NASDAQ$PAYX

Paychex Inc · Q4 2021 earnings

Q4 2021 earnings · · Investor relations

Briefing

Paychex's fourth quarter results were driven by record client retention, sales, and stronger checks per client.

Paychex reported strong Q4 2021 results, driven by record client retention and sales, and stronger checks per client. Total service revenue increased by 14% to $1.0147 billion, and diluted earnings per share grew by 20% to $0.73. The company ended the fiscal year with over 710,000 clients and positive service revenue growth.

  • Service revenue grew 14% to $1.0 billion.
  • Diluted earnings per share grew 20%.
  • Client base growth was strong, ending the year with over 710,000 clients.
  • Management Solutions revenue increased 14% due to client base growth and higher checks per client.

Headline financials

Total Revenue

$1.03B

Previous: $915M+12.4%
EPS (adj)

$0.72

Previous: $0.61+18.0%
Capital Expenditures

$27.7M

Previous: $35.1M-21.1%
Free Cash Flow

$362M

Previous: $353M+2.5%
Net Income

$263M

Previous: $221M+19.2%
Operating Income

$354M

Previous: $300M+18.1%
Gross Profit

$713M

Previous: $623M+14.4%
Cash & Equivalents

$995M

Previous: $905M+9.9%
Total Assets

$9.23B

Previous: $8.55B+7.9%
Stock-Based Comp

$14.4M

Previous: $10.9M+32.1%

Revenue & EPS history

Paychex · Revenue · Quarterly

$1.03B

Q4 2021+12.4%vs Q4 2020
Beat estimate in 14 of 16 quarters(88%)
ActualEstimate

Revenue by segment

Paychex · $1.03B total across 3 segments · Q4 2021

  • Management Solutions
    $756M+14.3%
  • PEO and Insurance Solutions
    $258M+13.3%
  • Interest on Client Funds
    $14.5M-42.7%

Forward guidance

Paychex provided its outlook for fiscal year 2022, incorporating current assumptions and market conditions. Changes in the macroeconomic environment could alter this guidance.

Tailwinds

  • Management Solutions revenue is anticipated to grow approximately 7%.
  • PEO and Insurance Solutions revenue is anticipated to grow in the range of 8% to 10%.
  • Interest on funds held for clients is expected to be flat.
  • Total revenue is anticipated to grow approximately 7%.
  • Adjusted diluted earnings per share is anticipated to grow in the range of 10% to 12%.

Headwinds

  • Changes in the macroeconomic environment could alter our guidance.
  • Other expense, net is anticipated to be in the range of $33 million to $37 million.
  • The effective income tax rate for fiscal 2022 is anticipated to be in the range of 24% to 25%.
  • Unknown: Potential impacts from macroeconomic changes.
  • Unknown: Risks associated with forward-looking statements as detailed in the cautionary note.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q4 2021

Historical avgQ4 2021

-0.6%

Avg return

Earnings day

+0.5%

Avg return

5 days after

+1.1%

Avg return

30 days after

36%

26 / 72 earnings

Positive

+10.2%

Q3 2020

Best reaction

-6.3%

Q2 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q3 2026-0.5%+2.7%
Q2 2026-1.7%+0.3%-2.7%
Q1 2026-1.3%-3.0%-8.8%
Q4 2025-2.5%-0.6%-4.7%
Q3 2025+4.2%+7.0%-0.6%
Q2 2025+2.7%+4.1%+7.7%
Q1 2025+4.9%+3.3%+3.8%
Q4 2024-5.8%-6.4%+0.6%
Q3 2024-1.1%+0.6%-2.6%
Q2 2024-6.3%-6.0%-4.5%
Q1 2024+3.9%+0.9%-2.8%
Q4 2023+1.0%+0.7%+14.3%
Q3 2023+4.2%+2.2%+0.8%
Q2 2023+1.1%+0.3%+2.8%
Q1 2023+0.1%+1.4%+5.7%
Q4 2022-5.0%-2.9%+7.0%
Q3 2022+3.0%+5.1%-4.4%
Q2 2022+6.2%+7.3%-6.1%
Q1 2022+6.8%+8.3%+14.3%
Q4 2021+2.5%+2.9%+7.6%
Q3 2021-5.5%-4.0%+1.2%
Q2 2021-2.0%-2.4%-10.1%
Q1 2021-1.1%+1.2%+6.3%
Q4 2020-4.2%-5.8%-6.7%
Q3 2020+10.2%+8.2%+14.3%
Q2 2020-0.2%-0.4%+3.6%
Q1 2020+0.8%+1.3%+2.4%
Q4 2019-3.2%-1.5%+2.1%
Q3 2019-1.3%+1.0%+4.6%
Q2 2019+1.0%-4.2%+8.7%
Q1 2019-0.7%-1.1%-11.8%
Q4 2018-1.5%-1.4%+2.8%
Q3 2018-3.1%-0.2%-2.8%
Q2 2018-1.3%-0.5%+0.4%
Q1 2018+4.7%+6.4%+7.9%
Q4 2017-3.3%-3.6%-1.5%
Q3 2017-2.4%-3.5%-2.1%
Q2 2017-0.7%-0.3%-0.7%
Q1 2017-5.2%-4.7%-8.7%
Q4 2016+5.9%+7.0%+5.6%
Q3 2016-0.9%
Q2 2016+2.6%
Q1 2016+4.6%
Q4 2015+1.6%
Q3 2015-4.5%
Q2 2015-1.5%
Q1 2015+3.0%
Q4 2014-1.0%
Q3 2014+0.1%
Q2 2014+4.7%
Q1 2014-0.9%
Q4 2013-2.7%
Q3 2013+0.6%
Q2 2013-2.3%
Q1 2013-3.3%
Q4 2012-2.5%
Q3 2012-2.3%
Q2 2012-0.5%
Q1 2012+1.3%
Q4 2011-3.6%
Q3 2011-3.0%
Q2 2011-1.1%
Q1 2011+2.0%
Q4 2008-1.8%
Q4 2010-1.8%
Q3 2009-5.2%
Q3 2010-5.2%
Q2 2010-3.0%
Q1 2009-5.1%
Q1 2010-5.1%
Q4 2009-5.1%
Q2 2009-5.1%

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