Paychex Inc
PAYX
$112.06 0.26%
Exchange: NASDAQ | Sector: Industrials | Industry: Staffing Employment Services
Q3 2025
Published: Mar 26, 2025

Earnings Highlights

  • Revenue of $1.51B up 4.8% year-over-year
  • EPS of $1.43 increased by 3.6% from previous year
  • Gross margin of 74.3%
  • Net income of 519.30M
  • "β€œWe now expect synergies over the $80 million that we shared with you in January.”" - John Gibson
PAYX
Company PAYX

Executive Summary

Paychex delivered a solid QQ3 2025 performance with revenue growth of 5% year over year (6% excluding the ERTC headwind) driven by its leading HCM and payroll solutions. The quarter featured meaningful margin expansion, with adjusted operating margins up ~180 basis points to 46.9% and adjusted diluted EPS up 8% to $1.49. Net income rose to $519.3 million on revenue of $1.509 billion, while free cash flow generation remained robust at approximately $667 million for the period. Management framed the move into AI- and automation-enabled productivity as a core driver of efficiency and long-term margin resilience, citing the Gen AI-powered HR Copilot and ongoing digital transformations. In addition, Paychex announced a Definitive Agreement to acquire Paycor, targeting synergies above $80 million and aiming for near-term EPS accretion. The company also highlighted strong customer retention and solid demand in its HR outsourcing and PO/insurance solutions, while noting Florida-specific pass-through headwinds in the health plan attachment that partially offset revenue growth. Looking forward, guidance for FY2025 remains a balanced mix of mid-single-digit core growth (4-5.5% revenue growth) and higher near-term Q4 revenue with Paycor contributions, while the company expects the acquisition to be accretive to adjusted EPS in the next fiscal year. Investors should monitor Paycor integration progress, ongoing price realization, health-plan attachment dynamics (notably Florida), and AI-driven product adoption as key drivers of the multi-year earnings trajectory.

Key Performance Indicators

Revenue
Increasing
1.51B
QoQ: 14.59% | YoY: 4.84%
Gross Profit
Increasing
1.12B
74.33% margin
QoQ: 19.60% | YoY: 5.86%
Operating Income
Increasing
691.80M
QoQ: 28.56% | YoY: 6.46%
Net Income
Increasing
519.30M
QoQ: 25.62% | YoY: 4.15%
EPS
Increasing
1.44
QoQ: 25.22% | YoY: 3.60%

Revenue Trend

Margin Analysis

Historical Earnings Comparison

PeriodRevenue ($M)EPS ($)YoY GrowthReport
Q1 2026 1,540.00 1.06 +18.9% View
Q3 2025 1,509.00 1.43 +4.8% View
Q2 2025 1,316.90 1.14 +4.7% View
Q1 2025 1,318.50 1.18 +2.5% View
Q4 2024 1,295.10 1.05 +5.3% View