Paychex, Inc. stock research
FY2023 Q3
Paychex (PAYX) Gross Margin — Quarter Ended Feb 28, 2023
Revenue and cost of revenue both increased compared to the prior quarter, but gross profit rose more than cost, resulting in an improved gross margin. Relative to the same quarter last year, revenue was similar while cost of revenue was higher, yet gross profit increased, leading to a slightly higher gross margin.
Gross margin takeaway
Quarter ended Feb 28, 2023 · FY2023 Q3
Revenue and cost of revenue both increased compared to the prior quarter, but gross profit rose more than cost, resulting in an improved gross margin. Relative to the same quarter last year, revenue was similar while cost of revenue was higher, yet gross profit increased, leading to a slightly higher gross margin.
- The sequential improvement in gross margin from the prior quarter is the strongest observable driver, as gross profit increased more than cost of revenue.
- Compared to the prior quarter, revenue, cost of revenue, and gross profit were all higher, and gross margin improved. Compared to the same quarter last year, revenue was stable, cost of revenue was higher, gross profit was higher, and gross margin was slightly higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
72.3%
Gross profit
$972.8M
Revenue
$1.3B
Cost of revenue
$372.9M
Quarter-over-quarter change
n/a
Year-over-year change
+0.2 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Feb 28, 2023 | $1.3B | $972.8M | $372.9M | 72.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Previous quarter unavailable
n/a
Year-over-year change
Feb 28, 2022
+0.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The sequential improvement in gross margin from the prior quarter is the strongest observable driver, as gross profit increased more than cost of revenue.
Compared to the prior quarter, revenue, cost of revenue, and gross profit were all higher, and gross margin improved. Compared to the same quarter last year, revenue was stable, cost of revenue was higher, gross profit was higher, and gross margin was slightly higher.
Monitor the company's liquidity and capital resources, including its standby letters of credit and senior notes, as discussed in the filing.