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Aug 31, 2023
Paychex Q1 2024 Earnings Report
Reported sustained growth in revenue and earnings.
Key Takeaways
Paychex reported a strong start to fiscal year 2024, with a 7% increase in total revenue and an 11% increase in adjusted diluted earnings per share. Demand for Paychex's solutions remains strong as businesses seek technology and expertise to navigate the changing business environment.
Total revenue increased by 7% and adjusted diluted earnings per share increased by 11%.
Management Solutions revenue increased 6% due to growth in clients served and higher revenue per client.
PEO and Insurance Solutions revenue increased 5% due to growth in worksite employees and higher state unemployment insurance revenue.
Interest on funds held for clients increased 83% due to higher average interest rates and investment balances.
Paychex
Paychex
Paychex Revenue by Segment
Revenue by Segment
Management Solutions Revenue
CapyFin.comPEO & Insurance Revenue
CapyFin.comClient Funds Interest Revenue
CapyFin.com Forward Guidance
Paychex has updated its business outlook for the fiscal year ending May 31, 2024, incorporating current assumptions and market conditions.
Positive Outlook
- Interest on funds held for clients is now expected to be in the range of $140 million to $150 million.
- Adjusted diluted earnings per share is now anticipated to grow in the range of 9% to 11%.
- Other aspects of our guidance for fiscal 2024 remain unchanged from what we provided previously.
- Small and mid-sized businesses remain resilient in navigating the broader macro-economic environment.
- Small businesses are hiring workers at a moderate level and wage inflation continues to normalize along with overall inflation.
Challenges Ahead
- Changes in the macroeconomic environment could alter guidance.
- Our ability to keep pace with changes in technology or provide timely enhancements to our solutions and support.
- The possibility of cyberattacks, security vulnerabilities or Internet disruptions, including data security and privacy leaks, and data loss and business interruptions.
- The impact of macroeconomic factors on the U.S. and global economy, and in particular on our small- and medium-sized business clients.
- Volatility in the political and economic environment, including rising inflation.
Revenue & Expenses
Visualization of income flow from segment revenue to net income