PAYX

Early results show measurable gains in payroll accuracy, service speed, and operational efficiency WISE agents proactively help prevent payroll errors, enable more consultative service, and increase efficiency across the Paychex enterprise – enhancing customer experiences Results from more than 50,000 early adopters reinforce the value of WISE across Paychex’s HCM platforms Company continues to scale WISE based on early adopter success ROCHESTER, N.Y., Aug. 31, 2026 (GLOBE NEWSWIRE) -- Paychex, Inc. (Nasdaq: PAYX), a leading provider of expert-enabled HR, payroll, and benefits, today shared early results from more than 50,000 businesses using WISE (Workforce Intelligence, Strengthened by Expertise). Early adopter data shows WISE is helping customers proactively prevent payroll errors, resolve service interactions faster, and improve efficiency across the Paychex enterprise — validating the company’s strategy to bring agentic AI into mission-critical workforce workflows. Preventing Payroll Errors Before They HappenRecurring payroll issues waste time, create risk, and can undermine employee trust. Companies average a 1.2% payroll error rate, and employees often begin looking for a new job after just two payroll mistakes. As business leaders are increasingly expected to do more with less, persistent demands and expanding priorities leave limited time for manual correction. With WISE intelligence, Intelligent Pay Cycle continuously monitors the pay cycle for anomalies and proactively flags missing pay data, incomplete time records, and unresolved approvals before they become payroll problems, including: Enabled proactive payroll management, with nearly 90% of identified time and pay rate errors corrected before payroll run day. Average time to review and resolve direct deposit changes fell from approximately three days to less than two days. “WISE is not a set of AI features. It’s a shared intelligence engine embedded across our platforms to help customers complete work more efficiently and effectively,” said Ryan Bergstrom, Paychex Chief Product and Technology Officer. “From proactively identifying payroll issues to automating service interactions, WISE is already delivering measurable value at scale for customers and across our operations.” Based on strong early adoption and validation, payroll intelligence and direct deposit approval capabilities reached general availability across Paychex Flex® users in late July, with missing punch and missing pay rate capabilities rolling out through September. Driving Efficiency and Increasing Client Satisfaction Delivered through both email and phone agents, WISE agentic intelligence runs through a customer lifecycle, from payroll pre-flight through post-cycle service. Thoughtfully developed to drive personalization and user confidence, WISE is delivering a faster, more positive client experience: Across voice and email, WISE agents have handled more than 350,000 workforce conversations, with more than 20% resolved without human involvement. The WISE payroll voice agent operates at nearly 100% accuracy — with more than 40,000 users regularly choosing AI over a live representative. The WISE email agent has handled nearly 300,000 interactions with an average processing time of three minutes – more than 80% faster than human handling. “By automating routine interactions and surfacing issues earlier, WISE enables our service professionals to spend less time on repetitive tasks and more time helping clients solve broader workforce challenges,” Bergstrom added. “That shift from transaction handling to higher-value guidance is one of the most important benefits of our AI strategy.” Unlocking Insights to Drive Organizational Effectiveness Paychex continues to expand WISE across its operations to increase efficiency, accelerate service delivery, and enhance the customer experience. Over the past year, the company has equipped sales and service professionals with AI-powered tools that deliver real-time answers to customer questions and help teams respond more quickly and effectively. Paychex is also leveraging AI to modernize implementation workflows, helping new clients onboard faster and more efficiently. To learn more about WISE and AI at Paychex, visit paychex.com/ai. About WISEWISE (Workforce Intelligence Strengthened by Expertise) is the AI-powered intelligence engine transforming business operations with embedded context-aware intelligence, expert-enabled guidance, and autonomous execution. With Paychex’s five decades of trusted data and human expertise at its core, WISE transforms AI from a passive tool to expert-designed agentic workflows with the ability to complete tasks autonomously, making work faster, smarter, and more efficient. About Paychex Paychex, Inc. (Nasdaq: PAYX) provides a comprehensive suite of expert-enabled technology and advisory solutions that help businesses manage HR, payroll, and benefits. Serving approximately 840,000 customers and paying 1 in 11 U.S. private sector workers, Paychex combines scale, trusted expertise, and innovation to help businesses succeed. Built on more than 50 years of workforce experience and one of the industry’s largest proprietary HR datasets, Paychex’s WISE agentic AI engine embeds intelligence directly into workflows to improve productivity, enhance decision-making, and deliver better outcomes. Learn more at paychex.com. Media ContactChelsea WernickPublic Relations Program ManagerPaychex, Inc.(585) [email protected]

