Paychex (PAYX) 6 Oct 202021 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Paychex First Quarter Fiscal Year 2021 Earnings Conference Call. [Operator Instructions] Thank you. I will now hand the call over to Martin Mucci, President and Chief Executive Officer to begin. Please go ahead, sir.

Great, thank you and thank you for joining us for our discussion of our Paychex first quarter fiscal year 2021 earnings release.

Efrain Chief is Officer. today me Rivera, Financial our Joining released market results August This the we XX, our ended morning before quarter opened, financial first for XXXX. the

on provide the it Efrain and and on update highlights on can start and the with for available be for broadcast first ‘XX quarter. the This today’s website an will Investor up call You ‘XX over first business earnings days. within will Fiscal start. XX-Q questions. quarter is approximately release the on with few open I fiscal is the Relations be your we our then financial access SEC will an off webpage XX archived our teleconference our for good next filed the review Form to results will will our and update days. being a Internet,

the Although our COVID-XX affect crisis, results a recovered the at as comparisons, causing than model COVID-XX anticipated. year-over-year projected business originally metrics most unfavorable results than Throughout to impacts faster proven our of rate resilient. better key has our of quarter our first continue business finished

clients. responsive good We accelerated development client of momentum, to our the retention sales product needs and excellent have seen

also are We protect as to initiatives discretionary on needed a of margins where ahead to reduced rapidly costs, and number schedule costs of reduce well. long-term

in our reflecting Growth during quarter quarter, year-over-year reflected which fiscal in expectations. revenue payroll was performance higher first our X the growth are sales than with years. highest We pleased new annualized sales the significantly over strong new units

to in generation and sales, virtual years this positioned lead environment. the sales us and over have investments Our several marketing in past support succeed technologies well digital

during our midsized has challenges businesses value more clear. have With proposition and small this environment, faced never been HR the

increase for our were year. double-digit for since strong very We QX results with beginning sales and HR demand offerings seen a surge over HR the our services of in COVID various last our have division

this of opportunity. advantage take to continue to well-positioned are We

Our levels. quarter has remained first record client retention at during the

to guidance We again. proactive to have this see and we that crisis, begin employees pay payroll status very non-processing continue Throughout to been information, clients our clients. in providing tools been in have

of proud We response advocate agencies clients remain regulatory closely both to for crisis. during work and with this informed our are We our our clients. supporting

in compliance teams interpret the software and clients through to to the to our and development changing respond design Our regulations most quickly worked for community. challenging assist of business one times the products

their which to updates and regulations. ready Wolters application. with We signature provider PPP Center. subscribers. tax April, we and Help with estimator solutions AnswerConnect visitors be now Since accounting to produces of have expertise, first unique leading platform our were selected utilized a a We real-time to COVID-XX have forgiveness Recently, Kluwer, launching loan by in CCH provided forgiveness XXX,XXX market new our early loan approximately research a estimator, compliant PPP national

training with maintain participation, satisfaction. known client the service to strong our seen attendees. leadership to environment with attracting we that combined us some client Our and Paychex with webinars high XX,XXX X/XX/XXX COVID-related that adapt in service record made over delivery, for, adaptability our Investments our achieving in speed current the due is us has in investments platforms allowed served and helped has of have levels thought have over delivery. the in has technology well available personalized Along

compared during and the increase. sessions platform period prior increase platform double-digits the the utilizing employees seen the to We our continues number on active of year have to mobile quarter

working request attending environment COVID-XX virtually a or come for the and at many learning leave and employees given been to Flex information percentage collect features taking physical when employee advantage ways. environment attestation a have service, Paychex work the clients high an total variety of service member by that for to in Our school of employers their for back clients utilization family remote self screening or a care solution child of These self for health a client to is of enrollments product employees allows employees Connect and continue as combined will utilization our recently an users health tracking through our introduced office their continue scan prepared environment. clients, capabilities can significantly workplace features, absence work whether include virtual as also to employees and with Iris from of in features HR leave pay-on-demand employees our location. in returning conversations HR for their safety prove to offerings that for features Flex. We functionality new Paychex COVID-XX benefiting in invaluable and clocks, These employee to and any remotely Connect training employees are who participate the from to all-time they other

As fully in will than mentioned first that expected. have saving anticipate projected we savings accelerated in office better We certain to are these initiatives, from we the costs $XX including we million one-time cost realize our physical during recognized we footprint. these initiatives. initiatives reducing June, and progressing long-term our quarter, And related

We Most independent are has with the Paychex proud Core give as apart strength was recognized platform and Flex device sets an and been recently, services a The care category. customers Lighthouse as with the of technology we the SMB by this Research our Tech for recognized us by category. resource solution Award in well the the HR/Workforce HR both that focused Advisory others Best our application of human capabilities industry combination from benchmarking single experts. in

support pandemic. straight and plans as for record-keeping a by the by been recognized provider recognized have largest COVID-XX to XXth clients the presented Cares companies services year, celebrates to with the I Tech by the number that We that of gone have also with their beyond Award which above been proud have Magazine. of XXX(k) note and during TrustRadius, XXXX am provide we communities PLANSPONSOR also very

are business challenging employees times. for retirement of to longstanding Flex simplify and and of recovery, solutions and and proud during the Paychex speed to service task a the leveraging these retirement best-in-class help have Irrespective innovative We to through complex safer our the solutions technology commitment resilient like pace to employees provide of our continue business stronger, often model, saving to service the turn to and continuing quarter. Efrain? now and owners I outstanding us first technology call our this come review while results financial allow Efrain position leading for to strong clients. over to liquidity dedicated industry to will will

best Thanks, your by by safe Marty out have and and start I go the doing those everyone pandemic. who that wishes well good families been want to I is morning everyone. impacted saying our the and to by hope are

refer events, refer the that non-GAAP I contain disclosures for everyone same will look conference as Let statements all to GAAP you the customary to then etcetera, non-GAAP going at to such reconciliation measures call the future me release refer things, forward-looking measures. to know am and remind EBITDA, press of that today’s stuff adjusted please to

then in for Let me quarter greater key then the and areas some follow-up start with fiscal detail points the wrap by and with our certain providing of XXXX outlook.

economic COVID-XX. First reflect conditions resulting from the quarter results of impact

