Compared to Estimates, Paychex (PAYX) Q2 Earnings: A Look at Key Metrics

Core Insights - Paychex reported $1.32 billion in revenue for the quarter ended November 2024, a year-over-year increase of 4.7$1.14 compared to $1.08 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of$1.31 billion, resulting in a surprise of +0.29%, while the EPS also surpassed expectations by +1.79% [1] Financial Performance Metrics - Average investment balance for funds held for clients was $4.25 billion, exceeding the estimated$4.13 billion [3] - Average interest rates earned on funds held for clients were 3.4%, matching the average estimate [3] - Average investment balance for corporate cash equivalents and investments was $1.47 billion, slightly below the estimated$1.52 billion [3] - Average interest rates earned on corporate cash equivalents and investments were 4.3%, lower than the estimated 4.8% [3] - Revenue from Management Solutions was $962.90 million, surpassing the average estimate of$959.27 million, reflecting a year-over-year change of +3.5% [3] - Revenue from interest on funds held for clients was $36.10 million, exceeding the estimated$34.81 million, with a year-over-year increase of +14.6% [3] - Total service revenue was reported at $1.28 billion, aligning with the average estimate, and showing a year-over-year change of +4.4$317.90 million, slightly below the average estimate of $319.37 million, but still representing a year-over-year increase of +7.5% [3] Stock Performance - Paychex shares have returned -4.2% over the past month, compared to the Zacks S&P 500 composite's -0.3% change [4] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [4]