Paychex, Inc. stock research
FY2026 Q2
Paychex (PAYX) Gross Margin — Quarter Ended Nov 30, 2025
Revenue and gross profit were both higher than the immediately preceding quarter and the same quarter one year earlier, while cost of revenue moved differently across the two comparisons. Gross margin improved sequentially and compared to the year-ago period.
Gross margin takeaway
Quarter ended Nov 30, 2025 · FY2026 Q2
Revenue and gross profit were both higher than the immediately preceding quarter and the same quarter one year earlier, while cost of revenue moved differently across the two comparisons. Gross margin improved sequentially and compared to the year-ago period.
- The most observable driver was the improvement in gross margin relative to both prior periods, supported by gross profit growing faster than revenue versus the year-ago quarter.
- Compared to the immediately preceding quarter, revenue was stable while cost of revenue was slightly lower, resulting in a modest gross margin improvement. Versus the same quarter one year earlier, revenue and gross profit were notably higher, with gross margin expanding as gross profit grew at a faster pace than revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
72.6%
Gross profit
$1.1B
Revenue
$1.5B
Cost of revenue
$412.2M
Quarter-over-quarter change
+0.3 pts
Year-over-year change
+2.2 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Feb 28, 2025 | $1.5B | $1.1B | $387.4M | 73.6% |
| May 31, 2025 | $1.4B | $988.2M | $393.9M | 71.5% |
| Aug 31, 2025 | $1.5B | $1.1B | $413.8M | 72.3% |
| Nov 30, 2025 | $1.5B | $1.1B | $412.2M | 72.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Aug 31, 2025
+0.3 pts
Year-over-year change
Nov 30, 2024
+2.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver was the improvement in gross margin relative to both prior periods, supported by gross profit growing faster than revenue versus the year-ago quarter.
Compared to the immediately preceding quarter, revenue was stable while cost of revenue was slightly lower, resulting in a modest gross margin improvement. Versus the same quarter one year earlier, revenue and gross profit were notably higher, with gross margin expanding as gross profit grew at a faster pace than revenue.
Monitor the trend in cost of revenue, which showed a mixed change between the sequential and year-ago comparisons.