PAYX Earnings Prediction
The chart below shows how PAYX performed 10 days before and after its earnings report, based on data from the past quarters. Typically, PAYX sees a +0.88% change in stock price 10 days leading up to the earnings, and a +1.48% change 10 days following the report. On the earnings day itself, the stock moves by +0.41%. This data can give you a slight idea of what to expect for the next quarter's release.
PAYX Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
1.51B
4.84%
14.59%
Gross Margin
88.68%
0.14%
2.05%
Operating Margin
46.95%
3.99%
14.90%
Net Margin
34.41%
-0.66%
9.62%
EPS
1.43
3.62%
25.44%
No Data Available
PAYX Earnings Analysis
Paychex Inc Corporation (PAYX.O) Earnings Conference Call
Positive
Revenue Growth Analysis: Total revenue growth was 5% in the third quarter, and 6% when excluding the impact of the discontinued ERTC program, driven by strong HCM solutions.
Earnings Per Share Growth: Diluted earnings per share increased 4%, and adjusted diluted earnings per share grew 8% during the quarter, indicating solid profitability.
Strategic Acquisition Announcement: The company announced a definitive agreement to acquire Paycor, which is expected to enhance their competitive position and provide access to a larger customer base.
Accretive Acquisition Impact: The acquisition of Paycor is anticipated to be accretive to adjusted earnings per share next fiscal year, reflecting confidence in future growth.
Client Retention Improvement: Client retention rates improved, remaining above pre-pandemic levels, showcasing the effectiveness of their value proposition.
Innovation Recognition in HR: Paychex was recognized as one of Fortune's most innovative companies for the third consecutive year, validating their strategy in the HR sector.
Ethical Business Recognition: The company was named one of the World's Most Ethical Companies for the 17th time, highlighting their commitment to ethical business practices.
HR Copilot Tool Launch: The introduction of the GenAI powered HR Copilot tool is set to enhance client service by providing efficient answers to HR inquiries, demonstrating innovation in technology.
Employee Engagement Success: Paychex Perks, a digital marketplace for employees, has seen over 180,000 client employees purchase products since its launch, indicating strong engagement with new offerings.
Negative
Revenue Growth Slowdown: Total revenue growth was only 5% in the third quarter, indicating a slowdown in growth compared to previous periods.
Revenue Growth Outlook: The company expects total revenue growth to be at the low end of the 4% to 5.5% range for the fiscal year, primarily due to continued headwinds from pass-through insurance revenues.
Projected Revenue Growth Decline: Management Solutions revenue growth is projected to be only 3% to 4%, which is lower than previous expectations.
Revised Growth Forecast: PEO and Insurance Solutions growth has been revised down to 6% to 6.5%, down from a previous guidance of 7% to 9%.
Client Funds Interest Decline: Interest on funds held for clients decreased by 2% to $43 million, reflecting lower average interest rates.
Client Employment Challenges: The company reported that client employment levels were softer than expected, which may have been impacted by weather-related challenges and lower bonus checks than last year.
ERTC Program Expiration Impact: The expiration of the ERTC program continues to be a headwind for revenue, affecting overall financial performance.
Effective Tax Rate Impact: The effective income tax rate is expected to be in the range of 24% to 25%, which may impact net earnings.
Operating Income Margin Adjustment: Adjusted operating income margin is now expected to be approximately 43%, down from previous guidance of the high end of the range of 42% to 43%.
PAYX FAQs
How does PAYX typically perform around its earnings report dates?
Is Paychex Inc (PAYX) Q3 2025 Earnings Call Summary positive or negative?
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PAYX Earning Call Sentiment
Paychex, Inc. (PAYX) Q3 2025 Earnings Call Transcript
PAYX.O
0.2%Positive
The earnings call reveals steady growth in key areas like PEO and insurance solutions, but challenges in Florida and lack of specific guidance on Paycor synergies create uncertainties. The positive aspects, such as strong year-to-date earnings, are balanced by cautious future guidance and specific regional issues. The Q&A section highlights concerns about Florida's impact and management's vague responses, which tempers overall optimism. Therefore, the sentiment is neutral, expecting the stock to remain relatively stable in the short term.
