Paychex, Inc. (PAYX) Q2 2023 Earnings Call Transcript

For the period ending November 30, 2022

December 22, 2022 9:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, everyone, and welcome to the Paychex Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. Please note, this call will be recorded, and I will be standing by if you should need any assistance.

It is now my pleasure to turn the conference over to Mr. John Gibson, President and CEO. Please go ahead, sir.

John Gibson - President and CEO

Thanks, Tadd. Good morning, everyone. Thank you for joining us for our discussion of the Paychex second quarter fiscal year '23 earnings release. Joining me today is Efrain Rivera, our Chief Financial Officer. This morning, before the market opened, we released our financial results for the second quarter ended November 30. You can access our earnings release on our Investor Relations website. Our Form 10-Q will be filed with the SEC within the next day.

This teleconference is being broadcast over the Internet and will be archived and available on our website for approximately 90 days. We'll start the call with an update on the business for the second quarter and then Efrain will review our financial results and outlook for fiscal year '23. We'll then open it up to your questions.

We delivered solid financial results for the second quarter with total revenue of 7% and adjusted diluted earnings per share growth of 9%. Demand for our comprehensive solution suite remains strong and we are well positioned to help our clients succeed. Our unique combination of leading HR technology, HR expertise and the wide breadth of solutions we have to address the many needs in the marketplace continue to help small and midsized businesses navigate this very dynamic and challenging environment. We continue to closely monitor the macroeconomic environment and our internal leading indicators. The latest findings from our Paychex IHS Small Business Employment Watch revealed moderating growth in jobs and steady growth in wages.

Our clients continue to be challenged by the continuing impacts of the pandemic, inflationary pressures and the challenges of this labor market. However, small and midsized businesses continue to show their resilience. Our revenue retention remained solid as we focus on retaining clients and driving increased value and penetration of our HR outsourcing, HCM software and retirement solutions. Our overall HR outsourcing business continues to perform well with strong growth in worksite employees and record revenue retention. We achieved a major milestone this quarter. We now serve over 2 million worksite employees across our ASO and PEO business, clearly establishing us as an HR leader.