Is the business good?
How good a business is PAYX?
Paychex earns 28% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
28%
Return on invested capital · cost of capital 9.0% · 19 points above what the capital costs: growth creates value
- Operating margin
- 39%
Operating margin · Software - Application median 8.2% · 12 months to Q4 2026
- Cash conversion
- 1.32×
Cash conversion · 1.03× a year ago · every dollar of reported profit arrived as cash, and more
- Gross margin
- 74%
Gross margin
| Year | Operating margin |
|---|---|
| FY2021 | 36% |
| FY2022 | 40% |
| FY2023 | 41% |
| FY2024 | 41% |
| FY2025 | 40% |
| FY2026 | 39% |
Details›
- Gross margin12 months to Q4 2026
- 74%
- Operating margin12 months to Q4 2026
- 39%
- Net margin12 months to Q4 2026
- 27%
- Free cash flow margin
- 36%
- Revenue, trailing twelve months
- $6.51B
- Free cash flow, trailing twelve months
- $2.32B
- Net income, trailing twelve months
- $1.76B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 28%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion from the cash flow statement.
Software - Application
Ranks #10 of 90 by Smart Score