We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
PAYX posted Q4 EPS of $1.19 and revenues of $1.4B, up 6.3% and 10% y/y, beating estimates.
Management Solutions' revenues rose 12% due to Paycor's buyout and stronger revenues per client.
PAYX raised the FY25 revenue growth view to 16.5-18.5% and lifted client fund interest forecast to $190-$200M.
Paychex, Inc. (PAYX - Free Report) has reported impressive fourth-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
PAYX’s fiscal fourth-quarter earnings of $1.19 per share beat the Zacks Consensus Estimate by a slight margin and increased 6.3% from the year-ago quarter. Total revenues of $1.4 billion surpassed the consensus estimate by a slight margin and gained 10% from the year-ago quarter.
The company’s shares have risen 33.4% in a year compared with the 35.2% and 11% rallies of the industry and the Zacks S&P 500 composite, respectively.
Revenues from the Management Solutions segment increased 12% year over year to $1 billion, beating our estimate of $979 million. Paycor's buyout and higher revenues per client, resulting from price realization and product penetration, facilitated this growth.
Professional employer organization (“PEO”) and Insurance Solutions’ revenues were $340.3 million, up 4% from the year-ago quarter. The figure met our estimate. Growth in the number of average PEO worksite employees and a surge in PEO insurance revenues contributed to this segment’s growth.
Service revenues gained 10% year over year to $1.4 billion, exceeding our projection of $1.3 billion. Interest on funds held for clients rose 18% from the year-ago quarter to $45.2 million, surpassing our estimation of $37.4 million.
EBITDA of $518.2 million dropped 1% from the year-ago quarter, missing our estimate of $657.9 million. Operating income decreased 11% year over year to $431.1 million, missing our projection of $615.4 million. The operating margin was 30.2%, down 700 basis points from the year-ago quarter. The reported figure beat our estimate of 43.5%.
Balance Sheet & Cash Flow of Paychex
The company exited the fourth quarter of fiscal 2025 with cash and cash equivalents of $1.6 billion, flat with the preceding quarter. The long-term debt totaled $4.5 billion compared with $799 million in the third quarter of fiscal 2025.
Cash generated from operating activities amounted to $394 million, while the capital expenditure totaled $60.5 million.
PAYX’S FY25 Guidance
Paychex expects revenues to grow 16.5-18.5%. The management raised its expectation for interest on funds held for clients to $190-$200 million compared with the preceding quarter’s view of $145-$155 million.
FI’s adjusted earnings per share of $2.14 beat the consensus mark by 2.9% and gained 13.8% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Adjusted revenues of $4.8 billion missed the consensus estimate by 1.6% but gained 5.5% on a year-over-year basis.
FactSet (FDS - Free Report) reported the results for the third quarter of fiscal 2025.
FDS’s earnings per share of $4.27 missed the consensus mark by a slight margin and decreased 2.3% from the year-ago quarter. Revenues of $585.5 million beat the Zacks Consensus Estimate by a slight margin and gained 5.9% from the year-ago quarter.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Paychex Q4 Earnings & Revenues Surpass Estimates, Increase Y/Y
Key Takeaways
Paychex, Inc. (PAYX - Free Report) has reported impressive fourth-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
PAYX’s fiscal fourth-quarter earnings of $1.19 per share beat the Zacks Consensus Estimate by a slight margin and increased 6.3% from the year-ago quarter. Total revenues of $1.4 billion surpassed the consensus estimate by a slight margin and gained 10% from the year-ago quarter.
The company’s shares have risen 33.4% in a year compared with the 35.2% and 11% rallies of the industry and the Zacks S&P 500 composite, respectively.
Paychex, Inc. Price, Consensus and EPS Surprise
Paychex, Inc. price-consensus-eps-surprise-chart | Paychex, Inc. Quote
PAYX’s Quarterly Performance
Revenues from the Management Solutions segment increased 12% year over year to $1 billion, beating our estimate of $979 million. Paycor's buyout and higher revenues per client, resulting from price realization and product penetration, facilitated this growth.
Professional employer organization (“PEO”) and Insurance Solutions’ revenues were $340.3 million, up 4% from the year-ago quarter. The figure met our estimate. Growth in the number of average PEO worksite employees and a surge in PEO insurance revenues contributed to this segment’s growth.
Service revenues gained 10% year over year to $1.4 billion, exceeding our projection of $1.3 billion. Interest on funds held for clients rose 18% from the year-ago quarter to $45.2 million, surpassing our estimation of $37.4 million.
EBITDA of $518.2 million dropped 1% from the year-ago quarter, missing our estimate of $657.9 million. Operating income decreased 11% year over year to $431.1 million, missing our projection of $615.4 million. The operating margin was 30.2%, down 700 basis points from the year-ago quarter. The reported figure beat our estimate of 43.5%.
Balance Sheet & Cash Flow of Paychex
The company exited the fourth quarter of fiscal 2025 with cash and cash equivalents of $1.6 billion, flat with the preceding quarter. The long-term debt totaled $4.5 billion compared with $799 million in the third quarter of fiscal 2025.
Cash generated from operating activities amounted to $394 million, while the capital expenditure totaled $60.5 million.
PAYX’S FY25 Guidance
Paychex expects revenues to grow 16.5-18.5%. The management raised its expectation for interest on funds held for clients to $190-$200 million compared with the preceding quarter’s view of $145-$155 million.
The company carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshots
Fiserv, Inc. (FI - Free Report) registered mixed first-quarter 2025 results.
FI’s adjusted earnings per share of $2.14 beat the consensus mark by 2.9% and gained 13.8% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Adjusted revenues of $4.8 billion missed the consensus estimate by 1.6% but gained 5.5% on a year-over-year basis.
FactSet (FDS - Free Report) reported the results for the third quarter of fiscal 2025.
FDS’s earnings per share of $4.27 missed the consensus mark by a slight margin and decreased 2.3% from the year-ago quarter. Revenues of $585.5 million beat the Zacks Consensus Estimate by a slight margin and gained 5.9% from the year-ago quarter.