Paychex beats quarterly profit estimates as small businesses boost HR spending

Dayforce

19/12/2024 14:29

Dec 19 (Reuters) - HR management firm Paychex  PAYX.O 
beat quarterly profit estimates on Thursday, driven by increased
spending on its human resources and payroll services from small-
and medium-sized businesses.
    On an adjusted basis, Paychex recorded quarterly profit of
$1.14 per share compared to analysts' estimates of $1.12 per
share, according to data compiled by LSEG.
    While the U.S. labor market has shown resilience, volatility
in jobless claims has made it challenging to get a clear picture
of the job market. 
    "In the face of challenging labor market conditions and
rising healthcare and benefits costs, many businesses are
reevaluating their HR strategies as we head into the new year,"
Paychex Chief Executive Officer John Gibson said. 
     Higher spending by small and medium-sized businesses has
benefited HR management firms such as Paychex as well as
competitors Automatic Data Processing  ADP.O  and Paycom
Software  PAYC.N  - both of which exceeded analysts' estimates
for quarterly revenue in October. 
    The company's revenue for the quarter ended Nov. 30
increased 5% to $1.32 billion, in line with analysts' estimates.
    Paychex, which has more than 745,000 clients, offers HR
outsourcing, human capital management technology, payroll
processing, and retirement and insurance solutions.
    Paychex maintained its annual forecast of revenue growth in
the range of 4.0% to 5.5% and adjusted per share profit growth
between 5% and 7%.
    
    

 (Reporting by Kritika Lamba in Bengaluru; Editing by Mohammed
Safi Shamsi and Tasim Zahid)
 ((Kritika.Lamba@thomsonreuters.com;))