Paychex Inc.

Strong FY26 performance + accelerating organic growth (good) - Q4: Total revenue +12% YoY to $1.6B; Management Solutions revenue +14% to $1.2B; PEO & Insurance +9% to $370M. - FY26: Total revenue +17% YoY to $6.5B; Management Solutions +20% to $4.9B; PEO & Insurance +7% to $1.4B. - Profitability/earnings: FY26 adjusted operating margin +~70 bps to 43.2%; FY diluted EPS +7% to $4.89 and adjusted diluted EPS +11% to $5.51. - Organic growth trend: Management said organic growth improved sequentially each quarter in FY26, nearly doubling from the level at the prior-year exit (exiting FY26 around ~mid-single-digits).

Guidance for FY27: steady growth outlook but within a macro/stability frame (forecast) - Total revenue: expected +5% to +6% in FY27. - Management Solutions: +5% to +6%. - PEO & Insurance: +6% to +7%. - Interest on funds held for clients: $195M–$205M (explicit decline vs FY26 due to full-year impact of 75 bps Fed cuts and lapping one-time gains from earlier portfolio repositioning). - Margins & EPS: adjusted operating margin expected about 44%; adjusted diluted EPS expected +7% to +9%. - Q1 FY27: guided to revenue growth consistent with full-year guidance with adjusted op margin 41%–42%. - Assumptions/risks acknowledged: stable macro and employment levels flat; no further Fed rate changes assumed.

Capital returns + cash generation (investor-friendly shareholder returns) - FY26 cash flow: operating cash flow +35% to $2.6B; free cash flow +36% to $2.3B. - Returns: $2.2B to shareholders in FY26 via $1.6B dividends and $600M buybacks. - Leverage: reduced leverage by ~half a turn by repaying a $400M Oasis acquisition tranche (matured March). - Management emphasized “industry leading” cash margins with opportunity for expansion over time (esp. as AI/productivity ramps).