PAYCHEX INC
For the period ended Feb 28, 2026. Filed Mar 26, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 28, 2026 · Filed Mar 26, 2026
PAYX$117.06-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-11-30; filed 2025-12-22.
0001193125-25-328698
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-02-28; filed 2026-03-26.
0001193125-26-126204
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 169 previous paragraphs and 174 current paragraphs.
105 unchanged; 58 reworded; 7 added; 5 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
We support our clients with three proprietary SaaS-based HCM platforms: SurePayroll®, Paychex Flex®, and Paycor®, each designed to meet diverse client needs and business requirements. For example, larger clients often have more complex HCM demands. Our integrated HCM solutions span the entire employee life cycle, enabling clients to choose from a broad range of solutions that seamlessly integrate with leading HR, accounting, enterprise resource planning, and point-of-sale applications. Our technology is complemented by a wide array of advisory, benefits, and insurance solutions. In today's dynamic, complex regulatory landscape, we see growing demand for HR outsourcing solutions.
Current report
Management Solutions revenue: $1.4 billion for the third quarter and $3.7 billion for the nine months, reflecting increases of 23% and 22%, respectively. Paycor, acquired in April 2025, contributed approximately 19% and 18% to
Current report
$0.9 million for the third quarter and $9.9 million for the nine months compared to $16.7 million for both corresponding prior year periods, in other acquisition-related costs, primarily reflecting professional service fees.
Current report
In addition, acquisition-related costs for the three and nine months ended February 28, 2025 include $13.2 million, reflecting the amortization of financing fees related to debt instruments associated with the financing of the Paycor acquisition and the excluded component of the initial fair value of the interest rate swaption contracts that are included in Interest expense in the Company's Consolidated Statements of Income. Refer to Note H in the Notes to Consolidated Financial Statements (Unaudited) contained in Item 1 of this Form 10-Q for additional information regarding the Company's financing arrangements related to the acquisition of Paycor.
Current report
Subsequent to February 28, 2026, we repaid our long-term private placement debt Senior Notes, Series A for $400.0 million, which matured on March 13, 2026.
Current report
Bridge Loan Commitment: On January 7, 2025, we and our subsidiary, Paychex of New York, LLC, entered into a bridge loan commitment with JPM, pursuant to which JPM committed to provide a 364-day senior unsecured credit facility not to exceed $3.5 billion for the acquisition of Paycor, including related fees and expenses. We incurred $11.4 million in debt financing fees, during the three months ended February 28, 2025, including structuring and commitment fees, which were capitalized as prepaid expenses and other current assets on our Consolidated Balance Sheets and recognized as interest expense on a straight-line basis through the issuance date of our Corporate Bonds. The bridge loan commitment expired upon the issuance of our Corporate Bonds.
Current report
Interest Rate Swaption Contracts: On January 31, 2025, we executed three interest rate swaption contracts ("Swaption Contracts") with JPM. The Swaption Contracts qualified as cash flow hedges, had an aggregate notional amount of $3.0 billion, and were utilized to manage exposure to fluctuations in benchmark interest rates associated with the issuance of Corporate Bonds to fund our acquisition of Paycor. At inception, we recorded Swaption Contract assets related to paid premiums of $19.2 million. The fair value of the Swaption Contract assets were classified as prepaid expenses and other current assets on the Company's Consolidated Balance Sheets. Upon issuance of our Corporate Bonds, the Swaption Contracts expired unexercised.
Removed paragraphs (5)
Previous report
We offer a full range of integrated HCM solutions spanning 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, enterprise resource planning, and point-of-sale applications on the market today.
Previous report
We support our clients through our proprietary SaaS-based solutions, SurePayroll®, 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 solutions has been expanding. Any of our clients on Paychex Flex or Paycor can opt for the integrated suite of HCM solutions, which enables clients to choose the service and software solutions that best meet the needs of their business.
Previous report
Subsequent to November 30, 2025, we borrowed one time on an overnight basis, $595.0 million under our PNC and JPM credit facilities.
Previous report
A net decrease in accrued corporate compensation primarily due to the settlement of fiscal 2025 year-end bonuses.
