Paychex(PAYX)2024-12-19 21:04Financial Performance - For the three months ended November 30, 2024, revenue was $1,280.8 million, a 4% increase from $1,226.4 million in the prior year period[113]. - For the six months ended November 30, 2024, revenue was $2,561.8 million, a 3% increase from $2,479.7 million in the prior year[113]. - Adjusted net income for the three months ended November 30, 2024, was $538.1 million, a 6% increase from $506.2 million in the prior year[113]. - Adjusted diluted earnings per share for the three months ended November 30, 2024, was $1.14, a 6% increase from $1.08 in the prior year[113]. - Total revenue increased to $1.3 billion for the second quarter and $2.6 billion for the six months, reflecting increases of 5% and 4% respectively compared to the prior year periods[115]. - Management Solutions revenue was $962.9 million for the second quarter and $1.9 billion for the six months, reflecting increases of 3% and 2% respectively[117]. - PEO and Insurance Solutions revenue was $317.9 million for the second quarter and $637.2 million for the six months, reflecting increases of 7% for each period[118]. - Operating income increased 6% to $538.1 million for the second quarter and 4% to $1.1 billion for the six months[123]. - Diluted earnings per share increased to $1.14 for the second quarter and $2.32 for the six months, reflecting increases of 6% and 4% respectively[1]. - EBITDA for the six months ended November 30, 2024, was $1,164.9 million, reflecting a 3% increase from $1,129.2 million for the same period in 2023[125]. - Net income for the three months ended November 30, 2024, was $413.4 million, a 5% increase from $392.7 million for the same period in 2023[125]. Equity and Investments - The company reported a 10% increase in total stockholders' equity to $352.8 million for the three months ended November 30, 2024, compared to $320.2 million in the prior year[113]. - The company reported total corporate investments of $1.3 billion as of November 30, 2024, with cash and restricted cash contributing significantly to liquidity[126]. - The company has approximately $2.0 billion in unused capacity under its unsecured credit facilities as of November 30, 2024[126]. - The company has outstanding commitments to purchase approximately $6.3 million of capital assets and has contributed $24.1 million of a $30.0 million commitment to venture capital funds[136]. - As of November 30, 2024, the total investment portfolio is expected to average approximately $6.2 billion, with 45% in short-term securities and 55% in AFS securities[161]. - The net unrealized losses on investment portfolios were $85.9 million as of November 30, 2024, down from $162.5 million as of May 31, 2024[162]. - The weighted-average yield-to-maturity for AFS securities was 3.1% as of November 30, 2024, compared to 3.0% as of May 31, 2024[163]. - Credit risk exposure includes $2.4 billion of AFS securities with fair values below amortized cost, but expected to be collected in accordance with contractual terms[165]. Cash Flow and Financing - Net cash provided by operating activities decreased to $841.1 million from $1,004.3 million, a change of $(163.2) million[143]. - Net cash used in investing activities increased to $(302.7) million from $(109.7) million, a change of $(193.0) million[143]. - Net cash used in financing activities changed to $(776.4) million from $532.3 million, a decrease of $(1,308.7) million[143]. - Cash dividends per common share increased to $1.96 from $1.78[143]. - The weighted-average interest rate on short-term borrowings was 8.22% for the $1 billion JPM credit facility and 5.54% for the $250 million PNC facility[131]. - The company anticipates that its cash flows and available financing will support business operations, capital purchases, and dividend payments for the foreseeable future[126]. Strategic Focus - The company aims to expand its leadership in HR and grow its client base through strategic acquisitions[109]. - The company is investing in technology and digital capabilities to capitalize on long-term growth opportunities[110]. - The company is focused on providing integrated technology and superior customer experiences to support small- and medium-sized businesses[109]. - The company utilizes its proprietary Paychex Flex® platform to support small-business clients and meet their complex payroll and employee benefit needs[107]. - The company is closely monitoring the evolving challenges faced by small- and mid-sized businesses to provide effective solutions[111]. Internal Controls and Compliance - The Company conducted an evaluation of its disclosure controls and procedures, concluding they were effective at a reasonable assurance level as of November 30, 2024[173]. - There were no changes in the Company's internal control over financial reporting during the fiscal quarter ended November 30, 2024, that materially affected its internal controls[174]. - The Company has a stock repurchase program authorized for up to $400.0 million, expiring on May 31, 2027, with $296.0 million remaining available for repurchases[175]. - The Company paid $0.5 million in federal excise tax for net share repurchases made during the fiscal year ended May 31, 2024[176].