As total Marty impacting due revenue revenue X% million the for declined HCM largely $XXX to to across solutions. quarter, first mentioned, our lower volume

for X% to balances average revenue lower X% lower million. $XX the lower exceeded our and high due million, $XXX measures to Obviously but per for exclude million Interest declined revenue revenue Marty by noted checks at spending first service our when cost to total double-digits. moderated those quarter of clients when decreased results COVID. decreased Total Expenses to expectations. declined. earnings down Within the we balances impact for I $XX implemented quarter X% held Insurance in discretionary Solutions Average earned. $XXX the one-time revenue $XXX single-digits X% investment that the actually During due mentioned, million funds you costs funds down say call, I service due held QX. and Management quarter to were to to lower control looking on for X% revenue, and XX% primarily client to declined service had million low to $XXX be the on was interest mean, this, million, during up revenue rates moderating, PEO anticipated June were Solutions driven clients I to X% average and of interest

are know, to expectations, million am increased decreased, to in includes is We interest income, as margin operating and XX% one-time was this reflected investment XX.X%. rates. an that net operating managed decreased proud entire for partially – reflected very impact which period. $XXX excluding income corporate XX% of and expense quarter you Again, adjusted through adjusted I first low was by lower operating quite costs ahead offset of borrowings how million we by XX.X%. expenses of Other $XXX of sorry, on of margin that the impacted Operating long-term income the

year. to decreased comp to million, occur reflect Both vesting annual net decreased for XX.X% for the Our $XXX XX% of the income effective benefits rate rewards. same the XX% last first XX.X% adjusted payments compared for tax income Net income but period tax to stock stock-based quarter million. with that various $XXX was periods

includes quarter, income benefit For payments. adjusted the one-time stock costs tax from in net comp the

can have and way reasons earnings not, out guesstimate, above. given don’t diluted know discuss to just the it decreased know the the some income. to earnings all benefits you providing per is share in $X.XX ended whether declined time. per we share We to to this we $X.XX, or quarter. that going Diluted adjusted give quarter, people up in cited but exercise but have quarter XX% pulled no a There for Investments XX% I are

As optimize principal to liquidity. you goal and our primary know, protect is

duration for shares restricted credit for in as portfolios repurchased Total compared to August available-for-sale I position. strong as will and averaged of million of investments, paid XX, $X.X as average $XXX $XXX corporate XX, quarter. down Combined August quarter. held million. yield widely gains average equity vary resulted X.X% X% for quarter, It X% held the from quality was year. billion, for a continue XXXX clients to of of the X.X XX, The billion. of $XXX Total highlights $XXX in securities. from compared with dividend clients net total XXXX. of held cash million position had reflected increase Funds investments XXXX of earned remains of an for currently were invest financial stockholders’ billion as $X.X including corporate portfolio about $XX or average May X.X% million interest now Funds basis day-to-day unrealized in and first and through rate with net the an walk can on during and you years. We declines billion return have rates. of gain reflecting million of in clients $X.X high Long-term $X.X surmise of our investments cash, last funds

the from months were first year. flows XX% Cash quarter, for Our XX%. was net same return capital. at by decrease The last robust operations lower on equity and period the from for driven decrease working million fluctuations the remains of a past XX income $XXX over in

the XX, turn me the you fiscal as ends which of XXXX on recovery. speed – outlook thinking The guidance let economic XXXX. reflects to for our current regarding the timing guidance Now, current and know year, May fiscal

see There First about over expectation. can is the several of quarter quarters. exceeded trajectory recovery results uncertainty next as you the

a of Our year. guidance the improvement fiscal assumes rest steady, the through gradual but

first We seeing results. to in the to after X%. range of have provided now decline expected is Solutions following the guidance Management revenue the X% updates to quarter

X%. range X% We continue expected have revenue of PEO to passes. update the previously to to to a of decline in quarter range decline the Services will each we X% is X% to Insurance and and as guided in

Our to previous Total to Interest to clients be the guidance decline X%. of is a and $XX between on the expected is million X%. X% X% decline held in million. was funds revenue expected for range of in range $XX to

expected is to previous XX% anticipated decline the of XXXX, million earnings expected in million. be of tax We from margins in as to operating share, up guided in rate XX%. to Adjusted full is to be effective from X%. fiscal range approximately be percent range XX%, total is of a the range to revenue, be the X%. $XX now have to diluted approximately $XX XX%. The decline EBITDA Adjusted anticipated XX%. XX% net Other to for to X% previously a to to in of expected for range is the Adjusted of up XX% of fiscal the to income, per year to expense guidance XXXX income X% XX%,

a decline guided to of range XX%. previously to have X% in We the

be to decline to will and this guidance. second mention we want to thought. anticipate to quarter, at margins, of currently in things started, Insurance And second PEO quarter completely revenue in Turning the operating all Solutions it of walked the excluding XX% range X% many to didn’t year where XX%. of and the Solutions view of and range we X%. in first, We withdrew will middle costs, of told to of Adjusted you right anticipated the revenue the Management we An one-time decline the the and you are something, half you we were X% we X% people just get updated what to when in I but communicated tell changing. and early

will So, continue. we

to are full We And a committed you committed to are transparency. basis. we on regular updating

investors is right now. know what think exactly what we we So, thinking, This when we thinking are are it.

very to single-digits. course, anticipate approximately of revenue can early the the anticipate low be half change the second at be as margins, to the this total will go we the of view But XX%. through we we Of Operating year. in things flat of range year, point,

said, this to all is subject subject as assumptions, to Of current course, of change. are I which

update We second call. quarter on again you our will

more Number So, the more knows first and are very at in it, quarter with. quarter. were saw are comments. were the to Digital call. and don’t on have conclude mean than think virtual I was I was of very is digital things Obviously, when what a Obviously, solutions. very but mean sales to mean, strength you XX, any that we sale XX positive And I dependent alluded very, I challenging, June strong, meetings strong. say dealing and uncertainty my it the the face-to-face I don’t just the I there. we we you is and up one. number standpoint more in strong one been stronger couple would of Marty at say everyone HR in Number strong than anticipated. gaining from two, the up strong a revenue very recovery was solutions has sales been That’s we momentum quarter

we that you marketing digital incrementally driving part at being we really When the on, you So, through recovery that we downturn would as this, positive a go that digital-based, the things year. have solutions, had have while sharp one good and PEO, we a is had also. look And initially, a at sales, HR of good very learned what’s PEO seen say sharp gone we has a as look I is of the when and year quarter. had quarter or

we important – incrementally the think And be are That in positive solution a so to we market, will more again there is demand. on PEO. be and continue good

as of all is manage in there I in on short-term father’s obviously, lot through where it were, steps direct we turn a in we in Marty. long-term that, not we Now, uncertainty the environment. that, the second said, This half, taken the investments have But still not we the lot I the be right position. a steps done think are we different in to a the to of to a we and of and right back is With had to your Paychex. took it would position will

for operator, we now will we And will Efrain. your – open you, thank questions. Okay, it up

