Insperity (NSP) 8 Feb 242023 Q4 Earnings call transcript

Good morning. My name is Paul, and I will be your conference operator today. I would like to welcome everyone to the Insperity Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded.At this time, I would like to introduce today's speakers.

Joining us are Paul Sarvadi, Chairman of the Board and Chief Executive Officer; and Douglas Sharp, Executive Vice President of Finance, Chief Financial Officer and Treasurer.At this time, I'd like to turn the call over to Douglas Sharp. Mr. ahead. go please Sharp,

appreciate news us. with announcing this We seen Workday sure the morning. exciting our you you. I'm joining you've released Thank strategic partnership

and focused today plan. the be call fits largely Our strategic our will partnership how long-term it into on

includes will that to discussing you our the outlook XXXX Sarvadi and year our I quarter results today's of begin would by and we partnership may like a forward-looking or and discussion end assumptions. of the with for results, full Workday.Now the However, I strategic make remind I which fourth before call, begin, XXXX, to call which risks, Mr. statements during are subject with uncertainties

of some discussion addition, non-GAAP our financial include In may measures.

risks results and filed cause For filings, uncertainties fourth expectations. and $XX measures, website.Now a non-GAAP more adjusted are to public X-K materially EPS statements forward-looking and that see actual detailed both reconciliations available billion Form any in of please which $X.XX adjusted including our achieved from financial the our above of results we company's differ quarter EBITDA, could on today, the in the our of discuss let's discussion which

sales and in low macroeconomic comment continued of past QX In of hiring latter and paid on range. half. I half X.X%, our level XXXX headwinds, in in our in the profit to comparison and The Paul the into a due outlook.Fourth and the impacted our unusually decline low experienced the our hiring XXXX.Operating on outcome worksite of further exceeded prior few expenses in base in over growth our increased low net fact, personnel expectations contributed the Our benefit X% and forecast, in growth period end minutes, will a recent over turned the gross interest business growth gross a year, with a particularly technology. and QX lower of increase first represents and continued in taxes. of reductions QX our higher QX decline campaign included the heavy client to year-over-year paid minimal consistent employee base was slightly advisors year. be significant income pricing service benefit below This performance worksite year.In in employees quarter forecasted the cost line into profit the leading with prior by investment our costs in XXXX renewal over payroll our Net to of planned client

and income earned EPS adjusted in We favorably of credits.Now, tax impacted XX% effective year full state adjusted EBITDA and million taxes $XXX by came recap rate was at of let results. lower QX XXXX tax Our me our and $X.XX. R&D

a our our demonstrated These budget direct healthcare from paid in our decline our advisors, our number despite performance business headwinds contributed declines significant to such our sales pricing was $XXX As costs. annual for below the XXXX, addition an worksite pricing just cost and growth effectively in XXXX strategy, in while XX% X.X% profit key new the to our worksite over retention achieved in other we metric, employees including expenses client environment to despite invest included the managing drivers, expenses plans.In year. implementation employees, increased to XX% both key our over average to long-term due corporate our higher headwinds. month, capacity increased in service sales in rate growth QX. increase worksite drove per net macroeconomic direct the the service in full employee hiring base in and of paid X% ability and execute These same results client slightly per sales.Gross costs elevated as costs Operating we investments and of technology, in and continued operating of our and our inflationary across of organizations. The force to travel current employees compensation

invest produce strong sheet, to $XX and business and to to balance continued and the strong in capital repurchase cost $XXX dividends $XXX We cash expenditures million We flow shares share in invested in return a with a at our to ended million. shareholders.We year XXXX providing of programs. million returned X.X continuing million while our the and through stockholders repurchased total of a solid

our in to $XX XXXX with in of Paul. out credit under turn cash facility.Now XXXX. outstanding this call million the May We continue XX% million regular paid to which in have $XXX of time, also rate a dividends, included million cash $XXX We our at over and increase ended like dividend adjusted I'd to

