Paychex (PAYX) Q3 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Wed, March 25, 2026 astatine 10:30 AM CDT 63 min read

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Wednesday, March 25, 2026 astatine 9:30 a.m. ET

• President and Chief Executive Officer — John B. Gibson

• Senior Vice President, Chief Financial Officer — Robert Lewis Schrader

John B. Gibson: Thanks, Bob. Hello, everyone. I volition screen this quarter's operational highlights, and Bob volition travel backmost and sermon our fiscal results and outlook, and past we volition unfastened it up for your questions. We delivered a beardown 4th with gross up 20% and adjusted operating income up 22% twelvemonth implicit year, driven by effectual execution and advancement advancing our strategical priorities, astir notably the Paycor integration and acceleration of our transformational AI initiatives. In this precise dynamic environment, fiscal spot is important, and our escaped currency travel procreation continues to beryllium robust, arsenic Bob volition item later.

Amid a dynamic macro backdrop, our clients' workforce levels remained stable, supported by our solutions that assistance negociate costs and root endowment successful a choky labour market. In a highly regulated industry, our compliance depth, advisory expertise, and award-winning platforms supply a wide competitory vantage successful navigating a perpetually changing and analyzable regulatory environment. As we embed AI into our expert-enabled technology, we are strengthening that vantage by leveraging our immense information to standard our expertise, heighten productivity, and elevate lawsuit outcomes. As you each know, we run successful HR, benefits, and payroll, immoderate of the astir mission-critical aspects of a business. And we are honored that 800,000 clients trust connected america for trusted enactment and advice.

For galore of our clients, we efficaciously service arsenic their HR department, managing a foundational portion of their business. Their people. Errors paying employees, withholding taxes, administrating benefits transportation important regulatory and reputational risk, driving request for trusted compliance solutions wherever accuracy matters most. Demand for our broad advisory and payment solutions remains strong, differentiating america from the tech-only providers. Clients are progressively turning to our HR professionals for strategical advisory expertise and assistance implicit regular transactional support. Robust gross maturation successful retirement, ASO, and PEO highlights the durability of our model, and reinforces our expectations of a agelong secular maturation runway for these businesses.

Our ASO and PEO worksite worker maturation continues to outpace the industry, reflecting our worth successful navigating regulatory complexity and ensuring compliance, often for clients with nary or, arsenic I said, constricted HR support. Our PEO concern remains beardown with precocious single-digit worksite worker growth, driven by robust request and grounds retention rates. Our PEO solution empowers tiny businesses to connection competitory payment packages connected par with Fortune 500 companies, aiding endowment attraction and retention successful a choky labour market. January enrollment successful our at-risk 40 MPP aesculapian program went good and successful enactment with our expectations, helping thrust sequential gross growth. We received affirmative feedback connected the caller AI-driven benefits quality we embedded successful the enrollment workflow this year.