ROCHESTER, N.Y. – Paychex, Inc. (NASDAQ:) reported a solid finish to its fiscal year with fourth-quarter earnings surpassing analyst expectations.
The company announced an adjusted EPS of $1.12, which was $0.02 higher than the analyst estimate of $1.10. Total revenue for the quarter reached $1.3 billion, also exceeding the consensus estimate of $1.29 billion.
The company’s fourth-quarter performance demonstrated a 5% increase in total revenue compared to the same period last year, reflecting Paychex’s ability to navigate market challenges effectively. President and CEO John Gibson expressed satisfaction with the company’s financial outcomes, attributing the success to the dedication of over 16,000 employees and investments in technology and advisory solutions.
For the fiscal year ended May 31, 2024, Paychex reported a 5% growth in total revenue, reaching $5.3 billion. The company’s operating income rose by 7% to $2.2 billion, with an operating margin improvement from 40.6% to 41.2%. Adjusted operating income saw a 9% increase, resulting in a 41.9% adjusted operating margin. Diluted earnings per share grew by 9% to $4.67, while adjusted diluted earnings per share climbed by 11% to $4.72.
Looking ahead, Paychex provided its business outlook for fiscal 2025, expecting total revenue growth between 4.0% to 5.5%. The company anticipates adjusted diluted earnings per share to increase by 5% to 7%. Management Solutions revenue is projected to grow by 3.0% to 4.0%, and PEO and Insurance Solutions revenue by 7.0% to 9.0%. Furthermore, the company estimates interest on funds held for clients to be in the range of $150 million to $160 million, with an operating margin between 42% to 43%.
CEO Gibson highlighted the challenging operating environment for small and mid-size businesses, emphasizing Paychex’s commitment to supporting their success through innovative HR technology and advisory solutions. Despite the challenges, Paychex’s strong financial position and cash flow generation, including $1.6 billion in cash, restricted cash, and total corporate investments, and cash flow from operations of $1.9 billion for the fiscal year, position the company well for continued growth and shareholder returns.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