Ramsey of Thank question Barclays. Instructions] first comes of Our line El-Assal [Operator the from you.

a from, we well more fabric your product this this a for is like blip on versus in your kind Marty the fundamentally I comments mentioned technology do of a to think as standpoint, as sales father’s to of Hi, is things how Thanks will something view about standpoint you and the it’s your permanent of think Paychex, the your you just last digital well, go guess it – shifts business wanted do digital analog are my how not terms get forward? question. in or I when change as or Efrain you had comes guys. as some of you ask taking

coming from Efrain Look, will anything environment comments I he has being to on-boarding, on workforces invested miss and a think return paperless, accelerated we And so of I will had seen it, if I the many or let had, then that is all I paperless mobile accelerated in jump think has all, of and a definitely start any are employees look has. but have things everything in, everyone it office, that as with quite it’s of permanent will the the things permanent. think could back for to to with I in employee I dramatically to see that the recruiting, and training, never change really adoption, use I to also that’s makes change. similar environment. even the that it’s work-from-home I as or the remote employees lot going office come think the many Yes, think, to

which the simple from which more through for have very have have then search because a well. I doing And strong commented, easy buying, the results working strong as basically, going Flex in been Efrain are invested to up buying think are used have much online we have to do self-service looking they a use, just demos, people is in that at as the is and invested invested online we Also are we it’s it. product that’s in they virtual, where themselves SurePayroll are way I us, sign to or well a which and Efrain very and think we both mentioned. for been very

all permanent, everything and I to paperless, else mobility in through it’s remote, the way between. think So, app the very to from

feel we permanent well-positioned very a So, going from standpoint. forward

we digital really to the one too. without be can our progress by in its Yes. with was yourself by digital What model. efforts that of on can, search only the Marty all I we Marty of side. selling think something onboard as together to marketing but you really, years was and service as have ago, digital we tied had But not great lot mentioning, I involved in did mean, I where And would payroll That powered And been we say, having needs anyone several a a quarter. made process. strong thing that mentioned, also add is hey, that sales SurePayroll investments virtual our that efforts are have in

You and to update their actually heard about who of platform information. are utilizing employees our his number connect the do, to comments

XX And so it’s are many the put like interesting. sometimes somehow, competitors we can’t and do just going And market. weren’t, isn’t hear you you compete going now making people SaaS, can years that let to behind interesting we be we too true, market left behind to the this we digital, in it It that that. it’s way. only if me weren’t in certain are you the and but changes quietly you not and same narrative if that been now have of you left and the are ago, to are be pivoting understand

are the been the is I am sorry, basically talked would that’s a lot the And Efrain, it’s incredible. now the what focus answered perspective, people saved coming just so us chatbot from questions being I we Assistant, our it answers a from by and and in from XX% is other that stat of as service have Flex clients. use about which a say interesting, on. that questions they has perspective, chatbot of can a

as you for it more more freed our that’s people ever team up X/XX/XXX available questions. the is service always need if So, and now only personal a than said, those the available value-added one I from are

a So, of will environment. be we this and really have and as the accelerated off investments feel pandemic result made like paying permanent it’s we are

to business about relative terrific. up existing customers you for the wanted cross-selling the the would how sort terms evolving kind is as kind on how that signing can in to versus to sort in That’s the it of ones characterize another kind the is more existing business of usual, is model growth pandemic, or your of reliant of today of me, your clients of wallet speak of question to you One importance Great. ask the context more share new of algorithm expanding balance? now, I of

selling business into it’s we I say would the usual. base I well. fairly mean, are as

the more are the clients to us. talking the satisfied clients, to the have, more think services obviously existing they with I the are open they

time new package technology and dramatically We quite the help are out we of have product services advancements have a expanded coming and our will quite pandemic. have that that all we set in the

is how one the that a COVID of driven of lot Help to see during think I pandemic things clients valuable. is Center really that in this

is they what able they and in when know clients need have to the information. and most they You value from when seen been value have we see have what access greatest offered you really great

loans get You first the were got the know downloaded times payroll accessed when you better same no over we now. estimator and think our been any valuable. loan a that of and payroll found signature-ready report X.X things clients them million have has of leaving to value now the to report that we about able were stronger. And a so out the be been produced, to the available, that to a kinds go day has put they that’s forgiveness forgiven, application estimator, one now the one competitor your client No those lot and retention is are loan kind because to to added of never tools those therefore using

has the in of helped think the by additional I in think retirement, big come sales, a we fourth features process first year that quarter. quarter things, focused people are I then weren’t the even retirement back of saw in on drop certain strong being last because and So, selling

retirement look So, in are a payroll people and a and retirement from HR or perspective. increased actually payroll sales year-over-year revenue who for were clients now

the So, have we the the to sell of I because ability through improved value think has pandemic services really offered. other

I so taking terrific. the your much That’s answers. Thanks question. appreciate for

Thanks. Alright.

comes Our Togut from ISI. of next of Evercore David question the line

half point growth thinking a have Thank the the of lot a guidance metrics like where X-year wondering called you. giving are sales, but Good flesh in on your out previous in it appreciate you Efrain bit to ranges, guidance and out Marty are you pointing that of of record result highest sales, ‘XX, little many ever, FY new little more, in just ‘XX? fiscal you FY a seems leading – or you are you about are a I indicators are charts? and top terms there payroll given stronger stimulus morning, ‘XX? not. environment, detail of not I we companies not if a why thinking stronger you off then could the are uncertain why growth your am for FY really Efrain. And maybe client more Are maybe retention for all actually outcomes – the another HR around are if maybe get to wave might double-digit how you little

Hi, off David, would the be going It good. to what not quite feel just chart, But than be we think is so was we few a is yes, I pretty that first things on half one that, that expected. better good big.

