For the quarter ended Aug. 31 the Rochester, N.Y., company reported earnings of 89 cents per share. Revenue grew 16% year over year to $1.08 billion.
Analysts surveyed by FactSet were expecting the company to report earnings of 80 cents per share on revenue of $1.04 billion.
"Our sales performance was driven by ongoing strength in both digital and human-resources outsourcing sales and solid growth in the midmarket space," Chief Executive Martin Mucci said in a statement.
"Our client retention was a function of the resilience of small businesses."
The company said that the Covid-19 pandemic has hastened the digital transformation of work.
But the company says it has transitioned to become a technology-enabled service provider that has more than 710,000 clients across the U.S. and Europe.
Paychex shares at last check were 4.1% higher at $112.30.
The company's management solutions segment saw revenue jump 17% year over year to $805.5 million due to an increase in its client base and higher checks per client. The figures reflected employees returning to work as the pandemic lockdown eased.
Paychex cut total expenses 1% to $640 million. Operating profit rose 56% to $42.9 million thanks to the double-digit revenue growth and slight reduction in expenses.
The company's operating margin widened to 40.9% in the quarter from 30.5% a year earlier.
Paychex's "most recent product release introduced enhancements and new solutions focused on helping employers hire and retain top talent in this challenging environment," Mucci said.