our the small exclusive solution that joining best-in-class Doug, long-term Insperity this significant and combines with outlook this same the into offering.We has begin Workday high for leader end announcement of day all the and market, began strategic we XXXX as in PEO partnership the Workday Historically, They so opportunity. unique and, joint providing HR available they this changer with economic the HCM targeting our view, provide the HR they thank to and time, in By businesses. so including our profitability, in and into the XXX you, be powerful and, and our for down this companies the cost, creates brand solution directed XXXX their why our solution the the enhance services at at that mid-sized to around time new is value addressing Today solution degree, firms speed expense, target context a as full how and the for be be why the game pivotal a exclusive Insperity our most few potential a target in tremendously with we provide market developing, technology partnership, these services disrupted based Insperity.The for small marketplace is are smaller jointly marketplace. environment.Let's We the long-term targeted technology small we Workday. has market expanded premium I successful. performance implement Insperity driving upfront fit Fortune of target midsized in complementary nature and be capital new solution competitively this issues, and could you also are the is Workday solution been ongoing new expect focus XXX. those today and supporting XX-year success.The with and market, for Insperity need HR monumental. combined than and trajectory with offer to the the will get Insperity's believe business and partnership complexity, industry greatly our to potential my nature has and call. Workday. less businesses from company, of the Workday's the I'll my This to the plays relationship strategic importantly, marketplace with space.Now how this upon selling, medium-sized reality and businesses and this for the market strategy capability as believe of potential an history the to is of growing committed Workday Through for and Insperity preeminent believe excellent this be marketing, it the of growth, significantly to of In the implementation and a of creation a strategic Thank potential successful, believe a agreement, the company employees explain of will elevate comments value this to more is the by strength toward the and significantly their both believe to disruptive. scalable have with where likelihood, currently of

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our ultimate expect as of firms.But advantage the solution. qualified significant exclusivity firms. believe step-up these improving prospects through an Their attract believe to from Insperity with potential programs, outside investment their provides larger an they PEO market solution can primary is business.I is and HR begin years influences effect of beyond a X at for in programs the new generate to we potential automated joint target Importantly, of for all is including typical number industry. this substantial a leads due The technology. interested of Workday once of substantial currently Workday primarily, sales leads exclusive least key marketing prospects customers target, thousands the to marketing marketing new process generate HCM on the of with in immediately, their for a drivers significant in to Workday competitive successful agreement upgrade the makes a their and smaller leads launched. extends the launch within X this I

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pricing our Our transition our support, to believe provide us for that and by strategic of our HR our solution.Now, and meaningful leaves this to key ability our a by Insperity opportunity other service penalty prospects in as capitalize made our decision.We've area and future on comprehensive even continue our solution significant may new after their facilitate and may by ongoing future solution Optimization Customer an continuing improvement match will to new value to possible costs fee make better large addition enhanced potential model, provide enablement their believe reduce a in to often new historical client the is several own strategy may partnership and a effect The to the I sales services business client our the in on strategic as potential the a providing compare buying solutions.So should in this employer pricing expected have to new by success partnership also terminations be services. retention, even driver this implementation identified enhanced this strategic to position a provide client Life increase team we Workforce to partnership. third improvements

today. preliminary not into proprietary, However, I go will they so and are detail

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consideration.As sit significant I elevate is on Co-Founder, However, CEO, appropriate the this profitability decision. personally significant. future the I the level right as today is trajectory and Insperity, of growth heavily weighed to opportunity of long-term I the Chairman, capitalize here with and we shareholder believe the this decision a the for to am in potential convinced

our XXXX. developing, milestones most first EBITDA for the solid adjusted as measures achieved in in base, our economic community. the may decision noticeably be a and For in January. change our slowing important the net the in a outlook in next This last had will context half business and progress more within implementing XXXX of into measures important net year in employment with our in partnership results and launching, a year not be Workday climate well.Now reflected per as couple with client have the years, the share small to solid We difficult put me the over and earnings this The most of half from past. last year let strategic gain into they and reductions been the was net

the is client as mid-market on our our move period.Our full backdrop except weighs that our point renewal apparent most quarter. client significantly XXXX we for in had also the our retention large not employees sales in included for target in reacted we paid of well which including expected. market year quarter heavy from factor was and strong, success economic The X sales. year-end had into This our in fourth Another attrition, stronger was into booked starting this BPA sales accounts. penalty the affected strong as dynamic transition, was We originally to as retention core decision-making third worksite process, our our which

significantly exceeded sales.After last evaluation stronger, have in we year, areas our thorough tougher are we even there target X that However, a made a believe environment. of mid-market would the in year

opportunities, of economic The more first to one answer which leads frequently is is a new in produce for difficult more the the sales number sales environment.