to you win half, don’t the is before game end. up touchdowns but several first So, certainly a half be before it in the the good

we back a it occurred. that, fourth to quarter we half that’s suggest a depends be of first of So, and the strong. we said lot of you going all quarter half big comparing be is and the year still Having results as pandemic on to think is because very effects going important. being muted, against see a are Through before the QX, quarter

we So do not guidance, a the that, a caution we it’s providing, better. are things we lines we look direction. there were accurate right June have a where from lot it’s very but but a not forecast be think in would – comfortable the pointing of if timeframe, or we metrics in it’s we would if And the not what we could certainly see note we have projected because different is the we now don’t and – of

we it’s We assume would that cushion businesses, a for improvement are there several that over stimulus. not be small dramatic it we don’t a we think did of that for the in be going as help. interviews, are quarters. the assuming but Marty the that great. lot We anticipating is think other to medium-sized another said And a in blow provided It If not and better. comes, next unemployment stimulus

we with some but of we dictates So, is than anticipated areas of in or caution what environment terms we recovery better we better thought. in started a than than the coming year than that faster the provide, we number

Got it.

business, timeline constraints the follow-up, quick on book the the to services to implement of new as payroll new what’s your sales in Just a record any are these ability mean, implement there business? I strong

starting be some the particularly think getting the clients most decisions, I coming to selling be a only are bit this still that’s that clients, thing mid-market actually going I in season of Well, what delaying challenging in is mid-market is the month, think careful. will two to up probably little be

We are making sales.

We are if to want two to getting has meet for now quarters. remotely clients This they meet. been really out last done the all with

to a in has do pretty being the and have even kind remote sales environment we so And new been that skills have think to of selling on impressive honed have that. I we able

decision business the based whether their good feel we the right ready, results small in market. would I comfortable make to client the hitting on to would those and particular, probably be small but in challenge business and getting think now, business a So, continuing, biggest client results they just be access are the in being the to

I think that’s continuing to expand.

larger, I particular think because outsource the outsourced first share, in do more payroll businesses we the before, not seeing at that small we for get time. not a seen also HR So have the we pie for but not payroll have are businesses, and – little payroll them have least, only taken if

that to loans, complexities of market, of work the them forth with I so get regulations a are and as the the think provider, for that being help forth. and kind the through changing get help complicated the them example, value loans they are environment well so to and forgiven, seeing is to payroll the given of growing of so And all

Understood. Thank you very much.

Okay, David.

of Bank line from of Kupferberg Jason question the next Our comes America. of

I reps? say wanted clarification. should half Hey, Efrain, a the did thanks, total you be to just flat with up that just guys. to outlook, Good revenue on morning. second start

low very up to single-digits. flat Yes,

okay. Okay,

little single, last and talking know, quarter, nuance, sooner. wanted have kind is just Now, but timing I I a where this up were the right of it’s a thing of low difference, recovery not a that just much if we happened see I to

thought year is more than you the have balanced So, little a might bit otherwise?

sequentially are previous you last the say quarter, up you Jason, what quarter… referring to When or

us that half single-digits. No, in half, quarter the guidance thought I gave point be down you first low last when at up to time, and you the half broke second expected was second and the

didn’t for been half No, I single-digits second have low correct. that wouldn’t say

Jason, fourth to growth be significant expect said at third have growth prior haven’t we is think, this half have something will we said, speculate correct. clarification, that, the we look second back I positive down wouldn’t And quarter. provide won’t were at the would our if to point, more half, and said, I in to going then no, quarter No, But said. transcript I what that versus but be said we have in we still might been that some going what no, indicated but growth the we we said So, don’t what no. quarter say that just with to I on

customer the a anyway cost Okay, should sales that at on I long-term about point the okay. to estate, And mean, obviously we is too just for implications Fair force margin or not question perhaps? quantify there support, your this distant in the some future, real point etcetera, enough. front, structure, how think at

so rationalization, to you many much think that ask assumptions speed But can’t too way. continue mentioning second. that take I evolve a footprint not it costs to initiatives question space than doesn’t you model that look, the this question a answer or asking, address Marty too you is the the are with in need the distant there less – are we Probably can it was do I you take asking of not too that currently we if think range not to, which question did doesn’t future, in and that a

we look So, that. will at

at future in to along. we are we had efforts of thus that like looks not get area in talk good that experience that this we acceleration at digital And least efficient what commit can But to that ready We suggests number as go costs maybe more about far. calls. control more and other think will but point, have the our I we

about talk can your you performance saw, are terms the creation the just maybe of just business win one And seeing new last you rates? one overall trends in of strong on and the back just sales you

incredible see what you I mean, I up and businesses year-over-year. think I – are in economy, seeing certainly new shifting. are we it pretty are the seeing just people new on generally sure. is startups we Yes, what as are It’s see we XX% think and business

are getting opportunities in So seeing they to people others see evolving before. businesses, environment out shifting this didn’t and their that of are some business others or

to a up, are startups business it’s those, to investments I you share of really product, new need good made, we easy the or where a because full are go featured think very Sure and you have So we whether it’s sign getting of Flex. whether growing,

are so an then think rapidly that that environment outsourcing, are we to as deliver protect benefits HR and And from really is business now them that them is of changing and think, regulations – the in it’s businesses, value well. to great doing And looking found existing new with are as someone so startups them helping. the our and for, outsource employees all I mentioned that Paychex can I and what help have I like that and them payroll that time protect themselves to

thanks Well, comments, for guys. Alright. the

Okay, thank you.

of of comes Stanley. Steven Wald question the from next line Our Morgan

but Hey, all good you around the a was I sharpening it. few an We by all on to pencils been that the I think Thanks this. for it, off continued just think guidance hoping have specifically, – morning. don’t I through I talking do I from items actual appreciate guys providing missed the year year about if unemployment adjustment it business end that – walk then you fiscal number you end thinking are businesses rates how but could were last for maybe you included and rate XX% And assumptions us failure through retention here? quarter, an think suspended. for quarter, start said

I once a year, on would retention client the we highest are had. Yes, levels it retention, say, we but we of still really at the give

down of I three we those even quarters those from So said the and were – that Steven, that would of probably – say were numbers the that suspended peak.

very we suspended low service, getting to that So, a their have down some number. but still have it’s

from those quarter we watching we that. saw. down pretty dramatic to Now end, decrease a really seen lost of year more after go What what – have probably the of a peak, are we

whether end. a either calendar and other to get impact for see your question? point, was through on client kind And seen but to are retention, we they able could number we hanging than year have or this stimulus be will through I in that. what it more at yes, it to But real what end, improvement was am So it’s year a much have still of get we smaller as sorry,

question The is on other unemployment.

