Yahoo Finance Paychex (PAYX) Q4 Earnings Beat Estimates, Revenues Miss
Paychex, Inc. PAYX has reported mixed fourth-quarter fiscal 2024 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
PAYX’s earnings of $1.1 per share beat the Zacks Consensus Estimate by 1.8% and increased 15.5% from the year-ago quarter. Total revenues of $1.3 billion missed the consensus estimate marginally but rose 5.3% from the year-ago quarter.
Paychex, Inc. Price and EPS Surprise
Paychex, Inc. price-eps-surprise | Paychex, Inc. Quote
Quarter in Detail
Revenues from the Management Solutions segment increased 3% on a year-over-year basis to $930.3 million, beating our estimate by a slight margin. Professional employer organization (“PEO”) and Insurance Solutions’ revenues totaled $326.6 million, up 9% from the year-ago quarter. The figure missed our estimate of $327.7 million.
Service revenues of $1.3 billion gained 4% year over year, lagging our expectation by a slight margin. Interest on funds held for clients jumped 54% from the year-ago quarter to $38.2 million, missing our estimate of $41.5 million.
EBITDA of $525.3 million gained 5% from the year-ago quarter, lagging our estimate of $560.1 million. Operating income increased 6% year over year to $481.8 million, missing our expectation of $516.4 million. The operating margin was 37.2%, up 30 basis points from the year-ago quarter. It missed our estimate of 39.7%.
Balance Sheet & Cash Flow
Paychex exited the quarter with cash and cash equivalents of $1.5 billion compared with $1.7 billion at the end of the preceding quarter. The long-term debt totaled $798.6 million compared with $798.5 million in third-quarter fiscal 2024.
Cash generated from operating activities amounted to $221.7 million, while capital expenditure totaled $41.3 million.
Updated 2024 Guidance
Adjusted EPS is expected to grow 5-7% year over year. The company expects total revenues to rise 4-5.5% compared with 5-6% growth mentioned previously.
Management Solutions’ revenues are expected to increase 3-4% compared with the 3.5-4% year-over-year rise mentioned previously. The company anticipates PEO and Insurance Solutions’ revenues to grow 7-9%. Interest on funds held for clients is projected to be $150-$160 million compared with the $140-$150 million mentioned previously. The operating margin is expected at 42-43% compared with the 41-42% mentioned previously.
Currently, Paychex carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshots of Peers
Insperity, Inc. NSP reported mixed first-quarter 2024 results.
NSP’s adjusted earnings (excluding 19 cents from non-recurring items) of $2.27 per share outpaced the consensus estimate by 7.6% but declined 15% year over year. Revenues of $1.8 billion missed the Zacks Consensus Estimate by a slight margin but increased 1.8% from the year-ago quarter.
Exl Service Holdings EXLS reported impressive first-quarter 2024 results.
EXLS’s quarterly adjusted EPS of 38 cents beat the consensus estimate by 5.6% and increased 8.6% on a year-over-year basis. Total revenues of $436.5 million beat the Zacks Consensus Estimate by 2.8% and increased 9% on a year-over-year basis on a reported currency basis and 8.8% on a constant-currency basis.
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Paychex, Inc. (PAYX) : Free Stock Analysis Report
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