On this page of StockholderLetter.com we present the latest annual shareholder letter from PAYCHEX INC — ticker symbol PAYX. Reading current and past PAYX letters to shareholders can bring important insights into the investment thesis.
ANNUAL REPORT | 2025
Financial Highlights Total Revenue Adjusted Operating Income 1 ($ Millions) ($ Millions) 7% CAGR $5,572 10% CAGR 6% $5,007 7% $2,033 $4,612 $1,840 $4,057 FY21 $2,370 $$2,214 $5,278 $5 $1,493 FY22 FY23 FY24 FY25 FY21 Adjusted Diluted Earnings Per Share1 FY22 FY23 FY25 FY24 Shareholder Distributions ($ Millions) 8% CAGR 11% CAGR $4.72 $4.98 >$6,422 6% $1,485 $1,553 FY24 FY25 5% $4.27 $3.77 $1,064 $3.04 FY22 FY23 FY24 FY25 FY21 $1,145 $1,175 FY22 FY23 Fiscal 2025 Operational Highlights 1in11 Private Sector American Workers Paid ~2.5 M Worksite Employees Supported by our HR Outsourcing Solutions ~1.6 M Employees Across 124,000 Clients use Paychex to Save for Retirement
A Letter From our President and CEO Fellow Shareholders, Fiscal 2025 was a significant year for Paychex, marked by solid progress on our strategic objectives and the successful completion of the acquisition of Paycor . We exit the year better positioned than ever to meet the marketplace s evolving needs and have expanded our addressable market to over $100 billion. We remain committed to upholding our long-standing tradition of sustained growth and margin expansion while also driving innovation and enhancing the customer experience through industry-leading operational execution. Since closing the Paycor acquisition in April, we have made significant progress executing our expanded go-to-market strategy and capturing the identified acquisition synergies. We now offer the most comprehensive, flexible, and innovative human capital management (HCM) solutions for organizations of all sizes across our three main platforms: SurePayroll , Paychex Flex and Paycor. Our combined strengths and ability to focus our innovation on specific customer segments position us to deliver stronger solutions for our customers and long-term shareholder value. At the core of our purpose is an unwavering commitment to the success of our approximately 800,000 clients. Our strong client retention in today s complex business environment reflects the value of our technology combined with our extensive HR expertise. As the digitally driven HR leader, we continue to build on our history of award-winning applications of artificial intelligence (AI) and digital solutions to deliver client value and operational efficiency. By leveraging our vast data assets and cloud-based HCM platforms, we automate routine tasks and provide actionable insights that empower smarter decisions. Clients trust our expert guidance to navigate workforce challenges in an increasingly complex business environment. It s not only what we do, but also how we do it that drives our strong culture. Our commitment to integrity, innovation, and a positive workplace has earned us multiple honors, including 17 years as one of the World s Most Ethical Companies by Ethisphere an achievement shared by only two others. Fortune recognized our leadership in AI and analytics by naming us one of America s Most Innovative Companies. Newsweek also named us one of America s Greatest Workplaces for 2025. Alongside our achievements for our customers and employees, we continued to prioritize our long-standing commitment to shareholders. This fiscal year we distributed $1.6 billion and increased our dividend by 10%, all while maintaining investments in innovation and growth. Looking ahead to fiscal 2026, we are more confident than ever in our ability to win in the digital, AI-driven era of HCM. Thank you for your continued trust and support as we deliver the future of HCM and help businesses succeed. John h B. Gibson ib President and Chief Executive Officer Paychex Annual Report 2025 | 1
Pioneering the Future of Human Capital Management Our Mission: Helping Businesses Succeed as the Digitally Driven HR Leader In today s complex digital and AI-driven era shaped by technological advancements, regulatory shifts, and changing employee expectations Paychex excels at helping our clients succeed. Our unique blend of cuttingedge digital solutions, deep human resources (HR) expertise, and powerful data analytics enables us to provide the most comprehensive, flexible, and innovative HCM solutions for organizations of all sizes. Digital Solutions: Empowering Businesses Through Technology At the heart of our strategy is a commitment to cutting-edge digital solutions that simplify and automate complex HR processes. Our three modern cloud-based platforms SurePayroll, Paychex Flex and