Paychex Q1 2026 Earnings: Revenue Growth Overshadowed by Rising Costs

Paychex Inc. (NASDAQ: PAYX) delivered mixed results for Q1 2026, with revenue climbing 17% year-over-year to $1.54 billion, edging past analyst expectations. Adjusted EPS ROSE 5% to $1.22, but GAAP earnings per share fell 10% as acquisition costs weighed on profitability.

The company's aggressive expansion strategy, including its Paycor integration, drove a 29% surge in operating expenses to $998 million. Despite margin compression, management raised full-year revenue guidance to 16.5–18.5% growth, signaling confidence in their growth-through-acquisition playbook.

Investors appeared cautious, sending shares down 1.38% to $126.76 at the September 30 close. The market reaction reflects concerns about whether Paychex can maintain premium valuations while digesting its recent purchases.