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Investing.com -- Paychex, Inc. reported fiscal third-quarter earnings that beat analyst expectations, while revenue was in line with estimates.
Paychex (NASDAQ:PAYX) posted adjusted earnings per share of $1.49 for the quarter ended February 28, 2025, surpassing the analyst consensus of $1.48. Revenue grew 5% YoY to $1.51 billion, matching analyst estimates.
Management Solutions revenue, the company’s largest segment, increased 5% to $1.1 billion, driven by growth in clients served and higher revenue per client. Professional Employer Organization (PEO) and Insurance Solutions revenue rose 6% to $365.4 million.
"The third quarter of this fiscal year has been a transformational time at Paychex," said President and CEO John Gibson. " Total (EPA:TTEF) revenue growth in the third quarter was 5% and, excluding the impact of the discontinued Employee Retention Tax Credit program, revenue growth was 6%, driven by the strength of our industry-leading HCM solutions."
The company now expects its fiscal 2025 PEO and Insurance Solutions revenue growth to be in the range of 6.0% to 6.5%. Paychex also now expects adjusted operating margin of approximately 43% for the full year.
Paychex shares were down 1.5% following the earnings release.
The company noted it has entered into a definitive agreement to acquire Paycor (NASDAQ:PYCR) HCM, Inc., with the deal expected to close in April 2025. Gibson said the acquisition will position Paychex "for continued growth" as it expands its human capital management offerings.