Adjusted EPS of $1.08 beat the analyst consensus estimate of $1.07.

Selling, general and administrative expenses climbed 8% to $387.6 million.

Operating income for the quarter increased 7% to $506.2 million with an operating margin of 40.2%, a 50 basis point expansion.

The company held $1.4 billion in cash and equivalents as of November 30, 2023. 

President and Chief Executive Officer, John Gibson commented, "The macro-economic environment remains stable for small and mid-sized businesses, who continue to face challenges in both the cost of and access to growth capital; and finding quality talent in the current labor market. Our Small Business Employment Watch continues to show moderation in both job growth and wage inflation."

Outlook: Paychex revised its FY24 adjusted EPS growth outlook from 10% - 11% (prior 9% - 11%) versus consensus $4.7.

Last quarter, the company forecasted total revenue growth of 6% - 7% versus consensus $5.34 billion.

Price Action: PAYX shares are trading lower by 5.70% at $120.58 on the last check Thursday.