Paychex misses on revenue and EPS but raises fiscal 2027 guidance
Revenue came in at $1.63 billion versus $1.66 billion expected, with EPS of $1.34 a cent short of forecasts
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Paychex reported first-quarter earnings per share of $1.34, a cent below expectations, on revenue of $1.63 billion, short of the $1.66 billion analysts had forecast.
Alongside the miss, the payroll and human resources company raised its outlook for the rest of fiscal 2027. It now expects PEO and Insurance Solutions revenue to grow 7% to 8%, up from a prior forecast of 6% to 7%. It also lifted its forecast for interest earned on funds held for clients, to a range of $200 million to $210 million from $195 million to $205 million.
President and Chief Executive Officer John Gibson said the quarter's double-digit growth in PEO and Insurance Solutions revenue and in earnings per share reflected strength in advisory solutions, disciplined execution and progress on strategic priorities. The company also paid a dividend of $1.19 per share during the quarter, totaling $424.1 million.
The shortfall in revenue and the penny-light earnings are modest, and the raised full-year guidance offsets them by signaling that management does not see the quarter's softer top line as the start of a trend. Taken together, the report is close to neutral for the stock, with the improved outlook balancing the lighter print.