Paychex (PAYX) shares dip as revenue misses expectations

Paychex (NASDAQ: PAYX) shares are down more than 3% premarket after the company reported earnings for its latest quarter, missing the consensus revenue estimate.

The company reported second-quarter earnings of $1.08, $0.01 better than the analyst estimate of $1.07, while revenue, which rose 6% YoY, came in at $1.26 billion versus the consensus estimate of $1.27 billion.

The company said the macroeconomic environment remains stable for small and mid-sized businesses despite the challenges in both the cost of and access to growth capital. PAYX said there is also an issue with finding quality talent in the current labor market, with its Small Business Employment Watch continuing to show moderation in both job growth and wage inflation.

“We continue to see demand for our HCM technology, HR, and insurance solutions, as businesses struggle to comply with increasing regulations and a challenging HR landscape and labor market,” said PAYX President and CEO John Gibson.

Looking ahead, for the year ending May 31, 2024, the company sees PEO and Insurance Solutions revenue in the range of 7% to 9%, while other income is now expected to be in the range of $35 million to $40 million. The company's adjusted earnings per share is now anticipated to grow in the range of 10% to 11%.

By Sam Boughedda

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