Paychex Reports $560.3M Q3 Profit on 19.9% Revenue Growth
Paychex, Inc. (NASDAQ: PAYX) posted net income of $560.3 million for the three months ending February 28, 2026, up 7.9% from $519.3 million in the prior-year quarter. Total revenue climbed to $1.81 billion.
Paychex, Inc. (NASDAQ: PAYX), a payroll processing and human resources services provider, reported net income of $560.3 million for the three months ending February 28, 2026, up from $519.3 million in the same quarter a year earlier. Diluted earnings per share came in at $1.56, compared to $1.43 in the prior-year period. Read more earnings reports.
Total revenue for the quarter reached $1.81 billion, a 19.9% increase from $1.51 billion in the three months ending February 28, 2025. For the nine months ending February 28, 2026, total revenue rose 18.4% to $4.91 billion from $4.14 billion in the comparable period of fiscal 2025.
Net revenue from management solutions jumped 23.1% to $1.35 billion for the quarter, compared to $1.10 billion in the prior-year period. Professional employer organization and insurance solutions revenue climbed 8.8% to $397.5 million from $365.4 million. Interest income on funds held for clients surged to $56.8 million from $43 million a year earlier.
Operating income for the quarter totaled $792 million, up 14.5% from $691.8 million in the prior-year quarter. For the nine-month period, operating income reached $1.91 billion, compared to $1.78 billion a year earlier.
Cost of revenue for the three months ending February 28, 2026 rose to $431.2 million from $387.4 million in the same quarter last year. Selling, general and administrative expenses increased to $585.7 million from $429.8 million.
The company reported cash from operations of $1.98 billion for the nine months ending February 28, 2026, compared to $1.56 billion in the prior-year period. Cash used in investing activities totaled $925 million, primarily reflecting increased investment activity compared to $281.7 million in the prior year.
Total assets stood at $17.51 billion as of February 28, 2026, up from $16.56 billion at the end of fiscal 2025. Cash and cash equivalents increased to $1.74 billion from $1.63 billion. Long-term debt remained relatively stable at $4.95 billion compared to $4.95 billion at the end of the prior fiscal year.
Stockholders' equity declined to $4.01 billion as of February 28, 2026 from $4.13 billion at May 31, 2025. Common shares outstanding decreased to 358.3 million from 360.5 million over the same period.
Financial Summary
| Metric | Q3 FY2026 | Q3 FY2025 | Change |
|---|---|---|---|
| Total Revenue | $1.81 billion | $1.51 billion | +19.9% |
| Net Income | $560.3 million | $519.3 million | +7.9% |
| Operating Income | $792 million | $691.8 million | +14.5% |
| EPS (Diluted) | $1.56 | $1.43 | +9.1% |
Nine-Month Performance
| Metric | 9M FY2026 | 9M FY2025 | Change |
|---|---|---|---|
| Total Revenue | $4.91 billion | $4.14 billion | +18.4% |
| Net Income | $1.34 billion | $1.36 billion | -1.5% |
| Operating Income | $1.91 billion | $1.78 billion | +7.3% |
| EPS (Diluted) | $3.71 | $3.76 | -1.3% |