The earnings call reflects a generally positive outlook for Paychex, with strong growth in revenue and earnings, robust performance in the PEO segment, and high client and revenue retention rates. The company introduced new AI-powered solutions, which are seeing strong adoption. However, challenges include the expiration of the ERTC program and flat enrollment in certain insurance plans due to rising health care costs.

Company Guidance

During the Paychex Q2 2025 earnings call, the company provided guidance that projected total revenue growth for the fiscal year in the range of 4% to 5.5%, despite an approximate 200 basis point headwind from the expiration of the ERTC program. Management Solutions revenue is expected to grow between 3% and 4%, while PEO and Insurance Solutions revenue is anticipated to increase by 7% to 9%, though likely at the lower end of the range due to factors affecting Florida's at-risk medical plan enrollment. Interest on funds held for clients is projected to be between $135 million and $155 million. Operating income margin is forecasted to be at the higher end of 42% to 43%, and adjusted diluted earnings per share are expected to rise by 5% to 7%. Additionally, for Q3, total revenue growth is anticipated to be between 4.5% and 5%, including another 150 basis point headwind from the ERTC program.

Solid Revenue and Earnings Growth

Excluding the impact of the expiration of the ERTC program, revenue growth was 7% in the second quarter. Diluted earnings per share growth was 6%.

Strong PEO Performance

PEO and Insurance Solutions revenue increased 7% to $318 million, driven by higher average worksite employees and increased insurance revenues.

Client and Revenue Retention at High Levels

Revenue retention improved and remains above pre-pandemic levels. Client losses are down, with improvements across all employee size segments.

Introduction of AI-Powered Solutions

Announced Paychex Recruiting CoPilot and expanded HR analytics with Premium Plus offering. Strong early adoption with over 80% engagement among early adopters.

Strong Financial Position

Cash, restricted cash, and total corporate investments of $1.3 billion with total borrowings of approximately $817 million as of November 30, 2024.

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Paychex (PAYX) Earnings, Revenues Date & History

The upcoming earnings date is based on a company’s previous reporting, and may be updated when the actual date is announced

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PAYX Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Oct 02, 2018	2019 (Q1)	- / 0.67	0.62	8.06% (+0.05)	―	―
Dec 19, 2018	2019 (Q2)	- / 0.65	0.59	10.17% (+0.06)	―	―
Mar 27, 2019	2019 (Q3)	- / 0.89	0.63	41.27% (+0.26)	―	―
Jun 26, 2019	2019 (Q4)	- / 0.63	0.61	3.28% (+0.02)	―	―
Oct 02, 2019	2020 (Q1)	- / 0.71	0.67	5.97% (+0.04)	―	―
Dec 18, 2019	2020 (Q2)	- / 0.70	0.65	7.69% (+0.05)	―	―
Mar 25, 2020	2020 (Q3)	- / 0.97	0.89	8.99% (+0.08)	―	―
Jul 07, 2020	2020 (Q4)	- / 0.61	0.63	-3.17% (-0.02)	―	―
Oct 06, 2020	2021 (Q1)	- / 0.63	0.71	-11.27% (-0.08)	―	―
Dec 23, 2020	2021 (Q2)	- / 0.73	0.7	4.29% (+0.03)	―	―

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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PAYX Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Dec 19, 2024	$135.86	$137.81	+1.44%
Oct 01, 2024	$133.30	$139.86	+4.92%
Jun 26, 2024	$123.22	$115.69	-6.11%
Apr 02, 2024	$118.89	$119.34	+0.38%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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