Previous report
A net decrease in accrued corporate compensation primarily due to the settlement of fiscal 2024 year-end bonuses.
Reworded paragraphs (58)
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations reviews the operating results of Paychex, Inc. and its wholly owned subsidiaries (“Paychex,” the “Company,” “we,” “our,” or “us”) for the three months ended November 30, 2025 (the “second quarter”), the six months ended November 30, 2025 (the "six months"), the respective prior year periods ended November 30, 2024 (the “prior year periods”), and our financial condition as of November 30, 2025. The focus of this review is on the underlying business reasons for material changes and trends affecting our revenue, expenses, net income, and financial condition. This review should be read in conjunction with the November 30, 2025 consolidated financial statements and the related Notes to Consolidated Financial Statements (Unaudited) contained in this Quarterly Report on Form 10-Q (“Form 10-Q”). This review should also be read in conjunction with our Annual Report on Form 10-K (“Form 10-K”) for the year ended May 31, 2025 (“fiscal 2025”). Forward-looking statements in this Form 10-Q are qualified by the cautionary statement included under the next sub-heading, “Cautionary Note Regarding Forward-Looking Statements.”
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations reviews the operating results of Paychex, Inc. and its wholly owned subsidiaries (“Paychex,” the “Company,” “we,” “our,” or “us”) for the three months ended February 28, 2026 (the “third quarter”), the nine months ended February 28, 2026 (the "nine months"), the respective prior year periods ended February 28, 2025 (the “prior year periods”), and our financial condition as of February 28, 2026. The focus of this review is on the underlying business reasons for material changes and trends affecting our revenue, expenses, net income, and financial condition. This review should be read in conjunction with the February 28, 2026 consolidated financial statements and the related Notes to Consolidated Financial Statements (Unaudited) contained in this Quarterly Report on Form 10-Q (“Form 10-Q”). This review should also be read in conjunction with our Annual Report on Form 10-K (“Form 10-K”) for the year ended May 31, 2025 (“fiscal 2025”). Forward-looking statements in this Form 10-Q are qualified by the cautionary statement included under the next sub-heading, “Cautionary Note Regarding Forward-Looking Statements.”
Previous wording
Certain written and oral statements made by management of Paychex may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States (“U.S.”) Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by such words and phrases as “expect,” “outlook,” “will,” “guidance,” “projections,” “strategy,” “mission,” “anticipate,” “believe,” “can,” “could,” “design,” “look forward,” “may,” “possible,” “potential,” “should,” “target,” and other similar words or phrases. Forward-looking statements include, without limitation, all matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding the integration of Paycor HCM, Inc. ("Paycor"), operating performance, events, or developments that we expect or anticipate will occur in the future, including statements relating to our outlook, revenue growth, earnings, earnings-per-share growth, and similar projections.
Current wording
Certain written and oral statements made by management of Paychex may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States (“U.S.”) Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by such words and phrases as “aim,” “expect,” “outlook,” “will,” “guidance,” “projections,” “strategy,” “mission,” “anticipate,” “believe,” “can,” “could,” “design,” “may,” “possible,” “potential,” “should,” “view,” and other similar words or phrases. Forward-looking statements include, without limitation, all matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding the integration of Paycor HCM, Inc. ("Paycor"), operating performance, events, or developments that we expect or anticipate will occur in the future, including statements relating to our outlook, revenue growth, earnings, earnings-per-share growth, and similar projections.
Previous wording
Our investor presentation regarding the financial results for the second quarter is available and accessible on our Paychex Investor Relations portal athttps://investor.paychex.com. Information available on our website is not a part of, and is not incorporated into, this Form 10-Q. We intend to make future investor presentations available exclusively on our Paychex Investor Relations portal.
Current wording
Our investor presentation regarding the financial results for the third quarter is available and accessible on our Paychex Investor Relations portal athttps://investor.paychex.com. Information available on our website is not a part of, and is not incorporated into, this Form 10-Q. We intend to make future investor presentations available exclusively on our Paychex Investor Relations portal.
