Payroll processor Paychex forecasts annual profit above estimates on resilient spending
June 26 (Reuters) -Paychex PAYX.O forecast fiscal year 2025 profit growth above Wall Street estimates on Wednesday, anticipating resilient spending by its clients on its human capital management and payroll services.
The company, which has more than 745,000 clients as of May 31, has benefited from a strong demand for its management solutions, which includes payroll processing, amid a challenging economic environment and labor market.
The Rochester, New York-based company also offers HR outsourcing, human capital management technology, retirement and insurance solutions among others to small- and mid-sized businesses.
The company forecast fiscal year 2025 adjusted profit per share growth of between 5% and 7%, the mid-point of which is above analysts' average estimates of 5.4%, according to LSEG data.
It expects fiscal year revenue growth between 4% and 5.5%, compared with average estimates of 5.1%.
Paychex's revenue grew 5% from a year earlier to $1.30 billion for the fourth quarter ended May 31, coming in line with the average estimates. Its quarterly profit per share came in at $1.05, compared with 97 cents per share a year ago.
The company said lower contribution from employee retention tax credit, a credit that helps businesses keep employees during financial distress, has impacted total revenue in the fourth quarter by about 300 basis points.
Reporting by Jaspreet Singh in Bengaluru; Editing by Vijay Kishore
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