Paychex, Inc. (NASDAQ:PAYX) Q3 2018 Earnings Conference Call - Final Transcript

Mar 26, 2018 • 09:30 am ET


Paychex, Inc. (NASDAQ:PAYX) Q3 2018 Earnings Conference Call - Final Transcript


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Welcome and thank you for standing by. At this time, all participants are in a listen-only mode. After the presentation, we'll conduct a question-and-answer session.

[Operator Instructions] Today's call is being recorded. If you have any objections, you may disconnect from the conference. Now I'll turn the meeting over to your host Mr. Martin Mucci, President and Chief Executive Officer. You may now begin.

Martin Mucci

Thank you. Thank you for joining us for our discussion of the Paychex's Third Quarter Fiscal 2018 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 third quarter ended February 28, 2018. Our Form 10-Q will be filed with the SEC within the next few days and you can access our earnings release and Form 10-Q on our Investor Relations webpage.

This teleconference is being broadcast over the Internet and will be archived and available on our website for approximately one month. On today's call, I will review business highlights for the third quarter and Efrain will review our third quarter financial results and discuss our full-year guidance. Then we'll open it up to any questions. We were pleased with our results for the third quarter as we continued to deliver solid performance across our major HCM product lines. Our total revenue growth was 9%, aided by our acquisition of HROI. This is the highest revenue growth in our past six fiscal quarters.

In addition to HROI, organic HR outsourcing services, retirement services, and insurance services all performed very well in the quarter. On March 1st, 2018, we announced the acquisition of Lessor Group, a market leading provider of payroll and HCM software solutions headquartered in Denmark and serving clients in northern Europe. We believe the combination of Lessor's payroll and HCM software products with our full-service business process outsourcing capabilities will provide a complete technology enabled services platform in the markets that they serve and will expand to. The Lessor Group is a good strategic fit for the following reasons: First, the vast majority of its clients across four countries are in our target small business market. Lessor has a solid and scalable proprietary intellectual property with experienced technology development talent. They have a seasoned management team. They are profitable and reflect study growth with the ability to fund further growth and development. We can leverage Lessor to support our growth in Germany, where we've been for the past 10 years and provide an enhanced technology solution going forward there. And this acquisition offers us the opportunity to expand our market penetration in countries Lessor serves as well as other European countries in the future.

We are pleased to welcome the employees of Lesser Group to the Paychex's family and while our international operations are currently small in relation to the company as a whole, we are excited by the opportunities this acquisition provides us for further expansion and growth.

We have seen increased momentum in our sales execution as