A month has gone by since the last earnings report for Paychex (PAYX). Shares have added about 14.4% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Paychex due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Paychex, Inc. reported solid fourth-quarter fiscal 2026 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues coming in line. Adjusted earnings of $1.32 per share surpassed the consensus estimate of $1.31 by a slight margin and increased 10.9% from the year-ago quarter. Total revenues of $1.61 billion rose 12.5% year over year and beat the consensus estimate by a slight margin. The earnings upside was backed by segment growth, Paycor contributions and disciplined expense performance. Management Solutions led the quarter, while PEO and Insurance Solutions, and client fund interest added further support. Management Solutions’ revenues increased 14% year over year to $1.18 billion in the fiscal fourth quarter. The segment benefited from higher product penetration and growth in client worksite employees within Human Resources Solutions. Paycor, acquired in April 2025, contributed about 8 percentage points to Management Solutions revenue growth. The acquisition also supported price realization and higher revenues per client, reflecting Paycor’s upmarket client base. Management noted that the quarter included a full period of Paycor revenues and expenses compared with a partial period in the prior-year quarter. That comparison helped drive the sharper contribution from the acquired business in the latest quarter. Professional Employer Organization and Insurance Solutions revenues were $369.7 million, up 9% from the year-ago quarter. Growth in the number of average PEO worksite employees supported the segment’s performance. PEO insurance revenues also increased during the quarter. Interest on funds held for clients rose 15% to $52.2 million, driven by higher average investment balances resulting from the Paycor acquisition. Total service revenues came in at $1.55 billion, up 12% from the year-ago period. The broad advance across core services showed that growth was not confined to one operating line. Total expenses were relatively flat year over year at $1 billion. Increases in compensation-related expenses, amortization of intangible assets, technology investments, selling initiatives and marketing spending were offset by lower acquisition-related compensation and professional service costs. Operating income rose 40% to $604.7 million. The operating margin expanded to 37.7% from 30.2% a year earlier, while the adjusted operating margin improved to 42.1% from 40.4%. Adjusted operating income increased 17% to $675.8 million. The adjusted figure excludes acquisition-related costs, which were lower than in the prior-year quarter. Net income increased 41% year over year to $420.6 million in the fiscal fourth quarter. Diluted earnings were $1.17 per share, up 43% from the prior-year period. Adjusted net income rose 10% to $474.6 million. EBITDA increased 39% to $719.1 million, while adjusted EBITDA advanced 17% to $729.7 million, reflecting revenue gains and reduced acquisition-related drag. Interest expenses increased to $64.7 million from $63.7 million. Other income, net, declined to $14.2 million from $21.9 million due to lower average balances on corporate investments and higher share repurchases in fiscal 2026. Paychex ended fiscal 2026 with cash, restricted cash and total corporate investments of $1.2 billion. Short-term and long-term borrowings, net of debt issuance costs, totaled $4.6 billion as of May 31, 2026. Cash flow from operations was $2.6 billion for the fiscal year. The company paid out cumulative dividends of $4.43 per share, totaling $1.6 billion, and repurchased 5.6 million shares for $611 million. Fiscal 2026 total revenues increased 17% to $6.51 billion. Adjusted diluted earnings advanced 11% to $5.51 per share, whereas adjusted operating income grew 19% to $2.81 billion. For fiscal 2027, Paychex expects total revenues to grow 5-6%. Management Solutions’ revenues are also projected to rise 5-6%, while PEO and Insurance Solutions revenues are expected to increase 6-7%. Interest on funds held for clients is expected to be $195-$205 million. The company anticipates an adjusted operating margin of 44%, an effective income tax rate of 24% and adjusted diluted earnings growth of 7-9%. Paychex also highlighted the launch of WISE, its AI-powered intelligence engine, across HCM platforms and internal operations. Management said that the platform is designed to unlock insights from unstructured data, increase productivity and enhance client outcomes. Adjusted earnings of 99 cents per share beat the Zacks Consensus Estimate by 4.2% and increased 8.8% on a year-over-year basis. Total revenues of $1.2 billion also beat the Zacks Consensus Estimate by 0.5% and increased 7.4% year over year. Revenues in Detail Revenues from Management Solutions segment increased 8% year over year to $895.3 million. The segment benefited from growth in the number of client employees served for human capital management (HCM) and additional worksite employees for HR Solutions. Also, improved revenue per client on price realization and higher product penetration, strong demand for HR Solutions, retirement, time and attendance solutions and expansion of HCM ancillary services acted as tailwinds. Professional employer organization (“PEO”) and Insurance Solutions’ revenues were $273.3 million, up 4% from the year-ago quarter’s level. The uptick was owing to growth in the number of average worksite employees. Interest on funds held for clients increased 54% year over year to $21.7 million. Operating Performance Operating income increased 7% year over year to $472.3 million. EBITDA of $518.6 million increased 4.7% year over year. Balance Sheet & Cash Flow Paychex exited second-quarter fiscal 2022 with cash and cash equivalents of $1.1 billion compared with $1.18 