Investing.com -- Paychex, Inc. (NASDAQ: PAYX) reported its third-quarter results on Wednesday, exceeding analyst expectations, sending shares higher in premarket trading.

The company posted adjusted earnings per share of $1.71, beating the consensus estimate of $1.67, while revenue of $1.81 billion surpassed the $1.78 billion estimate. Revenue surged 20% compared to the same quarter last year, driven primarily by the April 2025 acquisition of Paycor HCM, Inc.

The company's Management Solutions revenue climbed 23% to $1.4 billion, with Paycor contributing approximately 19% to that growth. The acquisition also boosted client counts and revenue per client due to Paycor's upmarket customer base. PEO and Insurance Solutions revenue increased 9% to $397.5 million, while interest on funds held for clients rose 33% to $56.8 million, benefiting from higher investment balances following the Paycor deal.

Shares rose 4.3% following the earnings release.

"This quarter, we delivered strong double-digit growth in revenue and operating income and accelerated our organic revenue growth, driven by effective execution and progress on our strategic priorities," stated John Gibson, President and Chief Executive Officer.

Adjusted operating income grew 22% to $863.2 million for the quarter, excluding $71.0 million in Paycor acquisition-related costs. Adjusted operating margin expanded to 47.7% from 46.9% in the prior year period. However, operating expenses increased 24% to $1.0 billion, primarily due to compensation costs, intangible asset amortization, and technology investments related to Paycor.

Interest expense jumped $45.5 million to $68.1 million, reflecting debt issued to finance the Paycor acquisition.

For fiscal 2026, Paychex updated its guidance for interest on funds held for clients to a range of $200 million to $210 million, with the midpoint of $205 million. All other aspects of the company's fiscal 2026 outlook remained unchanged.