- Paychex (NASDAQ:PAYX -0.8%) reports fiscal FQ1 beats with revenue down 6% Y/Y to $932M; as the Company’s results of operations were adversely impacted as businesses continue to be affected by the COVID-19 pandemic.
- Management Solutions revenue fell 5% to $687.4M Y/Y, and Insurance Solutions declined 7% to $229.9M.
- Q1 overall margins: Operating declined 470 bps to 30.5%; adj. operating declined 140 bps to 33.8% and adj. EBITDA too declined 144 bps to 39.2%.
- Interest on funds held for clients decreased 28%, primarily due to lower average investment balances, average interest rates, and realized gains.
- During Q1, Co. paid dividends of $223.2M and repurchased 0.4M shares of common stock for a total of $28.8M.
- Financial position remained strong with cash, restricted cash, and total corporate investments of $952.1M.
- Also the positive cash flows have historically allowed to support the business and to pay substantial dividends to stockholders.
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2021 Guidance: Total revenue to decline in the range of 2% to 4% vs. consensus of -3.65%; adj. diluted EPS to decline in the range of 6% to 8% vs. consensus of -8.24%; Management Solutions revenue to decline in the range of 1% to 3%; PEO and Insurance Solutions revenue to decline in the range of 2% to 5%; adj. operating margin of ~35% and adj. EBITDA margin of ~40%.
- Previously: Paychex EPS beats by $0.08, beats on revenue (Oct. 06 2020)