Paychex, Inc. is a leading human capital management (HCM) company that delivers technology and advisory services in HR, employee benefits, insurance, and payroll processing. The company serves over 745,000 small- to medium-sized businesses and their employees across the U.S. and parts of Europe. Paychex offers a full range of integrated HCM solutions, customizable to client needs, and integrates with popular HR, accounting, point-of-sale, and productivity applications. The company markets its solutions through a combination of direct and virtual sales forces and ecommerce solutions. Over 50% of revenues are from solutions other than payroll processing.

• Employees: Approximately 16,500 (as of May 31, 2024)
• Geographic Footprint: U.S. and parts of Europe
• Headquarters: Rochester, NY
• Founded: 1979
• Number of locations/facilities: Multiple locations throughout the U.S. and international locations in Denmark, Germany and India.
• Revenue: $5.28 billion (FY2024)
• Market Capitalization: $32.2 billion (as of November 30, 2023)
• Key Subsidiaries/Brands: Paychex Advance, LLC; Paychex Insurance Agency, Inc.; Alterna Capital Solutions, LLC

• CEO: John B. Gibson
• CFO: Robert L. Schrader
• Chief Human Resources Officer: Mason Argiropoulos
• Chief Legal Officer, Chief Ethics Officer and Secretary: Sipi Bhandari
• Senior Vice President of Sales: Mark A. Bottini
• Senior Vice President of Information Technology and Product Development: Michael E. Gioja
• Senior Vice President of Operations and Customer Experience: Elizabeth Roaldsen
• Senior Vice President of Data, Analytics, and AI: Beaumont Vance
• Vice President, Controller and Treasurer: Christopher Simmons

Key executives have extensive experience in HR solutions, technology, finance, and business services.

• Annual Revenue: $5.28 billion (FY2024)
• Net Income: $1.69 billion (FY2024)
• Market Cap: $32.2 billion (as of November 30, 2023)
• Total Assets: $10.38 billion (as of May 31, 2024)
• Employees: Approximately 16,500 (as of May 31, 2024)
• Key Financial Highlights: Revenue increased by 5% year-over-year, Net Income increased by 9% year-over-year, Dividends paid to stockholders represented approximately 78% of net income.

Paychex offers a comprehensive portfolio of HCM technology and HR advisory solutions.

• Payroll processing solutions: Includes calculation, preparation, and delivery of employee payroll checks; production of internal accounting records and management reports; preparation of federal, state, and local payroll tax returns; and collection and remittance of clients' payroll obligations.
• Payroll tax administration solutions: Provides for accurate preparation and timely filing of quarterly and year-end tax returns, as well as the electronic transfer of funds to the applicable federal, state, and local tax or regulatory agencies.
• Employee payment solutions: Provides an employer the option of paying their employees by direct deposit, payroll debit card, a check drawn on a Paychex account, or a check drawn on the employer's account and electronically signed by Paychex.
• HR solutions: Allows businesses to outsource and simplify their HR administration and compliance support.
• Retirement solutions administration: Offers a variety of options to employers, including 401(k) plans, 401(k) SIMPLE plans, SIMPLE IRAs, and other retirement plans.
• HR administration solutions: Offers cloud-based HR administration software solutions for employee benefits management and administration, time and attendance reporting, recruiting, and onboarding.
• Regulatory compliance solutions: Offers new-hire reporting solutions, which enable clients to comply with federal and state requirements to report information on newly hired employees.
• Other HR solutions and support: Offers the outsourcing of plan administration under section 125 of the Internal Revenue Code, and state unemployment insurance solutions.
• Business services: Offers various business solutions for small- to medium-sized businesses, including payroll funding and outsourcing services.
• PEO solutions: Offers businesses a combined package that includes payroll, employer compliance, HR and employee benefits administration, risk management outsourcing, and both virtual and on-site availability of a professionally trained HR representative.
• Insurance solutions: Provides insurance through a variety of carriers, allowing employers to expand their employee benefit and corporate offerings at an affordable cost.

Paychex's operations are disaggregated into two categories:

• Management Solutions: Includes HR, payroll, and employee benefits solutions. Revenue was $3.9 billion for fiscal 2024, reflecting a 4% increase.
• PEO and Insurance Solutions: Includes professional employer organization and insurance offerings. Revenue was $1.3 billion for fiscal 2024, reflecting an 8% increase.

Paychex's strategy is to be the digitally driven HR leader, serving as an essential partner to small-to-medium sized businesses. Key elements of their strategy include:

• Growing their client base and market share.
• Expanding their share of wallet.
• Leveraging technology innovations, including AI.
• Engaging in strategic acquisitions.

Paychex operates in the highly competitive and fragmented HCM services market. They compete with:

• Traditional payroll processing and HR service providers.
• In-house payroll and HR systems and departments.
• Providers of HR services, such as retirement services companies, insurance companies, HR and benefits consulting firms, and national and regional PEOs.

Competition is based on service responsiveness, product quality and reputation, ease of use and accessibility of technology, breadth of service and product offerings, and price. Paychex believes it is competitive in each of these areas.

• Technological Risks: Inability to keep pace with changes in technology or provide timely enhancements to solutions and support; software defects, undetected errors, and development delays.
• Cybersecurity Risks: Cyberattacks, security vulnerabilities or Internet disruptions, including data security and privacy leaks and data loss and business interruptions.
• Operational Risks: Failure of third-party service providers to perform their functions; business continuity plan failure during a catastrophic event; data loss and business interruption.
• Financial Risks: Clients' insufficient funds to cover payments made on their behalf; changes in health insurance and workers' compensation rates and underlying claims trends.
• Legal and Regulatory Risks: Changes in government regulations and policies; failure to comply with U.S. and foreign laws and regulations; failure to comply with data privacy and AI laws and regulations.