Paychex, Inc. is a prominent provider of human capital management (HCM) solutions, offering a comprehensive suite of payroll and HR services to businesses of all sizes. For the third quarter of fiscal 2025, which ended on February 28, 2025, Paychex reported a total revenue of $1.5 billion, a 5% increase from the previous year. Revenue growth, excluding the impact of the discontinued Employee Retention Tax Credit (ERTC) program, was 6%.

The company’s Management Solutions revenue segment also rose 5% to $1.1 billion, driven by an increase in the number of clients and higher average revenue per client due to successful price realization and product penetration. PEO and Insurance Solutions revenue grew 6% to $365 million, attributed to an increase in the number of average worksite employees and PEO insurance revenues.

Operating income for the quarter advanced by 6% to $692 million, which corresponds to an operating margin of 45.8%. Adjusted operating income grew 9% to $709 million, resulting in an adjusted operating margin of 46.9%, up by 180 basis points year-over-year. Diluted earnings per share increased 4% to $1.43, while adjusted diluted earnings per share rose by 8% to $1.49.

For the first nine months of the fiscal year, total revenue increased by 4% to $4.1 billion. Management Solutions revenue rose by 3% to $3 billion, while PEO and Insurance Solutions grew by 7% to $1 billion. The company reported a total of $1.6 billion in cash flow from operations.

Looking ahead, Paychex has adjusted its fiscal 2025 guidance. Total revenue growth is now expected to fall within the range of 4% to 5.5%, with Management Solutions projected to grow between 3% and 4%. PEO and Insurance Solutions, however, is now expected to grow by 6% to 6.5%. Additionally, the anticipated adjusted operating margin for the fiscal year is approximately 43%.

With a strong financial position, the company had $1.7 billion in cash and total corporate investments, while total borrowings stood at approximately $817 million at the end of the reporting period. In the first nine months, Paychex returned $1.2 billion to shareholders through dividends and share repurchases.