Paychex Q4 Earnings & Revenues Surpass Estimates, Increase Y/Y

Core Insights - Paychex, Inc. (PAYX) reported strong fourth-quarter fiscal 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1][10] - The company's shares have increased by 33.4% over the past year, outperforming the industry and the Zacks S&P 500 composite [2] Financial Performance - Fiscal fourth-quarter earnings were $1.19 per share, a 6.3% increase year-over-year, and total revenues reached $1.4 billion, up 10% from the previous year [1][10] - Management Solutions segment revenues grew by 12% year-over-year to $1 billion, driven by Paycor's acquisition and higher revenues per client [3][10] - Revenues from Professional Employer Organization (PEO) and Insurance Solutions were $340.3 million, a 4% increase from the year-ago quarter [4] - Service revenues increased by 10% year-over-year to $1.4 billion, surpassing projections [5] - EBITDA decreased by 1% year-over-year to $518.2 million, while operating income fell by 11% to $431.1 million, with an operating margin of 30.2% [6] Balance Sheet & Cash Flow - At the end of the fourth quarter, the company had cash and cash equivalents of $1.6 billion, with long-term debt totaling $4.5 billion [7] - Cash generated from operating activities was $394 million, and capital expenditures amounted to $60.5 million [7] Future Guidance - Paychex anticipates revenue growth of 16.5-18.5% for fiscal year 2025 and has raised its forecast for interest on funds held for clients to $190-$200 million [8][10]