Q1 2019

Q1 2019

@Huoya
em 02/10/2018 10:22
@MarkFord
em 02/10/2018 18:43
A Paychex Inc. (NASDAQ: PAYX) divulgou seu resultado trimestral na terça-feira, 2 de outubro. Reportou US $ 0,67 EPS no trimestre, superando a estimativa de consenso do mercado, que era de US $ 0,65, por US $ 0,02. A empresa reportou receita de US $ 862,80 milhões durante o trimestre, ao passo que a estimativa de consenso era de US $ 850,39 milhões. Paychex teve um retorno sobre o patrimônio de 44,29% e uma margem líquida de 27,62%. A receita da empresa no trimestre cresceu 8,8% em relação ao mesmo trimestre do ano passado. Durante o mesmo período do ano anterior, o negócio registrou US $ 0,62 EPS.
NASDAQ:PAYX - Stock Price, News, & Analysis for Paychex
#1 de 9
@MarkFord
em 02/10/2018 18:49
First Quarter Fiscal 2019

Highlights

Total revenue increased 9% to $862.8 million.

Total service revenue increased 9% to $845.7 million.

Interest on funds held for clients increased 25% to $17.1 million.

Operating income increased 1% to $320.3 million.

Net income increased 16% to $243.6 million and adjusted net income(1) increased 18% to $242.0 million.

Diluted earnings per share increased 16% to $0.67 per share and adjusted diluted earnings per share(1) increased 18% to $0.67 per share.

Martin Mucci, President and Chief Executive Officer, commented, “We had a strong start to the fiscal year, posting solid growth across our major human capital management (“HCM”) product lines for the first quarter. In particular, our administrative services organization (“ASO”), retirement services, and time and attendance solutions performed well. We also continue to experience strong demand for our professional employer organization (“PEO”) services, achieving double-digit growth in the number of client worksite employees served.”

Mucci added, “At the HR Technology Conference and Exposition in September, we premiered our Paychex brand refresh, which focuses on the power of simplicity. While we are offering more solutions than ever to clients of all sizes, we are still focused on making the complicated world of payroll, human resources (“HR”), employee benefits, and insurance simple for our clients. We were excited to introduce Paychex Learning, a web-based learning management system that provides employers with a simple and affordable learning tool. In addition, we showcased several new products and features, including HR enhancements, tablet-enabled facial recognition for time and attendance, and the Paychex Flex Assistant, a chatbot programmed to answer commonly asked HR-related questions.”
Paychex, Inc. Reports First Quarter Results | Business Wire
#2 de 9
@MarkFord
em 05/10/2018 22:12
Martin Mucci - President and Chief Executive Officer

We have had a good start for fiscal 2019 and our financial results reflect growth across our major product lines. Our total revenue growth was a solid 9% for the first quarter. Beginning this quarter, we are changing from our traditional disclosures, as Efrain talked about last quarter, of the service revenue categories of payroll and human resource services and are now reporting service revenues as management solutions revenues or PEO and insurance services revenues. This new revenue disaggregation provides a better representation of how our business has evolved to the selling of more bundled products and Efrain will provide more information about this in his commentary.

You may recall last fiscal year we implemented certain go-to-market strategies for sales, which began to gain momentum in the back half of the year. That momentum has continued for the first quarter, especially to HR outsourcing services both in our PEO as well as our traditional ASO/HCM service bundle. We have also continued to add to our sales force and are fully staffed as we head into our upcoming peak selling season.

With regards to the client retention in the first quarter, we are very pleased with the continued increase in this metric for retention as well as our strong client satisfaction performance. August 18 was the anniversary of our acquisition of HR Outsourcing Holdings, Inc., or HROI, a national PEO. HROI continues to perform well and has integrated very well into the existing PEO sales and service organization of Paychex. We also acquired Lessor Group, a payroll and HR services provider headquartered in Denmark at the end of February 2018. Lessor is performing well and we are enthusiastic about the growth opportunities that these acquisitions provide us. At the HR Tech Conference in September, we premiered our Paychex brand refresh, which focuses on the power of simplicity. This renews our commitment to our customers to make their lives easier by alleviating the complexity of payroll, HR, benefits, and insurance.

Paychex has over four decades of experience working with businesses to solve their complex challenges. And everything we do is focused on making it simpler for our clients to run their businesses through a combination of our leading technology, our breadth of product offerings and our personalized service options. At HR Tech, we also introduced Paychex Learning Management, a web-based learning management system that provides employers with a simple and affordable learning tool. Paychex Learning Management features access to hundreds of preloaded learning modules, allows clients to create their own new materials, and upload existing training material specific to their industry or workforce. It is also integrated with our performance management solution, which recently underwent a user experience update.

