Paychex (PAYX) Tops Q1 EPS by 9c

Paychex (NASDAQ: PAYX) reported Q1 EPS of $0.89, $0.09 better than the analyst estimate of $0.80. Revenue for the quarter came in at $1.08 billion versus the consensus estimate of $1.04 billion.

Business Outlook

Our outlook for the fiscal year ending May 31, 2022 (“fiscal 2022”) incorporates current assumptions and market conditions. Changes in the macroeconomic environment could alter our guidance. With consideration of these impacts, we have updated our guidance as follows:

• Management Solutions revenue is now anticipated to grow approximately 8%;
• Total revenue is also anticipated to grow approximately 8%;
• Adjusted operating margin(1) is anticipated to increase to a range of 38% to 39%;
• Adjusted EBITDA margin(1) is anticipated to increase to approximately 43%;
• Other expense, net is now anticipated to be in the range of $23 million to $26 million; and
• Adjusted diluted earnings per share(2) is now anticipated to grow in the range of 12% to 14%.

Other aspects of our guidance for fiscal 2022 remain unchanged from what we provided previously.

(1)

Adjusted operating margin and adjusted EBITDA margin are not U.S. GAAP measures. Adjusted operating margin is calculated as operating margin, adjusted for one-time non-recurring items, as a percentage of total revenue. Adjusted EBITDA margin is calculated as net income, adjusted for interest, taxes, depreciation, amortization, and one-time non-recurring items, as a percentage of total revenue. We believe that the exclusion of certain one-time non-recurring items when calculating these measures provides a better indicator of our core business operations’ performance period over period.

(2)

Adjusted diluted earnings per share is not a U.S. GAAP measure. Please refer to the “Non-GAAP Financial Measures” section on page 3 of this press release for a discussion of this non-GAAP measure and a reconciliation to the most comparable U.S. GAAP measure of diluted earnings per share.

For earnings history and earnings-related data on Paychex (PAYX) click here.

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