that’s where really know, are. you say, to a as hard just to it’s we prediction Unemployment,

the see back as were progress seen that and definitely come paid. half have being see We you back lost. jobs what come slowing We employees the that

as It’s hard think be. saw So, we and improvement number – talked that we quarter going where expected still is than the kind that’s we we positive. seeing of – it slowing. to had are about progressing the be better But we have much to first and would predict in

I had. I does do continue what after the a think really kind think then we election, that but improve, And rate to at it’s to going prediction to slower is than hardest things. the of

and I a are the it’s the you more little of why saying, – good pretty see second is but third second a we predict. obviously year quarter, of when hey, think harder a fourth, sense just little have half bit in cautious we to of that’s

– Yes, me reason X% is or X.X% we or is expect as employees complex obviously excuse with business We our more that in not have forecast hit we don’t worksite – – and were said be be pegging pegging by client. unemployment for originally together. to simply it than the we unemployment need when are anticipating plan happening X% it X% really checks per we to the better numbers or what’s are with to or QX. Part way. than put been forecast think to not frankly, Marty I numbers, QX the that that’s improve than to What’s in our – our the

really but XX% on sales, than happening at more not HCM with, So only factors our what’s which a of the looking rest to of that we do have lot of other base, are what’s revenue. happening is the in

Yes.

thing to diversified other are base. is very in client that’s The we note important our

sectors. clients even perspective, we of also closed and then and construction certainly around sector, in has into perform but as So, continued even in forth. in hospitality so quite though a are very And hit south particularly partially jobs to other restaurants forth. kind and have plenty the leisure and hospitality spread huge – reopened from particular well everything around construction we that took We leisure of and happened, didn’t and as this a so

are spread out. we So quite

see is industry really don’t if our one we necessarily where reflect so that’s there any doesn’t results. that hit a And taken in

was any as quick where about concentrated. and understood the talking one the color area more diversification, was you sort the believe I in Completely on appreciate among like base it’s follow-up, there of your client just were Maybe all the PEO maybe that. one concentration space, where

from ground any thoughts particular just I migration the relative if think you conditions there the on of mentioned in about areas to think on just of a tax headlines Texas, footprint any about of areas? low of in previously there things, strength ground or Florida, is what on discussions, you obviously out California, just sort national on that the are in PEO whether or those states you nets seeing wash dollars those how side of curious towards investment the lot the and

as is pretty look What in seen with have sharp states. flare-ups states a certainly states, the would say PEO seen pretty we a PEO were a levels. certainly the battled if it of at not those volatile just Yes, a amount to And COVID. have get we I a where of significant seen, results at lot in both have normalizing. rebound they revenue itself, several of ends But were from employees worksite larger seeing employee those they standpoint, both it more is those good you states from those we you and is up on equation, before California of sales a standpoint pre-COVID, if what in of towards and but to which standpoint processing look we that on suggests worksite that that also environment are starting I the recovery think

we South still has index has Efrain business small Florida strong a that monthly our Florida Yes, again has there. Florida continued to commercial residential and strong both one, is said on strongest be number as down, on is that everybody construction, been track but basis. the been

been had been and that So, good. have states, where insurance we stronger more states concentration rates they have those on in certainly of top

the pretty in increases insurance have pretty, So, been low.

open we have should to through everything retention think they So, continue we quarter. enrollment insurance have have I this – good plans for as and will go continue to

Great. my Thanks for questions. taking

Okay.

You’re welcome.

of from the Bryan comes Keane Our question of Bank. next line Deutsche

Wanted per And does ask change revenue secondly, then margin it change and margin that? to Good how client it the to guys. virtual inherent in a the does morning. the Hi, higher about structure, is first? how change there e-com,

Interesting.

size I so of So, client, it’s think Bryan, obviously, the the of a revenue. smaller function the clients, the lower

to you e-commerce use lot lot – that ones So, solutions. the are tend are be of that clients a if driving the smaller of a

So, you in that get standpoint. less revenue

better it’s other from standpoint, the is a because margin to On sometimes hand, there lower serve. cost

overcome I just be question. it’s that a of as of you catch sometimes a So impact, still then revenue but the of the or longer positive And a margin, I to can wash, sales, got positive, a a little even bit second didn’t term, pretty part margin the it development. good there better. is mentioned bit

wanted how clients number have I in highest sold, year-over-year in to was you growing No, get then trough on and with talked basis, much was the trough? year-over-year that’s is sense now your that of much on helpful. is X to just in but the then down growth think That’s would to where sales And quantify the Marty, in a maybe that record And trying client it growth years. How just performance a I hoping maybe was number a confirm. what figured, about I units of comment, accelerating sold. of impact?

high. the what very When saying comparing improvement number in was growth want are years, X what quarter to terms Bryan. it’s would amazing. comparing against improvement, been of unit be we But clarify the was the unit quarter Marty it same we that the is highest year is not in is sequential are it if our something, said that he in Just sequential even more was pre-COVID, last growth

rest of with Marty will let it. that, So, the I answer

Yes, where last are think because I trough that’s up, tonight, where you of picked when top the quarter. you’re talking about Efrain

year-over-year. comparing are We

the little growth more. even in quarter, a that best first bit year-over-year or seen it’s So, maybe X sales years been unit we have probably

if what So were asking. that’s you

So, it it’s fourth in how last not the compared got year quarter. low to compared to first quarter, it’s

who year, share from really those growth. seen retention in we about So and to as said, you growth when say, helped. think nice well We a the Bryan, net business didn’t as some I new real a taking once has talk and needless I client that together, outsource have starts client pickup being before demand got you put it’s so strong except but don’t overall then

and would I years lot and digital think of the last fueling terrific say really been results. picked have couple over just efforts I really really, really it’s a up of our marketing those

this model to you And X% bit of that a client going think model? it’s or Efrain this starts business with forward, in X% growth it still do maybe these little is the kind e-com does new – change

a to that surprise. there coming that’s a there your which element there, we that durable of digital durable not then and when of And that’s outsource. Marty bake what to how kind an it? points wants was you we is a asked that it’s is we here line some that solutions. that got have got to he part demand question, things several into this and want is that. in I to are where – permanent earlier demand have an is and Certainly, me that seen be, Yes, Marty that have one cautious is indicators out. want didn’t with some I think the seen There of from to that mean, portion be is extrapolate saying. that will companies environment that I model that still answered mean, about favors is that of was you or and continue of well, draw – early. I Yes,

so formation very happen an in which a counterintuitive anyone expected, is some is business also environment, different than ‘XX/XX. in We to where from be better ways

that sense have this to to whether more of couple to get will of we quarters our a under equation get a starts So a change bit. belt

taking Thanks questions. Great. for the

Okay, Bryan. Thanks.

