Paychex Inc. Reports Strong First Quarter Results

ROCHESTER, N.Y. – Paychex Inc. (NASDAQ: PAYX) announced better-than-expected first quarter results on Tuesday, displaying growth in its core business segments. In response, shares increased by 1.65% post-earnings release.

The company’s adjusted earnings per share for the quarter ending August 31 were $1.16, surpassing analyst expectations of $1.14. Revenue increased by 3% year-over-year to $1.32 billion, slightly above the consensus forecast of $1.31 billion.

John Gibson, President and CEO, stated, “We are off to a solid start in fiscal 2025 with 3% growth in total revenue during the first quarter.” Excluding the expiration of the Employee Retention Tax Credit program and the reduction of one payroll processing day, revenue growth was 7%.

The Management Solutions segment, the largest for the company, saw revenue rise by 1% to $961.7 million. Meanwhile, Professional Employer Organization (PEO) and Insurance Solutions revenues grew by 7% to $319.3 million, fueled by an increase in average PEO worksite employees and higher PEO insurance revenues.

Interest on funds held for clients surged by 15% to $37.5 million, benefitting from elevated average interest rates and investment balances.

Looking ahead, Paychex has revised its fiscal 2025 outlook, now forecasting interest on client-held funds between $145 million and $155 million while maintaining its other full-year guidance.

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