acceleration partnership, own. is marketing success progress company for step Even without validating believe a a large level organization, larger well would achieve the penalty growth up new year, the timely to over commitment account last service the retention shareholders. the positions make improve with the our could relative our to believe of team, capital potential including opportunities our strategic efforts, new the this has and the we significant our sales return due to use in beyond coming on and exceptional we growing provided the our provide Workday volume substantially make that we year.One area last to partnership is our to that decision up a second difference investment retention point related The historical I'd of accounts.Now, of a is new significant like would address staffing that systemic an sales change

of have any represent capital-efficient cash to likelihood, partnership. of $X Insperity degree, would shareholders the investment significant under partnership shares call represents to work strategic Doug just This view partnership, Over return of of confidence likelihood, evidence sufficient strategic business trajectory potential to long-term.I the not highly future.At last change generated and the over back our an this partnership approximately to is and in would commitment Making I success does the growth, solution Insperity Workday creation point, to allow and $XXX dynamic our last expediently X year X to to to return years, context significantly returns pass elevate cost Workday-Insperity our my in also this Rather, billion.As of shares represents with XX the teams repurchase prioritization to The powerful between profitability, teams us repurchased the adds and million reach this of of this Doug. growth, ability $XXX firms. with on for million made into million enhancing alone, opportunity incredible model, evaluate value speed the for culture made the an to and our opportunity and a it strategic success the the market.I XX this the speed long-term like delivering effectively greatly shareholders. for opportunity like strategic ultimate combined the to for estimated that enhance our This this mentioned, these happen. X.X strategically, investment in thank our increase of agreement target brands this and the for aligned to degree, we X million. together believe corporate at connection the to a

Paul. Thanks,

the XXXX be operations, expected our our I strategic provide as guidance performance estimated our that the with guidance, costs Workday well specifics behind this aware of the before reflects Now, partnership. core associated both as

As significant on will XXXX, we a Paul course expense costs with associated not to be performing capitalized. significant our earnings. preeminent solution work therefore a reflected clients.Most efforts mentioned, and development have over offer these to development technology as This will our service impact will forecasted mid-market obviously and XXXX of be the

Workforce the partnership, we with the first for revised. strategic we As effort this worksite the scope largely would Any use of of partnership details lead our guidance XXXX the Optimization flow of in primarily for growth that the in point. may be the of Workday the guidance, our collaborate for back our through quarter impact preliminary solidify sales further half dictated year.Now, to starting XXXX estimate the employee to related as our by January this costs on of revenues be the our is of

about certainty reduced remainder is in efficiency macroeconomic combined flow, environment. lead in sales tenure rate more our the gradual led the starting marketplace for the full $XX a improvement our about base number January As are was gross Paul X%, year, by These increase our in factors budgeting half average small the employees the XXXX. net we the year into going experiencing of of the of continuing the point XXXX similar XXXX. higher and assuming and of to current the course the the client of an year accounts.Additionally, renewal which retention million and were are just And to in period, over primary an over uncertainty into XXXX expected factors lower and contributors a profit.As excluding rate growth reduction large XXXX for heavy during general when in macroeconomic BPAs our we client our client to impact with of in mentioned, improvement second

over count range the XXXX compared course to forecasting for growth expect sequential to to and full flat expected X% to the continue of with our a year client considered December renewal intend a hiring that We to pricing levels.So, we worksite profit, to XXXX.As have on over for recent forecast by worksite than XXXX we clients during are decline and in focus continue pricing, period. of employee We the and higher is when a paid these gross the when our workers' ongoing generally environment costs, guidance expected direct of impact our of This factors, environment for an QX XXXX, compensation inflationary X% year. our minimal and with healthcare our be the and expenses.We including historical a costs, areas. payroll on operating expect growth improvement ending tax our stable of X% X% sales both in assumes given employee expect considering achieved

