PAYX F4Q26 Preview: Eyes on FY27, Migrations an Emerging Tailwind

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PAYX F4Q26 Preview: Eyes on FY27, Migrations an Emerging Tailwind

June 17, 2026

Jacob Smith jacob.smith@guggenheimpartners.com PAYX F4Q26 Preview: Eyes on FY27, Migrations an

212 518 9286 Emerging Tailwind

John DiFucci

john.difucci@guggenheimpartners.com

212 518 9670 Key Message: We expect Paychex to close FY26 with an in-line to modestly better F4Q.

We estimate F4Q Total revenue guidance of 12% growth requires flat New ARR growth in Blake Musumano

blake.musumano@guggenheimpartners.com Management Solutions and mid-single digit PEO segment growth, while the interest rate

212 518 9468 environment should be favorable for Interest on funds held for clients. In a more plausible

scenario with 10% New ARR growth for Management Solutions, we see 0.5% Total

revenue upside in the quarter. Attention has rightly shifted to FY27 where management

has already said they are comfortable with Total revenue consensus of $6.85B, +5.5%

PAYX NEUTRAL y/ywith(at7%thegrowthtime ofin theNewF3QARRcallforinManagementlate March). BySolutions.our estimate,A potentiallythis wouldunderappreciatedbe achievable

Paychex, Inc. tailwind for FY27 is Paycor migrations, and we believe ASO and PEO migrations can drive

Sector: Software around 75 bps to Total revenue growth (vs. 30-50 bps in FY26) with what we believe to be

Earnings Preview conservative assumptions. Our channel conversations also left us more constructive on the bear case of channel disruption as a significant headwind to growth, with brokers still

Share Price $97.58 monetizing these client relationships as existing Paycor clients migrate to PEO, although

Price Target NA we continue to believe that winning new Paycor business through the channel likely stays

pressured.