PAYCHEX INC
For the period ended Feb 28, 2025. Filed Mar 26, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 28, 2025 · Filed Mar 26, 2025
PAYX$117.06-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-11-30; filed 2024-12-19.
0000950170-24-138425
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-02-28; filed 2025-03-26.
0000950170-25-045216
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 159 previous paragraphs and 163 current paragraphs.
102 unchanged; 48 reworded; 11 added; 8 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
On January 7, 2025, we entered into an agreement to acquire Paycor, a leading provider of HCM, payroll and talent software, in an all-cash transaction for $22.50 per eligible share, representing an enterprise value of approximately $4.1 billion. This acquisition will extend our upmarket position and expand our suite of HR technology and advisory solutions. This acquisition is expected to close in April 2025, subject to customary closing conditions. Refer to the “Liquidity and Capital Resources” section of this Item 2 for additional information.
Current report
Management Solutions revenue: $1.1 billion for the third quarter and $3.0 billion for the nine months, reflecting increases of 5% and 3%, respectively:
Current report
Acquisition-related costs:$16.7 million in the third quarter and nine months, primarily reflecting third-party professional service fees related to the pending Paycor acquisition.
Current report
Other expenses:$174.0 million for the third quarter and $477.1 million for the nine months, reflecting increases of 7% and 6% respectively, primarily related to continued investment in technology, general cost increases to support business growth, and the benefit from a sales tax audit recognized in the three-month period ended February 29, 2024. In addition, the increase for the nine months included continued investment in sales and marketing.
Current report
Total expenses, excluding acquisition-related costs noted above, increased 1% to $800.5 million for the third quarter and 3% to $2.4 billion for the nine months, compared to the prior year periods.
Current report
Acquisition-related costs recognized related to the pending Paycor acquisition, including (i) $16.7 million for the third quarter and nine months primarily reflecting third-party professional service fees included in Selling, general, and administrative expenses and (ii) $13.2 million for the third quarter and nine months reflecting the amortization of financing fees related to debt instruments associated with the financing of the pending Paycor acquisition and the excluded component of the initial fair value of the interest rate swaption contracts ("Swaption Contracts") that are included in Other (expense)/income, net in the Company's Consolidated Statements of Income.
Current report
Bridge Loan Commitment: In addition to our recurring credit facilities, on January 7, 2025, we and our subsidiary, Paychex of New York, LLC, entered into a Bridge Loan Commitment with JPM, pursuant to which JPM committed to provide a 364-day senior unsecured credit facility not to exceed $3.5 billion for the acquisition of Paycor, including related fees and expenses. We incurred $11.4 million in debt financing fees, including structuring and commitment fees, which were capitalized as Prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets and are recognized as interest expense on a straight-line basis until the expected issuance date for permanent financing. There were no borrowings under the Bridge Loan Commitment as of February 28, 2025 or for the period from January 7, 2025 to February 28, 2025.
Current report
We and certain of our subsidiaries will guarantee any borrowings that are made under the Bridge Loan Commitment. The Bridge Loan Commitment contains various financial and operational covenants that would have been applicable to any borrowings under the Bridge Loan Commitment and that are usual and customary for such arrangements. If such covenants were in effect, we would have been in compliance with all of these covenants as of February 28, 2025.
Current report
Interest Rate Swaption Contracts: On January 31, 2025, the Company executed three Swaption Contracts with JPM. The Swaption Contracts qualify as cash flow hedges, have an aggregate notional amount of $3.0 billion, and are being utilized to manage exposure to fluctuations in benchmark interest rates associated with the anticipated issuance of long-term fixed rate debt to fund the planned acquisition of Paycor. At inception, we recorded Swaption Contract assets related to paid premiums of $19.2 million. The fair value of the Swaption Contract assets is classified as Prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets. Refer to Note G of the Notes to Consolidated Financial Statements for additional information on the Swaption Contracts.
