Company: PAYX
Filing Date: 2025-03-26
Form Type: 10-Q
Source: 0000950170-25-045216
Chunk: 53

Company: PAYCHEX INC
Filing Date: 2025-03-26
Form: 10-Q
Item: Part I, Item 8
Chunk 53
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 42.5
     
    %

    Adjusted operating margin (1)

    46.9
     
    %

    45.1
     
    %

    43.3
     
    %

    42.5
     
    %

(1)Adjusted operating income and adjusted operating margin are not U.S. GAAP measures. Refer to the “Non-GAAP Financial Measures” section of this Item 2 for a discussion of non-GAAP measures and a reconciliation to the U.S. GAAP measures of net income and diluted earnings per share.

24 

Other (expense)/income, net: Other (expense)/income, net decreased $15.4 million to expense of $6.0 million for the third quarter and decreased $23.9 million to income of $10.0 million for the nine months, primarily as a result of acquisition-related costs associated with the pending Paycor acquisition recognized in interest expense and lower average interest rates earned on our corporate investments.

Income taxes: Our effective income tax rate was 24.3% for the third quarter and 23.9% for the nine months, compared to 24.4% and 24.1%, for the prior year periods, respectively. All periods were impacted by the recognition of excess tax benefits related to employee stock-based compensation payments.

25 

Non-GAAP Financial Measures: Adjusted operating income, adjusted operating margin, adjusted other income, net, adjusted net income, adjusted diluted earnings per share, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), and adjusted EBITDA are summarized as follows:

    For the three months ended

    For the nine months ended

    February 28,

    February 29,

    February 28,

    February 29,

    $ in millions
     
    2025

    2024

    Change
     
    2025

    2024

    Change

    Operating income
     
    $
     
    691.8

    $
     
    649.8

    6
     
    %
     
    $
     
    1,776.6

    $
     
    1,692.3

    5
     
    %

    Non-GAAP adjustments:

    Acquisition-related costs(1)

    16.7

    —

    16.7

    —

    Adjusted operating income
     
    $