Paychex 2016 Annual Report Download - page 20

Any of these factors, as well as such other factors as discussed in Part I, Item 1A, “Risk Factors” and
throughout Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” of this Annual Report on Form 10-K (“Form 10-K”), as well as in our periodic filings with the
Securities and Exchange Commission (“SEC” or “Commission”), could cause our actual results to differ
materially from our anticipated results. The information provided in this Form 10-K is based upon the facts and
circumstances known at this time, and any forward-looking statements made by us in this Form 10-K speak only
as of the date on which they are made. Except as required by law, we undertake no obligation to update these
forward-looking statements after the date of filing this Form 10-K with the SEC to reflect events or
circumstances after such date, or to reflect the occurrence of unanticipated events.
Item 1. Business
Incorporated in Delaware in 1979, we are a leading provider of integrated human capital management
(“HCM”) solutions for payroll, human resource, retirement, and insurance services for small- to medium-sized
businesses. As of May 31, 2016, we serviced approximately 605,000 payroll clients. We maintain our corporate
headquarters in Rochester, New York, and serve clients throughout the U.S. and Germany. We report our results
of operations and financial condition as one business segment. Our fiscal year ends May 31st.
Company Strategy
Our mission is to be the leading provider of payroll, human resource and employee benefit services for
small- to medium-sized businesses by being an essential partner with America’s businesses. We believe that
success in this mission will lead to strong, long-term financial performance. Our strategy focuses on the
following:
• flexible, convenient service;
• industry-leading, integrated technology;
• solid sales execution;
• comprehensive suite of value-added HCM services;
• continued service penetration; and
• strategic acquisitions.
Services and Products
We offer a comprehensive portfolio of HCM services and products that allow our clients to meet their
diverse payroll and human resource needs. Clients can select services on an á la carte basis or as part of various
product bundles. Our payroll-related ancillary services and Human Resource Service (“HRS”) offerings often
leverage the information gathered in the base payroll processing service, allowing us to provide comprehensive
outsourcing services covering the HCM spectrum. We also offer professional employer organization (“PEO”)
services and provide insurance offerings through the Paychex Insurance Agency, Inc. (“PIA”) that allow
employers to expand their employee benefit offerings at an affordable cost. We mainly earn our revenue through
recurring fees for services performed. Service revenue is primarily driven by the number of clients, checks or
transactions per client per pay period, and utilization of ancillary services.
Paychex FlexSM is our proprietary HCM software-as-a-service (“SaaS”) platform through which we provide
an integrated product suite that covers the employee life cycle from recruiting and hiring to retirement. Paychex
Flex streamlines workforce management through innovative technology and flexible choice of service. The
platform uses a single cloud-based platform, with single client and employee records, and single sign-on,
including self-service options and mobility applications. The HCM product suite integrates recruiting and
applicant tracking, employee onboarding, payroll, employee benefits and human resource administration, time
and attendance, and retirement services. Paychex Flex also provides technology-enabled service, with options
that include self-service, a 24/7 dedicated service center, individual payroll specialist, and integrated service via
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