Summary of Paychex, Inc.

Business Overview

• Industry: Human Capital Management (HCM)
• Core Services:
  • Human Resources (HR) solutions
  • Employee benefit solutions and insurance
  • Payroll processing and administration
  • Human capital management technology platforms
  • HR advisory services
  • Retirement plan administration and funding solutions
  • Employee engagement and workforce management tools
  • Professional Employer Organization (PEO) and Administrative Services Organization (ASO) solutions
  • Employee benefits marketplaces and insurance agency services

Operations and Reach

• Geographic Markets:
  • Primarily United States, with operations in Europe (Denmark, Germany) and India.
• Customer Base:
  • Approximately 800,000 clients and their employees as of May 31, 2025.
  • Client retention rate: approximately 82-83%.
• Employees:
  • Around 19,000 employees as of May 31, 2025.
  • No employees are covered by collective bargaining agreements.

Revenue and Income

• Fiscal Year 2025 Financial Highlights:
  • Total Revenue: $5.57 billion (up 6% from FY 2024)
    • Made up of:
      • Management Solutions: $4.07 billion (up 5%)
      • PEO and Insurance Solutions: $1.34 billion (up 6%)
      • Interest on funds held for clients: $161.7 million (up 10%)
  • Operating Income: $2.21 billion (up 2%)
  • Net Income: $1.66 billion (down 2%)
  • Diluted Earnings Per Share: $4.58 (down 2%)
  • Adjusted Net Income (non-GAAP): $1.80 billion (up 5%)
  • Adjusted Diluted EPS (non-GAAP): $4.98 (up 6%)

Market and Growth Strategies

• Market Focus:
  • Large and growing market with over 6 million employer firms in the U.S.
  • Competitively fragmented with primary competitors including ADP.
• Growth Initiatives:
  • Expanding client base via digital marketing and sales channels, channel partnerships, and referrals.
  • Increasing share of wallet by penetrating HR outsourcing, retirement, and insurance segments.
  • Investing in technology innovation, especially in AI and data analytics.
  • Pursuing strategic acquisitions, notably the acquisition of Paycor HCM, Inc. on April 14, 2025, to expand upmarket and enhance HR solutions.

Product and Service Offerings

• Human Capital Management Platforms:
  • Paychex Flex: SaaS platform for small to medium-sized businesses with modules for payroll, HR, benefits, talent acquisition, and workforce management.
  • SurePayroll: Digital, self-service payroll for small businesses.
  • Paycor: SaaS platform for larger enterprises with complex HR needs.
• Solutions Provided:
  • Cloud-based HR and payroll platforms
  • Employee benefit administration including health, FSA/HSA, voluntary benefits
  • Workforce management with labor forecasting and mobile self-service
  • PEO offerings with co-employment model, including risk and benefits management
  • Insurance solutions through licensed insurance agency for property, casualty, and health coverages
  • Retirement plan administration, including 401(k), IRAs, and pooled employer plans
  • Funding solutions, including payroll funding and accounts receivable purchase programs

Revenue Streams

• Mainly from service fees (over 50% from non-payroll solutions)
• Includes interest income on client funds
• Revenue from product modules, advisory, and insurance commissions
• Recurring revenue with high client retention

Key Metrics

• Approximate client worksite employees in HR solutions: 2.46 million (up 5%)
• Retirement plans: 124,000 as of May 31, 2025 (up 3%)
• Asset value of retirement funds: $55.7 billion (up 8%)

Employees and Corporate Culture

• Focus on attracting, developing, and retaining qualified talent
• Corporate values emphasize integrity, accountability, innovation, partnership, respect, and service
• Recognized as one of the World’s Most Ethical Companies 17 times (since 2012)
• Investments in employee training, development, and well-being programs

Financial Position (As of May 31, 2025)

• Cash and equivalents: $1.63 billion
• Total assets: $16.56 billion
• Total liabilities: $12.44 billion
• Shareholders’ equity: $4.13 billion
• Debt:
  • Long-term corporate bonds: $4.55 billion
  • Short-term borrowings: $18.6 million
  • Unused credit capacity: $2 billion

Recent Developments

• Completed acquisition of Paycor (April 14, 2025)
• Continues to invest in AI, data analytics, and technology platforms
• Management projects continued growth driven by expanding solutions and client base

In Summary: Paychex, Inc. delivers comprehensive HR, payroll, benefits, and insurance solutions primarily in the U.S. with international operations, serving around 800,000 clients and managing over 2.46 million employee worksite units. It operates through proprietary SaaS platforms such as Paychex Flex and Paycor, generating over $5.57 billion in revenue for the fiscal year 2025, with net income of approximately $1.66 billion. The company emphasizes technological innovation, strategic acquisitions, and client retention in its long-term growth strategy.