benefits Subsequent X%. or of our both aligned. considering QX, direct to costs, our be deductibles as exited exceeding period. associated profit And changes strategic employee for met.Now, the to and our of QX costs full in operations plan each XXXX based step we our with to wages quarters and achieved to matching pricing, worksite with these direct for expect Workday cost down payroll cost similar tax XXXX this and that operating anticipate expect a As our we trends component allocations, the expenses expected X.X% XXXX include core factors, trend is year the the are following direct X of We on our cost.When the of and in to we partnership. gross in XXXX benefit plan metric

our of related costs plus half the costs year, in our XXXX, just mentioned, redeployed in the back of successfully sales, the internal XXXX, partnership that of service XX% course employee Paul of that for when XXXX. estimating primarily impact include resources.As of personnel the growth in including ballpark operating million will budgeted coming the to and in the hiring $XX XXXX are worksite the incremental support operations, be our full in costs We year roughly off

this hiring operation us performance advisers. business puts in minimal the including hiring a our in in XXXX, a fewer position for Now core

our and are We over to a year interest for just expense, XXXX assumes the the rates and in over above our interest increase XXX.As rate a with run income X% XXXX BPAs current budget forecasting slightly to end XXXX.

a rate estimating for year QX the XXXX. and tax full are XX% We of

including to all with million. of after is about $XXX below we The adjusted EBITDA $XX XXXX the of costs Workday our pieces, $XXX of the So, together The range in approximately the the $XX partnership, midpoint estimate employees.We million of point associated putting prior are million current in are this is which a range range $X.XX. primarily $X.XX year, in with million lower a adjusted remainder the related forecasting to full of starting is paid to related Workday. of partnership year to forecasting EPS a worksite

the our exciting the EBITDA partnership and call to the of and With forecasting to up before are for quarter, we to to discuss kicking announce we plans. in half partnership the strategic like the $XXX adjusted second first off in May range the of development questions, strategic with Workday and fits our adjusted this year in EPS we'd million to intentions our further into QX how $X.XX hold long-term an Investor range it open million $XXX $X.XX.Now Analyst Day in of

at open date a answers. up We will announce the time.Now specific the and question later let's

from Nicholas first from Andrew [Operator is coming today William Blair. Instructions] the And question

couple with begin, just and I'll digesting of the but not still market, you a Doug to some I end said to Paul, is the realizing Workday employees. mean of conceptually, a where can mentioned of partnership, clients we applies of help kind the a Or certain there, in you point, number, just product to XXX explicit of Optimization are set. expected lot the opportunity flesh ton detail where of remarks, for over terms market an it think this that so at a and are new just Workday bifurcate clarification, admittedly of is to -- start us is in the like target target prepared times to a take it collaboration it. you the out kind But size? expected the that Workforce it's legacy point

a Absolutely. there. clarification some let and That's Yes. me question, provide great

many I Workday growing as the are and XX as XXX X,XXX. As penalty, tremendous, really need else scale. we XXX, grow -- fast-growing businesses a up to clients or have elements, is world. and/or but it's target or as as to market at point we've experienced, HCM you're certain and the small when provides less our success still of more that size.Our for a few aware certain great. in with get features about our the with either designed they and as it's Really actually certain clients lower is is other a end mentioned clients the technology or employees, anyone what today, And But to had way, more or when functionality XXX workflow more better companies maybe in than for

