Annual report [Section 13 and 15(d), not S-K Item 405]

Segment Reporting

v3.25.2
Segment Reporting
 12 Months Ended
May 31, 2025
Segment Reporting [Abstract]  
Segment Reporting

Note R — Segment Reporting

 

The Company has determined that it operates as a single operating segment at the consolidated level. Operating segments for the Company are determined based on the information used by the chief operating decision maker ("CODM") in assessing performance and allocating resources. The Company's Chief Executive Officer is the CODM and reviews the Company's financial information on a consolidated basis. Accordingly, the CODM primarily uses consolidated net income as the measure of segment profit or loss and to assess performance and allocate resources, primarily through the annual budgeting and forecasting process. Budget-to-actual variances are reviewed regularly, with consideration given to the impact of certain expenses that are not considered part of the Company's core business operations.

 

Total revenue, net income, and significant expenses used by the CODM for the purpose of allocating resources and evaluating the Company's financial performance were as follows:

 

 

 

Year ended May 31,

 

In millions

 

2025

 

 

2024

 

 

2023

 

Total revenue

 

$

 

5,571.7

 

 

$

 

5,278.3

 

 

$

 

5,007.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core business operations:

 

 

 

 

 

 

 

 

 

 

 

 

Compensation-related expenses

 

 

 

1,853.0

 

 

 

 

1,810.4

 

 

 

 

1,782.6

 

PEO direct insurance costs

 

 

 

520.1

 

 

 

 

471.3

 

 

 

 

416.8

 

Depreciation and amortization

 

 

 

168.8

 

 

 

 

176.5

 

 

 

 

176.6

 

Other segment items(1)

 

 

 

659.8

 

 

 

 

606.5

 

 

 

 

598.0

 

Non-core business operations:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related costs(2)

 

 

 

162.3

 

 

 

 

—

 

 

 

 

—

 

Cost optimization initiatives(3)

 

 

 

—

 

 

 

 

39.5

 

 

 

 

—

 

Total expenses

 

 

 

3,364.0

 

 

 

 

3,104.2

 

 

 

 

2,974.0

 

Interest expense, excluding Paycor acquisition-related costs

 

 

 

(71.4

)

 

 

 

(37.3

)

 

 

 

(36.7

)

Acquisition-related costs(2)

 

 

 

(34.0

)

 

 

 

—

 

 

 

 

—

 

Other income, net

 

 

 

73.6

 

 

 

 

81.2

 

 

 

 

51.8

 

Income before income taxes

 

 

 

2,175.9

 

 

 

 

2,218.0

 

 

 

 

2,048.2

 

Income tax expense

 

 

 

518.6

 

 

 

 

527.6

 

 

 

 

490.9

 

Net income

 

$

 

1,657.3

 

 

$

 

1,690.4

 

 

$

 

1,557.3

 

 

(1)
Other segment items include professional service expense, marketing and advertising expenses, and other overhead expense.
(2)
Acquisition-related costs included in total expenses include the amortization of intangibles acquired in the acquisition of Paycor, compensation costs related to the acquisition and integration of Paycor, including replacement awards, severance, and retention and transaction bonuses, and other acquisition-related costs, primarily reflecting third-party professional service fees. Acquisition-related costs included in interest expense include the amortization of financing fees related to debt instruments associated with the financing of the Paycor acquisition and the excluded components of the initial fair value of the interest rate swaption contracts.
(3)
Cost optimization initiatives include further reductions to our geographic footprint, reprioritization of certain technology investments, and headcount optimization.

 

Geographic information: Substantially all of the Company's revenue is generated within the U.S. Approximately 1% of the Company's total revenue was generated within Europe for fiscal 2025, 2024, and 2023. Long-lived assets in European countries and other foreign countries were approximately 2% and less than 1% of total long-lived assets of the Company, respectively, as of May 31, 2025. Long-lived assets in European countries and other foreign countries were approximately 6% and less than 1% of total long-lived assets of the Company, respectively as of May 31, 2024.