Paychex delivered solid Q1 results, fueled by strong PEO performance and a 42% adjusted operating margin, while accelerating its strategic investment in AI-driven payroll and recruiting tools.
Paychex reported strong fiscal Q1 results with revenue up 6%, adjusted EPS up 10%, raised PEO and insurance revenue growth guidance, and reaffirmed overall FY2027 outlook.
Paychex reported a strong fiscal first quarter with revenue reaching $1.6 billion, a 6% increase, while adjusted EPS rose 10% to $1.34. Growth was primarily driven by the PEO and insurance segment, which saw a 12% revenue jump, prompting management to raise its full-year growth forecast for that division to 7%–8%.
Growth is driven by strong worksite employee numbers, record retention, and a higher-than-expected volume of customers upgrading from administrative services (ASO) to PEO arrangements.