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Paychex (Paychex) Gross Margin % : 71.03% (As of May. 2024)


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What is Paychex Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Paychex's Gross Profit for the three months ended in May. 2024 was $920 Mil. Paychex's Revenue for the three months ended in May. 2024 was $1,295 Mil. Therefore, Paychex's Gross Margin % for the quarter that ended in May. 2024 was 71.03%.


The historical rank and industry rank for Paychex's Gross Margin % or its related term are showing as below:

PAYX' s Gross Margin % Range Over the Past 10 Years
Min: 68.3   Med: 70.55   Max: 71.97
Current: 71.97


During the past 13 years, the highest Gross Margin % of Paychex was 71.97%. The lowest was 68.30%. And the median was 70.55%.

PAYX's Gross Margin % is ranked better than
86.59% of 984 companies
in the Business Services industry
Industry Median: 34.71 vs PAYX: 71.97

Paychex had a gross margin of 71.03% for the quarter that ended in May. 2024 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Paychex was 1.10% per year.


Paychex Gross Margin % Historical Data

The historical data trend for Paychex's Gross Margin % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Paychex Gross Margin % Chart

Paychex Annual Data
Trend May15 May16 May17 May18 May19 May20 May21 May22 May23 May24
Gross Margin %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 68.30 68.66 70.59 70.98 71.97

Paychex Quarterly Data
Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24 May24
Gross Margin % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 69.93 71.99 71.05 73.61 71.03

Competitive Comparison of Paychex's Gross Margin %

For the Staffing & Employment Services subindustry, Paychex's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Paychex's Gross Margin % Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Paychex's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Paychex's Gross Margin % falls into.



Paychex Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Paychex's Gross Margin for the fiscal year that ended in May. 2024 is calculated as

Gross Margin % (A: May. 2024 )=Gross Profit (A: May. 2024 ) / Revenue (A: May. 2024 )
=3799 / 5278.3
=(Revenue - Cost of Goods Sold) / Revenue
=(5278.3 - 1479.3) / 5278.3
=71.97 %

Paychex's Gross Margin for the quarter that ended in May. 2024 is calculated as


Gross Margin % (Q: May. 2024 )=Gross Profit (Q: May. 2024 ) / Revenue (Q: May. 2024 )
=919.9 / 1295.1
=(Revenue - Cost of Goods Sold) / Revenue
=(1295.1 - 375.2) / 1295.1
=71.03 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Paychex  (NAS:PAYX) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Paychex had a gross margin of 71.03% for the quarter that ended in May. 2024 => Durable competitive advantage


Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.


Paychex Gross Margin % Related Terms

Thank you for viewing the detailed overview of Paychex's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.


Paychex (Paychex) Business Description

Traded in Other Exchanges
Address
911 Panorama Trail South, Rochester, NY, USA, 14625-2396
Paychex is a leading provider of payroll, human capital management, and insurance solutions servicing small and midsize clients primarily in the United States. The company, established in 1979, services over 740,000 clients and pays over 1 in 12 U.S. private-sector workers. Alongside its traditional payroll services, Paychex offers HCM solutions such as benefits administration and time and attendance software, as well as human resources outsourcing and insurance agency services.
Executives
Flaschen David J S director 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Christopher C Simmons officer: VP, Controller & Treasurer 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Michael E Gioja officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Efrain Rivera officer: Sr. Vice President, CFO 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Martin Mucci officer: Sr. Vice President 911 PANORAMA TRAIL S, ROCHESTER NY 14625
Joseph M Tucci director EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748
Joseph M Velli director
Elizabeth Roaldsen officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Karen E. Saunders-mcclendon officer: VP, Chief Human Resources Offi 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Theresa M. Payton director 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
John B Gibson officer: Sr. VP, Service CONVERGYS CORPORATION, 201 EAST FOURTH STREET, CINCINNATI OH 45202
Mark Anthony Bottini officer: Sr. VP of Sales 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Robert L. Schrader officer: VP/Controller 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Stephanie L Schaeffer officer: Chief Legal Officer 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Joseph Doody director CASELLA WASTE SYSTEMS INC, 25 GREENS HILL LANE PO BOX 866, RUTLAND VT 05701

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