PAYX: 4Q26 QuickTake: PEO/CFI Strength Offsets Management Solutions; Inline Guidance but PEO Moderating

研报英文原文证据摘录

PAYX: 4Q26 QuickTake: PEO/CFI Strength Offsets Management Solutions; Inline Guidance but PEO Moderating

EQUITY RESEARCH QUICK TAKE

RBC Capital Markets, LLC

Ashish Sabadra (Analyst)

David Paige (Analyst)

William Qi (AVP)

June 24, 2026

Paychex, Inc.

4Q26 QuickTake: PEO/CFI Strength Offsets Management Solutions; Inline Guidance but

PEO Moderating

NASDAQ: PAYX | USD 97.99 | Sector Perform | Price Target USD 102.00

Sentiment: Neutral

Results Summary: 4Q26 results were inline, though Management Solutions underperformed relative to our and consensus

estimates. This weakness was counterbalanced by stronger-than-expected performance in PEO and CFI. We estimate Management

Solutions organic growth of 5.6%, which was modestly above our estimate; however, Paycor acquisition revenues were modestly

below our estimates. Adjusted operating income and margin came in modestly ahead of our and consensus estimates, reaching

the high end of company guidance, while adjusted EPS aligned with expectations.

For FY27, the company's guidance were inline with expectations. Adj op income margin guidance of 44% was above expectations.

However, we view the PEO guidance of 6-7% growth as below our expectations of 6-8%, suggesting a deceleration in growth

momentum compared to the second half of 2026.

Segment Performance

• Management Solutions revenue of $1,184m was driven by higher product penetration and an expanded HR Solutions worksite

employee base. The segment realized price increases and higher revenue per client, reflecting Paycor's upmarket client base.

Paycor contributed ~8% to the 13.6% revenue growth in 4Q.

• PEO's revenue of $370m (+9% y/y) was driven by growth in the number of average PEO worksite employees and increases in

PEO insurance revenues.