Revenue growth accelerated to 12.5% in 2026Q4 while maintaining structural gross margins at 74%, reflecting effective leverage of the proprietary technology platform.
| Metric | May'26 | May'25 | May'24 | May'23 | May'22 | May'21 | May'20 | May'19 | May'18 | May'17 | May'16 | May'15 | May'14 | May'13 | May'12 | May'11 | May'10 | May'09 | May'08 | May'07 | May'06 | May'05 | May'04 | May'03 | May'02 | May'01 | May'00 | May'99 | May'98 | May'97 |
|---|
| Sales/Revenue | 6.51B | 5.57B | 5.28B | 5.01B | 4.61B | 4.06B | 4.04B | 3.77B | 3.38B | 3.15B | 2.95B | 2.74B | 2.52B | 2.33B | 2.23B | 2.08B | 2B | 2.08B | 2.07B | 1.89B | 1.67B | 1.45B | 1.29B | 1.05B | 954.91M | 869.86M | 728.12M | 1.18B | 993.4M | 734.7M |
| Revenue Growth % | 16.88% | 5.56% | 5.42% | 8.57% | 13.68% | 0.4% | 7.1% | 11.58% | 7.29% | 6.75% | 7.75% | 8.76% | 8.28% | 4.32% | 6.98% | 4.17% | -3.93% | 0.8% | 9.51% | 12.68% | 15.88% | 11.65% | 23.74% | 9.54% | 9.78% | 19.47% | -38.05% | 18.32% | 35.21% | 125.85% |
| Cost of Goods Sold | 1.67B | 1.54B | 1.48B | 1.45B | 1.36B | 1.27B | 1.28B | 1.18B | 1.02B | 919.6M | 857.1M | 808M | 732.5M | 671.3M | 680.8M | 653.6M | 653.59M | 680.52M | 660.74M | 615.48M | 560.25M | 329.51M | 303.44M | 257.65M | 220.7M | 200.35M | 137M | 697.2M | 604.2M | 428.6M |
| COGS % of Revenue | 25.71% | 27.65% | 28.03% | 29.02% | 29.41% | 31.34% | 31.7% | 31.22% | 30.1% | 29.18% | 29.04% | 29.49% | 29.08% | 28.86% | 30.53% | 31.36% | 32.67% | 32.67% | 31.98% | 32.62% | 33.46% | 22.8% | 23.44% | 24.63% | 23.11% | 23.03% | 18.82% | 59.32% | 60.82% | 58.34% |
| Gross Profit | 4.84B | 4.03B | 3.8B | 3.55B | 3.26B | 2.79B | 2.76B | 2.59B | 2.36B | 2.23B | 2.09B | 1.93B | 1.79B | 1.65B | 1.55B | 1.43B | 1.35B | 1.4B | 1.41B | 1.27B | 1.11B | 1.12B | 990.91M | 788.38M | 734.21M | 669.5M | 591.12M | 478.2M | 389.2M | 306.1M |
| Gross Margin % | 74.29% | 72.35% | 71.97% | 70.98% | 70.59% | 68.66% | 68.3% | 68.78% | 69.9% | 70.82% | 70.96% | 70.51% | 70.92% | 71.14% | 69.47% | 68.64% | 67.33% | 67.33% | 68.02% | 67.38% | 66.54% | 77.2% | 76.56% | 75.37% | 76.89% | 76.97% | 81.18% | 40.68% | 39.18% | 41.66% |
| Gross Profit Growth % | 20% | 6.11% | 6.89% | 9.18% | 16.87% | 0.94% | 6.36% | 9.8% | 5.89% | 6.54% | 8.45% | 8.13% | 7.95% | 6.84% | 8.27% | 6.2% | -3.92% | -0.24% | 10.55% | 14.1% | -0.12% | 12.59% | 25.69% | 7.38% | 9.67% | 13.26% | 23.61% | 22.87% | 27.15% | 26.28% |
| Operating Expenses | 2.33B | 1.82B | 1.62B | 1.52B | 1.42B | 1.32B | 1.3B | 1.22B | 1.08B | 992.1M | 948.2M | 878M | 803.7M | 750.1M | 695.1M | 644.3M | 622.44M | 597.04M | 577.32M | 569.94M | 464.59M | 581.86M | 557.6M | 387.34M | 370.52M | 332.8M | 332.23M | 290.7M | 254.6M | 209.5M |
| OpEx % of Revenue | 35.73% | 32.73% | 30.78% | 30.38% | 30.69% | 32.66% | 32.15% | 32.43% | 31.81% | 31.48% | 32.12% | 32.05% | 31.91% | 32.25% | 31.17% | 30.91% | 31.11% | 28.67% | 27.94% | 30.2% | 27.74% | 40.26% | 43.08% | 37.03% | 38.8% | 38.26% | 45.63% | 24.73% | 25.63% | 28.52% |
