Paychex, Inc. (NASDAQ:PAYX) Q1 2020 Earnings Conference Call - Final Transcript

Oct 02, 2019 • 09:30 am ET


Paychex, Inc. (NASDAQ:PAYX) Q1 2020 Earnings Conference Call - Final Transcript


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Good morning, and welcome to Paychex First Quarter Fiscal Year 2020 Earnings Conference Call. [Operator Instructions] Thank you.

I would now like to turn the call over to Martin Mucci, President and Chief Executive Officer of Paychex. Please go ahead.

Martin Mucci

Thank you, and good morning and thank you for joining us for our discussion of the Paychex first quarter fiscal 2020 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 first quarter ended August 31, 2019. You can access our earnings release on our Investor Relations webpage and our Form 10-Q will be filed with the SEC within the next few days.

This teleconference is being broadcast over the Internet, will be archived and available for on our website for about approximately one month. On today's call, I will review business highlights for the first quarter, Efrain will review our first quarter financial results and discuss our guidance for fiscal 2020, and then we'll open it up for your questions.

We are pleased with the solid start to the fiscal year 2020. Our financial results reflect good progress in operations and sales. Total revenue growth was 15% for the first quarter, including the incremental results from Oasis Outsourcing Group, which we acquired back in December of '18, Management Solutions revenue grew 5% while PEO and Insurance Services revenues grew 56%. And not only are we off to a solid financial start, but our client retention and satisfaction continue to be at record high levels and sales continues to perform well as we start this fiscal year.

We are excited to introduce several new technology enhancements and solutions at HR Tech, which is happening this week in Las Vegas, and as a long-standing leader in this human capital management space, we have insight into the needs of our clients and their employees and see trends in our markets. These new solutions address key developments in payments, wearable devices, integrations, and data and analytics. Our new wearable solutions allow Paychex Flex time users to track time with their smartwatch, employees can clock in and out with a simple tap of the watch, it also makes time and attendance tracking easier for the increasingly remote workforces with enhanced geo-fencing capabilities, which remind employees the punch out as they leave their work locations. This is the first of many potential use cases utilizing wearable solutions that will be making available to Flex users.

We are also excited to be introducing pay-on-demand and real-time payments. By the end of calendar year 2019, Paychex clients can allow employees to access a portion of the earn pay before the scheduled check date. With many Americans living paycheck to paycheck, this advancement in technology allows financial flexibility when needed. Following this enhancement, then in early 2020, we will be offering the option to have earned funds deposited in an employee's bank account in real time. Real-time payments is an extension of our market-leading