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Paychex (Paychex) Operating Margin % : 37.20% (As of May. 2024)


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What is Paychex Operating Margin %?

Operating Margin % is calculated as Operating Income divided by its Revenue. Paychex's Operating Income for the three months ended in May. 2024 was $482 Mil. Paychex's Revenue for the three months ended in May. 2024 was $1,295 Mil. Therefore, Paychex's Operating Margin % for the quarter that ended in May. 2024 was 37.20%.

Good Sign:

Paychex Inc operating margin is expanding. Margin expansion is usually a good sign.

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

PAYX' s Operating Margin % Range Over the Past 10 Years
Min: 36.01   Med: 38.65   Max: 41.19
Current: 41.19


PAYX's Operating Margin % is ranked better than
98.1% of 1055 companies
in the Business Services industry
Industry Median: 6.2 vs PAYX: 41.19

Paychex's 5-Year Average Operating Margin % Growth Rate was 3.10% per year.

Paychex's Operating Income for the three months ended in May. 2024 was $482 Mil. Its Operating Income for the trailing twelve months (TTM) ended in May. 2024 was $2,174 Mil.


Paychex Operating Margin % Historical Data

The historical data trend for Paychex's Operating 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 Operating Margin % Chart

Paychex Annual Data
Trend May15 May16 May17 May18 May19 May20 May21 May22 May23 May24
Operating Margin %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 36.15 36.01 39.90 40.60 41.19

Paychex Quarterly Data
Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24 May24
Operating 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 36.87 41.70 40.24 45.15 37.20

Competitive Comparison of Paychex's Operating Margin %

For the Staffing & Employment Services subindustry, Paychex's Operating Margin %, along with its competitors' market caps and Operating 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 Operating Margin % Distribution in the Business Services Industry

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

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



Paychex Operating Margin % Calculation

Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.

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

Operating Margin %=Operating Income (A: May. 2024 ) / Revenue (A: May. 2024 )
=2174.1 / 5278.3
=41.19 %

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

Operating Margin %=Operating Income (Q: May. 2024 ) / Revenue (Q: May. 2024 )
=481.8 / 1295.1
=37.20 %

* 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.


Paychex  (NAS:PAYX) Operating Margin % Explanation

Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.


Be Aware

Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia’s Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.


Paychex Operating Margin % Related Terms

Thank you for viewing the detailed overview of Paychex's Operating 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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