Paychex stock was heading for its worst day in over a year after the company reported softening sales growth and stagnant guidance in its fiscal first quarter.

Paychex's fiscal first-quarter earnings were more or less in line with what Wall Street expected. Revenue grew 6% to $1.6 billion from the prior year, in line with Wall Street's estimates, while adjusted earnings of $1.34 a share slightly beat consensus calls for $1.32 a share.

Revenue in the fiscal first quarter, however, signaled a slowdown from the 12% year-over-year growth in the fiscal fourth quarter earnings released June 24.

Investors didn't appear satisfied Wednesday, sending shares down 6.9% to $106.58. The stock was one of the worst performers in the S&P 500.

If it closes at that level, it would be the worst single-session drop since June 25, 2025, when shares fell 9.4%.

Paychex's guidance may have also unnerved investors. The company kept its fiscal 2027 outlook, maintaining revenue growth targets of 5% to 6% and a range of 7% to 9% for its adjusted earnings growth.

Paychex offers software tailored to human resources, payroll, benefits, and insurance services. CEO John Gibson said in a press release that revenue from Paychex's insurance solutions and Professional Employer Organization (PEO), which handles human resources and payroll information, grew by 12% in the company's latest quarter.

Gibson noted early success in its proprietary artificial-intelligence engine, known as WISE, and said this could support sustainable growth in the future and long-term shareholder value. He added that Paychex launched a new AI feature for agentic recruiting that automates parts of the hiring process for clients.

While management highlighted the long-term benefits of its AI integration, the timeline for when those gains will actually materialize remains unclear.