Paychex Inc Stock Price, News & Analysis

The latest Paychex Small Business Employment Watch reveals that U.S. small businesses continued adding jobs in June, albeit slower than in May. Small business hourly earnings growth remained steady at 3.16% for the month.

The national jobs index for June was 100.29, indicating employment gains but at a slower rate compared to May's 100.58 and June 2023's 101.37. The state of California has seen a three-month consecutive decline below 100, indicating job losses, with the Leisure and Hospitality sector particularly affected. Conversely, Education and Health Services, along with Professional and Business Services, saw an uptick in small business employment growth.

Weekly earnings growth improved for the third straight month, albeit marginally, at 2.96%. However, challenges such as complex regulations, a tight labor market, and inflationary pressures continue to impact certain regions and industries.

Paychex has reported its fourth-quarter and full-year 2024 results, revealing solid financial performance. Total revenue grew by 5% year-over-year to $5.3 billion, with a 7% increase in operating income to $2.2 billion. Diluted EPS rose 9% to $4.67, while adjusted diluted EPS saw an 11% boost to $4.72. For Q4 alone, revenue was $1.3 billion, a 5% increase from the previous year, and operating income grew 6% to $481.8 million. Adjusted diluted EPS for Q4 rose 15% to $1.12.

The company benefited from higher interest on funds held for clients, which increased 54% to $38.2 million. Paychex also initiated cost optimization efforts, leading to a 5% increase in total expenses to $813.3 million for Q4. The company announced a fiscal 2025 outlook with expected revenue growth of 4.0%-5.5% and adjusted diluted EPS growth of 5%-7%.

Throughout fiscal 2024, Paychex maintained a strong cash position with $1.6 billion in cash and corporate investments and generated $1.9 billion in cash flow from operations. Dividends paid amounted to $3.65 per share, totaling $1.3 billion, with an additional $169.2 million spent on share repurchases.

Paychex (Nasdaq: PAYX) is set to release its fiscal 2024 fourth-quarter and full-year financial results on June 26, 2024. The announcement will be made via Business Wire before the financial markets open. A conference call to review these results is scheduled for 9:30 a.m. ET on the same day. The call will feature insights from John Gibson, President and CEO, and Bob Schrader, Senior Vice President and CFO. The live broadcast will be accessible online through the Paychex Investor Relations portal, with an archived replay available for 90 days.

According to the May report from the Paychex Small Business Employment Watch, the Small Business Jobs Index rose by 0.46 points to 100.58, marking the largest increase since January 2022. However, hourly earnings growth decelerated to 3.13%, the lowest since June 2021. Weekly earnings growth saw a positive uptick to above 3% for the first time since January 2024, driven by stabilized weekly working hours. The Midwest led regional growth with a 0.61-point increase, while the South maintained the highest employment growth rate at 101.05. The Leisure and Hospitality sector saw a notable 0.77-point rise. Despite these gains, challenges such as inflation, access to capital, and labor shortages persist.

Paychex Flex® has been awarded the 2024 HR Tech Award for Best Core HR/Workforce Solution by Lighthouse Research & Advisory Firm for the fifth time. The SaaS solution was recognized for simplifying HR tasks for small businesses, saving clients time and offering educational resources. Paychex continues to provide digital HR solutions and advisory services to streamline HR, payroll, and benefits management.

Paychex, Inc., a leading provider of human capital management software solutions, announced a 10% increase in its quarterly cash dividend to $0.98 per share. The Board of Directors approved the increase based on strong financial position and healthy free cash flow. The dividend will be payable on May 30, 2024, to shareholders of record as of May 10, 2024.

In April 2024, according to the Paychex Small Business Employment Watch, hourly earnings growth for U.S. small business workers increased to 3.34%, ending a nearly two-year deceleration trend. However, job growth slowed, with U.S. small businesses adding jobs at a slower pace. Weekly hours worked for employees also decreased for the 13th consecutive month. The Small Business Jobs Index stood at 100.12, indicating positive job gains but down from the previous year.