Paychex, Inc. stock research
FY2024 Q3
Paychex (PAYX) Gross Margin — Quarter Ended Feb 29, 2024
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue rose slightly. Gross margin improved sequentially and was stable relative to the year-ago period.
Gross margin takeaway
Quarter ended Feb 29, 2024 · FY2024 Q3
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue rose slightly. Gross margin improved sequentially and was stable relative to the year-ago period.
- The strongest observable margin driver is the gross margin level, which improved from the prior quarter and remained near the year-ago figure, indicating a stable relationship between revenue and cost of revenue.
- Compared to the immediately preceding quarter, gross margin was higher; compared to the same quarter one year earlier, gross margin was slightly higher. Revenue and gross profit were higher in both comparisons.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
72.8%
Gross profit
$1.0B
Revenue
$1.4B
Cost of revenue
$379.8M
Quarter-over-quarter change
+2.5 pts
Year-over-year change
+0.5 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 |
|---|---|---|---|---|
| May 31, 2023 | $1.2B | $834.9M | $369.8M | 69.3% |
| Aug 31, 2023 | $1.3B | $893.1M | $360.2M | 71.3% |
| Nov 30, 2023 | $1.2B | $862.3M | $364.1M | 70.3% |
| Feb 29, 2024 | $1.4B | $1.0B | $379.8M | 72.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Nov 30, 2023
+2.5 pts
Year-over-year change
Feb 28, 2023
+0.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the gross margin level, which improved from the prior quarter and remained near the year-ago figure, indicating a stable relationship between revenue and cost of revenue.
Compared to the immediately preceding quarter, gross margin was higher; compared to the same quarter one year earlier, gross margin was slightly higher. Revenue and gross profit were higher in both comparisons.
Monitor the trend in cost of revenue relative to revenue, as it increased sequentially and year-over-year while gross margin remained stable.