Paychex (PAYX) Q2 2025 Financial Results Summary
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Paychex (PAYX) Q2 2026 Financial Results Summary
On December 19, 2025, Paychex, Inc. (Nasdaq: PAYX) released its financial results for the second quarter ended November 30, 2025. Below is a summary of the key metrics and highlights from the report, comparing them to the same quarter one year prior.
Financial Highlights
- Total Revenue:
- Q2 2026: $1,557.6 million
- Q2 2025: $1,316.9 million
-
Change: +18%
-
Operating Income:
- Q2 2026: $571.9 million
- Q2 2025: $538.1 million
-
Change: +6%
-
Adjusted Operating Income:
- Q2 2026: $649.0 million
- Q2 2025: $538.1 million
-
Change: +21%
-
Diluted Earnings Per Share (EPS):
- Q2 2026: $1.10
- Q2 2025: $1.14
-
Change: -4%
-
Adjusted Diluted EPS:
- Q2 2026: $1.26
- Q2 2025: $1.14
- Change: +11%
Business Segment Highlights
- Management Solutions Revenue:
- Q2 2026: $1,166.4 million
- Q2 2025: $962.9 million
-
Change: +21%
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Professional Employer Organization (PEO) and Insurance Solutions Revenue:
- Q2 2026: $336.9 million
- Q2 2025: $317.9 million
-
Change: +6%
-
Interest on Funds Held for Clients:
- Q2 2026: $54.3 million
- Q2 2025: $36.1 million
- Change: +51%
Expense Details
- Total Expenses:
- Q2 2026: $985.7 million
- Q2 2025: $778.8 million
-
Change: +27% (driven by compensation-related expenses, amortization, and technology investments)
-
Interest Expense:
- Q2 2026: $68.5 million
- Q2 2025: $9.5 million
- Change: n/m (not meaningful due to debt issuance)
Income Tax and Net Income
-
Effective Income Tax Rate: Remained constant at 24% for both quarters.
-
Net Income:
- Q2 2026: $395.4 million
- Q2 2025: $413.4 million
- Change: -4%
Year-to-date Financial Highlights (For six months ended)
- Total Revenue:
- FY 2026: $3,097.6 million
- FY 2025: $2,635.4 million
-
Change: +18%
-
Operating Income:
- FY 2026: $1,113.8 million
- FY 2025: $1,084.8 million
-
Change: +3%
-
Adjusted Operating Income:
- FY 2026: $1,275.7 million
- FY 2025: $1,084.8 million
-
Change: +18%
-
Diluted EPS:
- FY 2026: $2.16
- FY 2025: $2.32
-
Change: -7%
-
Adjusted Diluted EPS:
- FY 2026: $2.48
- FY 2025: $2.30
- Change: +8%
Shareholder Returns
-
Dividends Paid: $2.16 per share, totaling $777.0 million during the six months.
-
Share Repurchase:
- 2.1 million shares repurchased for $286.6 million.
Financial Position and Liquidity
-
Cash and Corporate Investments: $1.6 billion as of November 30, 2025.
-
Total Borrowings:
-
Short-term and long-term borrowings totaled $5.0 billion.
-
Cash Flow from Operations: $1.2 billion for the six months.
Business Outlook
- Adjusted Diluted EPS Growth: Expected to grow in the range of 10% to 11% for fiscal 2026.
In summary, Paychex reported strong growth in total revenue and adjusted operating income, alongside significant growth in its Management Solutions segment driven by the acquisition of Paycor HCM, Inc. Shareholders also enjoyed dividends and share repurchase activity during the first half of fiscal 2026.
| For the three months ended | For the six months ended | |||||
|---|---|---|---|---|---|---|
| November 30, 2025 | 2024 | Change(2) | November 30, 2025 | 2024 | Change(2) | |
| Revenue: | ||||||
| Management | $1,166.4 | $962.9 | 21% | $2,329.7 | $1,924.6 | 21% |
| Solutions | ||||||
| PEO and | $336.9 | $317.9 | 6% | $666.0 | $637.2 | 5% |
| Insurance Solutions | ||||||
| Total service | $1,503.3 | $1,280.8 | 17% | $2,995.7 | $2,561.8 | 17% |
| revenue | ||||||
| Interest on | $54.3 | $36.1 | 51% | $101.9 | $73.6 | 38% |
| funds held for | ||||||
| clients(1) | ||||||
| Total revenue | $1,557.6 | $1,316.9 | 18% | $3,097.6 | $2,635.4 | 18% |
| Expenses: | ||||||
| Cost of service | $412.2 | $379.1 | 9% | $826.0 | $759.1 | 9% |
| revenue | ||||||
| Selling, general | $573.5 | $399.7 | 43% | $1,157.8 | $791.5 | 46% |
| and | ||||||
| administrative | ||||||
| expenses | ||||||
| Total expenses | $985.7 | $778.8 | 27% | $1,983.8 | $1,550.6 | 28% |
| Operating income | $571.9 | $538.1 | 6% | $1,113.8 | $1,084.8 | 3% |
| Interest expense | $(68.5) | $(9.5) | n/m | $(136.7) | $(19.1) | n/m |
| Other income, | $16.8 | $15.1 | 11% | $40.6 | $35.1 | 16% |
| net(1) | ||||||
| Income before | $520.2 | $543.7 | (4%) | $1,017.7 | $1,100.8 | (8%) |
| income taxes | ||||||
| Income taxes | $124.8 | $130.3 | (4%) | $238.5 | $260.0 | (8%) |
| Net income | $395.4 | $413.4 | (4%) | $779.2 | $840.8 | (7%) |
| Basic earnings | $1.10 | $1.15 | (4%) | $2.17 | $2.34 | (7%) |
| per share | ||||||
| Diluted earnings | $1.10 | $1.14 | (4%) | $2.16 | $2.32 | (7%) |
| per share | ||||||
| Weighted-average | ||||||
| common shares | 359.4 | 360.0 | 359.7 | 360.1 | ||
| outstanding | ||||||
| Weighted-average | ||||||
| common shares | 360.4 | 361.7 | 361.1 | 361.8 | ||
| outstanding, | ||||||
| assuming | ||||||
| dilution |
| ASSETS | November 30, 2025 | May 31, 2025 |
|---|---|---|
| Cash and cash equivalents | $1,485.6 | $1,628.6 |
| Restricted cash | $50.7 | $47.9 |
| Corporate investments | $37.6 | $34.5 |
| Interest receivable | $35.0 | $27.9 |
| Accounts receivable, net of allowance | $1,355.5 | $1,330.5 |
| for credit losses | ||
| PEO unbilled receivables, net of advance | $640.0 | $616.6 |
| collections | ||
| Prepaid income taxes | $56.8 | $38.9 |
| Prepaid expenses and other current | $372.5 | $378.3 |
| assets | ||
| Current assets before funds held for | $4,033.7 | $4,103.2 |
| clients | ||
| Funds held for clients | $4,875.7 | $4,813.3 |
| Total current assets | $8,909.4 | $8,916.5 |
| Property and equipment, net of | $551.2 | $511.5 |
| accumulated depreciation | ||
| Operating lease right-of-use assets, net | $80.1 | $63.8 |
| of accumulated amortization | ||
| Intangible assets, net of accumulated | $1,812.3 | $1,947.3 |