Paychex Inc (NASDAQ:PAYX) stock rose 1.84% (As on March 26, 11:15:00 AM UTC-4, Source: Google Finance) after the company reported its third-quarter results, exceeding analyst expectations. The company’s Management Solutions revenue climbed 23% to $1.4 billion, with Paycor contributing approximately 19% to that growth. The acquisition also boosted client counts and revenue per client due to Paycor’s upmarket customer base. PEO and Insurance Solutions revenue increased 9% to $397.5 million, while interest on funds held for clients rose 33% to $56.8 million, benefiting from higher investment balances following the Paycor deal. Cash, restricted cash, and total corporate investments of $1.8 billion. Short-term and long-term borrowings, net of debt issuance costs, of $5.0 billion. Cash flow from operations was $2.0 billion for the nine months.

Moreover, in a dynamic regulatory and macro environment, clients are increasingly relying on the comprehensive advisory and benefits solutions to help navigate complex, compliance-critical HR and workforce challenges, underscoring the breadth and differentiated value of the expert-enabled technology and advisory offerings. Increasing state-level compliance requirements for paid leave, retirement mandates and transparency in wage ​reporting have made in-house payroll increasingly risky for ​small firms, boosting demand for Paychex’s services.

PAYX in the third quarter of FY 26 has reported the adjusted earnings per share of $1.71, beating the analysts’ estimates for the adjusted earnings per share of $1.67. The company had reported the adjusted revenue growth of 20 percent to $1.81 billion in the third quarter of FY 26, beating the analysts’ estimates for revenue of $1.78 billion. This is driven primarily by the April 2025 acquisition of Paycor HCM, Inc. Adjusted operating income grew 22% to $863.2 million for the quarter, excluding $71.0 million in Paycor acquisition-related costs. Adjusted operating margin expanded to 47.7% from 46.9% in the prior year period. However, operating expenses increased 24% to $1.0 billion, primarily due to compensation costs, intangible asset amortization, and technology investments related to Paycor. Interest expense jumped $45.5 million to $68.1 million, reflecting debt issued to finance the Paycor acquisition.

Paychex also raised its annual ​forecast for interest on funds held for clients, ​which ⁠is the interest the company earns by investing client payroll and tax funds before they are paid out to employees or ⁠tax ​authorities. For fiscal 2026, Paychex updated its guidance for interest on funds held for clients to a range of $200 million to $210 million, with the midpoint of $205 million.