comes next Nicholas William of line from question of Blair. the Andrew Our

to the Have workers’ good you any I or that side be comp morning. stabilization there speak year? hoping the on continue the late. you Hi, rest trends to of of was could will throughout just a seen rates headwind

seen will revenue I be bit a stabilizing headwind think a of it slightly. rates and ticking be in from to but seem have a actually we up cases Andrew, standpoint, some been

to So, we trough we addition the speak. we obviously towards think in workers’ PEO so to we bottom are there. the our like comp sales. maybe impacts may insurance – getting That to of on have has some bottom getting It seems broker the closer

I are speak opportunity hear. where to relatedly, still to find opportunities? could now, right be and M&A if of a is little doing And deals, have to hear. assume was to you those just And then would it. like areas expect Good that helpful? then you what on any commentary hoping would those you pricing looking kind the bit you I Got to follow-up, a open Good do so in

Yes.

businesses particular, of open payroll available, of current interested all and contact so our as in others. opportunities stay and with with in course very have are still that continued to We very course forth in lines and to so and community what’s of and to banker business, the PEO the

little COVID. would going there. a up I valuations up on because was are bit. still right opening say it’s of I wouldn’t say think, any there I discounting

difficult and travel to found things it’s right those through to we we would difficult work like and due do – limited given bit I think But access. if it’s a I diligence still able business. the be that little think

certainly solid are have cash are So, execute and and good liquid open are Obviously we that. ready acquisition, to a on yes, M&A. very find to we if good able we very a and position we

Great, you. thank

Okay.

comes from Bergin Cowen. the of next Bryan Our question of line

Solutions, versus new are want you. increased understand services. addition in performance talking mix XQ expected in I on Thank and of than the versus to some the check retirement here your I ask you to contribution Management of Hi, the the good about better changes morning. volume wanted other momentum related to

help here of XQ? understand the the factors in that So, us contributed just can you mix

of Yes, I base function in we ended in where we would say started, client quarter. terms was average probably the largest where Bryan, really change, the up a of

So, that high, if retention. that was that ours more your businesses said or different than revenue, planned. anticipated rate on got you we established, We think you’ve what’s about actually are are of of probably higher like number factors weighing a that the

was that So, positive. a

what was revenue it You we than it wasn’t still while sales pre-COVID. had quite better overall planned was sales

of of bigger break clients better So, wasn’t what clients, within the a was employees number clients, It’s we happening big not of that driver. in drivers, But that that had those terms down. some so base but The the impact. number had. the just client

we employees just average that that the were had expected, the clients more were than clients than roughly we in base we had anticipated So what about on the processing. who had we

putting back we’re plans June. together remember, May, So, in

of trying California starting those where important states, the largely to to environment It shut were revenue an anticipate York, turns which process being continuing have in states New factors be are down. – We’re that out to, were in moderated. like and or

change pundits than was the end year. as impact had it of you from the thought worse the us that all you sharp the across up April, put thinking bit recovery another across recovery at analogy little most the Marty the – – mentioned which started a at from more analogy, be the country less if or together. So, when in like. that way or We those step in flip when we you earlier, a anticipated if think the over we higher the the we improving about that And it’s than plan on looking panorama statistics will, it, start moderate is was that in what industries, was put where now definitely look seeing anticipated And we – to actually here, you rung higher does geographies ladder severe who are you right wrong. very in a looking most we as when gradual. together, signaled than we’re would what Well, this were we COVID,

we recovery. however, from we as in severe gradual signs our seeing where progress quite is where a point that as point continue of still to at We’re Nothing at mind the quarter. the first a to changing trough wasn’t this thought say don’t are, we

helpful. that’s on a wanted ask force. then Okay, question And I to sales the

just force about the this of guess really the things in-person versus versus sense that currently returned as in So, longer mix street how you sales can mix has the too the XQ of term we here and us force sales give think meetings, feet should really I then normalize? a virtual model on

have think virtual this up we I we are picked year. more Yes, –

it’s to still It might So, the of XX% be probably XX%. total.

will is I earlier particularly mentioned Bryan, think I to that I the accelerated. continue that as think I grow, this in think is, call,

be online able to their think prospects, a client the make I to and do over things Webex feel digitally Zoom over call, a through able going decision. comfortable or and more client prospects are call over demo

I going that’s think accelerate. So, to

I virtual. think it also is efficient productive more if – can be and it’s they

of we to we as country opening well. However, being up, are able the as speak, visit across kind with go

much products both pretty and search, it, product you find being – think of there the client now. you years, is clients, the whether and doing on it that can also end, – all that and you anybody, investments more telephonic. Sure demo without many SurePayroll’s city-by-city if rules virtual reach and starting But the made of and that have I rep and but well they more the to comfortable. go at it at – as it someone that online that’s as the Flex’s are on management I rep more that local both feels comfortable prospect without and mentioned can it Efrain been you the sized more more to can see or virtual, is have a in you the we’ve will ever We’ve up growth talking talking always based are basically to state-by-state open and sales, self-service is much We in smaller the meaning buy for low because But kind done needed. much visit, is

demoing we’re complex engineering to is a that but virtual person and of sales, going have forth. the team of experienced to are So, going way sales furthermore always still so there and with be product the more future, in the reps the

what Yes. And want I reiterate to Marty said. just

equates have they. are have While one okay, thought sales the in the would where in past about you – equation. factor many only people you sales and to how That’s

ability to you’re we benefit invested amount If you without the the people sell something constrained salespeople, of not we e-commerce, then the that of the have end-to-end by last that in have in you field this was which in seen quarter. couple the of have years, and any a

Just a it model? to size what’s there, employer of by themselves end follow-up e-commerce top do are seeing that the you that

it’s be be always it employer size. complexity. I well, not depends could think, the on – It It employee could size.

it’s employees, employees If you XX it but be I’d be the if – But more XX business Bryan. it’s I think it’s but XX a pretty that, typically, than could into say could straightforward, it’s are it under typically employees. under up straightforward

Thanks, guys.