In our current environment of record low unemployment and award for talent, employers need every advantage they can to get for recruiting and retaining employees and our comprehensive suite of HR products can help employers recruit with attractive benefit package and our new LMS offering helps with the retention of talent by providing ongoing engagement and professional development. We also showcased additional new enhancements and features within our HR product suite. We now offer tablet-enabled facial recognition for time and attendance and the new Paychex Flex Assistant, a chatbot for commonly asked HR related questions. These are examples of our ongoing commitment to continually introduce advancements in technology that evolves and enhances our clients’ experience and makes it more valuable to them across all of our services.

We are pleased with our progress in retirement services for the eighth consecutive year. Paychex was named by PLANSPONSOR Magazine as the leader in total number of defined contribution plans as we now serve well over 80,000 plans. Paychex Retirement Services meets the needs of businesses of all sizes by delivering next level efficiency with full Paychex HCM integration, fee transparency, plan accessibility across devices, flexibility in investment options and fiduciary solutions and personalized participant support. We also ranked number 20 as the 20th largest business insurance agency in 2018 in their top list of 100 brokers in the U.S. This is up 1 spot from last year. This is our eighth time on this list as well and is a testament to our best-in-class insurance agents who continue to deliver customized solutions to meet the evolving needs of business owners and their employees. Value-rich insurance coverage plays a key role in both hiring and keeping key talent.

I would also like to note that for the sixth consecutive year, we were recognized by Selling Power Magazine as one of its 50 best companies to sell for, in fact ranking number 3. We have been making significant investments in our sales force, including new technology support tools and more sophisticated demand generation to improve the quantity and quality of the sales leads to support our sales force and their success.

We continue to also provide value to our shareholders. Our quarterly dividend is currently at $0.56 per share, with a last increase of 12% this past April.

In summary, our state of art technology full suite of integrated HCM product offerings and personalized service is a powerful combination that positions us for sustainable growth in our markets. Our employees make this combination successful with their hard work and commitment to our clients each and every day.
Paychex, Inc. (PAYX) CEO Martin Mucci on Q1 2019 Results - Earnings Call Transcript | Seeking Alpha
#3 de 9
@MarkFord
em 05/10/2018 22:18
Efrain Rivera - Chief Financial Officer
Total revenue and services grew 9% for the first quarter to $863 million and $846 million respectively. The growth was aided by the acquisitions of HROI and Lessor, more to come on those. Expenses increased 14% for the first quarter. The acquisitions of HROI and Lessor together contributed approximately 6% to the total expense growth for the first quarter. Accelerated investment in sales, marketing and product development as part of tax reform investments and PEO costs were major factors in expense growth.

Operating income increased 1% to $320 million. Operating margins were 37.1% for the first quarter. Margins were impacted by acquisition expenses, increased investment initiatives, higher growth and PEO costs and the composition of payroll processing days. Our effective income tax rate was 24.5% for the first quarter compared to 34.1% for the respective prior year quarter. The significant decline year-over-year in the effective tax rate is of course due to tax reform legislation. We anticipate that the effective tax rate will be approximately 24% for the remainder of the year. Net income increased 16% to $244 million for the first quarter and adjusted net income increased 18% to $242 million. Diluted earnings per share increased 16% to $0.67 for the first quarter and adjusted diluted earnings per share increased 18% to $0.67.

I will provide some additional color now in selected areas and start with a discussion of service revenues and we will discuss results under our previous categories and our new service revenue categories. Under our previously reported categories of service revenue, payroll services revenue growth was 1% for the first quarter in line with our expectations. Organic growth related to pricing for the first quarter was offset by the impact of client size mix and the composition of payroll processing days within the quarter. If you recall in June, I indicted that payroll revenue growth for Q1 would be below the low end of the range of our guidance. HRS revenues grew 18%, approximately 12% excluding the HROI acquisition. This growth is due to the growth in clients across our HR products, in particular Paychex HR Services, ASO and PEO, and retirement services.
Now, let’s talk about management solutions revenue. This includes as I discussed previously payroll service revenue together with other HCM products included in many of our product bundles. Management solutions revenue increased 3% to $688 million for the first quarter. This increase was driven by growth in client bases across our HCM services, including payroll, ASO, retirement services, and time and attendance solutions. Retirement services revenue also benefited from an increase in the asset value participants’ funds. The acquisition of Lessor contributed less than 1% to this growth. The growth was partially offset by the impact of unfavorable composition of payroll processing days in the first quarter compared to the prior year quarter, same thing that I mentioned on payroll.

PEO and insurance services revenue increased 39% to $158 million for the first quarter. We acquired HROI near the end of the first quarter of fiscal 2018. The incremental impact of HROI accounts for approximately one half of this growth. The remaining growth was primarily driven by continued strong demand for our combined PEO services as we continue to experience strong growth in the number of client worksite employees. In addition, our insurance services revenue benefited from growth in the number of applicants.

