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Feb 28, 2021
Paychex Q3 2021 Earnings Report
Revenue and EPS declined slightly due to the impact of COVID-19, but client retention remained strong.
Key Takeaways
Paychex reported a slight decrease in total revenue and diluted earnings per share for the third quarter of fiscal year 2021, as compared to the prior-year period. Client retention remained strong and at record levels. The company also updated its full-year guidance.
Total revenue decreased 3% to $1.1 billion.
Diluted earnings per share decreased 1% to $0.97.
Management Solutions revenue was comparable at $846.8 million.
Client retention remains strong and at record levels.
Revenue by Segment
Forward Guidance
Paychex has updated its guidance for the fiscal year ending May 31, 2021, incorporating anticipated impacts resulting from the COVID-19 pandemic based on current assumptions and market conditions.
Positive Outlook
- Management Solutions revenue is anticipated to be in the range of flat to 2%.
- Total service revenue is anticipated to be in the range of (1%) to 1%.
- Total revenue is anticipated to be in the range of (2%) to flat.
- Adjusted operating margin is anticipated to be in the range of 36% to 37%.
- Adjusted EBITDA margin is anticipated to be in the range of 41% to 42%.
Challenges Ahead
- The effective income tax rate for fiscal 2021 is anticipated to be in the range of 23% to 24%.
- Adjusted diluted earnings per share is anticipated to be in the range of (2%) to flat.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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