Previous wording
We are an industry-leading human capital management (“HCM”) company delivering a full suite of technology and advisory solutions in human resources (“HR”), employee benefits, insurance, and payroll across the U.S. and parts of Europe.
Current wording
We are an industry-leading human capital management (“HCM”) company providing comprehensive technology and advisory solutions in human resources (“HR”), employee benefits, insurance, and payroll across the U.S. and parts of Europe.
Previous wording
Our portfolio of technology, HR advisory, and employee benefits-related solutions is 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 our Form 10-K for fiscal 2025.
Current wording
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 our Form 10-K for fiscal 2025.
Previous wording
Our mission is to help businesses succeed as the digitally driven HR leader. Our strategy focuses on growing our client base; increasing product penetration; driving technology innovation; and pursuing strategic acquisitions. We believe that successfully executing this strategy will lead to strong, long-term financial performance.
Current wording
As the digitally driven HR leader, our mission is to help businesses succeed. Our strategy includes growing our client base; increasing product penetration; driving technology innovation; and pursuing strategic acquisitions, all aimed at achieving long-term financial success.
Previous wording
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 our solutions, people, and digital capabilities will position us to capitalize on opportunities for long-term growth.
Current wording
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 investing in our solutions, people, and digital capabilities positions us to capitalize on long-term growth opportunities.
Previous wording
We closely monitor the evolving challenges and needs of our clients, and proactively aid our clients in navigating macroeconomic challenges, legislative changes, and other complexities they may face. Through our unique blend of innovative technology solutions, backed by our extensive compliance and HR expertise, we help clients more effectively hire, develop, and retain top talent in this challenging workforce environment. Ongoing investments in our platforms have prepared us well for the demands of the current business and regulatory environments, enabling us to adapt while maintaining strong solutions and support delivery, resulting in high levels of client satisfaction and retention.
Current wording
By closely monitoring client needs and challenges, we proactively assist our clients in navigating legislative changes and other employment complexities. Our unique blend of innovative technology and extensive HR expertise enables clients to more effectively hire, develop, and retain top talent in this tight labor market. Ongoing investments in our platforms have equipped us well to meet the current business demands and regulatory compliance, resulting in high levels of client satisfaction and retention.
Previous wording
On April 14, 2025, we completed our acquisition of Paycor, a leading provider of HCM, payroll and talent software. This acquisition extends our upmarket position and expands our suite of HR technology and advisory solutions. Refer to the "Results of Operations" and “Liquidity and Capital Resources” section of this Item 2 for additional information.
Current wording
On April 14, 2025, we completed the acquisition of Paycor, a leading provider of HCM, payroll, and talent software. This acquisition expands our upmarket position, suite of HCM technology and cross-sale potential. Refer to the "Results of Operations" and “Liquidity and Capital Resources” section of this Item 2 for additional information.
Previous wording
Second Quarter and Year to Date Business Highlights
Current wording
Third Quarter and Year to Date Business Highlights
Previous wording
For further analysis of our results of operations for the second quarter and six months, the prior year periods, and our financial position as of November 30, 2025, refer to the tables and analysis in the “Results of Operations” and “Liquidity and Capital Resources” sections of this Item 2.
Current wording
For further analysis of our results of operations for the third quarter and nine months, the prior year periods, and our financial position as of February 28, 2026, refer to the tables and analysis in the “Results of Operations” and “Liquidity and Capital Resources” sections of this Item 2.
