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Nov 30, 2021
Paychex Q2 2022 Earnings Report
Revenue advanced by 13% and diluted earnings per share grew by 21%. The company also raised its business outlook for the year.
Key Takeaways
Paychex reported strong financial results for Q2 2022, driven by growth in employees within their client base and continued strong sales growth and client retention. Total revenue increased by 13%, and diluted earnings per share grew by 21%.
Management Solutions revenue increased by 14%, driven by higher checks per payroll, improved price realization, and growth in client bases.
PEO and Insurance Solutions revenue increased by 11%, driven by an increase in the number of average worksite employees and an increase in average wages per worksite employee.
Operating income increased by 24% due to double-digit revenue growth and a moderate expense increase.
The company assisted businesses in securing $6.0 billion in employee retention and paid leave tax credits to date.
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 updated its guidance for fiscal year 2022, incorporating current assumptions and market conditions.
Positive Outlook
- Management Solutions revenue is now anticipated to grow in the range of 10% to 11%.
- PEO and Insurance Solutions revenue is now anticipated to grow in the range of 10% to 12%.
- Total revenue is now anticipated to grow in the range of 10% to 11%.
- Adjusted operating margin is anticipated to increase to a range of 39% to 40%.
- Adjusted EBITDA margin is anticipated to increase to approximately 44%.
Challenges Ahead
- Changes in the macroeconomic environment could alter the guidance.
- Other expense, net is now anticipated to be in the range of $15 million to $18 million.
- Adjusted diluted earnings per share is now anticipated to grow in the range of 18% to 20%.
- The guidance incorporates current assumptions and market conditions.
- No further negatives were provided.
Revenue & Expenses
Visualization of income flow from segment revenue to net income