Paychex, Inc. (NASDAQ:PAYX) Q3 2023 Earnings Call Transcript

John Gibson: I wouldn’t say any new entrants, it’s the same suspects. I think what we found was just everyone was more aggressive in trying to go after and grab market share, and I’m very proud of our sales team for really outcompeting the competitive metrics were very strong for the quarter and I think in a very aggressive market. And I would say every one of our market segments all that. And I think that’s going to continue. Look, I think very proud of where we are and where we’re positioned. I’m sure a lot of our smaller competitors and those that are maybe a little more focused in niches that aren’t doing as well as the traditional small business market is doing. We’ll maybe get more aggressive, but I feel good about where our value proposition is.

And I think what we’re finding is, as I said, I think our strategic partners, our clients, and I think prospects are beginning to put a premium on, hey, I want to be somewhere where you know what they’re doing. They’re doing it right and they’re stable, and they’re going to be able to have the financial capability to continue to invest in their products and services over the long term. And so I think there may be a little less chasing shiny objects as we go forward.

Andrew Polkowitz: Got it. And I just had one follow-up on op margins. I mean for the quarter, this quarter, it came out a little bit ahead of the 40%, 43% you laid out three months ago. Just wanted to ask if there is anything that came out better than you expected three months ago relating to the expense line?

Efrain Rivera: Well, I think revenue, obviously, was a little bit higher than we expected a lot of the flow-through and drove higher margins and our expenses were in line with maybe a little bit better than we anticipated. The combination of that is really what drove better margin performance in the quarter.

Operator: At this time, I have no further questions in queue. I’ll turn the call back over to John Gibson for any additional or closing remarks.

John Gibson: Well, thank you very much, Todd. I appreciate it. At this point, we’ll close the call. If you’re interested in a replay of the webcast, it will be archived for approximately 90 days on our website. I want to thank everybody for your interest in Paychex. And everybody have a great day.

Operator: This concludes today’s call. Thank you for your participation. You may disconnect at any time.