Previous wording
Total revenue increased to $1.6 billion for the second quarter and $3.1 billion for the six months, reflecting increases of 18% over the prior year periods. The changes in revenue as compared to the prior year periods were primarily driven by the following factors:
Current wording
Total revenue increased to $1.8 billion for the third quarter and $4.9 billion for the nine months, reflecting increases of 20% and 18%, respectively, over the prior year periods. The changes in revenue as compared to the prior year periods were primarily driven by the following factors:
Previous wording
Management Solutions revenue: $1.2 billion for the second quarter and $2.3 billion for the six months, reflecting increases of 21% over the prior year periods. Paycor, acquired in April 2025, contributed approximately 17% to Management Solutions revenue growth for the second quarter and six months. Management Solutions revenue increased due to the following:
Current wording
Management Solutions revenue growth for the third quarter and nine months, respectively. Management Solutions revenue increased due to the following:
Previous wording
PEO and Insurance Solutions revenue: $336.9 million for the second quarter and $666.0 million for the six months, reflecting increases of 6% and 5%, respectively:
Current wording
PEO and Insurance Solutions revenue: $397.5 million for the third quarter and $1.1 billion for the nine months, reflecting increases of 9% and 6%, respectively:
Previous wording
Interest on funds held for clients: $54.3 million for the second quarter and $101.9 million for the six months, reflecting increases of 51% and 38% respectively:
Current wording
Interest on funds held for clients: $56.8 million for the third quarter and $158.7 million for the nine months, reflecting increases of 33% and 36% respectively:
Previous wording
Higher realized gains due to strategic repositioning of our investment portfolio during the second quarter.
Current wording
Higher realized gains due to strategic repositioning of our investment portfolio during the nine months.
Previous wording
(1) The net unrealized loss on our investment portfolio was approximately $15.8 million as of December 17, 2025. Refer to Note F in the Notes to Consolidated Financial Statements and the "Market Risk Factors" caption contained in this Form 10-Q for more information regarding AFS securities held in an unrealized loss position.
Current wording
(1) The net unrealized loss on our investment portfolio was approximately $55.3 million as of March 24, 2026. Refer to Note F in the Notes to Consolidated Financial Statements (Unaudited) contained in Item 1 and the "Market Risk Factors" caption contained in Item 2 of this Form 10-Q for more information regarding AFS securities held in an unrealized loss position.
Previous wording
(2) The Federal Funds rate was in the range of 3.75% to 4.00% as of November 30, 2025 and 4.25% to 4.50% as of May 31, 2025. Effective December 11, 2025, the Federal Reserve decreased the Federal Funds rate to a range of 3.50% to 3.75%.
Current wording
(2) The Federal Funds rate was in the range of 3.50% to 3.75% as of February 28, 2026 and 4.25% to 4.50% as of May 31, 2025.
Previous wording
Total expenses: Total expenses, which reflects the total combined cost of service revenue and selling, general and administrative expenses, increased 27% to $985.7 million for the second quarter and 28% to $2.0 billion for the six months. The following table summarizes the components of total expenses:
Current wording
Total expenses: Total expenses, which reflects the total combined cost of service revenue and selling, general and administrative expenses, increased 24% to $1.0 billion for the third quarter and 27% to $3.0 billion for the nine months. The following table summarizes the components of total expenses:
Previous wording
Compensation-related expenses:$525.5 million for the second quarter and $1.1 billion for the six months, reflecting increases of 16% and 17% respectively, primarily due to an increase in headcount, driven by the acquisition of Paycor.
Current wording
Compensation-related expenses:$530.9 million for the third quarter and $1.6 billion for the nine months, reflecting increases of 17%, primarily due to an increase in headcount, driven by the acquisition of Paycor.
Previous wording
PEO direct insurance costs: $137.0 million for the second quarter and $275.6 million for the six months, reflecting increases of 5% and 6% respectively, related to growth in average worksite employees and PEO insurance revenues.
Current wording
PEO direct insurance costs: $139.7 million for the third quarter and $415.3 million for the nine months, reflecting increases of 9% and 7% respectively, related to growth in average worksite employees and PEO insurance revenues.
Previous wording
Depreciation and amortization: $49.1 million for the second quarter and $97.3 million for the six months, reflecting increases of 18% and 21% respectively, primarily due to higher property and equipment balances compared to the prior year period, including an increase in the development and enhancement of our client-facing internal-use software.
Current wording
Depreciation and amortization: $50.6 million for the third quarter and $147.9 million for the nine months, reflecting increases of 17% and 19% respectively, primarily due to higher property and equipment balances compared to the prior year period, including an increase in the development and enhancement of our client-facing internal-use software.
Previous wording
Other expenses:$197.0 million for the second quarter and $393.5 million for the six months, reflecting increases of 30%, primarily due to higher technology, selling, and marketing investments driven by the acquisition of Paycor and our continued strategic initiatives. The increase also reflects general cost increases to support business growth.
