR business professionals≥6500%
- WISE workforce conversations≥350,000
- WISE conversations resolved without human help≥20.0%
- WISE identified payroll errors corrected before run day≤90.0%
- Management Solutions revenue$1.2B+4%
- AI/self-serve tooling reduces need for human advisory
- Wage inflation and HR staff turnover
- Remote-first competitors scale support without local presence
- SourcePaychex WISE early operating resultsAug 31, 2026
- FilingPaychex FY2027 Q1 Form 10-QSep 24, 2026
- FilingPaychex FY2026 Form 10-K - HR advisory workforceJul 17, 2026
- Applies to
- PEO and Insurance Solutions
- Confidence
- Durability
- medium
- Trajectory
- stableas of Oct 9, 2026
PEO relationships embed payroll, HR administration, and benefits processes; switching can be operationally disruptive, supporting retention.
ASO and PEO supported 2.6 million worksite employees at May 2026, and PEO and Insurance revenue grew 12% in the August quarter. Employment, insurance volume and renewals help explain that growth; a separate PEO retention series is not disclosed.
- HR outsourcing worksite employees2,600,000+6%
- PEO and Insurance Solutions revenue$368M+12%
- Competitors offer smoother migrations and incentives
- Client dissatisfaction during insurance renewals
- Regulatory changes reduce perceived PEO value
- FilingPaychex FY2027 Q1 Form 10-QSep 24, 2026
- FilingPaychex FY2026 Form 10-K - HR outsourcing scaleJul 17, 2026
- Applies to
- Client funds float (interest on funds held for clients)
- Confidence
- Durability
- medium
- Trajectory
- stableas of Oct 9, 2026
Clients pre-fund payroll and tax obligations, and Paychex invests the balances in liquid fixed-income instruments until disbursement. The mechanism generated $210.9M of FY2026 interest income but remains rate-sensitive and available to other scaled payroll processors.
August-quarter average client balances were flat at about $5.4 billion while earned yield rose to 3.7%. Better interest income reflects rates rather than a stronger barrier to competing payroll providers.
- Average client funds$5.8B+23%
- Client funds earned yield3.5%+0.1 pts
- Client funds at period end$4.3B-12%
- Quarterly average client funds$5.4B+0%
- Quarterly client-funds earned yield3.7%+0.2 pts
- Client-funds interest revenue$50M+5%
- Interest-rate declines reduce yield
- Regulation changes permissible client-fund investments
- Competitive pressure requires more economics to be rebated to clients
- FilingPaychex FY2027 Q1 Form 10-QSep 24, 2026
- FilingPaychex FY2026 Form 10-K - Client-funds mechanismJul 17, 2026
- FilingPaychex FY2025 Form 10-K - Funds held for clientsJul 11, 2025
Profile change log
- Oct 9, 2026 · analyst revision
Replaced the PEO customer-survey provider list with the major US co-employment companies named by First Research. Recalled use, including former customers and mistaken provider names, does not establish market leadership. No provider shares or numerical rank are claimed.
- Oct 9, 2026 · analyst revision
ADP's current filing shows competing AI capabilities at larger global scale. Its revenue-retention measure differs from Paychex's client-count measure, so the percentages do not prove relative customer loyalty. NAPEO's release archive establishes September 17 as the publication date of its 2026 PEO footprint study.
- Oct 9, 2026 · analyst revision
Verified payroll and PEO market sizes and leaders. Added the reported payroll forecast growth rate and corrected PEO source dates to the survey cover date or an explicit access date when publication day is unavailable.
- Oct 9, 2026 · analyst revision
Added WISE automated resolution and payroll-error prevention measures to test service quality as well as usage. Verified the European leadership change and kept broader customer counts separate from payroll clients; competitive trajectories remain stable.
- Oct 9, 2026 · business change
Paychex Europe appointed Jürgen Dauk as CEO and Karina Sundbæk as CFO to lead its HR, payroll and workforce software business. Europe supplies about 1% of group revenue, so the change has limited immediate effect on group earnings.
- Oct 9, 2026 · analyst revision
Verified reported service and customer retention figures. Separated annual and quarterly float averages so investment yield and acquisition scope do not imply stronger customer protection; added direct evidence for WISE service results.
- Oct 9, 2026 · business change
Founder Thomas Golisano left the Paychex board. He retained 10.1% beneficial ownership at the September 2026 proxy date, while John Gibson continues to run the business.
