Paychex stock fell 6.7% through 12:20 p.m. ET Wednesday even after the payroll and benefits company beat profit and revenue expectations for its fiscal Q1 2027. Analysts had expected earnings of $1.32 per share on $1.63 billion in sales; Paychex hit the revenue target and reported $1.34 per share, though that figure was non-GAAP and GAAP earnings came in at just $1.21 per share. Revenue grew 6% year over year, while operating and GAAP net income each rose 14%, but free cash flow for the quarter was only $357.4 million, just 87% of reported net income and down significantly from a year earlier. Paychex largely stuck with its fiscal 2027 guidance, projecting revenue growth of 5% to 6%, adjusted operating margins of 44%, and adjusted earnings per share growth of 7% to 9%.
Paychex IncQ1 beat on EPS/revenue but free cash flow fell to 87% of net income, driving the 6.7% drop
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