PAYX — what changed in the latest 10-K

Text added vs the prior filing · source: 10-K · 2026-07-17

• We specialize in helping customers succeed in this rapidly evolving environment. What sets us apart in the industry is our comprehensive suite of solutions, deep advisory expertise, and differentiated access to a large and growing proprietary dataset. Paychex offers a full range of integrated HCM so…

• AI-powered capabilities through WISE, our workforce intelligence engine, which leverages our large proprietary datasets to help automate workflows, enhance decision making, and increase productivity across our solutions and operations;

• We market our solutions through a combination of direct and virtual sales forces, supported by referrals from channel partners and existing customers, as well as digital lead generation and multi-channel marketing initiatives. Over 60% of our revenue is derived from solutions other than payroll proc…

• On April 14, 2025, we completed our acquisition of Paycor HCM, Inc. ("Paycor"), a leading provider of HCM, payroll and talent software. This acquisition expanded our presence upmarket, increased cross-sale opportunities, and enhanced our suite of AI-driven HCM solutions.

• Our strategy is to be the digitally driven HR leader by serving as an essential partner to customers through technology and advisory solutions for HR, payroll, employee benefits, and insurance. We believe that successfully executing this strategy will lead to strong, long-term financial performance.…

Text removed vs the prior filing · source: 10-K · 2025-07-11

• We specialize in helping clients adapt to the rapidly evolving environment. Paychex offers a full range of integrated HCM solutions from hire to retire for businesses and their employees that enables customization to the clients' businesses, whether it is small or large, simple or complex. We believ…

• Software as a service, or “SaaS”, delivery model that reduces total cost of ownership for our clients; and

• Advanced data analytics and artificial intelligence (“AI”) capabilities powered by large data sets.

• We market our solutions through a combination of direct and virtual sales forces supported by various digital lead generation and multi-channel marketing initiatives. Over 50% of our revenues are from solutions other than payroll processing.

• On April 14, 2025, we completed our acquisition of Paycor HCM, Inc. ("Paycor"), a leading provider of HCM, payroll and talent software. The transaction aims to enhance the Company’s capabilities upmarket, expand its sales force and enhance its suite of AI-driven HCM solutions.

Text added vs the prior filing · source: 10-K · 2026-07-17

• Our use of AI technology and the incorporation of AI technology into our solutions carries risks and challenges that could adversely affect our business, financial condition, results of operations, and prospects.

• We have and are increasingly incorporating AI capabilities into many of our solutions, enabled by WISE, and internal processes to enable our customers and our employees to improve efficiency, scalability, and productivity. The integration of AI into our solutions presents risks and challenges, inclu…

• While AI technologies may offer significant benefits, they also create risks and challenges. Although we implement measures to address the accuracy and appropriate use of AI tools, including internal AI policies and training, these efforts may not always be successful. Use of AI tools that introduce…

• We may experience software defects, undetected errors, and development delays, which could damage our relationship with customers, decrease our potential profitability and expose us to liability.

• Our solutions rely on software and computing systems, including generative and agentic AI solutions, that can encounter development delays, complexities with integrating new technologies, and the underlying software may contain undetected errors, bias, viruses, or defects. Defects in our solutions, …

Text removed vs the prior filing · source: 10-K · 2025-07-11

• We may experience software defects, undetected errors, and development delays, which could damage our relationship with clients, decrease our potential profitability and expose us to liability.

• Our solutions rely on software and computing systems, including generative AI solutions, that can encounter development delays, complexities with integrating new technologies, and the underlying software may contain undetected errors, bias, viruses, or defects. Defects in our solutions, errors or de…

• We may not realize the expected financial or business benefits from the Paycor acquisition.

• The integration of Paycor into our existing operations may present challenges aligning disparate technology platforms, operational systems, and may divert management’s attention away from day-to-day operational responsibilities to managing the integration. Compatibility issues may arise between our …

• If the integration of any or all of our acquisitions or future acquisitions is not successful, it could have a material adverse impact on our operating results and stock price.

Text added vs the prior filing · source: 10-K · 2026-07-17

• risks related to our use of artificial intelligence ("AI") and new technologies in our business;

• risks related to acquisitions and the integration and performance of the businesses we acquire;

Text removed vs the prior filing · source: 10-K · 2025-07-11

• risks related to acquisitions and the integration of the businesses we acquire, including risks related to the integration of Paycor;

Text added vs the prior filing · source: 10-K · 2026-07-17

• We support our customers with three proprietary SaaS-based HCM platforms: SurePayroll®, Paychex Flex®, and Paycor®, each designed to meet diverse customer needs and business requirements. For example, larger customers often have more complex HCM demands. Our integrated HCM solutions span the entire …

• Our offerings are disaggregated into two categories, (1) Management Solutions and (2) PEO and Insurance Solutions, as discussed under the heading “Our Solutions” in Part I, Item 1 of this Form 10-K.