| Selling, General & Admin | 2.33B | 1.82B | 1.62B | 1.52B | 1.42B | 1.32B | 1.3B | 1.22B | 1.08B | 992.1M | 948.2M | 878M | 803.7M | 750.1M | 695.1M | 644.3M | 622.44M | 597.04M | 577.32M | 569.94M | 464.77M | 581.86M | 557.6M | 440.39M | 370.52M | 332.8M | 295.75M | 257.8M | 227.3M | 188.1M |
| SG&A % of Revenue | 35.73% | 32.73% | 30.78% | 30.38% | 30.69% | 32.66% | 32.15% | 32.43% | 31.81% | 31.48% | 32.12% | 32.05% | 31.91% | 32.25% | 31.17% | 30.91% | 31.11% | 28.67% | 27.94% | 30.2% | 27.75% | 40.26% | 43.08% | 42.1% | 38.8% | 38.26% | 40.62% | 21.93% | 22.88% | 25.6% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -180K | 0 | 0 | -53.05M | 0 | 0 | 36.48M | 32.9M | 27.3M | 21.4M |
| Operating Income | 2.51B | 2.21B | 2.17B | 2.03B | 1.84B | 1.46B | 1.46B | 1.37B | 1.29B | 1.24B | 1.15B | 1.05B | 982.7M | 904.8M | 853.9M | 786.4M | 724.79M | 805.2M | 828.27M | 701.55M | 649.75M | 533.77M | 433.31M | 401.04M | 363.69M | 336.7M | 258.89M | 187.5M | 134.6M | 96.6M |
| Operating Margin % | 38.55% | 39.62% | 41.19% | 40.6% | 39.9% | 36.01% | 36.15% | 36.35% | 38.08% | 39.34% | 38.84% | 38.46% | 39.01% | 38.9% | 38.29% | 37.73% | 36.22% | 38.66% | 40.08% | 37.18% | 38.8% | 36.94% | 33.48% | 38.34% | 38.09% | 38.71% | 35.56% | 15.95% | 13.55% | 13.15% |
| Operating Income Growth % | 13.72% | 1.55% | 6.94% | 10.49% | 25.97% | 0.01% | 6.5% | 6.51% | 3.86% | 8.11% | 8.83% | 7.21% | 8.61% | 5.96% | 8.58% | 8.5% | -9.99% | -2.79% | 18.06% | 7.97% | 21.73% | 23.18% | 8.05% | 10.27% | 8.02% | 30.05% | 38.08% | 39.3% | 39.34% | 43.11% |
| EBITDA | 2.95B | 2.42B | 2.35B | 2.21B | 2.03B | 1.65B | 1.67B | 1.55B | 1.43B | 1.37B | 1.26B | 1.16B | 1.09B | 1B | 951.7M | 875.1M | 811.24M | 913.93M | 927.91M | 798.53M | 744.16M | 625.63M | 516.11M | 465.6M | 411.09M | 375.84M | 295.38M | 220.4M | 161.9M | 118M |
| EBITDA Margin % | 45.35% | 43.38% | 44.53% | 44.13% | 44.06% | 40.74% | 41.34% | 41.16% | 42.16% | 43.36% | 42.74% | 42.35% | 43.18% | 43.12% | 42.68% | 41.99% | 40.55% | 43.88% | 44.91% | 42.32% | 44.44% | 43.29% | 39.87% | 44.51% | 43.05% | 43.21% | 40.57% | 18.75% | 16.3% | 16.06% |
| EBITDA Growth % | 22.17% | 2.83% | 6.38% | 8.76% | 22.94% | -1.05% | 7.56% | 8.93% | 4.32% | 8.31% | 8.75% | 6.67% | 8.44% | 5.39% | 8.75% | 7.87% | -11.24% | -1.51% | 16.2% | 7.31% | 18.95% | 21.22% | 10.85% | 13.26% | 9.38% | 27.24% | 34.02% | 36.13% | 37.2% | 44.96% |
| D&A (Non-Cash Add-back) | 442.6M | 209.5M | 176.5M | 176.6M | 191.8M | 192M | 209.7M | 181.5M | 138M | 126.9M | 115.1M | 106.6M | 105M | 98.2M | 97.8M | 88.7M | 86.44M | 108.73M | 99.65M | 96.99M | 94.41M | 91.86M | 82.79M | 64.56M | 47.39M | 39.14M | 36.48M | 32.9M | 27.3M | 21.4M |
| EBIT | 2.51B | 2.28B | 2.26B | 2.08B | 1.86B | 1.47B | 1.46B | 1.38B | 1.29B | 1.26B | 1.15B | 1.06B | 989.2M | 911.5M | 860.4M | 786.4M | 729.31M | 729.75M | 696.48M | 701.55M | 649.75M | 546.17M | 433.31M | 401.04M | 363.69M | 336.7M | 258.89M | 187.56M | 134.7M | 96.6M |
