The PEO decline contributed to an overall drop of 2 percent in services revenue. This was “largely due to a lower volume of client employees paid across our HCM solutions,” CEO Martin Mucci said in this week’s webcast for earnings for the third quarter.

Net income fell to $350.5 million for the most recent ended period, off from $354.1 million a year earlier. Total revenue fell percent to $1.11 billion from $1.14 billion for last year’s corresponding period. PEO revenue fell to slightly less than $250 million from $271.5 million for the compared periods. Management solutions (largely payroll) came in at $847.8 million, essentially unchanged from $850 million.

The revenue decline was also attributed to the fall off in interest on funds held for clients, which fell 29 percent to $15 million in the most recently ended quarter because of lower interest rates.

Mucci also said Paychex continues to expect total service revenue for 2021 will be “roughly flat to last fiscal year” despite the impact of the COVID-19 pandemic.

Bob Scott

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Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind