Paychex, Inc. reported financial results for the three months ended August 31, 2026, the first quarter of its fiscal year 2027. The company announced that total revenue increased 6% to $1.63 billion compared to the prior year period. This growth was driven by a 4% increase in Management Solutions revenue to $1.21 billion and a 12% increase in PEO and Insurance Solutions revenue to $367.6 million.
Operating income for the quarter grew 14% to $619.2 million, resulting in an operating margin of 38.0%. Diluted earnings per share rose 14% to $1.21. The company also reported interest on funds held for clients of $49.8 million, a 5% increase attributed to higher average interest rates.
Paychex provided updated business outlook guidance for fiscal year 2027. The company expects total revenue growth of 5% to 6% and adjusted diluted earnings per share growth of 7% to 9%. The outlook also includes adjusted operating margin of approximately 44% and an effective income tax rate of approximately 24%.
In other developments, Paychex highlighted its continued investment in artificial intelligence. The company noted the introduction of WISE Hire, an agentic recruiting solution, and the expansion of its WISE engine capabilities across its HCM platforms and Microsoft business applications.