| Net Interest Income | -269.5M | -32.6M | 45.4M | 12.4M | -33.7M | -33.5M | -26.5M | -4.3M | 8M | 7.4M | 7.3M | 7.1M | 5.8M | 6.6M | 6.4M | 48.1M | 55.03M | 75.45M | 131.79M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 72.8M | 82.7M | 49.1M | 2.9M | 2.3M | 12.3M | 13.3M | 11.9M | 9.9M | 8.4M | 7.8M | 6.9M | 6.7M | 6.5M | 48.1M | 55.03M | 75.45M | 131.79M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 269.5M | 105.4M | 37.3M | 36.7M | 36.6M | 35.8M | 38.8M | 17.6M | 3.9M | 2.5M | 1.1M | 700K | 1.1M | 100K | 100K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -199.6M | -31.8M | 43.9M | 15.1M | -15.4M | -26.5M | -23.4M | -3.3M | 8.6M | -9.1M | 4.5M | 6.4M | 5.4M | 6.6M | 6.4M | 5.8M | 4.51M | 6.88M | 26.55M | 43.42M | 26.09M | 12.39M | 16.47M | 30.5M | 31.32M | 27.28M | 16.48M | 12.6M | 9.6M | 7.1M |
| Pretax Income | 2.31B | 2.18B | 2.22B | 2.05B | 1.82B | 1.43B | 1.44B | 1.37B | 1.3B | 1.24B | 1.15B | 1.06B | 988.1M | 911.4M | 860.3M | 792.2M | 729.31M | 812.08M | 854.82M | 743.27M | 674.77M | 546.17M | 449.78M | 431.54M | 395.01M | 363.98M | 275.37M | 200.1M | 144.2M | 103.7M |
| Pretax Margin % | 35.49% | 39.05% | 42.02% | 40.91% | 39.56% | 35.35% | 35.57% | 36.26% | 38.34% | 39.5% | 39% | 38.69% | 39.23% | 39.18% | 38.58% | 38.01% | 36.45% | 38.99% | 41.37% | 39.39% | 40.29% | 37.79% | 34.75% | 41.26% | 41.37% | 41.84% | 37.82% | 17.02% | 14.52% | 14.11% |
| Income Tax | 550.8M | 518.6M | 527.6M | 490.9M | 431.8M | 336.7M | 339M | 333.6M | 362.4M | 427.5M | 394.3M | 385.1M | 360.6M | 342.4M | 312.3M | 276.9M | 252.31M | 278.53M | 278.67M | 227.82M | 209.85M | 177.32M | 146.83M | 138.09M | 120.48M | 109.11M | 85.36M | 61M | 42M | 28.5M |
| Effective Tax Rate % | 23.83% | 23.83% | 23.79% | 23.97% | 23.67% | 23.48% | 23.59% | 24.39% | 27.96% | 34.34% | 34.25% | 36.33% | 36.49% | 37.57% | 36.3% | 34.95% | 34.6% | 34.3% | 32.6% | 30.65% | 31.1% | 32.47% | 32.65% | 32% | 30.5% | 29.98% | 31% | 30.48% | 29.13% | 27.48% |
| Net Income | 1.76B | 1.66B | 1.69B | 1.56B | 1.39B | 1.1B | 1.1B | 1.03B | 933.7M | 817.3M | 756.8M | 674.9M | 627.5M | 569M | 548M | 515.3M | 477M | 533.54M | 576.14M | 515.45M | 464.91M | 368.85M | 302.95M | 293.45M | 274.53M | 254.87M | 190.01M | 139.1M | 102.2M | 75.2M |
| Net Margin % | 27.03% | 29.74% | 32.03% | 31.1% | 30.2% | 27.05% | 27.18% | 27.42% | 27.62% | 25.94% | 25.64% | 24.64% | 24.91% | 24.46% | 24.58% | 24.72% | 23.84% | 25.62% | 27.88% | 27.32% | 27.76% | 25.52% | 23.41% | 28.05% | 28.75% | 29.3% | 26.1% | 11.83% | 10.29% | 10.24% |
| Net Income Growth % | 6.2% | -1.96% | 8.55% | 11.81% | 26.91% | -0.05% | 6.16% | 10.79% | 14.24% | 7.99% | 12.14% | 7.55% | 10.28% | 3.83% | 6.35% | 8.03% | -10.6% | -7.39% | 11.78% | 10.87% | 26.04% | 21.75% | 3.24% | 6.89% | 7.71% | 34.14% | 36.6% | 36.11% | 35.9% | 43.79% |
