In the 1970s, there were no notable companies providing payroll accounting services to small businesses. Former Electronic Accounting Systems sales manager Thomas Golisano saw this gap as a huge opportunity. So, in 1971, Golisano founded Paymaster which was later renamed Paychex Inc. (NASDAQ:PAYX). The company began offering payroll services to small and medium-sized businesses. Today, it is a leading provider of human resources, payroll and benefits. outsourcing services in the USA
Paychex recently reported better than expected financial results for the fourth quarter, helped by strong demand for its services. The company reported earnings of 73 cents per share for the three months ended May 31, down from 61 cents per share in the previous year quarter. It earned 72 cents per share on an adjusted basis, ahead of the consensus estimate of 67 cents per share.
Revenue was $ 1.03 billion, compared to $ 915.1 million in the previous year quarter. Analysts on average expected Paychex to report revenue of $ 980 million. If we look at the performance of key segments, management solutions segment revenue increased 14% to $ 756.4 million, while PEO and insurance solutions revenue jumped 13% to 258.3 millions of dollars.
Commenting on the results, CEO Martin Mucci said in a statement: âOur fourth quarter results were driven by record levels of customer retention, record sales results and tighter controls per customer, which were driven by improving macroeconomic conditions and employment gains. The growth in the customer base was strong and we ended the year with over 710,000 customers. We are proud to end the year with positive growth in service revenues, a testament to the resilience, innovation and commitment of our employees and the strength of our business model. After navigating the uncertain environment of the pandemic, we are well positioned with the continued innovation of our technology and our product line to meet the continuing needs of businesses and help them succeed and prosper as they begin. getting people back to work and adapting to changes in how, where and when work is done.
Going forward, Paychex forecasts revenue growth of approximately 7% for its fiscal year ending May 31, 2022. Additionally, adjusted earnings are expected to increase in the range of 10-12% year-over-year. other.