Current wording
Other expenses:$224.5 million for the third quarter and $618.0 million for the nine months, reflecting increases of 29% and 30%, respectively, primarily due to higher technology, selling, and marketing investments driven by the acquisition of Paycor and continued investments in our strategic priorities. The increase also reflects general cost increases to support business growth.
Previous wording
Acquisition-related costs:$77.1 million for the second quarter and $161.9 million for the six months, reflecting the amortization of intangibles acquired in the acquisition of Paycor, compensation costs related to the acquisition and integration of Paycor, including replacement awards, severance, and retention bonuses, and other acquisition-related costs, primarily reflecting third-party professional service fees.
Current wording
Acquisition-related costs:$71.2 million for the third quarter and $233.1 million for the nine months, primarily due to the acquisition of Paycor in April 2025. Acquisition-related costs reflect the amortization of intangibles acquired in the acquisition of Paycor, compensation costs related to the acquisition and integration of Paycor, including replacement awards, severance, and retention bonuses, and other acquisition-related costs, primarily reflecting third-party professional service fees.
Previous wording
Operating income: Operating income increased 6% to $571.9 million for the second quarter and 3% to $1.1 billion for the six months. Adjusted operating income(1), which excludes acquisition-related costs included in selling, general and administrative expenses, grew 21% to $649.0 million for the second quarter and 18% to $1.3 billion for the six months.
Current wording
Operating income: Operating income increased 14% to $792.0 million for the third quarter and 7% to $1.9 billion for the nine months. Adjusted operating income(1), which excludes acquisition-related costs included in selling, general and administrative expenses, grew 22% to $863.2 million for the third quarter and 19% to $2.1 billion for the nine months.
Previous wording
Interest expense: Interest expense increased $59.0 million to $68.5 million for the second quarter and $117.6 million to $136.7 million for the six months, primarily due to the issuance of incremental debt to finance the acquisition of Paycor.
Current wording
Interest expense: Interest expense increased $45.5 million to $68.1 million for the third quarter and $163.1 million to $204.8 million for the nine months, primarily due to the issuance of incremental debt to finance the acquisition of Paycor.
Previous wording
Income taxes: Our effective income tax rate was 24.0% for the second quarter and 23.4% for the six months compared to 24.0% and 23.6%, for the prior year periods respectively. The effective income tax rates in all periods were affected by the recognition of discrete tax impacts related to employee stock-based compensation payments.
Current wording
Income taxes: Our effective income tax rate was 24.2% for the third quarter and 23.7% for the nine months compared to 24.3% and 23.9%, for the prior year periods respectively. The effective income tax rates in all periods were affected by the recognition of discrete tax impacts related to employee stock-based compensation payments.
Previous wording
Acquisition-related costs included in selling, general and administrative expenses include (i) $60.0 million for the second quarter and $121.0 million for the six months in amortization of intangibles acquired in the acquisition of Paycor, (ii) $13.2 million for the second quarter and $31.9 million for the six months in compensation costs related to the acquisition and integration of Paycor, including replacement awards, severance and retention bonuses, and (iii) $3.9 million for the second quarter and $9.0 million for the six months in other acquisition-related costs, primarily reflecting professional service fees.
Current wording
Acquisition-related costs included in selling, general and administrative expenses include:
Previous wording
Our financial position as of November 30, 2025 remained strong with cash, restricted cash, and total corporate investments of $1.6 billion. Short-term borrowings of $18.2 million and long-term borrowings of $5.0 billion were outstanding as of November 30, 2025. Our unused capacity under our unsecured credit facilities was approximately $2.0 billion as of November 30, 2025. Our primary source of cash is our ongoing operations, which was $1.2 billion for the six months. Our positive cash flows have allowed us to support our business and pay dividends. We currently anticipate that corporate cash, corporate restricted cash, and total corporate investments as of November 30, 2025, along with projected operating cash flows and available short-term financing, will support our business operations, capital purchases, primarily investment in our technology solutions, share repurchases, dividend payments, acquisitions and debt service for the foreseeable future.
