Paychex Q1: $1.63B revenue; raises PEO outlook

Paychex, Inc. reported fiscal 2027 first-quarter results for the period ended August 31, 2026 on September 23, 2026, saying total revenue was $1.63 billion, up 6 percent, and adjusted diluted earnings per share were $1.34, up 10 percent. The company raised its full-year PEO and Insurance Solutions revenue-growth outlook and its interest-on-client-funds outlook while leaving total revenue growth and adjusted EPS growth guidance unchanged.

Paychex furnished a press release as Exhibit 99.1 to its Form 8-K AccNo 0000723531-26-000004 (Item 2.02). The Rochester HR, payroll, and benefits provider’s fiscal 2027 first quarter combines mid-single-digit total revenue growth with double-digit adjusted EPS growth — and updates two pieces of full-year outlook while leaving the rest unchanged.

What the quarter shows

Total revenue was $1.63 billion, up 6 percent from $1.54 billion a year earlier.

Management Solutions revenue rose 4 percent to $1.21 billion, which the company ties to higher revenue per client from price realization and product penetration. Professional Employer Organization (PEO) and Insurance Solutions revenue rose 12 percent to $367.6 million, driven by growth in average PEO worksite employees and higher PEO insurance volumes. Interest on funds held for clients increased 5 percent to $49.8 million on higher average interest rates.

Operating income grew 14 percent to $619.2 million. Adjusted operating income — which excludes acquisition-related costs — grew 9 percent to $684.7 million. Operating margin expanded to 38.0 percent from 35.2 percent; adjusted operating margin was 42.0 percent versus 40.7 percent. GAAP diluted EPS rose 14 percent to $1.21; adjusted diluted EPS rose 10 percent to $1.34.

CEO John Gibson framed the print as a solid start to fiscal 2027 revenue growth, pointing to double-digit PEO and Insurance Solutions revenue and EPS growth, go-to-market investment, and the combination of technology with advisory expertise. The release also notes the launch of WISE Hire, an agentic recruiting solution — a product milestone, not a quantified revenue line in the quarter’s headline tables.

Outlook updates — raise, not a blanket reaffirmation

Management left total revenue growth guidance at 5 percent to 6 percent and Management Solutions revenue growth at 5 percent to 6 percent. It raised PEO and Insurance Solutions revenue growth to 7 percent to 8 percent from a prior 6 percent to 7 percent, and raised the interest-on-client-funds outlook to $200 million to $210 million from $195 million to $205 million. Adjusted operating margin remains about 44 percent; the effective tax rate about 24 percent; and adjusted diluted EPS growth 7 percent to 9 percent. Forward-looking adjusted operating margin and adjusted diluted EPS exclude acquisition-related costs. The company warns that macroeconomic changes could alter guidance.

Balance sheet and capital return

As of August 31, 2026, Paychex reported cash, restricted cash, and total corporate investments of about $1.0 billion and long-term borrowings, net of debt issuance costs, of about $4.56 billion. Cash flow from operations was $413.5 million in the quarter. The company paid dividends of $1.19 per share totaling $424.1 million.

These materials do not price a market reaction, do not break out WISE Hire contribution, and do not revise the unchanged total-revenue or adjusted-EPS growth bands. Readers should treat the PEO and client-funds interest lines as the explicit updates and keep adjusted figures labeled as non-GAAP.