Slide 1: Third Quarter Highlights and Financial Results Fiscal 2023
Third Quarter Highlights and Financial Results Fiscal 2023
Slide 2: Forward Looking Statements
Forward Looking Statements You should be aware that certain written and oral statements made by management may constitute “forward-looking statements” within the meaning of the safe-harbor provisions of the United States (“U.S.”) Private Securities Litigation Reform Act of 1995. Forward-looking stat
Slide 3: Paychex Overview
Paychex Overview • Comprehensive technology-driven HCM solutions company • Leading-edge technology platform A leading provider of integrated backed by HR and compliance human capital management expertise (“HCM”) solutions for human • Leader in comprehensive HR resources (“HR”), payroll, benefits out
Slide 4: Third Quarter Highlights
Third Quarter Highlights
Slide 5: Third Quarter Financial Highlights
Third Quarter Financial Highlights Total Revenues Operating Income Adjusted Diluted EPS(1) 8% 9% 12% $1.29 $1,381M $612M $1,276M $563M $1.15 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 (1) Adjusted diluted earnings per share (“EPS”) is not a U.S. generally accepted accounting principles (“GAAP”)
Slide 6: Third Quarter Service Revenue
Third Quarter Service Revenue Service Revenue Key Drivers 7% $1,345.7 Management Solutions $1,261.6 • Increase in the number of clients and client employees throughout our HCM solutions suite • Higher revenue per client due to price realization and increased product penetration +7% $1,025 $960 • Exp
Slide 7: Third Quarter Business Highlights
Third Quarter Business Highlights Achieved solid Q3 revenue and earnings growth o Solid revenue growth and operating margins in challenging environment for SMBs o Strong internal execution and stable client employment levels drove growth o Continued demand for HR technology and HR outsourcing soluti
Slide 8: Product & Technology Horizon
Product & Technology Horizon Innovation to meet our customers’ evolving business needs Artificial Intelligence Data Analytics Expanded (including Paychex Flex Integrations (APIs) Intelligence Engine) Wearable Voice Personalization Solutions Recognition 8
Slide 9: Recent Awards and Recognition
Recent Awards and Recognition Paychex was honored for its innovative technology and customer satisfaction FORTUNE® Magazine 2023 Ethisphere FORTUNE® Magazine 2023 America’s Worlds’ Most Admired Companies World’s Most Ethical Companies Most Innovative Companies Paychex was named to the list of the Pa
Slide 10: Sustained Financial Performance
Sustained Financial Performance (in uncertain times) (In Millions, Except Per Share Amounts) Total Service Revenue Adjusted Diluted EPS(1) $3.77 $4,554 $3,997 $3.00 $3.04 $3,954 $3,692 $1,111 $2.84 $3,314 $991 $974 $2.55 $814 $556 $3,443 $2,878 $2,963 $3,023 $2,758 FY18(2) FY19 FY20 FY21 FY22 FY18(2
Slide 11: Fiscal 2023 Outlook
Fiscal 2023 Outlook
Slide 12: Fiscal Year 2023 Outlook
Fiscal Year 2023 Outlook March 29, 2023 December 22, 2022 September 28, 2022 June 29, 2022 Year-over-Year Growth Year-over-Year Growth Year-over-Year Growth Year-over-Year Growth Management Solutions Revenue ~8% 7% - 8% 5% - 7% 5% - 7% PEO & Insurance Solutions Revenue 5% - 7% 5% - 7% 8% - 10% 8% -
Slide 13: Financial Results
Financial Results 13
Slide 14: Financial Results
Financial Results For the Three and Nine Months ended February 28, 2023 Three Months Ended % Nine Months Ended % (In millions, except per share amounts) February 28, 2023 Change February 28, 2023 Change Management Solutions $ 1,024.5 7% $ 2,825.3 9% PEO and Insurance Solutions $ 321.2 6% $ 877.3 6%
Slide 15: Balance Sheets and Cash Flows
Balance Sheets and Cash Flows February 28, 2023 May 31, 2022 ($ in Millions) Cash, Restricted Cash, & Total Corporate Investments $ 1,617.4 $ 1,304.7 Total Debt, Net of Debt Issuance • Strong liquidity position with no Costs (1) $ 808.3 $ 806.4 net debt Return on Equity 47% 45% • $800M of private pl
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures For the Three and Nine Months ended February 28, 2023 (In millions, except per share amounts) Three Months Ended Nine Months Ended February 28, % February 28, % 2023 2022 Change 2023 2022 Change Net Income $ 467.4 $ 430.7 9% $ 1,206.9 $ 1,096.4 10% Non-GAAP Adjustments: E
Slide 17: Investment Portfolio Results
Investment Portfolio Results Three Months Ended Nine Months Ended February 28, % February 28, % ($ in millions) 2023 2022 Change 2023 2022 Change Average Investment Balances: Funds Held For Clients $ 4,935.7 $ 5,046.0 -2% $ 4,355.5 $ 4,287.0 2% Corporate Cash Equivalents and Investments $ 1,508.0 $
Slide 18: PAYCHEX
PAYCHEX HR | Payroll | Benefits | Insurance The Power of Simplicity 18