Paychex Boasts $1.2B In Revenue For Q2, Says Operating Margin Remains Stable

Paychex Inc (NASDAQ: PAYX) reported second-quarter FY23 revenue growth of 7% year-on-year to $1.19 billion, in line with the consensus. 

Total service revenue grew 7% year-over-year to $1.17 billion.

Segments

• Management Solutions revenue grew 8% Y/Y to $895.3 million. PEO and Insurance Solutions' revenue rose 4% Y/Y to $273.3 million.
• The operating margin remained stable Y/Y at 39.7%. 
• Adjusted EPS of $0.99 beat the consensus of $0.95.
• Paychex held $1.3 billion in cash and equivalents.

Outlook

• Paychex sees FY23 revenue of $4.981 billion (versus the prior $4.935 billion - $4.981 billion), above the consensus of $4.97 billion.
• Paychex sees adjusted EPS guidance to $4.22 - $4.30 (vs. prior $4.19 - $4.22) above the consensus of $4.18.

Price Action: PAYX shares traded lower by 5.2% at $108.83 on the last check Thursday.