Paychex Q2 Earnings & Revenues Surpass Estimates, Increase Y/Y

Paychex, Inc. PAYX has reported impressive second-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate.See Zacks Earnings Calendar to stay ahead of market-making news.PAYX’s earnings of $1.1 per share beat the Zacks Consensus Estimate by 1.8% and increased 5.6% from the year-ago quarter. Total revenues of $1.3 billion outpaced the consensus estimate by a slight margin and gained 4.8% from the year-ago quarter.The company’s shares have gained 17.5% in the year-to-date period, underperforming the 23.3% and 25.7% rallies of the industry and the Zacks S&P 500 composite, respectively.Paychex, Inc. Price, Consensus and EPS Surprise  Paychex, Inc. price-consensus-eps-surprise-chart | Paychex, Inc. QuotePAYX’s Quarterly PerformanceRevenues from the Management Solutions segment increased 3% year over year to $962.9 million, beating our estimate of $955.5 million. Professional employer organization (“PEO”) and Insurance Solutions’ revenues were $317.9 million, up 7% from the year-ago quarter. The figure missed our estimate of $319.4 million.Service revenues gained 5% year over year to $1.3 billion, meeting our estimate. Interest on funds held for clients jumped 15% from the year-ago quarter to $36.1 million, missing our projection of $36.8 million.EBITDA of $579.1 million gained 5% from the year-ago quarter, missing our estimate of $581.3 million. Operating income increased 6% year over year to $538.1 million, surpassing our projection by a slight margin. The operating margin was 40.9%, up 70 basis points from the year-ago quarter. The reported figure missed our estimate of 41%.Balance Sheet & Cash Flow of PaychexThe company exited the second quarter of fiscal 2025 with cash and cash equivalents of $1.2 billion compared with $1.5 billion in the preceding quarter. The long-term debt totaled $798.9 million compared with $798.7 in first-quarter fiscal 2025.Cash generated from operating activities amounted to $295 million, while the capital expenditure totaled $47 million.PAYX’S FY25 GuidancePaychex expects interest on funds held for clients to be $145-$155 million. PAYX anticipates other income of $30-$35 million.Paychex carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Earnings Snapshots of PAYX’s PeersInsperity, Inc. NSP reported mixed third-quarter 2024 results.NSP’s adjusted earnings (excluding 32 cents from non-recurring items) of 39 cents per share outpaced the consensus estimate by 21.9% but decreased 73.3% year over year. Revenues of $1.6 billion missed the Zacks Consensus Estimate slightly but increased from the year-ago quarter.Republic Services, Inc. RSG posted mixed third-quarter 2024 results.RSG’s earnings per share (excluding 1 cent from non-recurring items) of $1.8 outpaced the Zacks Consensus Estimate by 11.7% and grew 17.5% from the year-ago quarter. Revenues of $4.1 billion missed the consensus mark by a slight margin but increased 6.5% on a year-over-year basis.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Paychex, Inc. (PAYX): Free Stock Analysis Report Republic Services, Inc. (RSG): Free Stock Analysis Report Insperity, Inc. (NSP): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks