Payroll services company Paychex, Inc ( PAYX ) stock gained after fiscal first quarter results.

The company reported sales growth of 3% year over year to $1.32 billion, in-line with the analyst consensus estimate. Adjusted EPS of $1.16 beat the analyst consensus estimate of $1.14.

Management Solutions revenue rose 1% year over year to $961.7 million, led by growth in the number of clients served across the human capital management (HCM) solutions suite and higher product penetration, including HR Solutions and Retirement.

Revenue from Professional Employer Organizations (PEO) and Insurance Solutions increased 7% year over year to $319.3 million.

Operating income grew 2% to $546.7 million, and the margin declined by 20 basis points year over year to 41.5%, impacted by the expiration of the ERTC program.

As of August 31, 2024, the company held $1.6 billion in cash and equivalents and generated $546.1 million in operating cash flow.

“Small and mid-sized businesses remain resilient as the U.S. labor market gradually returns to its pre-pandemic level and wage inflation continues to moderate. We continue to invest in our go to market capabilities and products to drive innovation to meet the realities of the post-pandemic marketplace,” said John Gibson, president and CEO.

Outlook: Paychex ( PAYX ) reiterated its fiscal 2025 guidance, which it shared during its fourth-quarter print. The company said it expects fiscal 2025 revenue growth of 4.0%- 5.5% versus the $5.52 billion analyst consensus.

Paychex ( PAYX ) expects Management Solutions revenue growth in the 3.0%- 4.0% range, PEO and Insurance Solutions revenue growth of 7.0%- 9.0%, and adjusted EPS growth of 5%- 7% versus the $4.98 analyst estimate.

Paychex ( PAYX ) stock is up 18% in the last 12 months.

Price Action: PAYX stock is up 4.42% at $140.12 at the last check Tuesday.