billion reported at the end of the prior quarter. Long-term debt was $797.9 million compared with $797.8 million in the prior quarter. Cash provided by operating activities was $321.6 million in the reported quarter. During the reported quarter, PAYX paid out $284.7 million as dividends. Fiscal 2023 View Tweaked Paychex upped its adjusted earnings per share view with respect to year-over-year growth for fiscal 2023. Adjusted EPS is now expected to register 12-14% growth compared with the prior expectation of 11-12% growth. PAYX continues to expect total revenues to register 8% (prior view: 7-8%) growth. Management Solutions’ revenues are expected to grow 7-8% (prior view: 5-7%). PEO and Insurance Solutions’ revenues are expected to grow 5-7% (prior view: 8-10%). In the past month, investors have witnessed a upward trend in estimates revision. At this time, Paychex has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of C on the value side, putting it in the middle 20% for value investors. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Paychex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Paychex, Inc. (PAYX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Christopher C. Simmons, VP, Controller & Treasurer of Paychex, Inc. (NASDAQ:PAYX), disposed of 3,787 shares of common stock on July 15, 2026 and July 17, 2026, according to an SEC Form 4 filing. Transaction value based on SEC Form 4 weighted average sale price ($114.09); post-transaction value based on July 17, 2026 market close ($114.39). What drove the liquidity event for the VP, Controller & Treasurer?The transaction was executed to manage equity compensation vesting, with 1,172 shares withheld to satisfy tax liabilities arising from restricted stock units. What is the remaining equity exposure for Christopher C. Simmons?After this disposition, the insider maintains a direct position of 3,420 shares and continues to hold a number of derivative securities. How does the execution price align with the company's recent market performance?The weighted average sale price of $114.09 per share occurred during a period in which the stock has realized a one-year total return of -20% as of the July 17, 2026 transaction date. What are the fundamental metrics of the company at the time of this filing?Paychex currently maintains a market capitalization of $40.8 billion and reported trailing-twelve-month revenue of $6.5 billion and net income of $1.8 billion as of the July 16, 2026 market close. Paychex delivers comprehensive human capital management (HCM) solutions, including payroll processing, payroll tax administration, employee benefits administration, and insurance services, generating revenue primarily from subscription-based HCM platforms and ancillary service offerings. The company operates a recurring revenue model centered on subscription-based HCM software and services, complemented by transaction-based revenue from payroll processing, tax administration, and employee benefits services, which provides predictable cash flows and customer stickiness. Paychex primarily serves small to medium-sized enterprises (SMEs) across the United States, Europe, and India, targeting businesses seeking integrated human resources and payroll administration solutions. Founded in 1971 and headquartered in Rochester, New York, Paychex is a leading provider of HCM solutions with a market capitalization of $40.8 billion and TTM revenue of $6.5 billion. The company maintains a competitive advantage through its integrated platform approach, extensive service portfolio, and deep customer relationships with over 16,500 employees supporting millions of SMEs globally. Only 1,172 of these shares went to taxes, which means Simmons sold roughly 2,600 on the open market, and he did it after the stock rallied toward $114. That's a real decision, unlike the pure withholding transactions two of his colleagues filed for last week. Still, treasurers and controllers are among the most tightly constrained insiders at any public company, and selling into strength as shares climbed from recent lows is ordinary financial planning. It leaves him with 3,420 shares plus a substantial number of unvested awards.Meanwhile, the strength he sold into is worth understanding. Paychex reported fiscal 2026 results in late June, showing revenue up 17% to $6.51 billion, with organic growth accelerating in every quarter of the year and record client retention. Shares initially fell on cautious forward guidance, but have since surged some 20% toward 2026 highs (though shares are still down 20% from one year ago). CEO John Gibson pointed to "AI innovation that further differentiates our HCM and advisory solutions." For long-term investors, the ongoing recovery is important. The market has been brutal for Paychex and its peers, but the recent leg up is worth watching. Whether the market is ultimately right depends on whether accelerating organic growth continues once the acquisition-driven comparisons fade. Before you buy stock in Paychex, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Paychex wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $371,842!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,244,783!* Now, it’s worth noting Stock Advisor’s total average return is 900% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of July 20, 2026. Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. What This Paychex Insider Sale Signals With Shares Down 20% in a Year — But Up 20% Since Earnings was originally published by The Motley Fool