Paycor are built for purpose and well positioned for market share expansion. They each deliver seamless HR, payroll processing, benefits, workforce management, and talent management solutions targeted at distinct segments of the HCM market. By streamlining processes and easing administrative tasks, these innovative technologies empower clients to focus on what matters most: their business. HR Expertise: Providing Trusted Guidance in a Complex Environment Technology alone is not enough to navigate the complexities of human resources. That s why we complement our digital offerings with a team of expert HR professionals who provide personalized support and strategic guidance. To enhance their effectiveness, we equip our experts with advanced AI solutions, enabling them to deliver services more quickly and effectively at scale. This blend of human expertise and intelligent technology helps clients stay compliant with ever-changing regulations, address workforce challenges, and implement best practices tailored to their unique needs. By seamlessly integrating data, AI, and human insight, we are establishing ourselves as the industry leader in expert-driven, AI data-enabled solutions. Unrivaled Data: Delivering Data-Rich, Data-Driven Solutions Data is a critical asset in modern HR management, and we leverage our vast repository to deliver actionable insights for our team and clients. Through advanced analytics and benchmarking tools, clients gain visibility into labor trends, compensation strategies, and employee engagement metrics. This data-driven approach empowers businesses to make informed decisions, optimize talent management, and anticipate future workforce needs to gain a competitive advantage. 2 | The Digitally Driven HR Leader
Advancing Innovative HCM Solutions to Empower Businesses to Succeed Driving Success Through Product Innovation At Paychex, product innovation is central to our mission of helping businesses succeed by simplifying HR processes from hire to retire. We consistently invest in advancing our HCM solutions to meet our diverse customers evolving needs and unlock new growth opportunities. Transforming HR with Data and AI A cornerstone of our innovation strategy is harnessing data and AI to transform the customer experience. Embedding AI-driven analytics and automation into our platforms delivers actionable insights that enhance decision-making, compliance, and operational efficiency. These capabilities boost client retention, revenue growth, and productivity. Introducing Innovative Solutions to Attract and Retain Talent This year, we introduced several solutions to help businesses attract and retain qualified talent. Paychex Engage leverages generative AI to streamline HR workflows, improve communication, and increase collaboration. Paychex Perks, our award-winning digital marketplace, offers employees affordable benefits and discounts at no cost to employers, deepening engagement. Our AI-powered recruiting solution quickly identifies top candidates based on job requirements across multiple sourcing channels. These tools exemplify our commitment to bringing enterprise-grade capabilities to small and medium-sized businesses, empowering clients to compete in today s challenging labor market. Expanding our Market Reach Through Strategic Acquisition Our acquisition of Paycor expands our product portfolio, enabling us to offer the most comprehensive, flexible, and innovative suite of HR, payroll, benefits, and time management solutions. This expanded offering enables us to serve larger, more complex organizations. Empowering Partners with Proactive Insights We are equally committed to expanding our go-to-market efforts and building win-win partnerships with trusted advisors CPA s, banks, and brokers who share our purpose. We recently launched Paychex Partner Pro, a portal providing accountants access to payroll and HR data to help streamline workflows and strengthen advisory services. Additionally, our new Partner+ Program for brokers fosters relationships and mutual growth by offering a broader suite of solutions and a framework to protect shared clients from competing products. Through ongoing innovation, Paychex remains at the forefront of HCM, delivering value to customers and partners while driving long-term growth. Paychex Annual Report 2025 | 3
 • shareholder letter icon 8/29/2025 Letter Continued (Full PDF)
 • stockholder letter icon 9/1/2023 PAYX Stockholder Letter
 • stockholder letter icon 8/30/2024 PAYX Stockholder Letter
 • stockholder letter icon More "Business Services & Equipment" Category Stockholder Letters
 • Benford's Law Stocks icon PAYX Benford's Law Stock Score = 94


