Paychex, Inc. (NASDAQ: PAYX) reported financial results for the first quarter. Total revenue amounted to USD 932.2 Million, a 6% shortfall compared to the prior year period. Net income fell 20% to USD 211.6 Million and diluted earnings per share dropped 19% to USD 0.59 per share in the first quarter.
Martin Mucci, President and Chief Executive Officer, commented, “Financial results for the first quarter showed marked improvement as most of our key business metrics recovered at a faster rate than anticipated. The effects of the COVID-19 pandemic continue to impact our results causing unfavorable year-over-year comparisons, however, client retention has remained strong and sales performance is accelerating with year-over-year growth in the number of clients sold. We continue to provide excellent customer service and invest in our business while remaining cost-conscious. Cost-saving initiatives are underway and proceeding as expected.”
Mucci added, “We have released several new innovative Paychex Flex® features and functions to our clients to address the ongoing business challenges and shifting workplace dynamics resulting from the COVID-19 pandemic. The Company’s most recent round of product releases includes solutions designed to help organizations stay connected with remote workers and assist clients as workers return to the office. Our mobile technology delivers solutions for ongoing health attestations, time clocks with iris scanning capabilities and paperless reporting and tracking of COVID-19 exposure and return to work testing, including automated Occupational Safety and Health Administration reporting requirements. We believe our current and past investments in our platforms have prepared us well for the demands of this environment, allowing us to adapt while maintaining high levels of service delivery resulting in strong client satisfaction and retention.”
Operational results for the first quarter were negatively impacted due to the coronavirus impact. Management solutions revenue reached USD 687.4 Million for the first quarter, a 5% drop compared to the prior year period.
For fiscal 2021, PEO and Insurance Solutions revenue is predicted to fall between 2% and 5%. Adjusted diluted earnings per share is predicted to fall between 6% and 8%.