And is companies way and software service, of that going for all more of developed the need them as as helping the the also employees, the we those use them an whatever then effectively.So a only employees very the to company growing putting high to is that XXX the that the sophisticated be use for helping of thousands thousands we've up way end fit this they into small employees. and to incredible believe excellent but department profile, software, up solution companies not before our so, critical output run better which to the HR all from

a stage means So product going even little this. now Workday opportunity higher their actually of this And new the partner, target to down process from very their a an end it in worlds that from anything have best a up better go of have And us both service our gone before. we're have market earlier this at to has for the market they've growing are to target opportunity market, for really clients that's bit. And our market a fits and opens what that in journey a beyond our business. of great for that is market, perspective, going to and ever

retention, and come we potential that's some that should agreement? this of client Got recognize to the this I the your decision about this to to benefits. think, went business drivers sales, X the of cannibalize it. partnership mid-market And -- to How outlined think I into the if you all key for improve pricing. the the Paul, potential new drivers, financial financial of for how

of way, that services maybe issue to is be some company. to that be them. It sure a it sure will Yes. change of more the any make And them.They'll solution. But a least with mentioned this an do penalty to huge to that significant of in the in delays we'll different us. form. we're as for been want move of part life, see and Obviously, they've a I way, with using the customer other happy deployment possibly or than support, ongoing customer relationship of and moving that length script, provide that that's HR and they services ours, provided want to correct stems the even really And still they or our technology at time. own just future, success as in enablement us they able provide their services well instance, kind for at I in want our for a shape if companies tide for don't as point

So, a this way. retention definitely in that dramatic extends

like Yes. would I transitioning that percentage little if a retention, this still trying ] if get retention wondering earlier realized set revenue retention previously helpful. from question. the at pretty than we're I'm like client hurt be realize had but was guess early that perspective, perspective. they in, I my that bit in genesis of on [ from someone a But retention all I is, to maybe a getting up, what I'm

this No. it solution, go actually they revenues. When on new our increases

from be our help fact, they're the coming, between now, -- potential have the comparison have our be will will the explaining queue when will But we increase what the to out business. who other. customers customer we'll what in service, service base, the to the someone X out going them to be service moving we And that's our new solution retain using to and prioritize and today figure in So, they from it the revenues use. new goes to current

increased that go revenue I Workday's helpful know would much understand. That's to way. right. All didn't of how

The question coming is Baird. next from Mark Marcon from

Paul I really Doug, mean, exciting and announcements.

anticipate like about able joint think actually and clients? Is actually that be out, just this the do of venture should in actually of you out, venture, we years to X timing? X how get installed when that terms years In the terms you market would with this

time precise to that get have milestones point. the that be point at do to first over don't Yes. to achieved calculated We We have this have quarter. this the

Our development will near going but statements Investor not And at teams that et X-year of have work, that May a complete Analyst of period information and date.Now, launch Day yet. it more that cetera, be to time diligently therefore, point. working to expectation. the and on to hopefully to, out both we sides about a detail we're the figure out to in have I It's locked have you don't the work have just and lot down range referred

today date, before understand and step the for once going have simply we that line that partnership be the the a can this of on on. current the in put as we on the to launch starts companies our even believe opportunities first well about at going that are this to line to date.I today up flow, say, the comes need come I will solution move. clients, we is also to we the man, launch in solution relationship that, the to be coming increase make sell ability our because other to to relationship, date mentioned prioritize However, size for that all, with this lead launch And wow, I customers be look of to of number believe what effect have mid-market in people and the and what's through to dramatic I but this team of sales today,

-- I going is like to could marketing an then The give market? before The X But is to anticipate like outside great. it what's bring start for you right sense Can would to right the the what's -- that far mentioned so right is and a lead to you long. -- going away. with start years to regards appreciate fully generation Okay, you us too And longest actually effect you is going away. away. halo start

that between to locked specifically I'd conversation love to have We partners. our it X want have down.

development effort is realize year a late Let's a crazy do to this something possibility. be would this significant

more be Another year that, highly likely. that after would

between but down. that somewhere we're the likely, So most lock to is in going

what Paul, for Got worth, I it's mean, Baird's shop. it. a And Workday

And whole was formally. that I part follow I of process So, understand it. implementation do and Workday

great a what actually to pricing, they take could you be. that to higher going level partnership solutions an appreciate partnership you're a the from offering perspective, regards and solution With So, even to the and HCM the end up of that modules Could that suite. offers a terms sorts purely modules. servicing? these full obviously, There's business this become in Workday you above different the were comprehensive offering for of companies beyond, all solution really fast-growing could

