Paychex, Inc. stock research
FY2024 Q4
Paychex (PAYX) Gross Margin — Quarter Ended May 31, 2024
Revenue decreased from the previous quarter but increased compared to the same quarter last year. Gross profit followed a similar pattern, resulting in a gross margin that weakened sequentially but improved year-over-year.
Gross margin takeaway
Quarter ended May 31, 2024 · FY2024 Q4
Revenue decreased from the previous quarter but increased compared to the same quarter last year. Gross profit followed a similar pattern, resulting in a gross margin that weakened sequentially but improved year-over-year.
- The strongest observable margin driver is the year-over-year improvement, where revenue increased more than cost of revenue.
- Compared to the previous quarter, revenue and gross profit were lower, and gross margin weakened. Compared to the same quarter last year, revenue and gross profit were higher, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
70.1%
Gross profit
$881.7M
Revenue
$1.3B
Cost of revenue
$375.2M
Quarter-over-quarter change
-2.6 pts
Year-over-year change
+0.8 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 |
|---|---|---|---|---|
| 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% |
| May 31, 2024 | $1.3B | $881.7M | $375.2M | 70.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Feb 29, 2024
-2.6 pts
Year-over-year change
May 31, 2023
+0.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the year-over-year improvement, where revenue increased more than cost of revenue.
Compared to the previous quarter, revenue and gross profit were lower, and gross margin weakened. Compared to the same quarter last year, revenue and gross profit were higher, and gross margin improved.
The sequential decline in gross margin is a key metric to monitor in the next reporting period.