PAYX Shareholder/Stockholder Letter Transcript:

ANNUAL REPORT | 2025

Financial Highlights
Total Revenue
Adjusted Operating Income 1
($ Millions)
($ Millions)
7% CAGR
$5,572
10% CAGR
6%
$5,007
7%
$2,033
$4,612
$1,840
$4,057
FY21
$2,370
$$2,214
$5,278
$5
$1,493
FY22
FY23
FY24
FY25
FY21
Adjusted Diluted Earnings Per Share1
FY22
FY23
FY25
FY24
Shareholder Distributions
($ Millions)
8% CAGR
11% CAGR
$4.72
$4.98
>$6,422
6%
$1,485

$1,553
FY24
FY25
5%
$4.27
$3.77
$1,064
$3.04
FY22
FY23
FY24
FY25
FY21
$1,145
$1,175
FY22
FY23
Fiscal 2025 Operational Highlights
1in11
Private Sector American
Workers Paid
~2.5 M
Worksite Employees
Supported by our HR
Outsourcing Solutions
~1.6 M
Employees Across 124,000
Clients use Paychex to Save
for Retirement

A Letter From our President and CEO
Fellow Shareholders,
Fiscal 2025 was a significant year for Paychex, marked by solid progress on our strategic objectives and the
successful completion of the acquisition of Paycor  . We exit the year better positioned than ever to meet the
marketplace   s evolving needs and have expanded our addressable market to over $100 billion. We remain
committed to upholding our long-standing tradition of sustained growth and margin expansion while also
driving innovation and enhancing the customer experience through industry-leading operational execution.
Since closing the Paycor acquisition in April, we have made significant progress executing our expanded
go-to-market strategy and capturing the identified acquisition synergies. We now offer the most
comprehensive, flexible, and innovative human capital management (HCM) solutions for organizations of all
sizes across our three main platforms: SurePayroll  , Paychex Flex   and Paycor. Our combined strengths and
ability to focus our innovation on specific customer segments position us to deliver stronger solutions for our
customers and long-term shareholder value.
At the core of our purpose is an unwavering commitment to the success of our approximately 800,000
clients. Our strong client retention in today   s complex business environment reflects the value of our
technology combined with our extensive HR expertise. As the digitally driven HR leader, we continue
to build on our history of award-winning applications of artificial intelligence (AI) and digital solutions
to deliver client value and operational efficiency. By leveraging our vast data assets and cloud-based
HCM platforms, we automate routine tasks and provide actionable insights that empower smarter
decisions. Clients trust our expert guidance to navigate workforce challenges in an increasingly
complex business environment.
It   s not only what we do, but also how we do it that drives our strong culture. Our commitment
to integrity, innovation, and a positive workplace has earned us multiple honors, including 17
years as one of the World   s Most Ethical Companies   by Ethisphere     an achievement
shared by only two others. Fortune recognized our leadership in AI and analytics
by naming us one of America   s Most Innovative Companies. Newsweek
also named us one of America   s Greatest Workplaces for 2025.
Alongside our achievements for our customers and employees, we
continued to prioritize our long-standing commitment to shareholders.
This fiscal year we distributed $1.6 billion and increased our dividend by
10%, all while maintaining investments in innovation and growth.
Looking ahead to fiscal 2026, we are more confident than ever in our
ability to win in the digital, AI-driven era of HCM. Thank you for your
continued trust and support as we deliver the future of HCM and
help businesses succeed.
John
h B. Gibson
ib
President and Chief Executive Officer
Paychex Annual Report 2025 | 1