Okay.

of the from comes question Northcoast Research. next of Kartik Mehta line Our

into we’re ask wondering wondering against ‘XX a Efrain. Efrain, and factored you you year fiscal I’m last fiscal decided little have the to I’m increases Hey, morning, good in. wanted I about guidance, I of price year it. because what or for any in bit just situation anticipate? last it the know and Marty you if

Yes.

So, we increases the there would short answer say, price is selective, I are implementing. are that yes,

I a and reasons this about are that’s why – comfortable record again well people that record model such we stellar part are that for plays the this scores environment. But of part through scores doing in pandemic and the in of strength our operations model. the point on our One going could fact highs. that job things on strength at NPS are NPS of did keep really The is that at customer high, our we our the feel mean, feedback, our

part or the that were gotten And just the that struggling We evidenced think decrease by of We to and we think with many have facing. hanging think in year many of feedback as service, clients many, selective think the clients. environment that And non-processing for our so, of level on. price of we’re modest appropriate first increase increase. stabilized, was in great clients price And will through on didn’t the our the clients be get we’ve okay we through increases. and were opportunity just delayed it we obviously there there that is we knew the that because

do through we will we So, go the that as year.

on PEO that that And your will all? just then insurance into think going health impact at a second year – premiums, expectations business, what how will question and the you if do next

pretty I And course, client, think think I Generally, mentioned on the I think I generally going if kind think favorable to looked for insurance as of I very Kartik, but it’s gaining think increases I a crossed. be favorable. that’s high of depending new to single-digit going you be clients.

I think we performed very well.

the I certainly rates, overall very And better helping has well. is benefit rate as think, team and we’re changes. also environment risk well to think better therefore, going underwriting Our from done us and I

better insurance that better should agency, an perspective for and from think even I the agency So, bode PEO itself. the insurance well sales, for sales both

Hey, thank Appreciate much. very you it.

Kartik. Thanks. Okay,

line Christiansen of next the Our Pete of question from Citi. comes

Thank you for questions. morning. I quick nice Good and the question trends. two had

from wondering there So, accounts? understand self-processors you if or would terms are these whether I share you you shift? are are to lately was you or believe of you early seeing trends you that seeing competitors? Any discernible other where helpful signs be it rates not seeing characterize could in some winning new Are and win your of

little it’s a Yes, of I bit – both. think well,

a the of and doing we seeing business they to themselves, time. at are I need of mentioned, the the growth, for think help their kind have been who have survival changes self-processing, outsource in and have things time critical for first or those We complexity the looked

pie So, I I gotten said, think think, the has I as larger.

are competitors track largest mention think been we I we of large etcetera., competitor. our I think, very based wouldn’t mobility that and think now have steady demo, lead app. And – many won, offering times a happy has have And some number see to this then quarter, like also changed the gain of pretty on gain because generation and from gain. as seen we a we definitely some that’s Efrain I that’s outsourcing. – something and would there. competitor net years. from from we set the a it’s or saw digital, not product those our mentioned it competitor net have we and huge, lost, what a the in that from but I the more feels say sold we taking are a net we versus positive in over a gain And say – the

with are is in we Loan definitely least signature-ready keep them I anything mean, regional that the rent, in loan have gaining well to we is as pre-populated payroll in forgiveness. be support that’s pre-populated. particular you already can’t the smaller a need had they and So, just and available for information them else application. some have to providers loans the for to some fill payroll Estimator or need then there, and we able a said the payroll go the data the probably program, do protection up paycheck from as at All the non-payroll, utilities I to of share – that a market them give

to get of opposed you a kind and that loan print forgiven. some and regional your offer technology sign very it’s You ones, we that to file electronically can proposition. particularly even company just different see a of advancements or national value When either those as the

time more I shift a extra you of are think toward seeing a in So, need, outsourcing.

that that least the That’s been coming directly I wondering the into areas you or possibly beginning that that shed trends now are business? creeping is community if that been at helpful. suggesting that’s some impacted just had indicates business any at one to jobs. some companies on, then was And I data quick within seeing small pandemic small are a just enterprise by there’s any haven’t out the at least particular And level, trend

I are have QX, would I took March-April – the they think think and was hit hurting – – our that I biggest timeframe. And of mean another now small need I stimulus. in QX they what in they kind business

not counting what use seen, on but have based it are it. on we We certainly they could

up took the not then kind survey sure to impact then more over the used capacity XX% businesses looking recent they and in a them and Northeast to of going for stimulus And to think particularly the in have what the I most have restaurants through. are who second particular was have small we diners now constraints. them loans bring are is help as be inside of

not hit and there. there also think is we still I are more be to could So, business biggest were took probably some fallout. bringing They layoffs mid-size their them small seeing careful hopefully I necessarily But back. about – already more much

back We or back, laid haven’t people the return employees back double-digits I businesses a have were pre-COVID. I right to from now started I seen probably and off meaning, total Small haven’t where haven’t furloughed of yet. are I but down everybody they come that bring – that brought they have

are And progressively so, I and most drop don’t data I is back, shown a pretty continuing no can’t has just stimulus our there necessarily of seeing But think unless good we already survive people saw that. come another we think off, improve. I anymore. to say, hey,

so Thank helpful really much, trends. commentary, gentlemen. That’s Nice Marty. you

Alright.

Thanks. welcome. are You

Our of the MoffettNathanson. next question line of comes Lisa Ellis from

Hi. guys. Good morning,

is to PEO. understand in better PEO. to going want on just what’s I question bit First related the a the

a you a to those? upturn. or and I first think, now or the then mentioned sharp Efrain, were referring of just you of both downturn saw you business sharp performance Can existing elaborate sales you

Yes.