Current report
On January 7, 2025, we entered into a definitive agreement to acquire Paycor in an all-cash transaction for $22.50 per eligible share, without interest (the "Acquisition"). The waiting period with respect to the consummation of the Acquisition under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on February 21, 2025. The expiration of the waiting period satisfies one of the major conditions to the closing of the Acquisition, which remains subject to other customary closing conditions. We have the Bridge Loan Commitment in place and expect to secure long-term fixed financing prior to closing. The Acquisition is expected to close in April 2025, subject to customary closing conditions.
Current report
We periodically utilize derivative financial instruments to manage our interest rate risk. On January 31, 2025, we executed three Swaption Contracts with JPM. The Swaption Contracts qualify as cash flow hedges, have an aggregate notional amount of $3.0 billion, and are being utilized to manage exposure to fluctuations in benchmark interest rates associated with our anticipated issuance of long-term fixed rate debt to fund the planned acquisition of Paycor. The fair value of the Swaption Contracts was $3.4 million as of February 28, 2025.
Removed paragraphs (8)
Previous report
n/m — not meaningful
Previous report
Management Solutions revenue: $962.9 million for the second quarter and $1.9 billion for the six months, reflecting increases of 3% and 2%, respectively:
Previous report
Other expenses:$151.9 million for the second quarter and $303.1 million for the six months, reflecting an increase of 6% for each period, primarily related to continued investment in technology, sales, and marketing.
Previous report
Net increase in prepaid income taxes due to the timing of estimated tax payments as compared to the accrual of income tax expense;
Previous report
A net decrease in accrued corporate compensation primarily due to the settlement of fiscal 2024 year-end bonuses.
Previous report
A net decrease in accrued corporate compensation primarily due to the settlement of fiscal 2023 year-end bonuses;
Previous report
Increase in trade receivables due to timing of payroll operational cut-off and month-end and timing of cash collections on billing for ancillary services; and
Previous report
Net increase in prepaid income taxes due to the timing of estimated tax payments as compared to the accrual of income tax expense.
Reworded paragraphs (48)
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations reviews the operating results of Paychex, Inc. and its wholly owned subsidiaries (“Paychex,” the “Company,” “we,” “our,” or “us”) for the three months ended November 30, 2024 (the “second quarter”), the six months ended November 30, 2024 (the "six months"), the respective prior year periods ended November 30, 2023 (the “prior year periods”), and our financial condition as of November 30, 2024. The focus of this review is on the underlying business reasons for material changes and trends affecting our revenue, expenses, net income, and financial condition. This review should be read in conjunction with the November 30, 2024 consolidated financial statements and the related Notes to Consolidated Financial Statements (Unaudited) contained in this Quarterly Report on Form 10-Q (“Form 10-Q”). This review should also be read in conjunction with our Annual Report on Form 10-K (“Form 10-K”) for the year ended May 31, 2024 (“fiscal 2024”). Forward-looking statements in this Form 10-Q are qualified by the cautionary statement included under the next sub-heading, “Cautionary Note Regarding Forward-Looking Statements.”
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations reviews the operating results of Paychex, Inc. and its wholly owned subsidiaries (“Paychex,” the “Company,” “we,” “our,” or “us”) for the three months ended February 28, 2025 (the “third quarter”), the nine months ended February 28, 2025 (the "nine months"), the respective prior year periods ended February 29, 2024 (the “prior year periods”), and our financial condition as of February 28, 2025. The focus of this review is on the underlying business reasons for material changes and trends affecting our revenue, expenses, net income, and financial condition. This review should be read in conjunction with the February 28, 2025 consolidated financial statements and the related Notes to Consolidated Financial Statements (Unaudited) contained in this Quarterly Report on Form 10-Q (“Form 10-Q”). This review should also be read in conjunction with our Annual Report on Form 10-K (“Form 10-K”) for the year ended May 31, 2024 (“fiscal 2024”). Forward-looking statements in this Form 10-Q are qualified by the cautionary statement included under the next sub-heading, “Cautionary Note Regarding Forward-Looking Statements.”