| Net Income (Continuing) | 1.76B | 1.66B | 1.69B | 1.56B | 1.39B | 1.1B | 1.1B | 1.03B | 994.1M | 817.3M | 756.8M | 674.9M | 627.5M | 569M | 548M | 515.3M | 477M | 533.54M | 576.14M | 515.45M | 464.91M | 368.85M | 302.95M | 293.45M | 274.53M | 254.87M | 190.01M | 139.1M | 102.22M | 75.2M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 4.89 | 4.58 | 4.67 | 4.30 | 3.84 | 3.03 | 3.04 | 2.86 | 2.58 | 2.25 | 2.09 | 1.85 | 1.71 | 1.56 | 1.51 | 1.42 | 1.32 | 1.48 | 1.56 | 1.35 | 1.22 | 0.97 | 0.80 | 0.78 | 0.73 | 0.68 | 0.51 | 0.38 | 0.28 | 0.21 |
| EPS Growth % | 6.77% | -1.93% | 8.6% | 11.98% | 26.73% | -0.33% | 6.29% | 10.85% | 14.67% | 7.66% | 12.97% | 8.19% | 9.62% | 3.31% | 6.34% | 7.58% | -10.81% | -5.13% | 15.56% | 10.66% | 25.77% | 21.25% | 2.56% | 6.85% | 7.35% | 33.33% | 34.21% | 35.71% | 33.33% | 40% |
| EPS (Basic) | 4.90 | 4.60 | 4.69 | 4.32 | 3.86 | 3.05 | 3.06 | 2.88 | 2.60 | 2.27 | 2.10 | 1.86 | 1.72 | 1.56 | 1.51 | 1.42 | 1.32 | 1.48 | 1.56 | 1.35 | 1.23 | 0.97 | 0.80 | 0.78 | 0.73 | 0.68 | 0.51 | 0.25 | 0.28 | 0.21 |
| Diluted Shares Outstanding | 360M | 362M | 362.1M | 362.3M | 363.1M | 362.1M | 361M | 361.8M | 361.5M | 362.6M | 362.5M | 364.6M | 366.1M | 364.7M | 363M | 362.4M | 361.73M | 360.99M | 369.53M | 382.8M | 381.35M | 379.76M | 378.69M | 378.08M | 378M | 377.51M | 375.08M | 369.89M | 367.31M | 366.25M |
| Basic Shares Outstanding | 358.9M | 360.2M | 360.3M | 360.4M | 360.6M | 359.9M | 358.5M | 359.2M | 359M | 359.8M | 360.7M | 362.9M | 364.5M | 363.8M | 362.4M | 361.8M | 361.36M | 360.78M | 368.42M | 381.15M | 379.46M | 378.34M | 377.22M | 376.26M | 374.75M | 372.78M | 370.6M | 369.69M | 367.09M | 366.25M |
| Dividend Payout Ratio | 90.31% | 87.4% | 77.81% | 75.45% | 71.77% | 82.8% | 80.99% | 79.93% | 79.22% | 81.04% | 80.14% | 81.76% | 81.37% | 83.78% | 84.03% | 87.09% | 94.04% | 83.92% | 76.74% | 58.46% | 49.81% | 52.32% | 58.56% | 56.38% | 57.36% | 48.3% | 42.94% | 38.86% | 35.1% | 32.05% |
SMB economic sensitivity
As reported in recent financial filings, Paychex has demonstrated a notable acceleration in top-line performance, with revenue growth reaching 12.5% in 2026Q4 compared to more modest mid-single-digit growth in prior periods, suggesting that the company is successfully capturing increased demand for outsourced HR and compliance services.
The recent uptick in revenue growth appears to be driven by a combination of pricing power and the increasing administrative burden placed on small businesses. Investors should monitor whether this acceleration is sustainable or if it reflects a temporary surge in demand for complex regulatory navigation.
Based on the provided income statement data, Paychex maintains a robust gross margin profile, consistently hovering around the 74% level, which underscores the company's ability to leverage its proprietary technology platform while managing the semi-variable costs associated with its high-touch human service model.
This structural margin stability suggests that the company possesses significant pricing power within its core SMB segment. The ability to maintain these margins despite potential wage inflation in its own service workforce indicates a highly efficient operational model that effectively scales with client volume.
According to the latest quarterly results, Paychex has demonstrated effective operating leverage, as operating income has shown significant expansion relative to gross profit growth, with operating margins reaching as high as 43.8% in 2026Q3, reflecting disciplined management of SG&A expenses relative to revenue gains.
The company appears to be successfully decoupling its revenue growth from its overhead costs, suggesting that its digital transformation initiatives are yielding tangible efficiencies. This trend warrants further investigation to determine if such high operating margins are sustainable or if they are bolstered by non-recurring cost-saving measures.
As indicated by the reported financial statements, Paychex's net income and EPS have experienced notable fluctuations, with EPS growth swinging from a 21.9% decline in 2025Q4 to a 42.7% increase in 2026Q4, largely influenced by variable stock-based compensation and non-operating items that warrant careful investor scrutiny.
The volatility in quarterly EPS suggests that headline figures may be distorted by periodic adjustments rather than purely operational performance. Investors should focus on normalized earnings trends to better assess the underlying profitability of the business, as these swings may mask the true trajectory of core operations.
While Paychex exhibits strong profitability, the potential for margin compression remains a critical risk, as evidenced by the competitive pressure from emerging fintech entrants that may offer lower-cost, automated compliance solutions, potentially challenging the company's premium pricing model in the micro-business segment.
Short-sellers might focus on the risk that the company's 'human-in-the-loop' service model becomes a liability if AI-driven tools successfully commoditize payroll and compliance. The reliance on interest income from client funds also introduces a cyclical vulnerability that could negatively impact earnings if the interest rate environment shifts.
Quick answers to the most common questions about buying PAYX stock.
For fiscal year 2026, Paychex, Inc. (PAYX) reported total revenue of $6.51B. This represents a 786.3% increase compared to $734.7M in 1997.
Paychex, Inc. (PAYX) is profitable, generating $1.76B in net income for the fiscal year ending 2026 with a net profit margin of 27.0%.
Paychex, Inc. (PAYX) reported an operating income of $2.51B, resulting in an operating profit margin of 38.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Paychex, Inc. (PAYX) generated $4.84B in gross profit for the year, representing a gross profit margin of 74.3%. This demonstrates the company's core pricing power and production efficiency.