Paychex Shares Slip After Q3 Beat on Higher Costs

Overview

• Following Wednesday's earnings release, Paychex closed down 3.09% at $90.61.
• Revenue rose 20% to $1.81 billion and adjusted earnings per share increased 15% to $1.71.
• Total operating expenses jumped 24% to $1.0 billion, pushing the reported operating margin down to 43.8% as the adjusted margin reached 47.7%.
• The Paycor deal lifted Management Solutions revenue 23% and added higher-value clients, but financing raised interest expense to $68.1 million.
• The company held $1.8 billion in cash and $5.0 billion in debt, returned $1.5 billion to shareholders year to date, and is investing in acquisitions, product upgrades, and AI.