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Paychex, Inc. (“Paychex,” “we,” “our,” or “us”) (NASDAQ:PAYX) today announced total service revenue of $597.9 million for the three months ended August 31, 2013 (the “first quarter”), an increase of 5% from $568.1 million for the same period last year. Net income increased 6% to $162.8 million and diluted earnings per share increased 5% to $0.44 per share.
Martin Mucci, President and Chief Executive Officer, commented, “We had a solid start to fiscal 2014. Payroll revenue results met expectations and Human Resource Services revenue growth continued to progress at a double-digit rate. Our sales execution continues to advance, particularly in core payroll and in Human Resource Services. Our investments in market-leading software-as-a-service technology and mobile applications position us for long-term growth. Furthermore, client satisfaction and client retention continued at record levels."
Mr. Mucci added, "We recently announced we are expanding our Payroll and Human Resource Services offerings into South America through a joint venture arrangement in Brazil. Brazil is a significant market with a growing economy, approximately five million small businesses, and, with recent regulatory changes, a significant opportunity for outsourcing payroll and human resource services. We also have recently acquired a payroll provider in Germany. This acquisition will increase our revenue and client base in Germany and help us gain greater share of the payroll market in that country. The decision to expand into Brazil and further expand in Germany represents our focus on growth, specifically targeting product expansion through new markets and geographies."
Payroll service revenue was $395.2 million for the first quarter, an increase of 2% compared to the same period last year. This increase was driven by growth in checks per payroll and revenue per check. Checks per payroll increased 1.6% for the first quarter. Revenue per check grew modestly, as a result of price increases partially offset by discounting.