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PAYX delivered 2Q26 EPS of $1.26, beating estimates and rising 10.5% y/y.
PAYX saw Management Solutions revenues jump 21% y/y to $1.2B, while PEO and Insurance rose 6% to $336.9M.
PAYX reported a 36.7% operating margin and a 51% jump in client-fund interest.
Paychex, Inc. (PAYX - Free Report) has reported impressive second-quarter fiscal 2026 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
PAYX’s fiscal second-quarter earnings of $1.26 per share beat the Zacks Consensus Estimate by 1.6% and increased 10.5% from the year-ago quarter. Total revenues of $1.6 billion surpassed the consensus estimate by a slight margin and rallied 18.3% from the year-ago quarter.
The company’s shares have declined 11.6% over the past three months compared with the 13.5% dip of the industry and against a 2% hike of the Zacks S&P 500 composite.
Revenues from the Management Solutions segment improved 21% year over year to $1.2 billion, meeting our estimate.
Professional employer organization (“PEO”) and Insurance Solutions’ revenues were $336.9 million, increasing 6% from the year-ago quarter. The figure missed our projected figure of $341.5 million.
Service revenues gained 17% year over year to $1.5 billion, meeting our estimated figure. Interest on funds held for clients rallied 51% from the year-ago quarter to $54.3 million, beating our projection of $46.1 million.
EBITDA of $681.3 million increased 18% from the year-ago quarter, missing our estimate of $728.5 million. Operating income rose 6% year over year to $571.9 million, missing our forecast of $653.8 million. The operating margin was 36.7%, down 420 basis points from the year-ago quarter. The reported figure missed our estimate of 42%.
Balance Sheet & Cash Flow of Paychex
The company exited the second quarter of fiscal 2026 with cash and cash equivalents of $1.5 billion compared with $809 million in the preceding quarter. The long-term debt totaled $4.6 billion, flat with the preceding quarter.
Cash generated from operating activities amounted to $444.9 million, while the capital expenditure totaled $62.1 million.
PAYX’S FY26 Guidance
Paychex expects revenues to grow 16.5-18.5%. Management expects interest on funds held for clients of $190-$200 million.
The company carries a Zacks Rank #4 (Sell) at present.
FDS’s earnings per share of $4.51 beat the consensus mark by 2.7% and increased 3.2% from the year-ago quarter. Revenues of $607.6 million beat the Zacks Consensus Estimate by 1.4% and rose 6.9% from the year-ago quarter.
ACN’s earnings were $3.94 per share, beating the Zacks Consensus Estimate by 5.6%. The metric increased 9.8% from the year-ago quarter. Total revenues of $18.7 billion beat the consensus estimate by 1% and rose 6% on a year-over-year basis.
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Paychex Q2 Earnings & Revenues Surpass Estimates, Increase Y/Y
Key Takeaways
Paychex, Inc. (PAYX - Free Report) has reported impressive second-quarter fiscal 2026 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
PAYX’s fiscal second-quarter earnings of $1.26 per share beat the Zacks Consensus Estimate by 1.6% and increased 10.5% from the year-ago quarter. Total revenues of $1.6 billion surpassed the consensus estimate by a slight margin and rallied 18.3% from the year-ago quarter.
The company’s shares have declined 11.6% over the past three months compared with the 13.5% dip of the industry and against a 2% hike of the Zacks S&P 500 composite.
Paychex, Inc. Price, Consensus and EPS Surprise
Paychex, Inc. price-consensus-eps-surprise-chart | Paychex, Inc. Quote
PAYX’s Quarterly Performance
Revenues from the Management Solutions segment improved 21% year over year to $1.2 billion, meeting our estimate.
Professional employer organization (“PEO”) and Insurance Solutions’ revenues were $336.9 million, increasing 6% from the year-ago quarter. The figure missed our projected figure of $341.5 million.
Service revenues gained 17% year over year to $1.5 billion, meeting our estimated figure. Interest on funds held for clients rallied 51% from the year-ago quarter to $54.3 million, beating our projection of $46.1 million.
EBITDA of $681.3 million increased 18% from the year-ago quarter, missing our estimate of $728.5 million. Operating income rose 6% year over year to $571.9 million, missing our forecast of $653.8 million. The operating margin was 36.7%, down 420 basis points from the year-ago quarter. The reported figure missed our estimate of 42%.
Balance Sheet & Cash Flow of Paychex
The company exited the second quarter of fiscal 2026 with cash and cash equivalents of $1.5 billion compared with $809 million in the preceding quarter. The long-term debt totaled $4.6 billion, flat with the preceding quarter.
Cash generated from operating activities amounted to $444.9 million, while the capital expenditure totaled $62.1 million.
PAYX’S FY26 Guidance
Paychex expects revenues to grow 16.5-18.5%. Management expects interest on funds held for clients of $190-$200 million.
The company carries a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshots
FactSet (FDS - Free Report) reported impressive results for first-quarter fiscal 2026.
FDS’s earnings per share of $4.51 beat the consensus mark by 2.7% and increased 3.2% from the year-ago quarter. Revenues of $607.6 million beat the Zacks Consensus Estimate by 1.4% and rose 6.9% from the year-ago quarter.
Accenture plc (ACN - Free Report) posted impressive first-quarter fiscal 2026 results.
ACN’s earnings were $3.94 per share, beating the Zacks Consensus Estimate by 5.6%. The metric increased 9.8% from the year-ago quarter. Total revenues of $18.7 billion beat the consensus estimate by 1% and rose 6% on a year-over-year basis.