Paychex beats estimates as revenue rises 3%, shares rise via Investing.com

ROCHESTER, NY – Paychex Inc . (NASDAQ: ) reported better-than-expected first-quarter results on Tuesday as the payroll and human resources company saw continued growth in its core business segments. Shares rose 1.65% after the earnings release.

The company posted adjusted earnings per share of $1.16 for the quarter ended Aug. 31, beating analysts’ estimates of $1.14. Revenue rose 3% from a year ago to $1.32 billion, slightly above the consensus forecast of $1.31 billion.

“We’re off to a solid start in fiscal 2025 with 3% growth in total revenue in the first quarter,” said President and CEO John Gibson. He noted that excluding the impact of the expiration of the employee retention tax credit program and one less day of payroll processing, revenue growth was 7 percent.

Revenue from Management Solutions, the company’s largest segment, rose 1 percent to $961.7 million. Professional Employer Organizations (PEOs) and Insurance Solutions revenue increased 7% to $319.3 million, driven by an increase in the average number of PEO employees at work and higher PEO insurance revenue.

Interest on funds held for clients increased 15% to $37.5 million, benefiting from higher average interest rates and investment balances.

Looking ahead, Paychex updated its outlook for fiscal 2025, now expecting interest on client funds to be between $145 million and $155 million. The company maintained its other previous guidance for the full year.

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