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Nov 30, 2020
Paychex Q2 2021 Earnings Report
Revenue declined slightly, but EPS increased, reflecting improved financial performance.
Key Takeaways
Paychex reported a slight decrease in total revenue but an increase in net income and diluted earnings per share for the second quarter of fiscal year 2021. The company raised its guidance as results showed sequential improvement.
Diluted earnings per share increased 4% to $0.75.
Adjusted diluted earnings per share increased 4% to $0.73.
Management Solutions revenue increased 1% to $732.8 million.
Total revenue decreased 1% to $983.7 million.
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 provided updated guidance for fiscal year 2021, incorporating anticipated impacts from the COVID-19 pandemic. Management Solutions revenue is anticipated to be in the range of (1%) to 1%; Total revenue is anticipated to be in the range of (3%) to flat; Adjusted operating margin is anticipated to be approximately 36%; Adjusted EBITDA margin is anticipated to be approximately 41%; The effective income tax rate for fiscal 2021 is anticipated to be approximately 24%; and Adjusted diluted earnings per share is anticipated to be in the range of (1%) to (4%).
Positive Outlook
- Management Solutions revenue is anticipated to be in the range of (1%) to 1%.
- Total revenue is anticipated to be in the range of (3%) to flat.
- Adjusted operating margin is anticipated to be approximately 36%.
- Adjusted EBITDA margin is anticipated to be approximately 41%.
- The effective income tax rate for fiscal 2021 is anticipated to be approximately 24%.
Challenges Ahead
- Adjusted diluted earnings per share is anticipated to be in the range of (1%) to (4%).
- Impact of the COVID-19 pandemic on the U.S. and global economy.
- Changes in governmental regulations and policies.
- The possibility of cyberattacks, security vulnerabilities and Internet disruptions.
- Volatility in the political and economic environment.
Revenue & Expenses
Visualization of income flow from segment revenue to net income