Q3 2025 Paychex Inc Earnings Call Transcript
Key Points
- Paychex Inc (PAYX) reported a 5% increase in total revenue for the third quarter, with a 6% growth excluding the impact of the discontinued ERTC program.
- Diluted earnings per share increased by 4%, and adjusted diluted earnings per share grew by 8% during the quarter.
- The acquisition of Paycor is expected to strengthen Paychex Inc (PAYX)'s competitive position and is anticipated to be accretive to adjusted earnings per share next fiscal year.
- Client retention has improved over last year's performance, with retention in HR outsourcing solutions remaining near record levels.
- Paychex Inc (PAYX) was named one of Fortune's Most Innovative Companies for the third consecutive year, highlighting its commitment to innovation and technology.
- The expiration of the ERTC program continues to present a revenue headwind, impacting overall revenue growth.
- Enrollment in the specialty Florida at-risk medical plan decreased year-over-year, affecting pass-through revenue.
- Interest on funds held for clients decreased by 2% due to lower average interest rates.
- The macro environment presents challenges, with U.S. job growth moderating and customer employment levels softer than expected.
- The acquisition of Paycor involves significant integration efforts and potential risks related to change management and achieving expected synergies.
Good morning, and welcome to the third-quarter fiscal 2025 Paychex earnings conference call. Participating on the call today are John Gibson and Bob Schrader. (Operator Instructions) As a reminder, this conference is being recorded, and your participation implies consent to our recording of this call. If you do not agree to these terms, please disconnect at this time.
I would now like to turn the call over to Bob Schrader, Chief Financial Officer. Please go ahead.
Thank you for joining us for our review of Paychex's third-quarter 2025 financial results. Joining me today is John Gibson, our Chief Executive Officer.
This morning, before the market opened, we released our financial results for the quarter ended February 28, 2025. You can access our earnings release and investor presentation on our investor relations website. Our Form 10-Q will be filed with the SEC within the next couple of days. This teleconference is being broadcast over the Internet and will be
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