Previous wording
Certain written statements made in this Form 10-Q may contain, and members of management may from time to time make or discuss statements which constitute, “forward-looking statements” within the meaning of the safe harbor provisions of the United States (“U.S.”) Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by such words and phrases as “expect,” “outlook,” “will,” “guidance,” “projections,” “strategy,” “mission,” “anticipate,” “believe,” “can,” “could,” “design,” “may,” “possible,” “potential,” “should,” and other similar words or phrases. Forward-looking statements include, without limitation, all matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding operating performance, events, or developments that we expect or anticipate will occur in the future, including statements relating to our outlook, revenue growth, earnings, earnings-per-share growth, and similar projections.
Current wording
Certain written statements made in this Form 10-Q may contain, and members of management may from time to time make or discuss statements which constitute, “forward-looking statements” within the meaning of the safe harbor provisions of the United States (“U.S.”) Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by such words and phrases as “expect,” “outlook,” “will,” “guidance,” “projections,” “strategy,” “mission,” “anticipate,” “believe,” “can,” “could,” “design,” “look forward,” “may,” “possible,” “potential,” “should,” and other similar words or phrases. Forward-looking statements include, without limitation, all matters that are not historical facts. Examples of forward-looking statements include, among others, statements we make regarding operating performance, events, or developments that we expect or anticipate will occur in the future, including statements relating to our outlook, revenue growth, earnings, earnings-per-share growth, and similar projections, and the pending acquisition of Paycor HCM, Inc. ("Paycor").
Previous wording
risks related to acquisitions and the integration of the businesses we acquire;
Current wording
risks related to acquisitions and the integration of the businesses we acquire, including risks related to the acquisition and integration of Paycor;
Previous wording
Our investor presentation regarding the financial results for the second quarter is available and accessible on our Paychex Investor Relations portal athttps://investor.paychex.com. Information available on our website is not a part of, and is not incorporated into, this Form 10-Q. We intend to make future investor presentations available exclusively on our Paychex Investor Relations portal.
Current wording
Our investor presentation regarding the financial results for the third quarter is available and accessible on our Paychex Investor Relations portal athttps://investor.paychex.com. Information available on our website is not a part of, and is not incorporated into, this Form 10-Q. We intend to make future investor presentations available exclusively on our Paychex Investor Relations portal.
Previous wording
We closely monitor the evolving challenges and needs of small- and mid-sized businesses, and proactively aid our clients in navigating macroeconomic challenges, legislative changes, and other complexities they may face. Through our unique blend of innovative technology solutions, backed by our extensive compliance and HR expertise, we help clients more effectively hire, develop, and retain top talent in this challenging workforce environment. Our ongoing investments in our platforms have prepared us well for the demands of the current business and regulatory environments, allowing us to adapt while maintaining strong solutions and support delivery, resulting in high levels of client satisfaction and retention.
Current wording
We closely monitor the evolving challenges and needs of small- and medium-sized businesses, and proactively aid our clients in navigating macroeconomic challenges, legislative changes, and other complexities they may face. Through our unique blend of innovative technology solutions, backed by our extensive compliance and HR expertise, we help clients more effectively hire, develop, and retain top talent in this challenging workforce environment. Our ongoing investments in our platforms have prepared us well for the demands of the current business and regulatory environments, allowing us to adapt while maintaining strong solutions and support delivery, resulting in high levels of client satisfaction and retention.
Previous wording
Second Quarter and Year to Date Business Highlights
Current wording
Third Quarter and Year to Date Business Highlights
Previous wording
Adjusted net income and adjusted diluted earnings per share are not U.S. generally accepted accounting principle (“GAAP”) measures. Refer to the “Non-GAAP Financial Measures” section of this Item 2 for a discussion of non-GAAP measures and a reconciliation to the U.S. GAAP measures of net income and diluted earnings per share.
Current wording
Adjusted operating income, adjusted net income and adjusted diluted earnings per share are not U.S. generally accepted accounting principle (“GAAP”) measures. Refer to the “Non-GAAP Financial Measures” section of this Item 2 for a discussion of non-GAAP measures and a reconciliation to the U.S. GAAP measures of operating income, net income, and diluted earnings per share.
