Paychex shares fell despite a fiscal 2027 Q1 earnings beat: revenue rose 6% to $1.6 billion and adjusted diluted EPS reached $1.34, above the $1.32 estimate. Full-year revenue growth guidance stayed at 5%–6%, while its largest segment, Management Solutions, grew 4%.
Paychex raised its fiscal 2027 revenue-growth outlook for PEO and Insurance Solutions to 7%–8%, from 6%–7%, and lifted its forecast for interest earned on client funds, citing higher average rates. Operating income increased 14% to $619.2 million; adjusted operating income rose 9% to $684.7 million.
Fiscal 2026 revenue growth was 17%, including roughly 12 percentage points from the Paycor acquisition. Management said Q2 faces a difficult comparison because the prior-year quarter included a revenue-synergy benefit and realized portfolio-repositioning gains. AI spending is five times its year-earlier level and could pressure margins. Insider Monkey reported 40 hedge funds held Paychex at Q2’s end, down from 43 in Q1; short interest was 6.23% of float on Sept. 15.
