Payroll services company Paychex Inc PAYX reported first-quarter FY24 sales growth of 7% year-on-year to $1.286 billion, slightly missing the analyst consensus estimate of $1.29 billion.
Adjusted EPS of $1.14 beat the analyst consensus estimate of $1.12.
Selling, general and administartive expenses climbed 8% to $389.5 million.
Operating income for the quarter increased 8% to $536.3 million with an operating margin of 41.7%, a 60 basis point expansion.
The company held $1.7 billion in cash and equivalents as of August 31, 2023. Operating cash flow for the quarter totaled $655.8 million.
President and Chief Executive Officer, John Gibson commented, "Small and mid-sized businesses remain resilient in navigating the broader macro-economic environment, as our Small Business Employment Watch continues to report that small businesses are hiring workers at a moderate level and wage inflation continues to normalize along with overall inflation."
Outlook: Paychex revised its FY24 adjusted EPS growth outlook from 9%-10% to 9%-11%.
The company's forecast for total revenue to grow in the range of 6% to 7% remains unchanged.
Price Action: PAYX shares are trading lower by 0.34% at $112.34 on the last check Wednesday.
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