Payroll services company Paychex Inc (NASDAQ:PAYX) reported second-quarter FY24 sales growth of 6% year-on-year to $1.26 billion, slightly missing the analyst consensus estimate of $1.27 billion.
Adjusted EPS of $1.08 beat the analyst consensus estimate of $1.07.
Selling, general and administrative expenses climbed 8% to $387.6 million.
Operating income for the quarter increased 7% to $506.2 million with an operating margin of 40.2%, a 50 basis point expansion.
The company held $1.4 billion in cash and equivalents as of November 30, 2023.
President and Chief Executive Officer, John Gibson commented, “The macro-economic environment remains stable for small and mid-sized businesses, who continue to face challenges in both the cost of and access to growth capital; and finding quality talent in the current labor market. Our Small Business Employment Watch continues to show moderation in both job growth and wage inflation.”
Outlook: Paychex revised its FY24 adjusted EPS growth outlook from 10% – 11% (prior 9% – 11%) versus consensus $4.7.
Last quarter, the company forecasted total revenue growth of 6% – 7% versus consensus $5.34 billion.
Price Action: PAYX shares are trading lower by 5.70% at $120.58 on the last check Thursday.
