F4Q26 Preview: Expect Upside to F4Q Ests; FY27 Growth Likely to Match Consensus

研报英文原文证据摘录

F4Q26 Preview: Expect Upside to F4Q Ests; FY27 Growth Likely to Match Consensus

e 10.8% 10.1% 70 bps

Key Metrics:

Avg. funds held for clients $5,657 $5,610 0.8%MS: Stabilization in Growth as PYCR Acquisition Laps. F4Q will be the last quarter before PAYX . Avg. yield on float 3.26% 3.38% -12 bps

fully laps the PYCR deal, with subsequent quarters being fully organic. Underlying MS drivers appear Source: Company data, VisibleAlpha, Jefferies

strong--CEO Gibson's recent comments at a conference were quite positive on bookings, and

Exhibit 2 - SMB Cohort Employment Growth

employment trends at the SMB level appear to have improved intra-qtr (Exhibit 2). For F4Q, our Improved Q/Q

ex-PYCR MS growth est of +4.7% implies similar seasonality to last year, which faced one-time 4.0%3.5%

headwinds. In F4Q25, close rates were affected by one-time SMB GTM changes and Micro segment 3.0%2.5%

% 2.0%tech stack changes. Considering the easy comp, we expect seasonally stronger new bookings and

Growth 1.5%1.0%employment tailwinds vs. F4Q25. We see an upside scenario where PAYX delivers ex-PYCR MS Y/Y 0.5%

0.0%growth of ~5% y/y. On PYCR, PAYX noted in F3Q that bookings accelerated back to pre-acquisition (0.5%)

(1.0%)levels, a factor that should support re-acceleration vs. the recent HSD growth into F4Q/FY27. Our (1.5%)

MS forecast assumes $186M of PYCR recurring revs and $5M of rev synergies. F3Q241-19 employeesF4Q24 Y/YF1Q25 F2Q2520-49 employeesF3Q25 F4Q25Y/Y F1Q2650-249F2Q26employeesF3Q26Y/Y F4Q26

.

Source: ADP National Employment Report, Jefferies

PEO: Likely Acceleration on Healthy Bookings + Easier Comp. Demand drivers and comps

should help support continued acceleration -- last qtr, mgmt cited at-risk enrollment in line with Exhibit 3 - In F3Q26, PAYX Cited Comfort with