• As a digitally driven HR leader, our mission is to help businesses succeed. Our strategy includes growing our customer base; increasing product penetration; driving technology innovation; and pursuing strategic acquisitions, all aimed at achieving long-term financial success.

• We maintain industry-leading margins by efficiently managing costs while strategically investing in our business, particularly in sales and marketing and leading-edge, AI-driven technology and advisory solutions, which we view as critical to our ongoing success. Looking ahead, we believe that invest…

• By closely monitoring customer needs and challenges, we proactively assist our customers in navigating legislative changes and other employment complexities. Our unique blend of innovative technology and extensive HR expertise enables customers to more effectively hire, develop, and retain top talen…

Text removed vs the prior filing · source: 10-K · 2025-07-11

• We offer a full range of integrated HCM solutions covering the employee life cycle for businesses and their employees. Clients may choose from a breadth of solutions that also allow integration with some of the most popular HR, accounting, ERP, and point-of-sale applications on the market today.

• We support our clients through our proprietary, robust, SurePayroll® SaaS-based solutions, Paychex Flex® and Paycor. Our larger clients generally have more complex payroll and employee benefit needs, though with the environment of increasing regulations, we believe the need for HR outsourcing soluti…

• Our portfolio of technology, HR advisory, and employee benefits-related solutions is disaggregated into two categories, (1) Management Solutions and (2) professional employer organization (“PEO”) and Insurance Solutions, as discussed in Part I, Item 1 of this Form 10-K.

• Our mission is to be the leading provider of HR, employee benefits, insurance, and payroll solutions by being an essential partner to businesses across the U.S. and parts of Europe. Our strategy focuses on providing industry-leading, integrated technology; growing our client base; expanding our shar…

• We maintain industry-leading margins by managing our personnel costs and expenses while continuing to invest in our business, particularly in sales and marketing and leading-edge technology. We believe these investments are critical to our success. Looking to the future, we believe that investing in…

Text added vs the prior filing · source: 10-K · 2026-07-17

• Changes in interest rates and interest rate risk: Funds held for clients are primarily comprised of short-term funds and AFS securities. Corporate investments are primarily comprised of AFS securities. As a result of our investing activities, we are exposed to changes in interest rates that may mate…

• securities. We follow an investment strategy of protecting principal and optimizing liquidity. A substantial portion of our portfolios are invested in high credit quality securities with ratings of AA or higher, and A-1/P-1 ratings on short-term securities. We invest predominately in corporate bonds…

• During fiscal 2026, our primary short-term investment vehicles were U.S. government agency discount notes and bank demand deposit accounts. We have no exposure to high-risk or non-liquid investments. We have insignificant exposure to European investments.

• During fiscal 2026, the average interest rate earned on our combined funds held for clients and corporate cash equivalents and investment portfolios was 3.6%, compared to 3.7% for fiscal 2025. When interest rates are falling, the full impact of lower interest rates will not immediately be reflected …

• The amortized cost and fair value of AFS securities that had stated maturities as of May 31, 2026 are shown below by expected maturity.

Text removed vs the prior filing · source: 10-K · 2025-07-11

• Changes in interest rates and interest rate risk: Funds held for clients are primarily comprised of short-term funds and AFS securities. Corporate investments are primarily comprised of AFS securities. As a result of our investing activities, we are exposed to changes in interest rates that may mate…

• During fiscal 2025, our primary short-term investment vehicles were U.S. government agency discount notes and bank demand deposit accounts. We have no exposure to high-risk or non-liquid investments. We have insignificant exposure to European investments.

• During fiscal 2025, the average interest rate earned on our combined funds held for clients and corporate cash equivalents and investment portfolios was 3.7%, compared to 3.8% for fiscal 2024. When interest rates are falling, the full impact of lower interest rates will not immediately be reflected …

• The amortized cost and fair value of AFS securities that had stated maturities as of May 31, 2025 are shown below by expected maturity.

• During fiscal 2025, the net unrealized loss on our investment portfolios ranged from $41.8 million to $162.5 million. During fiscal 2024, the net unrealized loss on our investment portfolios ranged from $127.5 million to $259.6 million. The net unrealized loss on our investment portfolios was approx…