Previous wording
For further analysis of our results of operations for the second quarter and six months, the prior year periods, and our financial position as of November 30, 2024, refer to the tables and analysis in the “Results of Operations” and “Liquidity and Capital Resources” sections of this Item 2.
Current wording
For further analysis of our results of operations for the third quarter and nine months, the prior year periods, and our financial position as of February 28, 2025, refer to the tables and analysis in the “Results of Operations” and “Liquidity and Capital Resources” sections of this Item 2.
Previous wording
Total revenue increased to $1.3 billion for the second quarter and $2.6 billion for the six months, reflecting increases of 5% and 4% respectively, compared to the prior year periods. Excluding the impact of the expiration of the Employee Retention Tax Credit ("ERTC") program, revenue growth for the second quarter and the six months was 7% and 6% respectively. The changes in revenue as compared to the prior year periods were primarily driven by the following factors:
Current wording
Total revenue increased to $1.5 billion for the third quarter and $4.1 billion for the nine months, reflecting increases of 5% and 4% respectively, compared to the prior year periods. Excluding the impact of the expiration of the Employee Retention Tax Credit ("ERTC") program, revenue growth for both the third quarter and the nine months was 6%. The changes in revenue as compared to the prior year periods were primarily driven by the following factors:
Previous wording
Growth in the number of clients served across our suite of HCM solutions and client worksite employees for HR solutions;
Current wording
Continued growth in the number of clients served across our suite of HCM solutions and client worksite employees for HR solutions;
Previous wording
Higher product penetration, including HR solutions and retirement; and
Current wording
Higher revenue per client resulting from price realization and product penetration, including HR solutions and retirement; and
Previous wording
Lower revenue from ancillary services, primarily due to the expiration of our ERTC program.
Current wording
Lower revenue from ancillary services, primarily due to the expiration of our ERTC program during the three-month period ended February 29, 2024.
Previous wording
PEO and Insurance Solutions revenue: $317.9 million for the second quarter and $637.2 million for the six months, reflecting increases of 7% for each period:
Current wording
PEO and Insurance Solutions revenue: $365.4 million for the third quarter and $1.0 billion for the nine months, reflecting increases of 6% and 7%, respectively:
Previous wording
Interest on funds held for clients: $36.1 million for the second quarter and $73.6 million for the six months, reflecting increases of 15% for each period, primarily due to higher average interest rates and average investment balances.
Current wording
Interest on funds held for clients: $42.9 million for the third quarter reflecting a decrease of 2%, primarily due to lower average interest rates. $116.5 million for the nine months, reflecting an increase of 8%, primarily due to higher average interest rates and average investment balances.
Previous wording
Details regarding our combined funds held for clients and corporate cash equivalents and investment portfolios were as follows:
Current wording
We invest in highly liquid, investment-grade fixed income securities. Details regarding our combined funds held for clients and corporate cash equivalents and investment portfolios were as follows:
Previous wording
(1) The net unrealized loss on our investment portfolio was approximately $103.3 million as of December 18, 2024. Refer to Note F in the Notes to Consolidated Financial Statements and the "Market Risk Factors" caption contained in this Form 10-Q for more information regarding AFS securities held in an unrealized loss position.
Current wording
(1) The net unrealized loss on our investment portfolio was approximately $70.2 million as of March 24, 2025. Refer to Note F in the Notes to Consolidated Financial Statements and the "Market Risk Factors" caption contained in this Form 10-Q for more information regarding AFS securities held in an unrealized loss position.
Previous wording
(2) The Federal Funds rate was in the range of 4.50% to 4.75% as of November 30, 2024 and 5.25% to 5.50% as of May 31, 2024. Effective December 19, 2024, the Federal Reserve decreased the Federal Funds rate to a range of 4.25% to 4.50%.
Current wording
(2) The Federal Funds rate was in the range of 4.25% to 4.50% as of February 28, 2025 and 5.25% to 5.50% as of May 31, 2024.
