Paychex Powers Ahead: Strong Q3 2025 Results and Exciting Future Prospects
Paychex, a leading provider of human capital management (HCM) solutions, has reported strong third-quarter 2025 financial results, with total revenue growth of 5% and adjusted diluted earnings per share increasing by 8%. According to John Gibson, Chief Executive Officer, this quarter marks an exciting time for the company as it enters the digitally-driven era of HCM.
The company's industry-leading HCM solutions drove revenue growth of 6%, excluding the impact of the discontinued ERTC program. Diluted earnings per share increased by 4% during the quarter, with adjusted operating margins rising 180 basis points compared to the prior year. Paychex's investments in automation and technology have boosted efficiency across the company.
One of the most significant highlights of the quarter is the pending acquisition of Paycor, a leading provider of HCM, payroll, and talent software. The waiting period under the Hart-Scott-Rodino (HSR) antitrust review expired on February 21, paving the way for the closing of the transaction in the coming weeks.
The acquisition of Paycor is expected to strengthen Paychex's competitive position upmarket while giving the company the ability to offer its robust set of HR and employee solutions to Paycor's approximately 50,000 customers and their 2.7 million employees. The combined entity will have nearly 800,000 customers, making it the most comprehensive HCM portfolio in the industry.
Paychex has already made several important decisions related to the integration of Paycor, including operating it as a stand-alone business unit. Adam Ante, Paycor's current CFO, and Ryan Bergstrom, Paycor's current Chief Product Officer, will be joining Paychex as Senior Vice President of Paycor and Chief Product Officer, respectively.
Customers of both companies will remain on their existing platforms and continue to receive support through their existing service team relationships. They will soon gain access to the most comprehensive, flexible, and innovative set of HCM technology and advisory solutions in the industry.
PAYCHIX's acquisition is expected to be accretive to its adjusted earnings per share next fiscal year, with synergies over $80 million being achieved.