Current wording
Our financial position as of February 28, 2026 remained strong with cash, restricted cash, and total corporate investments of $1.8 billion. Long-term borrowings of $5.0 billion were outstanding as of February 28, 2026. Our unused capacity under our unsecured credit facilities was $2.0 billion as of February 28, 2026. Our primary source of cash is our ongoing operations, which was $2.0 billion for the nine months. Our positive cash flows have allowed us to support our business and pay dividends. We currently anticipate that corporate cash, corporate restricted cash, and total corporate investments as of February 28, 2026, along with projected operating cash flows and available short-term financing, will support our business operations, capital purchases, primarily investment in our technology solutions, share repurchases, dividend payments, acquisitions, and debt service for the foreseeable future.
Previous wording
Short-term financing: We maintain committed and unsecured credit facilities and irrevocable letters of credit as part of our normal and recurring business operations. The purpose of these credit facilities is to meet short-term funding requirements, finance working capital needs, and for general corporate purposes. We typically borrow on an overnight or short-term basis under our credit facilities. Refer to Note M of the Notes to Consolidated Financial Statements contained in Item 8 of our Form 10-K for fiscal 2025 for further discussion of our credit facilities.
Current wording
Short-term financing: We maintain committed and unsecured credit facilities and irrevocable letters of credit as part of our normal and recurring business operations. The purpose of these credit facilities is to meet short-term funding requirements, finance working capital needs, and for general corporate purposes. We typically borrow on an overnight or short-term basis under our credit facilities. Refer to Note M in the Notes to Consolidated Financial Statements contained in Item 8 of our Form 10-K for fiscal 2025 for further discussion of our credit facilities as of May 31, 2025.
Previous wording
Amounts outstanding under the PNC credit facility as of November 30, 2025 remain outstanding as of the date of this report.
Current wording
Effective January 23, 2026, we entered into amendments of our $750.0 million, five-year, unsecured, revolving credit facility (the "2017 Credit Facility") and our $1.0 billion, five-year, unsecured, revolving credit facility (the "2019 Credit Facility") with a syndicate of lenders for which JPM acts as administrative agent. In connection with these amendments, we terminated our three-year, $250 million, unsecured, revolving credit facility for which PNC Bank, N.A. acted as administrative agent (the "2020 PNC Credit Facility"). As of the date of its termination, there were no outstanding loans under the PNC Bank, N.A. Credit Facility. Refer to Note H in the Notes to Consolidated Financial Statements (Unaudited) contained in Item 1 of this Form 10-Q and our Current Report on Form 8-K filed on January 26, 2026, for additional information.
Previous wording
Details of borrowings under each credit facility during the second quarter were as follows:
Current wording
Details of borrowings under each credit facility during the third quarter were as follows:
Previous wording
Letters of credit: As of November 30, 2025, we had irrevocable standby letters of credit available totaling $172.9 million, primarily to secure commitments for certain insurance policies. The letters of credit expire at various dates between December 01, 2025 and February 28, 2027. No amounts were outstanding on these letters of credit during the second quarter or as of November 30, 2025.
Current wording
Letters of credit: As of February 28, 2026, we had irrevocable standby letters of credit available totaling $179.1 million, primarily to secure commitments for certain insurance policies. The letters of credit expire at various dates between March 03, 2026 and February 28, 2027. No amounts were outstanding on these letters of credit during the third quarter or as of February 28, 2026.
Previous wording
Refer to Note N of the Notes to Consolidated Financial Statements contained in Item 8 of our Form 10-K for fiscal 2025 for further discussion on our long-term financing.
Current wording
Refer to Note N in the Notes to Consolidated Financial Statements contained in Item 8 of our Form 10-K for fiscal 2025 for further discussion on our long-term financing.
Previous wording
Other commitments: We had outstanding commitments under existing workers’ compensation insurance agreements and legally binding contractual arrangements. We also entered into various purchase commitments with vendors in the ordinary course of business and had outstanding commitments to purchase approximately $5.9 million of capital assets as of November 30, 2025. In addition, we are involved in six limited partnership agreements to contribute a maximum of $37.5 million to venture capital funds. As of November 30, 2025, we have contributed approximately $32.1 million of the total funding commitment.
