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Investing.com -- Paychex Inc (NASDAQ:PAYX) reported second-quarter fiscal 2025 results that exceeded analyst expectations, with revenue growth driven by its PEO and Insurance Solutions segment and higher interest income.
The human resources services provider posted adjusted earnings per share of $1.14, surpassing the analyst consensus of $1.13.
Revenue for the quarter rose 5% YoY to $1.32 billion, slightly above the $1.31 billion estimate.
Management Solutions revenue, the company's largest segment, increased 3% to $962.9 million, driven by growth in clients served and higher product penetration.
However, this was partially offset by lower revenue from ancillary services due to the expiration of the Employee Retention Tax Credit program.
PEO and Insurance Solutions revenue saw a stronger 7% growth to $317.9 million, benefiting from an increase in average PEO worksite employees and higher insurance revenues.
The company maintained its fiscal 2025 outlook, citing current assumptions and market conditions.
Paychex's operating margin improved to 40.9% from 40.2% in the prior year period, reflecting ongoing efforts to enhance operational efficiency through technology and data utilization.
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