Interest on funds held for clients grew 25% for the first quarter to $17 million primarily as a result of higher average interest rates earned. And just to pause there for a second, we have assumed that there would be Fed rate increases in this fiscal – there will likely be more, but we only included two in our plan. The first occurred this or last month I should say and we anticipate there will be one more at least that’s what’s contemplated in our plans. As we get to midyear, we will talk a little bit more about what our expectation is based on where the Fed is at that point.

Turning to our investment portfolio, our goal as always is to protect principal and optimize liquidity. And the short-term side, primary short-term investment vehicles were bank demand deposit accounts and variable rate demand notes. In our longer term portfolio, we invest primarily in high credit quality municipals bonds, corporate bonds, and U.S. government agency securities. Our long-term portfolio has an average yield of 1.9%. Average duration is 3.1 years. Our combined portfolios have earned an average rate of return of 1.8% for the first quarter, up from 1.4% last year. Average balances for interest on funds held for clients were down modestly for the first quarter, primarily driven by the impacts of tax reform and client employee withholdings partially offset by wage inflation.
I will now walk through our thoughts on our financial position. It remains strong with cash and total corporate investments of $788 million as of the end of the quarter. Funds held for clients were $3.8 billion compared to $4.7 billion as of May 31, 2018. Funds held for clients vary widely as you know on a day-to-day basis and averaged $3.7 billion for the first quarter. Our total available-for-sale investments, including corporate investments and funds held for clients, reflected net unrealized losses of $36 million as of August 31, 2018 compared with $38 million as of May 31, 2018.

Total stockholders’ equity was $2.4 billion as of August 31, 2018 reflecting $201 million in dividends paid and $33 million of shares repurchased during the first quarter. Our return on equity for the past 12 months has been a stellar 45%. Please note that our return on equity calculation was adjusted to reflect the impacts of the adoption of ASC 606. At fiscal 2018 year end, we reported 46% return on equity, which would be actually 44% on a restated basis, because of those changes made by ASC 606. Cash flows from operations were $274 million for the first quarter. It was a decline versus the prior year quarter. The change was primarily a result of timing impacts within working capital largely related to income taxes and our PEO payroll and related unbilled receivables for payrolls not yet processed as of the reporting date offset by higher net income.

Fiscal 2019 guidance. Now, I will turn to guidance for the upcoming fiscal year ending May 31, 2019. I will remind you that our outlook is based upon our current view of economic conditions continuing with no significant changes. Our guidance for fiscal 2019 is unchanged from what was provided in June, which was given reflecting adoption of ASC 606. Under our previous revenue categories, there is no change to payroll revenue guidance in the range of 2% to 3% and HRS revenue guidance in the range of 10% to 11%. Payroll services revenue was below the low end of the range in the first quarter as anticipated due to the composition of payroll processing days. Growth in payroll revenue will be at or above the high end of the range for Q2 and Q3 and Q4 is anticipated to be within the range. HRS revenue growth for the first quarter was significantly higher than the range due to the timing of the HROI acquisition. Growth for Q2 and Q3 is anticipated to be within the range. For Q4, growth is anticipated to be below the low end of the range due to a more challenging compare caused by the strong growth in the PEO in the latter part of fiscal 2018.

We will also provide you with revenue guidance under our new categories as we transition to this approach in the future. Management solutions revenue is anticipated to grow by approximately 4% for fiscal 2019 as compared to fiscal 2018. Our Q1 results were obviously lower than this due, as I mentioned before, to the composition of payroll processing days. We anticipate that Q2 and Q3 will be above 4% and we anticipate that Q4 will be in line with the full year guidance.

PEO and insurance services revenue is anticipated to grow in the range of 18% to 20%. Growth in the first quarter was obviously significantly higher due to the timing of the HROI acquisition. We anticipate that growth for Q2 and Q3 will be in the range of 15% to 17% and for Q4 in the range of 11% to 13% due to the factors that I mentioned before, i.e., a challenging comparison with strong PEO growth in the latter part of fiscal 2018. All other guidance remains unchanged.

Finally, just as a reminder, we have provided on our IR website a presentation entitled service revenue disaggregation, which reflects historical revenues as originally reported and as they would be under the new categories. We have also published an updated presentation entitled impacts of ASC 606 and other items that reflects the impacts of adoption of 606 and other non-GAAP adjustments for fiscal 2017 and fiscal 2018.

Paychex, Inc. (PAYX) CEO Martin Mucci on Q1 2019 Results - Earnings Call Transcript | Seeking Alpha
#4 de 9
@DavMe
em 08/10/2018 21:16
O net revenue(1Q19) esta em 17, pelo que li no release esta em 862. O net profit margin consequentemente esta bem alto.
#5 de 9
@MarkFord
em 08/10/2018 21:56
O net revenue deve estar errado, @gustavo, @Huoya
#6 de 9
@Fascar
em 02/11/2018 05:08
será que houve erro mesmo @gustavo?
#8 de 9

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