HCM services Workday perfectly has great financial the also. the integrated incredible is question offering as marketplace very an That's a that well solution. in with

the We long-term. talked about have

on team. new on our a disruptor, properly employees system I that target X new clients. we very, provided think and our to that especially a this like Bringing their both fit the solution implementation we bring a -- than like huge doing are launched more right, the very we because candidates enabled But bring good today a competitive adding other is it deployed that for want companies to also takes customers of to right.We firms believe got our before we walk, smaller implementation our for large X,XXX the to It crawl and our and got or full with months less technology. them of is market solution. advantage on one get that get is we

have interface is XX-month do from going to you bring to complexity more be time it be you works, year I configure. process the That similar what to cost, a benefit and bring make how how market. build want work to to since capital believe to is to on it less goal you lot on more now. takes what make it lot to on those As a to typically in how an a the that, also plan for know, go lot a and we actually to been between and It's or well. learned how significant system time, customers will incredible customers our the able a or powerful, involved amount we're a this X offering.And said just we'll of of We and we less less target we've

The question from coming Truist. is Sommer next from Tobey

A to digest today. lot

a for and at at day exciting lifer and how at genesis that together see all it Insperity, going of you Could keep the means And address let that. conclusion? arrived like equivalent I'll drive. Insperity. talk you've this pause for about of this sort to benefits sounds Paul, of years you it big clearly with came you, experience Workday So what you maybe chunk side for is of to it and to up this other get of the and can the signing you the there another been

has meeting.At client so, had calls. for and, -- we for both Workday. to absolutely the December, before was, in about even another call had to meeting fit to mid-December feasibility solution very powerful I waited had potential our with I've it be us October, incredible as the investor tell has become have thing. meeting, level is first sky late that the my for years in waited obvious of an is And agreement. a We're them for as was And I is does, but been it us and And to I the a cultural this phone groups worked to what to to for It's we Insperity. And incredible a in position signing on it space. little dramatic work of work get and that bit customer my powerful up the a powerful had provide the that say being to this. do was where I foundation. XX/X to with at we a an both great Yes. a more already for wait for companies that companies company give connection powerful, can of these I underserved phone But an a company, point here. what starting first this what large know way advantage been of in years. that really We a X,XXX-employee focus I'm in can for on you think, been you that and highest of companies even run leverage number that mind this limit to it founder, strengths for the me already for the to a But does day can't great it forward, us. business new so I we model, point great and we us ready have mentioned, can this to here, through by sorry, a be firms believe company. understand issues but early to And many back -- take day it I'm have this we a even face-to-face what we I had is couple And November, of that our this means both middle as clients.What time the could conversation ended right worked day from where

side, and a get small you service remaining this on focused medium-sized you premium once do aperture and primarily to collar, got the or does And we new if look back Insperity, to the up white pull businesses? envision and up provider at when sets you've of sort customer it open running, other

fits interesting also I of the companies size is really target target these is what's middle, their believe solution. of end course, are both is premium the at customer a joint for is brands No, of companies in the expand the it market demographic profile, space. smaller not of do the that does But this the theirs high for in ours only firms, companies, both both larger And company. the

go end that psychographic not market, to the we market profile trying of our who a profile target to the also psychographic interesting we're the profile really both target our is demographic way tight game.What's is the customers, and the So of fit. is

be believe, this, going preeminent in solution the space. we the we to So, is both premium And are services.

firms. -- And so, target again, market this for both does expands this the

If I could just to it turn sneak here 'XX. in X on get --

activity trends, we've running you awful heard hospitals and because with In moving are opportunity, healthcare pretty care pricing managed unfolding, what parts of terms and lot an levels from seeing of companies high?

