Paychex, Inc. announced its fiscal quarter and year-end results for the period ending May 31, 2024, showcasing growth and strategic initiatives amidst challenging market conditions.
Quarterly Highlights:
- Total Revenue: Increased 5% year-over-year to $1.3 billion.
- Segment Performance:
- Management Solutions: Revenue up 3% to $930.3 million, driven by expanded client base and higher product penetration.
- PEO and Insurance Solutions: Revenue grew 9% to $326.6 million, fueled by increased PEO worksite employees and insurance revenues.
- Interest on Funds Held for Clients: Rose 54% to $38.2 million due to higher interest rates and balances.
- Total Expenses: Increased 5% to $813.3 million, reflecting cost optimization efforts and growth-related costs.
- Operating Income: Increased 6% to $481.8 million; adjusted operating income grew 15% to $521.3 million.
- Diluted Earnings per Share: Increased 8% to $1.05; adjusted diluted EPS rose 15% to $1.12.
Annual Highlights (Fiscal 2024):
- Total Revenue: Grew 5% to $5.3 billion.
- Operating Income: Increased 7% to $2.2 billion; adjusted operating income rose 9% to $2.2 billion.
- Diluted Earnings per Share: Increased 9% to $4.67; adjusted diluted EPS increased 11% to $4.72.
- Financial Position: Strong with $1.6 billion in cash, restricted cash, and total corporate investments as of May 31, 2024.
- Return to Stockholders: Paid dividends totaling $1.3 billion and repurchased $169.2 million of common stock during fiscal 2024.
Business Outlook (Fiscal 2025):
- Total Revenue Growth: Expected in the range of 4.0% to 5.5%.
- Adjusted Diluted EPS Growth: Anticipated in the range of 5% to 7%.
- Segment Revenue Projections: Management Solutions up 3.0% to 4.0%; PEO and Insurance Solutions up 7.0% to 9.0%.
- Operating Margin: Projected to be in the range of 42% to 43%.
Paychex remains focused on navigating market challenges and delivering value through innovative HR technology and advisory solutions, positioning itself for continued growth in fiscal 2025.
