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Paychex (NASDAQ:PAYX) shares dipped 4.2% in Wednesday morning trading even after posting Q4 earnings and revenue for fiscal-year 2024 that exceeded the average analyst estimate as the human resource services provider navigated a challenging operating backdrop for small and medium-sized businesses.
The company now expects FY2025 adjusted EPS growth of 5%-7%, implying $4.95-$5.05 from 2024’s level. The guidance aligns with the $4.98 consensus.
Total revenue for the year is anticipated to rise 4.0%-5.5%, implying $5.49B-$5.57B (vs. $5.54B consensus). Management solutions revenue is seen growing 3.0%-4.0%, and PEO and insurance solutions revenue is targeted to increase 7.0%-9.0%.
Q4 adjusted EPS of $1.12, surpassing the $1.10 expected, advanced from $0.97 in the year-ago quarter.
By business segment, service revenue rose 4% Y/Y to $1.26B; management solutions revenue gained 3% to $930.3M and PEO and insurance solutions revenue ascended 9% to $326.6M.
“Small and mid-size businesses continue to face a challenging operating environment due to complex regulations, a tight labor market and inflationary pressures,” said President and CEO John Gibson.
“Our purpose remains to help these businesses succeed, and we believe we are well positioned to achieve that mission in the upcoming fiscal year,” he added.