Paychex announced total service revenue of $711.3 million for the second quarter ended November 30, 2015, an increase of 7% from $665.9 million for the same period last year.
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Net income increased 9% to $189.2 million and diluted earnings per share increased 11% to $0.52 per share. Operating income was $294.2 million, an increase of 9% from the same period last year.
Martin Mucci, president and chief executive officer, commented, "The second quarter reflected continued growth across our major product lines. Payroll service revenue advanced 4% and we continue to experience solid sales execution.
"The double digit growth in client worksite employees served within our human resource services is an indication of the continued strong demand for these services. During the second quarter, we released the Paychex Flex Time and Paychex Flex Benefits Administration modules for our cloud-based human capital management platform.
"We believe these modules further strengthen our robust, integrated suite of HCM solutions, Paychex Flex, by providing employers the means to better manage their labor scheduling and costs and employee benefit plans.
"Additionally, on December 2, 2015, we announced our planned acquisition of Advance Partners, a leading provider of integrated financial, operational, and strategic services to support independent staffing firms. Advance Partners offers customizable solutions to the temporary staffing industry, including payroll funding and outsourcing services.
"We believe this acquisition will be an ideal fit for Paychex, as the staffing outsourcing business is a growing business that serves many mall- and mid-sized firms."
Payroll service revenue was $427.4 million for the second quarter, an increase of 4% compared to the same period last year. The increase in payroll service revenue was primarily driven by growth in client base and revenue per check.
This growth in revenue per check was the result of price increases, net of discounts.
Human Resource Services (HRS) revenue was $283.9 million for the second quarter, an increase of 11% compared to the same period last year.
Total expenses were $428.2 million for the second quarter, an increase of 5% compared to the same period last year.
Compensation-related expenses increased 6%, primarily related to higher wages and performance-based compensation costs. Strong growth in professional employer organization (PEO) also contributed to the growth in total expenses for the second quarter. ■