Current wording
Other commitments: We had outstanding commitments under existing workers’ compensation insurance agreements and legally binding contractual arrangements. We also entered into various purchase commitments with vendors in the ordinary course of business and had outstanding commitments to purchase approximately $10.7 million of capital assets as of February 28, 2026. In addition, we are involved in six limited partnership agreements to contribute a maximum of $37.5 million to venture capital funds. As of February 28, 2026, we have contributed approximately $32.1 million of the total funding commitment.
Previous wording
We currently self-insure the deductible portion of various insured exposures under certain corporate employee and PEO employee health and medical benefit plans. Historically, the amounts accrued for these plans have not been material and were not material as of November 30, 2025. We also self-insure the deductible portion of certain PEO workers' compensation benefit plans. Refer to Note A in the Notes to Consolidated Financial Statements in this Form 10-Q for additional information regarding our estimated loss exposure under these PEO workers' compensation benefit plans.
Current wording
We currently self-insure the deductible portion of various insured exposures under certain corporate employee and PEO employee health and medical benefit plans. Historically, the amounts accrued for these plans have not been material and were not material as of February 28, 2026. We also self-insure the deductible portion of certain PEO workers' compensation benefit plans. Refer to Note A in the Notes to Consolidated Financial Statements (Unaudited) contained in Item 1 of this Form 10-Q for additional information regarding our estimated loss exposure under these PEO workers' compensation benefit plans.
Previous wording
PEO receivables and worksite-employee ("WSE") accrued compensation: PEO receivables and WSE accrued compensation fluctuate based on either/both: (1) the timing of the payroll cut-off date and our month-end close, and (2) the timing of when cash is collected from the client and when it is remitted to either the WSE for wages earned or applicable tax or regulatory agencies for payroll taxes. PEO accounts receivable collections and compensation payments to WSEs and applicable tax or regulatory agencies are settled through our corporate cash and the fluctuations impact our operating activities.
Current wording
PEO receivables and worksite-employee ("WSE") accrued compensation: PEO receivables and WSE accrued compensation fluctuate based on either/both: (1) the timing of the payroll cut-off date and our month-end close, and (2) the timing of when cash is collected from clients and when it is remitted to either the WSE for wages earned or applicable tax or regulatory agencies for payroll taxes. PEO accounts receivable collections and compensation payments to WSEs and applicable tax or regulatory agencies are settled through our corporate cash and the fluctuations impact our operating activities.
Previous wording
Summarized operating, investing, and financing cash flow information for the six months and the prior period:
Current wording
Summarized operating, investing, and financing cash flow information for the nine months and the prior period:
Previous wording
The changes in our cash flow for the six months compared to the prior year period were primarily the result of the following key drivers:
Current wording
The changes in our cash flow for the nine months compared to the prior year period were primarily the result of the following key drivers:
Previous wording
Net income, adjusted for non-cash items including depreciation and amortization, provision on deferred taxes and stock-based compensation, attributable to the reasons discussed in the “Results of Operations” section of this Item 2;
Current wording
Net income, adjusted for non-cash items including depreciation and amortization, provision on deferred taxes, stock-based compensation, and deferred costs, net, attributable to the reasons discussed in the “Results of Operations” section of this Item 2;
Showing the first 40 of 58 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
$60.5 million for the third quarter and $181.5 million for the nine months in amortization of intangibles acquired in the acquisition of Paycor;
Current report — wording carried from elsewhere
$9.8 million for the third quarter and $41.7 million for the nine months in compensation costs related to the acquisition and integration of Paycor, including replacement awards, severance and retention bonuses; and
Current report — wording carried from elsewhere
Net decrease in refunds owed to our clients and other cash collections related to tax benefits.
Current report — wording carried from elsewhere
Increase in client fund obligations related to the timing of collections and remittances of client funds.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net increase in accrued income taxes due to the timing of estimated tax payments as compared to the accrual of income tax expense; offset by