Previous wording
Total expenses increased 4% to $778.8 million for the second quarter and 3% to $1.6 billion for the six months, compared to the prior year periods. Total expenses increased as a result of the following:
Current wording
Total expenses increased 4% to $817.2 million for the third quarter and 3% to $2.4 billion for the nine months, compared to the prior year periods. Total expenses increased as a result of the following:
Previous wording
PEO direct insurance costs: $130.8 million for the second quarter and $261.1 million for the six months, reflecting increases of 17% and 18% respectively, related to growth in average worksite employees and PEO insurance revenues.
Current wording
PEO direct insurance costs: $127.7 million for the third quarter and $388.8 million for the nine months, reflecting increases of 7% and 14% respectively, related to growth in average worksite employees and PEO insurance revenues.
Previous wording
Operating income: Operating income increased 6% to $538.1 million for the second quarter and 4% to $1.1 billion for the six months, as a result of revenue growth which outpaced expense increases as previously discussed. Operating income for both periods was impacted by the expiration of the ERTC program.
Current wording
Operating income: Operating income increased 6% to $691.8 million for the third quarter and 5% to $1.8 billion for the nine months, as a result of revenue growth which outpaced expense increases as previously discussed. Adjusted operating income(1), which excludes the impact of the acquisition-related costs, increased 9% to $708.5 million for the third quarter and 6% to $1.8 billion for the nine months. Operating income for both periods was impacted by the expiration of the ERTC program.
Previous wording
Operating margin (operating income as a percentage of total revenue) was as follows:
Current wording
Operating margin (operating income as a percentage of total revenue) and adjusted operating margin(1)(operating income, as adjusted for acquisition-related costs, as a percentage of total revenue) were as follows:
Previous wording
Other income, net: Other income, net decreased $6.1 million to $5.6 million for the second quarter and $8.5 million to $16.0 million for the six months, primarily as a result of lower average interest rates earned on our corporate investments as well as lower average investment balances.
Current wording
Other (expense)/income, net: Other (expense)/income, net decreased $15.4 million to expense of $6.0 million for the third quarter and decreased $23.9 million to income of $10.0 million for the nine months, primarily as a result of acquisition-related costs associated with the pending Paycor acquisition recognized in interest expense and lower average interest rates earned on our corporate investments.
Previous wording
Income taxes: Our effective income tax rate was 24.0% for the second quarter and 23.6% for the six months, compared to 24.2% and 23.9%, for the prior year periods, respectively. All periods were impacted by the recognition of excess tax benefits related to employee stock-based compensation payments.
Current wording
Income taxes: Our effective income tax rate was 24.3% for the third quarter and 23.9% for the nine months, compared to 24.4% and 24.1%, for the prior year periods, respectively. All periods were impacted by the recognition of excess tax benefits related to employee stock-based compensation payments.
Previous wording
Non-GAAP Financial Measures: Adjusted net income, adjusted diluted earnings per share, and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) are summarized as follows:
Current wording
Non-GAAP Financial Measures: Adjusted operating income, adjusted operating margin, adjusted other income, net, adjusted net income, adjusted diluted earnings per share, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), and adjusted EBITDA are summarized as follows:
Previous wording
In addition to reporting net income and diluted earnings per share, which are U.S. GAAP measures, we present adjusted net income, adjusted diluted earnings per share, and EBITDA, which are non-GAAP measures. We believe these additional measures are indicators of our core business operations’ performance period over period. Adjusted net income, adjusted diluted earnings per share, and EBITDA are not calculated through the application of U.S. GAAP and are not required forms of disclosure by the SEC. As such, they should not be considered a substitute for the U.S. GAAP measures of net income and diluted earnings per share, and, therefore, they should not be used in isolation, but in conjunction with the U.S. GAAP measures. The use of any non-GAAP measure may produce results that vary from the U.S. GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.