Paychex, Inc. PAYX used its fourth-quarter fiscal 2026 earnings call to frame the year less around the quarter’s modest estimate beat and more around what management sees as a cleaner setup for fiscal 2027. Executives pointed to accelerating organic growth, Paycor integration progress and the launch of the WISE AI engine as the main reasons they believe the company is entering the new year with stronger momentum. Chief executive officer John Gibson said Paychex exited fiscal 2026 with improving sales momentum in every quarter, supported by execution in upmarket expansion and advisory offerings. He said fourth-quarter bookings topped the third quarter, which he had already described as unusually strong. Chief financial officer Robert Schrader said organic growth nearly doubled from about 3% a year earlier and that the fourth-quarter exit rate broadly aligns with the company’s fiscal 2027 revenue outlook. That framing mattered because management did not present next year as requiring a sharp second-half acceleration. For the quarter, adjusted EPS of $1.32 topped the Zacks Consensus Estimate of $1.31, delivering a 0.8% surprise. Revenues of $1.61 billion beat the consensus estimate of $1.6 billion by 0.2%. Total revenues rose 12% year over year. Paychex, Inc. price-consensus-eps-surprise-chart | Paychex, Inc. Quote Gibson devoted much of his prepared remarks to WISE, the company’s AI-powered intelligence engine, saying it now supports roughly 600 AI features and agents across workflows and internal operations. He positioned the offering as both a productivity tool and a longer-term monetization opportunity. Management said WISE is already helping automate handbook updates, schedule generation, payroll service tasks, and time-sheet approvals. In Q&A, Gibson added that some revenues are already being generated through reporting enhancements and intelligent timekeeping tools now in soft launch. The broader message was that Paychex sees AI differentiation coming from compliance knowledge, proprietary data, and advisory expertise rather than from automation alone. Gibson repeatedly tied that point to the company’s 50-plus years of payroll and HR data. Management’s tone around Paycor was notably confident. Gibson said the company exceeded its fiscal 2026 synergy targets, while Schrader said the deal contributed more than 50 basis points to revenue growth and delivered more than $100 million in cost synergies. In response to TD Cowen and BMO questions, executives argued that investor focus should be less on legacy Paycor growth math and more on the combined enterprise business. Gibson said Paychex now treats Paycor as the brand for clients with 100 or more employees and said retention in that cohort is the highest he has seen in 13 years. Schrader also said cross-selling into the Paycor base should contribute even more to growth next year, especially in ASO, retirement and PEO. That suggests the acquisition story is shifting from integration execution to revenue synergy delivery. Schrader guided fiscal 2027 revenue growth of 5% to 6%, with Management Solutions also expected to grow 5% to 6% and PEO and Insurance Solutions 6% to 7%. Adjusted EPS is projected to rise 7% to 9%, with adjusted operating margin near 44%. He said the outlook assumes a stable macro backdrop, flat employment levels, and no further Federal Reserve rate changes. Interest on funds held for clients is expected to decline year over year because of prior rate cuts and the absence of one-time portfolio gains. Asked about quarterly cadence, management resisted overexplaining seasonality and instead emphasized relatively even growth through the year. That response reinforced the view that the company sees the setup as more balanced than fiscal 2026. Another important theme was the durability of PEO demand. Schrader said PEO worksite employee growth continued to outpace the industry, supported by double-digit demand and record retention, while the insurance agency drag has begun to ease. Executives also described healthcare inflation as both a tailwind and a client pain point. Management argued that the company’s multiple insurance and benefits delivery models, including Perks and health reimbursement tools, help small businesses stay competitive in hiring. On client growth, Gibson was direct that Paychex is not chasing low-value additions. He said losses remain concentrated in smaller, out-of-business customers and that the company remains focused on larger, higher-lifetime-value accounts that support margin discipline. Several Q&A exchanges showed management widening the strategic lens beyond core payroll. Gibson said the company has now completed the back-office modernization needed to sell more products on a stand-alone basis, even when clients are not on a Paychex payroll platform. He said that capability can help retain pieces of client relationships, broaden market reach, and eventually support payroll-agnostic compliance and advisory tools. Management described this as early-stage, but the comments suggested a meaningful expansion of the addressable market. Coming out of the call, the company’s posture was clear: Paychex wants investors to see fiscal 2027 as a year of cleaner execution, steadier growth, and increasing monetization of assets built over the last year. PAYX carries a Zacks Rank #3 (Hold), which indicates more balanced near-term expectations than the stronger revision trends associated with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy). The stock’s Style Scores are uneven, with a Value Score of C, Growth Score of B, Momentum Score of F, and VGM Score of D. You can see the complete list of today’s Zacks #1 Rank stocks here. That combination points to some support from growth characteristics, but weaker momentum and a middling overall profile. Under Zacks’ framework, stronger return potential is usually associated