Paychex Accelerates Growth with Strategic Integration and Enhanced Solutions
Paychex, a leading provider of human capital management (HCM) solutions, has announced strong performance in its fourth quarter and fiscal year 2025 results. The company reported 10% revenue growth in the fourth quarter, driven by continued execution across the business and the addition of Paycor, which was acquired earlier this year.
For the full fiscal year 2025, Paychex achieved 6% revenue growth and 6% growth in adjusted diluted earnings per share. The company also delivered 60 basis points of adjusted operating income margin expansion, despite facing significant Employee Retention Tax Credit (ERTC) headwinds.
"We demonstrated solid performance this year against our strategic objectives, underscoring our unique ability to effectively navigate dynamic market conditions while continuing to enhance our customer experience and market position," said John Gibson, President and CEO of Paychex. "Our client retention rates increased year-over-year, reflecting the compelling value we provide as a trusted partner in our clients' growth and success."
Paychex served approximately 800,000 clients and grew the number of HR outsourcing worksite employees to 2.5 million this year. The company has made significant progress on the Paycor integration, surpassing expectations and setting a strong foundation for future success.
"We are raising our cost synergy expectations to approximately $90 million in fiscal year '26," said Bob Schrader, Chief Financial Officer of Paychex. "The actions we have already taken give us high confidence in achieving the synergies."
As part of its integration efforts, Paychex defined how its HCM platforms will serve different market segments moving forward. The company's solutions will cater to companies with up to 99 employees through Paychex Flex, while targeting the upmarket enterprise segment above 100 employees through the Paycor platform. SurePayroll will continue to serve the small business do-it-yourself marketplace.
Paychex also completed a comprehensive territory assessment and reassignment review across its sales teams, expanding and optimizing sales coverage nationwide in the fourth quarter. The company is encouraged by how sales hiring, retention, and tenure developments are trending going into the fiscal year.
"While all of these changes did create some internal disruption and took many of our sales resources out of the field for a portion of the fourth quarter, we believe now is the time to make these changes to best position us to win in the marketplace," said John Gibson. "Our retention remains strong, and the reception to the combined offerings has exceeded our expectations in their early days."