Pioneering the Future of Human
Capital Management
Our Mission: Helping Businesses Succeed as the Digitally Driven HR Leader
In today   s complex digital and AI-driven era     shaped by technological advancements, regulatory shifts, and
changing employee expectations     Paychex excels at helping our clients succeed. Our unique blend of cuttingedge digital solutions, deep human resources (HR) expertise, and powerful data analytics enables us to provide the
most comprehensive, flexible, and innovative HCM solutions for organizations of all sizes.
Digital Solutions: Empowering Businesses Through Technology
At the heart of our strategy is a commitment to cutting-edge digital solutions that simplify and automate complex
HR processes. Our three modern cloud-based platforms     SurePayroll, Paychex Flex and Paycor     are built for
purpose and well positioned for market share expansion. They each deliver seamless HR, payroll processing, benefits,
workforce management, and talent management solutions targeted at distinct segments of the HCM market. By
streamlining processes and easing administrative tasks, these innovative technologies empower clients to focus on
what matters most: their business.
HR Expertise: Providing Trusted Guidance in a Complex Environment
Technology alone is not enough to navigate the complexities of human resources. That   s why we complement our
digital offerings with a team of expert HR professionals who provide personalized support and strategic guidance. To
enhance their effectiveness, we equip our experts with advanced AI solutions, enabling them to deliver services more
quickly and effectively at scale. This blend of human expertise and intelligent technology helps clients stay compliant
with ever-changing regulations, address workforce challenges, and implement best practices tailored to their unique
needs. By seamlessly integrating data, AI, and human insight, we are establishing ourselves as the industry leader in
expert-driven, AI data-enabled solutions.
Unrivaled Data: Delivering Data-Rich, Data-Driven Solutions
Data is a critical asset in modern HR management, and we leverage our vast repository to deliver actionable insights
for our team and clients. Through advanced analytics and benchmarking tools, clients gain visibility into labor trends,
compensation strategies, and employee engagement metrics. This data-driven approach empowers businesses to
make informed decisions, optimize talent management, and anticipate future workforce needs to gain a
competitive advantage.
2 | The Digitally Driven HR Leader

Advancing Innovative HCM Solutions to
Empower Businesses to Succeed
Driving Success Through Product Innovation
At Paychex, product innovation is central to our mission of helping businesses succeed by simplifying HR processes from
hire to retire. We consistently invest in advancing our HCM solutions to meet our diverse customers    evolving needs and
unlock new growth opportunities.
Transforming HR with Data and AI
A cornerstone of our innovation strategy is harnessing data and AI to transform the customer experience. Embedding
AI-driven analytics and automation into our platforms delivers actionable insights that enhance decision-making,
compliance, and operational efficiency. These capabilities boost client retention, revenue growth, and productivity.
Introducing Innovative Solutions to Attract and Retain Talent
This year, we introduced several solutions to help businesses attract and retain qualified talent. Paychex Engage leverages
generative AI to streamline HR workflows, improve communication, and increase collaboration. Paychex Perks, our
award-winning digital marketplace, offers employees affordable benefits and discounts at no cost to employers,
deepening engagement. Our AI-powered recruiting solution quickly identifies top candidates based on job requirements
across multiple sourcing channels. These tools exemplify our commitment to bringing enterprise-grade capabilities to
small and medium-sized businesses, empowering clients to compete in today   s challenging labor market.
Expanding our Market Reach Through Strategic Acquisition
Our acquisition of Paycor expands our product portfolio, enabling us to offer the most comprehensive, flexible, and
innovative suite of HR, payroll, benefits, and time management solutions. This expanded offering enables us to serve larger,
more complex organizations.
Empowering Partners with Proactive Insights
We are equally committed to expanding our go-to-market efforts and building win-win partnerships with trusted
advisors     CPA   s, banks, and brokers     who share our purpose. We recently launched Paychex Partner Pro, a portal
providing accountants access to payroll and HR data to help streamline workflows and strengthen advisory services.
Additionally, our new Partner+ Program for brokers fosters relationships and mutual growth by offering a broader
suite of solutions and a framework to protect shared clients from competing products. Through ongoing innovation,
Paychex remains at the forefront of HCM, delivering value to customers and partners while driving long-term growth.
Paychex Annual Report 2025 | 3



shareholder letter icon 8/29/2025 Letter Continued (Full PDF)
 

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