10:59 AM EDT, 10/01/2024 (MT Newswires) -- Paychex ( PAYX ) reported higher-than-expected fiscal first-quarter results and reiterated its top- and bottom-line guidance for the full year on Tuesday, pointing to resilience among small and mid-sized businesses.

Revenue rose to $1.32 billion for the three months ended Aug. 31 from $1.29 billion a year ago and topped the $1.31 billion average analyst estimate on Capital IQ. Adjusted earnings per share rose to $1.16 from $1.14, which was the Street's view for the first quarter.

Management solutions revenue advanced 1% to $961.7 million amid growth in clients seeking human resources solutions. Professional employer organization and insurance solutions revenue increased 7% to $319.3 million.

"Small and mid-sized businesses remain resilient as the US labor market gradually returns to its pre-pandemic level and wage inflation continues to moderate," Chief Executive John Gibson said in a statement. Shares of Paycheck rose 4.3% in Tuesday trade.

When excluding the impact of the Employee Retention Tax Credit program's expiration in April and one fewer payroll processing day during the quarter, revenue growth was more than double the posted growth rate, at 7%, according to Gibson.

"Despite these headwinds, we delivered earnings per share growth in the first quarter through strong expense discipline," he said.

For the full year, the human resources, payroll and benefits management provider continues to expect annual revenue growth in the 4% to 5.5% range and adjusted EPS growth between 5% and 7%. The Capital IQ consensus is for revenue and normalized EPS of $5.52 billion and $4.97, respectively.

Paychex ( PAYX ) lowered its other income guidance to a range of $30 million to $35 million from a prior view of $35 million to $40 million. Interest on funds held for clients is now anticipated to range between $145 million and $155 million, down from $150 million to $160 million previously. Both reflect updated interest rate assumptions for the remainder of the fiscal year, Chief Financial Officer Bob Schrader said on a conference call, according to a Capital IQ transcript.

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