with Rank #1 or #2 stocks paired with A or B Style Scores, and the Zacks Rank can still change as estimate revisions adjust after the quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Paychex, Inc. (PAYX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Paychex (PAYX) came out with quarterly earnings of $1.32 per share, beating the Zacks Consensus Estimate of $1.31 per share. This compares to earnings of $1.19 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +0.63%. A quarter ago, it was expected that this payroll processor and human-resources services provider would post earnings of $1.68 per share when it actually produced earnings of $1.71, delivering a surprise of +1.79%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Paychex, which belongs to the Zacks Internet - Software industry, posted revenues of $1.61 billion for the quarter ended May 2026, surpassing the Zacks Consensus Estimate by 0.22%. This compares to year-ago revenues of $1.43 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Paychex shares have lost about 12.7% since the beginning of the year versus the S&P 500's gain of 7.6%. While Paychex has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Paychex was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.34 on $1.61 billion in revenues for the coming quarter and $5.90 on $6.9 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Penguin Solutions, Inc. (PENG), another stock in the same industry, has yet to report results for the quarter ended May 2026. The results are expected to be released on July 7. This company is expected to post quarterly earnings of $0.63 per share in its upcoming report, which represents a year-over-year change of +34%. The consensus EPS estimate for the quarter has been revised 13.3% higher over the last 30 days to the current level. Penguin Solutions, Inc.'s revenues are expected to be $435 million, up 34.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Paychex, Inc. (PAYX) : Free Stock Analysis Report Penguin Solutions, Inc. (PENG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by strong momentum in the fourth quarter, with organic revenue growth accelerating sequentially throughout the fiscal year. Management attributed success to the successful integration of the Paycor acquisition, exceeding synergy targets by contributing over 50 basis points to revenue growth and $100 million in cost savings. The company completed a major organizational realignment, moving all sub-100 employee clients to the SMB segment and consolidating 100+ employee clients into the Enterprise segment. Strategic differentiation is increasingly centered on the 'Wise' AI engine, which utilizes 26 trillion data points to automate administrative tasks like handbook updates and payroll submissions. Growth in the PEO segment outpaced the industry, driven by record worksite employee retention and high demand for regulatory and benefits advisory services. The modernization of underlying infrastructure is now complete, enabling the development of payroll-agnostic and stand-alone solutions to expand the addressable market. Management emphasized a shift toward higher-value client acquisition, prioritizing lifetime value and product attachment over raw client count growth. Fiscal 2027 guidance assumes a stable macro environment with flat employment levels and no further changes to the Fed funds rate. Total revenue growth is projected at 5% to 6%, with PEO and Insurance Solutions expected to lead growth in the 6% to 7% range. Interest on funds held for clients is expected to decline to $195 million–$205 million due to the full-year impact of previous interest rate cuts and lapping one-time gains. Management expects adjusted operating income margins to expand to approximately 44%, driven by AI-enabled productivity gains and continued cost discipline. The product roadmap focuses on direct monetization of AI features and expanding the 'Perks' digital benefits marketplace to the Paycor platform's 2.5 million employees. The company reduced its leverage ratio by half a turn through strong earnings and the repayment of a $400 million debt tranche from the Oasis acquisition. A 750 basis point increase in GAAP operating margins was partially driven by lower acquisition-related costs compared to the prior year. Management flagged a headwind in the agency business within the PEO segment, though they expect this pressure to subside in the coming year. The transition to payroll-agnostic billing and service models represents a structural shift in how Paychex engages with non-HCM clients. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that the Q4 organic exit rate is largely in line with the new fiscal year guidance, removing the need for a significant back-half ramp. Growth is expected to be split roughly equally between price realization and increased share of wallet (product penetration). Revenue is already being generated through AI-enhanced reporting and intelligence timekeeping features currently in soft launch with 10,000 customers. Initial benefits are primarily internal, with AI tools reducing time-sheet approval times by over 50% and cutting administrative errors by 70%. Rising healthcare costs act as a tailwind for PEO demand as small businesses seek to leverage Paychex's scale to provide competitive benefits. Management is countering affordability concerns by offering a-la-carte benefits through the Perks marketplace and Health Reimbursement Arrangements. Paychex signed two new national partnerships, including Hub International, under its 'Partner Plus' program. The new broker model is more holistic, allowing partners to refer the full suite of Paychex products rather than just core payroll.