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Paychex
🇺🇸 NASDAQ:PAYX
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OverviewEarningsDividends
•
May 31, 2024

Paychex Q4 2024 Earnings Report

Paychex reported solid financial results, with revenue growth and operating margin expansion.

Key Takeaways

Paychex reported a 5% increase in total revenue to $1.3 billion for the fourth quarter. Diluted earnings per share increased by 8% to $1.05, while adjusted diluted earnings per share increased by 15% to $1.12. The company's performance reflects its ability to navigate changing market conditions and deliver value to clients through innovative HR technology and advisory solutions.

Total revenue increased by 5% to $1.3 billion, driven by growth in Management Solutions and PEO & Insurance Solutions, partially offset by a lower contribution from ERTC service.

Management Solutions revenue grew by 3% to $930.3 million, driven by client growth and higher product penetration.

PEO and Insurance Solutions revenue increased by 9% to $326.6 million, driven by growth in average PEO worksite employees and increased insurance revenues.

Operating income grew by 6% to $481.8 million, with an operating margin of 37.2%.

Total Revenue
$1.3B
Previous year: $1.23B
+5.3%
EPS
$1.12
Previous year: $0.97
+15.5%
Gross Profit
$920M
Previous year: $860M
+7.0%
Cash and Equivalents
$1.55B
Previous year: $1.22B
+26.9%
Free Cash Flow
$180M
Previous year: $363M
-50.3%
Total Assets
$10.4B
Previous year: $10.5B
-1.5%

Paychex

Paychex

Paychex Revenue by Segment

Forward Guidance

Paychex anticipates total revenue growth in the range of 4.0% to 5.5% and adjusted diluted earnings per share growth in the range of 5% to 7% for fiscal year 2025.

Positive Outlook

  • Total revenue is anticipated to grow in the range of 4.0% to 5.5%.
  • Adjusted diluted earnings per share is anticipated to grow in the range of 5% to 7%.
  • Management Solutions revenue is anticipated to grow in the range of 3.0% to 4.0%.
  • PEO and Insurance Solutions revenue is anticipated to grow in the range of 7.0% to 9.0%.
  • Operating margin is anticipated to be in the range of 42% to 43%.

Challenges Ahead

  • Changes in the macroeconomic environment could alter our guidance.
  • Small and mid-size businesses continue to face a challenging operating environment due to complex regulations.
  • Small and mid-size businesses continue to face a tight labor market.
  • Small and mid-size businesses continue to face inflationary pressures.
  • The effective income tax rate for fiscal 2025 is anticipated to be in the range of 24% to 25%.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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