Paychex beats quarterly profit estimates as small businesses boost HR spending
Dec 19 (Reuters) -HR management firm Paychex PAYX.O beat quarterly profit estimates on Thursday, driven by increased spending on its human resources and payroll services from small- and medium-sized businesses.
On an adjusted basis, Paychex recorded quarterly profit of $1.14 per share compared to analysts' estimates of $1.12 per share, according to data compiled by LSEG.
While the U.S. labor market has shown resilience, volatility in jobless claims has made it challenging to get a clear picture of the job market.
"In the face of challenging labor market conditions and rising healthcare and benefits costs, many businesses are reevaluating their HR strategies as we head into the new year," Paychex Chief Executive Officer John Gibson said.
Higher spending by small and medium-sized businesses has benefited HR management firms such as Paychex as well as competitors Automatic Data Processing ADP.O and Paycom Software PAYC.N - both of which exceeded analysts' estimates for quarterly revenue in October.
The company's revenue for the quarter ended Nov. 30 increased 5% to $1.32 billion, in linewith analysts' estimates.
Paychex, which has more than 745,000 clients, offers HR outsourcing, human capital management technology, payroll processing, and retirement and insurance solutions.
Paychex maintained its annual forecast of revenue growth in the range of 4.0% to 5.5% and adjusted per share profit growth between 5% and 7%.
Reporting by Kritika Lamba in Bengaluru; Editing by Mohammed Safi Shamsi and Tasim Zahid
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