Current wording
In addition to reporting operating income, operating margin, other (expense)/income, net, net income, and diluted earnings per share, which are U.S. GAAP measures, we present adjusted operating income, adjusted operating margin, adjusted other income, net, adjusted net income, adjusted diluted earnings per share, EBITDA, and adjusted EBITDA, which are non-GAAP measures. We believe these additional measures are indicators of our core business operations’ performance period over period. Adjusted operating income, adjusted operating margin, adjusted other income, net, adjusted net income, adjusted diluted earnings per share, EBITDA, and adjusted EBITDA are not calculated through the application of U.S. GAAP and are not required forms of disclosure by the SEC. As such, they should not be considered a substitute for the U.S. GAAP measures of operating income, operating margin, other (expense)/income, net, net income and diluted earnings per share, and, therefore, they should not be used in isolation, but in conjunction with the U.S. GAAP measures. The use of any non-GAAP measure may produce results that vary from the U.S. GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.
Previous wording
Our financial position as of November 30, 2024 remained strong with cash, restricted cash, and total corporate investments of $1.3 billion. Short-term borrowings of $18.2 million and long-term borrowings of $800.0 million were outstanding as of November 30, 2024. Our unused capacity under our unsecured credit facilities was approximately $2.0 billion as of November 30, 2024. Our primary source of cash is our ongoing operations, which was $841.1 million for the six months. Our positive cash flows have allowed us to support our business, and pay dividends. We currently anticipate that corporate cash, corporate restricted cash, and total corporate investments as of November 30, 2024, along with projected operating cash flows and available short-term financing, will support our business operations, capital purchases, primarily investment in our technology solutions, share repurchases, dividend payments, and the servicing of long-term debt for the foreseeable future.
Current wording
Our financial position as of February 28, 2025 remained strong with cash, restricted cash, and total corporate investments of $1.7 billion. Short-term borrowings of $17.6 million and long-term borrowings of $800.0 million were outstanding as of February 28, 2025. Our unused capacity under our unsecured credit facilities was approximately $2.0 billion as of February 28, 2025. We also maintain a bridge commitment letter (“Bridge Loan Commitment”) in connection with our acquisition of Paycor. Our primary source of cash is our ongoing operations, which was $1.6 billion for the nine months. Our positive cash flows have allowed us to support our business and pay dividends. We currently anticipate that corporate cash, corporate restricted cash, and total corporate investments as of February 28, 2025, along with projected operating cash flows and available short-term financing, will support our business operations, capital purchases, primarily investment in our technology solutions, share repurchases, dividend payments, and the servicing of long-term debt for the foreseeable future.
Previous wording
Details of borrowings under each credit facility during the second quarter were as follows:
Current wording
Details of borrowings under each credit facility during the third quarter were as follows:
Previous wording
Letters of credit: As of November 30, 2024, we had irrevocable standby letters of credit available totaling $165.9 million, primarily to secure commitments for certain insurance policies. The letters of credit expire at various dates between December 01, 2024 and November 23, 2025. No amounts were outstanding on these letters of credit during the second quarter or as of November 30, 2024.
Current wording
Letters of credit: As of February 28, 2025, we had irrevocable standby letters of credit available totaling $168.7 million, primarily to secure commitments for certain insurance policies. The letters of credit expire at various dates between March 03, 2025 and February 28, 2026. No amounts were outstanding on these letters of credit during the third quarter or as of February 28, 2025.
Previous wording
Other commitments: We had outstanding commitments under existing workers’ compensation insurance agreements and legally binding contractual arrangements. We also entered into various purchase commitments with vendors in the ordinary course of business and had outstanding commitments to purchase approximately $6.3 million of capital assets as of November 30, 2024. In addition, we are involved in three limited partnership agreements to contribute a maximum of $30.0 million to venture capital funds in the financial technology sector. As of November 30, 2024, we have contributed approximately $24.1 million of the total funding commitment.
Current wording
Other commitments: We had outstanding commitments under existing workers’ compensation insurance agreements and legally binding contractual arrangements. We also entered into various purchase commitments with vendors in the ordinary course of business and had outstanding commitments to purchase approximately $6.1 million of capital assets as of February 28, 2025. In addition, we are involved in five limited partnership agreements to contribute a maximum of $37.0 million to venture capital funds. As of February 28, 2025, we have contributed approximately $28.1 million of the total funding commitment.
