Paychex Q1 2025 Earnings Report
Key Takeaways
Paychex reported a solid start to fiscal year 2025, with a 3% increase in total revenue for the first quarter. Excluding the impact of the Employee Retention Tax Credit (ERTC) program expiration and one less payroll processing day, revenue growth would have been 7%. The company delivered earnings per share growth through strong expense discipline and introduced several new digital solutions.
Total revenue increased by 3% to $1.3 billion in the first quarter.
Management Solutions revenue increased 1% to $961.7 million.
PEO and Insurance Solutions revenue increased 7% to $319.3 million.
Interest on funds held for clients increased 15% to $37.5 million.
Paychex
Paychex
Paychex Revenue by Segment
Forward Guidance
Paychex has updated its business outlook for the fiscal year ending May 31, 2025, incorporating current assumptions and market conditions.
Positive Outlook
- Interest on funds held for clients is now anticipated to be in the range of $145 million to $155 million.
- Other income, net is now anticipated to be in the range of $30 million to $35 million.
- Other aspects of our guidance for fiscal 2025 remain unchanged from what we provided previously.
- The company's business outlook incorporates current assumptions.
- The company's business outlook incorporates current market conditions.
Challenges Ahead
- Changes in the macroeconomic environment could alter our guidance.
- The company's business outlook is subject to change.
- Future performance is subject to known and unknown uncertainties.
- Future performance is subject to risks.
- Future performance is subject to changes in circumstances and other factors that are difficult to predict.
Revenue & Expenses
Visualization of income flow from segment revenue to net income