Paychex, Inc. stock research
FY2026 Q3
Paychex (PAYX) Gross Margin — Quarter Ended Feb 28, 2026
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue rose at a slower pace. As a result, gross margin improved relative to both comparison periods.
Gross margin takeaway
Quarter ended Feb 28, 2026 · FY2026 Q3
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue rose at a slower pace. As a result, gross margin improved relative to both comparison periods.
- The gross margin strengthened sequentially and year-over-year, driven by revenue growth that outpaced the increase in cost of revenue.
- Compared to the immediately preceding quarter, gross margin was higher. Compared to the same quarter one year earlier, gross margin was also higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
75.4%
Gross profit
$1.3B
Revenue
$1.8B
Cost of revenue
$431.2M
Quarter-over-quarter change
+2.8 pts
Year-over-year change
+1.8 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 |
|---|---|---|---|---|
| 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% |
| Feb 28, 2026 | $1.8B | $1.3B | $431.2M | 75.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Nov 30, 2025
+2.8 pts
Year-over-year change
Feb 28, 2025
+1.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin strengthened sequentially and year-over-year, driven by revenue growth that outpaced the increase in cost of revenue.
Compared to the immediately preceding quarter, gross margin was higher. Compared to the same quarter one year earlier, gross margin was also higher.
Monitor the trend in cost of revenue relative to revenue, as its growth rate influences gross margin direction.
Peer context
Latest available gross margins for related public companies.
| Company | Gross margin |
|---|---|
| Paychex, Inc. (PAYX) | 75.4% |