Previous wording
PEO receivables and worksite-employee ("WSE") accrued compensation: PEO receivables and WSE accrued compensation fluctuate based on either/both: (1) the timing of the payroll cut-off date and the Company’s month-end close, and (2) the timing of when cash is collected from the customer, and it is remitted to either the WSE for wages earned or applicable tax or regulatory agencies for payroll taxes. PEO accounts receivable collections and compensation payments to WSEs and applicable tax or regulatory agencies are settled through our corporate cash and the fluctuations impact our operating activities.
Current wording
PEO receivables and worksite-employee ("WSE") accrued compensation: PEO receivables and WSE accrued compensation fluctuate based on either/both: (1) the timing of the payroll cut-off date and our month-end close, and (2) the timing of when cash is collected from the customer, and it is remitted to either the WSE for wages earned or applicable tax or regulatory agencies for payroll taxes. PEO accounts receivable collections and compensation payments to WSEs and applicable tax or regulatory agencies are settled through our corporate cash and the fluctuations impact our operating activities.
Previous wording
Summarized operating, investing, and financing cash flow information for the six months and the prior period:
Current wording
Summarized operating, investing, and financing cash flow information for the nine months and the prior period:
Previous wording
The changes in our cash flow for the six months compared to the prior year period were primarily the result of the following key drivers:
Current wording
The changes in our cash flow for the nine months compared to the prior year period were primarily the result of the following key drivers:
Previous wording
Net income attributable to the reasons discussed in the “Results of Operations” section of this Item 2; offset by
Current wording
Net income attributable to the reasons discussed in the “Results of Operations” section of this Item 2; and
Previous wording
Net changes in PEO assets and liabilities as a result of the timing of cash collected and the settlement of payroll taxes;
Current wording
Net changes in PEO assets and liabilities as a result of the timing of cash collected and the settlement of payroll taxes; offset by
Previous wording
A net increase in refunds owed to our PEO clients related to tax benefits allowed under the Coronavirus Aid, Relief, and Economic Security Act; offset by
Current wording
A net increase in refunds owed to our PEO clients related to tax benefits allowed under the Coronavirus Aid, Relief, and Economic Security Act.
Previous wording
Net purchases of short-term accounts receivable due to an increase in our client base, the timing of cash collections on outstanding receivables and cash settlement of the related reserve;
Current wording
Net purchases of short-term accounts receivable due to an increase in our client base, the timing of cash collections on outstanding receivables and cash settlement of the related reserve; and
Previous wording
Net purchases of AFS securities related to investment in our long-term portfolio.
Current wording
Net sales of AFS securities related to investment in our long-term portfolio.
Previous wording
Net purchase of short-term accounts receivable due to an increase in our client base, and funding to existing client base, and the timing of net cash collections; and
Current wording
Net purchase of short-term accounts receivable due to an increase in our client base, and funding to existing client base, and the timing of net cash collections; offset by
Previous wording
Cumulative dividends paid at $1.96 per share. The payment of future dividends is dependent on our future earnings and cash flow and is subject to the discretion of our Board of Directors (the "Board"); and
Current wording
Cumulative dividends paid at $2.94 per share. The payment of future dividends is dependent on our future earnings and cash flow and is subject to the discretion of our Board of Directors (the "Board"); and
Previous wording
Cash used to repurchase 0.8 million shares of our common stock at a weighted average price of $125.50 per share during the six months. All repurchased shares were retired upon acquisition; offset by
Current wording
Cash used to repurchase 0.8 million shares of our common stock at a weighted average price of $125.50 per share during the nine months. All repurchased shares were retired upon acquisition; offset by
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Adjusted operating income and adjusted operating margin are not U.S. GAAP measures. Refer to the “Non-GAAP Financial Measures” section of this Item 2 for a discussion of non-GAAP measures and a reconciliation to the U.S. GAAP measures of net income and diluted earnings per share.
Current report — wording carried from elsewhere
A net decrease in refunds owed to our PEO clients related to tax benefits allowed under the Coronavirus Aid, Relief, and Economic Security Act.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We invest in highly liquid, investment-grade fixed income securities and do not utilize derivative instruments to manage interest rate risk.