Paychex, Inc. PAYX has reported impressive third-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate.

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PAYX’s fiscal third-quarter earnings of $1.49 per share beat the Zacks Consensus Estimate by a slight margin and increased 8% from the year-ago quarter. Total revenues of $1.5 billion surpassed the consensus estimate by a slight margin and gained 4.8%  from the year-ago quarter.

The company’s shares have gained 18.6% in a year compared with the 20.6% and 10.7% rallies of the industry and the Zacks S&P 500 composite, respectively.

One-Year Price Performance

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PAYX’s Quarterly Performance

Revenues from the Management Solutions segment increased 5% year over year to $1.1 million, meeting our estimate. Professional employer organization (“PEO”) and Insurance Solutions’ revenues were $365.4 million, up 6% from the year-ago quarter. The figure missed our expectation of $372.6 million.

Service revenues gained 5% year over year to $1.5 billion, meeting our anticipated figure. Interest on funds held for clients dipped 2% from the year-ago quarter to $42.9 million, surpassing our projection of $38.4 million. EBITDA of $734.9 million gained 6% from the year-ago quarter, missing our expectation of $755.1 million. Operating income increased 6% year over year to $691.8 million, missing our projection of $707.6 million. The operating margin was 45.8%, up 70 basis points from the year-ago quarter. The reported figure surpassed our estimate of 42.8%.

Balance Sheet & Cash Flow of Paychex

The company exited the third quarter of fiscal 2025 with cash and cash equivalents of $1.6 billion compared with $1.2 billion in the preceding quarter. The long-term debt totaled $799 million compared with $798.9 million in the second quarter of fiscal 2025.

Cash generated from operating activities amounted to $716 million, while the capital expenditure totaled $48.7 million.

PAYX’s FY25 Guidance

Paychex anticipates interest on funds held for clients of $145-$155 million for fiscal 2025. PAYX anticipates other income of $30-$35 million.

The company carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshots

IQVIA Holdings Analytics Inc. IQV reported impressive fourth-quarter 2024 results.

IQV’s adjusted earnings were $3.12 per share, outpacing the Zacks Consensus Estimate marginally and rising 9.9% on a year-over-year basis. Total revenues of $4 billion surpassed the consensus estimate by a slight margin and grew 2.3% from the year-ago quarter.

Gartner, Inc. IT posted better-than-expected fourth-quarter 2024 results.

IT's adjusted earnings per share of $5.6 beat the Zacks Consensus Estimate by 69.3% and increased 79.3% from the year-ago quarter. Revenues of $1.7 billion surpassed the consensus estimate by 1.8% and improved 8.2% year over year.

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This article originally published on Zacks Investment Research (zacks.com).

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