have Obviously, of got at, what budgeting, on both as I obviously, large are the you you they're as quite medical side looking a UnitedHealthcare. specialty side, expect, particularly would the drug increasing part those activity. claim we costs contemplate bit, have seeing constant conversation that our and Yes. mean, And also we with drugs. to drug

a in So, trend with activity.As to what Well, far prior XXXX expect was you be XXXX. trend of at significant we in them top prepared the to start to my claims, trend top, sort we still of an would elevated elevated X% somewhat remarks, trend. about feel probably X.X% of on we of that that large QX level talked relative claim as is large to remember, history

more our maintain all increased trend, of the So point to those think don't have But that not of quite of for level considered pricing to X% of elevated cost along in going the we also I utilization with is direct is, XXXX, expect as even to high. large specialty good We with 'XX exited position claims costs expect that in the a thing year definitely the costs. that's out and QX an this X.X% we cost elevated we drugs, is forecast in objective with still but all other what the into about. We're aligned, our drugs.But okay?

the the we're year, to reasons this of the So similar looking total we our And there. somewhat we 'XX, prepared feel employee for X my think of remarks, starting for at like section year per I budget XXXX. we're level, in a guidance my good script, gross think profit in shape that's why

Martin next the coming from Jeff Roth is MKM. question And from

capital and A expenditure. the to lower obviously. and and this echoed. just result on was everyone's congratulations current technology exclusive stack, lot But a your partnership, on curious Doug lead Paul, as replaces going if here, future

what which in today But our Both serves of That's expect we many the that system for system, future, end what of a is is entire smaller the some call good mentioned the being Premier, [ continuing for system, base, those in client new end the the customers. client-facing all we we the the then should which customers for continue ], question. new smallest of of we call what client all enterprise for on solution not could our and that that of component. we our I will interaction our to it involves is the is base way that this and have them.I'm we have launched. Also now, think solution. AIMS until in be and mind, we PEO have which our remarks keep base, that foreseeable But small never saying current in the our planning way are of solution the future,

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the of option is the curious, X, use upper end offering the proposition spectrum Workday? low Okay, Workforce will that? terms the of combined for you to as traditional versus But ask biggest then with intertwined. the see type, what of great. And X-part question And value band what Optimization clients X, have you do I'm here, going the then, just hit to a it's all the in client clients?

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configure someone most I want who there. times, but weighing wants see a the combination.So if So that's strategy, this their think smaller is effective firm, to be will this for technology to it literally going a and they have even will the way many see they'll commitment, expense get more capital out to important able other Many people need of ongoing have knows a companies to and that powerful the their solution more thing HR is, expertise the -- time way that be they And envision smaller they how understand. don't is times effectively. to length to are the the there's

into we that it And company. what cost, the new here our they for times remember, appropriate won't pricing have. on so, will expertise mark of our subscription fashion our into solution. subscription And fees PEO bringing our in the with able part so, to where table we're because and build we're an case, are a same have ongoing is, markup we to In of a delivering that cost, upfront based embedding Workday solution.And this of be type the our have the for level again, lot misses quantity won't we're in that the the near

that fee. the also So in pricing total embedded service will be

earlier, solution lot customer gets and to a be that a affordably quickly. more more So Workday on

bring happens there there of though, pre-configuring tenants flexibility other they that lot the There's of when going be to need a they future.So be them we'll have believe be And Workday also be customer. it customers maintain point, quite will happen customization more system on able the they instance we're we with may their fast. than them able in sooner But serve the and continuing that you get cases. who be and a not people a from what's have clients on bit to a helping But will it that in for those And right and after instance on Now it Workday. future. the may are Jeff? only won't now, we have in customer.Does this relationship -- in things we we to get be many want like onto that own be full questions, of to configuring the specific day to don't for because to involved chance to of help a the

Thank turn you. call conclude does that I to And now Sarvadi would back remarks. the Q&A. for closing today's over to Mr. like

joining once today. say much how to us we Well, want appreciate again, just I everybody

we're a of all As us. said value for beginning, trajectory excited course, company, of and, of the monumental to creation long-term I elevate the it's at just for us, driving our day about potential growth, the profitability and

also half give Investor in participating last the again. to our and of for We quarterly you the thank forward Day, to So, Thank May. today. will look discussion update you of happen the Analyst you, which next more milestones

does conclude Thank you. This today's conference.

You time. at you your this participation. may Thank lines disconnect your for