- Oct 9, 2026 · analyst revision
Added the investment debate, management profile, operating KPI history and three end-market profiles. The profile now distinguishes acquisition growth, insurance volume and interest yields from competitive gains.
- Oct 9, 2026 · analyst revision
Current filings and the tax judgment support stable trajectories. The payroll market classification changes from oligopoly to competitive because the filing describes fragmented national, local and online competition. The annual retention range and current operating figures do not yet show widening competitive protection.
- Oct 9, 2026 · business change
Paychex raised FY2027 PEO and Insurance revenue growth guidance to 7% to 8% from 6% to 7%, and client-funds interest guidance to $200 million to $210 million from $195 million to $205 million.
- Oct 9, 2026 · business change
Paychex launched WISE Hire for recruiting, available within its payroll platforms or separately; customer hiring decisions still require human control.
- Oct 9, 2026 · business change
Paychex made WISE available in Microsoft 365 Copilot and Teams, extending payroll and HR actions into customer productivity tools.
- Oct 9, 2026 · business change
The New York appeals court affirmed dismissal of Paychex's PEO tax-regulation challenge. Administrative proceedings continue, leaving tax exposure unresolved.
- Oct 9, 2026 · business change
Paychex launched WISE, an AI engine for payroll and HR workflows; later retention and revenue will show whether automation improves its customer advantage.
- Oct 9, 2026 · business change
Paychex bought Paycor for about $4.1 billion, adding mid-market HCM software and financing the deal with $4.2 billion of bonds.
Industry & peers
Peer map
Hover a point for its values; click a peer to compare. Dashed lines: industry medians.
US payroll services
Payroll processing, payroll tax administration and payroll-linked HR services sold to US employers across company sizes. Standalone HR software, PEO co-employment and interest earned on client funds are outside this market; a full HCM vendor earns revenue beyond this payroll-services market.
- ADP
- Paychex
- Paylocity
- Paycom
- Intuit QuickBooks Payroll
| Stocks | Moat | Gross m. | Op. m. | |
|---|---|---|---|---|
| PAYX | 70 | 74.4% | 39.2% | |
| Industry median | 13 | 70 | 74.4% | 19.2% |
| Sector median | 88 | 76 | 37.3% | 18.0% |
| All stocks median | 398 | 76 | 53.1% | 20.0% |
Moat medians cover every stock. Margin medians count only stocks with collected numbers and need at least three.
Drivers & risks
- Employers must pay workers and file taxes regularly, which supports repeat demand through the economic cycle.
- Small employers outsource complex federal, state and local rules when maintaining an internal payroll team costs too much.
- Cloud payroll records can support time, benefits and HR products, increasing spending with a provider that earns customer trust.
- Distributed and multistate work increases compliance tasks and integration needs.
- Automation can reduce payroll errors and service time, but investors need retention and paid-adoption evidence to test its value.
- Small-business closures and weak hiring reduce customer counts and employees paid, even when payroll itself is essential.
- ADP, specialist cloud vendors and local firms compete on price, software and service; easy onboarding can weaken switching costs.
- Cyberattacks or tax and payroll mistakes can cause direct losses and lasting customer distrust.
- AI errors and privacy rules can increase compliance costs and limit use of workforce data.
- Wage inflation raises service costs. Higher borrowing rates can slow customer expansion; demand depends mainly on employer survival and hiring rather than currency or commodity prices.
Bulls & bears
Can Paychex turn Paycor and WISE into lasting client growth and better service while paying down acquisition debt, rather than relying on price increases and higher investment yields?
Arguments
What to watch
- 1Payroll retention range
- 2Payroll clients with acquisition scope held constant
- 3Management Solutions revenue and product penetration
- 4ASO and PEO worksite employees
- 5PEO insurance costs and reserve development
- 6Paycor integration costs and debt principal
- 7Average client funds and earned yield
- 8WISE adoption and service resolution
Next check: Read the FY2027 second-quarter filing after the November 30, 2026 period end; check Management Solutions growth, integration costs, cash flow and insurance reserves. Recheck annual retention at FY2027 year-end.
Sources: company filings and dated sources collected for Find My Moat; market cap as of Nov 9, 2026. Not investment advice.
Free to reuse, commercially too, with a credit link. See the data license.
Moat Score 70/100 by <a href="https://www.findmymoat.com/stocks/XNAS:PAYX">Find My Moat</a> (as of September 2026)Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.