Paychex Q3 Highlights: 8% Revenue Growth, Earnings Beat, Updated Outlook & More

Paychex, Inc PAYX reported third-quarter FY23 revenue growth of 8% year-over-year to $1.38 billion, beating the consensus of $1.36 billion.
Total service revenue grew 7% Y/Y to $1.35 billion.
Segments: Management Solutions revenue grew 7% Y/Y to $1 billion. PEO and Insurance Solutions' revenue rose 6% Y/Y to $321.2 million.
Operating income increased by 9% Y/Y to $611.9 million, and the margin was 44.3%, up 20 bps.
Adjusted EPS increased 12% Y/Y to $1.29, beating the consensus of $1.24.
As of February 28, 2023, Paychex held cash, restricted cash, and total corporate investments of $1.6 billion.
The company reported cash flow from operations of $1.3 billion for the nine months ended February 28, 2023.
FY23 Outlook: Paychex expects Adjusted EPS to grow 13% - 14% (prior view 12% - 14%) and Management Solutions revenue to grow by ~8% (prior view 7% - 8%).
Price Action: PAYX shares traded higher by 4.93% at $114.35 on the last check Wednesday.

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