Paychex (NASDAQ: PAYX) reported Q4 EPS of $0.61, $0.01 worse than the analyst estimate of $0.62. Revenue for the quarter came in at $871.1 million versus the consensus estimate of $868.96 million.

Outlook

Our outlook for the fiscal year ending May 31, 2019 (“fiscal 2019”) is based upon current market expectations and economic conditions continuing with no significant changes. The guidance reflects the adoption of Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“ASC Topic 606”), which is effective for fiscal 2019. Our guidance for fiscal 2019 is as follows:

• Payroll service revenue is anticipated to increase in the range of 2% to 3%, incorporating a full year of Lessor;
• HRS revenue is anticipated to increase in the range of 10% to 11%;
• Interest on funds held for clients is expected to increase in the range of 15% to 20%;
• Total revenue, including interest on funds held for clients, is expected to increase in the range of 6% to 7%;
• Operating income, as a percent of total revenue, is anticipated to be approximately 37%;
• Investment income, net is anticipated to be approximately $15 million;
• The effective income tax rate for fiscal 2019 is expected to be approximately 24%;
• Adjusted net income (non-GAAP)(1) is expected to increase in the range of 11% to 12%;
• Adjusted diluted earnings per share (non-GAAP)(1) is expected to increase approximately 11%.

For earnings history and earnings-related data on Paychex (PAYX) click here.