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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.
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 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