Investment Thesis
Paychex provides payroll, HR, and benefits outsourcing for SMBs. Subscription revenue, cross-selling, and interest on client funds drive steady mid-teens EBITDA margins.
- SMB Scale: Serving 740K+ payroll clients with high retention.
- PEO & HR: Comprehensive HR outsourcing increases revenue per client.
- Financial Leverage: Interest on client funds benefits from higher rates.