Paychex Tops Q3 Backed By Strong Selling Season; Boosts FY22 Outlook

Paychex Inc PAYX reported third-quarter FY22 revenue growth of 15% year-on-year to $1.28 billion, beating the consensus of $1.22 billion. Total service revenue grew 15% Y/Y to $1.26 billion.
Segments: Management Solutions revenue grew 13% Y/Y to $959.9 million. PEO and Insurance Solutions' revenue rose 21% Y/Y to $301.7 million.
The operating margin expanded by 190 bps to 44.1%.
Adjusted EPS of $1.15 beat the consensus of $1.05.
Paychex held $1.8 billion in cash and equivalents.
Chair and CEO Martin Mucci, "We had a strong calendar year end and selling season, delivering a record quarter for new sales revenue and maintaining high levels of client retention."
"Focus is shifting from operational and financial survival during the height of the pandemic back to an employee-centric focus, with attracting and retaining talent, remote work, and workplace safety being top areas of concern," Mucci added.
Outlook: Paychex raised the FY22 revenue growth guidance from 10% - 11% to 12% - 13%.
Paychex raised adjusted EPS guidance growth from 18% - 20% to 22.5% - 23%.
Price Action: PAYX shares traded lower by 0.09% at $132.41 on the last check Wednesday.