(Reuters) -HR software provider Paychex on Tuesday reported higher expenses in the first quarter overshadowing a lift to its annual earnings forecast, and dragging the company’s shares down 6.2% in early trading.

Total expenses surged 29% to $998.1 million in the June-to-August quarter, fueled by higher compensation costs and amortization of intangible assets tied to its acquisition of payroll processing firm Paycor, earlier this year.

Spending on technology, sales and marketing also rose as Paychex pushed ahead with strategic investments and integrated the newly acquired business.

Despite the higher expenses, Paychex raised its annual adjusted earnings growth forecast to a range of 9%–11%, from its prior outlook of 8.5%–10.5%.

The company said it continues to benefit from gains in cli

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