Paychex, Inc. Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Segment Reporting (Tables)

Segment Reporting (Tables)

12 Months Ended

May 31, 2025

Schedule of Total Revenue, Net Income and Significant Expenses Used by the CODM

Total revenue, net income, and significant expenses used by the CODM for the purpose of allocating resources and evaluating the Company's financial performance were as follows:


	Year ended May 31,
In millions	2025			2024			2023
Total revenue	$	5,571.7		$	5,278.3		$	5,007.1

Core business operations:
Compensation-related expenses		1,853.0			1,810.4			1,782.6
PEO direct insurance costs		520.1			471.3			416.8
Depreciation and amortization		168.8			176.5			176.6
Other segment items(1)		659.8			606.5			598.0
Non-core business operations:
Acquisition-related costs(2)		162.3			—			—
Cost optimization initiatives(3)		—			39.5			—
Total expenses		3,364.0			3,104.2			2,974.0
Interest expense, excluding Paycor acquisition-related costs		(71.4	)		(37.3	)		(36.7	)
Acquisition-related costs(2)		(34.0	)		—			—
Other income, net		73.6			81.2			51.8
Income before income taxes		2,175.9			2,218.0			2,048.2
Income tax expense		518.6			527.6			490.9
Net income	$	1,657.3		$	1,690.4		$	1,557.3

(1)

Other segment items include professional service expense, marketing and advertising expenses, and other overhead expense.

(2)

Acquisition-related costs included in total expenses include 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 and transaction bonuses, and other acquisition-related costs, primarily reflecting third-party professional service fees. Acquisition-related costs included in interest expense include the amortization of financing fees related to debt instruments associated with the financing of the Paycor acquisition and the excluded components of the initial fair value of the interest rate swaption contracts.

(3)

Cost optimization initiatives include further reductions to our geographic footprint, reprioritization of certain technology investments, and headcount optimization.