Lisa. that, of making a Actually, number probably employees. was about comment was I But it’s sharp really decline both. Sorry in worksite the when that

employees employees check they – were where better. had to HCM get in volume shed saw started the we conditions seeing upturn sharp and before business a decline PEO more even then we that business, the in And as checks quickly. checks So, in PEO more

leisure. accommodations, in states that impact that what Now, the for be – like felt Florida could part hospitality, of example,

first feeling referring to are back, come talking started now were and in and that’s was hiring but they timeframe. back March-April – we the what it and back also started to, it and they obviously So, I but sales at impacted then

okay. Yes,

finding sales the it of complex like, demand Are – are side, a sales so, the I finding – I but And and sell are finding are the rebounding it’s the would able is in for there you current PEO that if in able a to in that that’s I typically you that imagine sales PEO? on the doing the – even environment. environment? – you Are the mean in know current how remote reasonably sale, are you you are lot

They ASO our have even Lisa. recovered Yes, business. stronger,

has taken Our reps really off. sell the of the both PEO for HR co-employment. not and – ASO, across the kind meaning but And board need

we really as side PEO and the back on are the on side – they ASO strong are coming So, well.

strength I PEO employees of payroll. on the has think the strongest what in been the coming Efrain worksite the back recovery the said

has side, On the fine but sales PEO has the ASO stronger. done been even

both. Now, can reps our sell

have which quicker to forth. I through which then underwriting HR, seen, bit airs that whatever think needs or but an go the think may as if the an I you because a client now, so toward sometimes as and the in don’t we the it’s sale, are ASO need right insurance So, lead they not to not and has have interested of insurance little need of much is

country. been but of of administration etcetera., a that. of we really HR much need, driven So, – across And handle an overall, the has strong furloughs, the COVID, those of them I been stuff, this it’s And has have that’s and all stronger. back, to it’s have and seen leaves I how whether think family do all HR been biggest has where because the for need by PEO we layoffs, handle demand is come ASO it’s of generalist, HRG’s, course, resource absence human XXX

been value have sell that’s those of dramatically able helping in quarter. clients quite HR the that We here the last to person

election guys – will Okay. will And the ask you then last quarter next for to by I I question, inevitable it my time because one, talk over. we will be the

agenda So, close you most are to the on, get the items we what policies election? closer eye keeping or as

with more better bring generally business because you that And for growth one businesses forth side could probably at has opportunities think on I lot so in the other because last – when appears more healthcare few years, interesting obviously depending look the and the out the in the and and it’s been Well, it a comes forth. so better of regulations regulation.

going administration us place If there’s changes that less an lot confusing great try would gives I to be heavier the it’s If but well. opportunity would regulations regulations, there. that us stays as be more if of to say opportunity in the give administration a So, opportunity. with regulation

be Probably, really with see we the trying opportunities the whatever bit middle a on to here, of sides, regulation it but not So, of tends see we the to election. happens more do the be little kind play on both some from line opportunities because change side are it. Democrat it we about think there just – businesses if But in gets they will but make way, either changes. coming and which outsource worried more the a I will see

We to really and way, impacts plenty of just level then to so of regulations, HR, payroll with impact retirement And be you. what is frank on there Either do insurance and to think for there. that forth. healthcare the are watching and in of any XXX(k) is regulations us the opportunity plenty and going and it on I level be

stuff. Terrific. Thanks, guys. Good

Thanks, Okay. Lisa.

the from question Our next comes Silber Jeff BMO line Capital. of of

to late. just keep I so Thanks it much. one. will I know it’s

and OpEx tell of of those separated is how of booked, the cost you between initiatives? million line and about cost on items accelerating talked us the spends SG&A some should You these Can $XX expect savings that both we initiatives. kind from what Thanks.

end going Hey, models. Jeff, you footnote most update to so it’s to and get into, in in but of talked up am will than the just can it slide, because rather I controller your laughing, G&A, the we I

great. cost have of And what quantified you you the in Okay, terms savings, expect?

I back to last think quarter. and provided go guidance I some update I have would that.

the but better I to cost answer. take that think it will comparable revisit to get me that let be out, a we

much. Okay, appreciate it. so Thanks

Okay.

Jefferies. from of the of line Our Samana Samad question next comes

taking one. I Thanks it to Similarly, question. morning. good Hi, for will keep my

aren’t still you but payrolls did Efrain, Just mention how this customers, that processing actively. customers are many quarter Paychex

quarter. mix last I that think gave you

how Just on that helpful? and an that update quarter-over-quarter maybe would changed be

Yes.

Go ahead.

Sorry.

No, go ahead, Marty.

from absolute peak we it earlier, the give we people it’s where think but about didn’t mentioned quarters it three big from three large that we but I very compared those to quarters and I that at our some down watching are could down we was are losses number, peaked. even as clients, base from client Samad, peak. even And like the number are misunderstood still its – was, but and not We down number those take clients. are a we to

they if the of to again on number year few and kind for quarters see through, Some number very end three them those maybe them the get or stimulus to another – dropped help but and hanging of went of lost.

lost. about good and processing feel back, Most less were back really definitely with ones they are of XX% are – of the the reduced they number the we less haven’t than are them So, because then that very processing than brought now. went number fewer came processing that non-processing. that – the employees, – all but them They

So, kind stimulus at so end we left, a it’s or good that’s far we or really quarter quarter, next end of us it were of of either last will a at service you kind more much that be My sense number few all. off that then exactly. guess pretty will I be tell kind the can not and but by much of got that will now very and suspended the impacting the is there was I really hanging on a of that have very that, year positive for think have

I are appreciate doing again. the you and Great. families well. hope all Thanks clarity and your

you, Samad. Thank

You too.

Our next question of the line of Tien-tsin JPMorgan. from Huang comes

really talked versus if Thank I startups you the this, organic to you different thought have so was encouraging the winning using I piece. something driving know, Efrain, I interesting. in is a to much. your results. doing How startups with and is much am different just that in there do on I generate of about digital I curious there think marketing Also you and wanted that? success leads? are internet you muscle hone

think I is. Well, it

has used Efrain the I think a Tien-tsin, big using probably, it. prize word have difference. made investments, the think really Those he mentioned, as I digital he won for has

to mentioned, we you to lot able online anyone. SurePayroll invested or as out, talking off, paid and this they to to ago and have whether Flex, as are they making As a in demo it’s that Efrain years number be search then a online back pointed well start both and to easy environment, people going really are more – in not are remote as while has used getting get Efrain that to buy of

the I think anyway. that trend was

leads process. sales business the say themselves got that This hold – you to are just wanting they lead. set people realizes the process especially that start getting setting setup. encourages self having would not simple after of rep prospect us the But biggest of to of jump already and and any if the sign-up time more if now and to they be to in them online go ability themselves figure out have themselves it small All people mention fairly has a of them down then in to necessarily right one up. and challenges allows able up the started can and and slowed meet Not that help of to start then with someone at of to that actually through then was to

weren’t someone investments the digital somewhere a standpoint This, else. we when of contact timing in these perfect both has marriage self and for able already them, there. reach setup, lot the had at Before startups lot of looking helped are kind lot when a had a time the more that they or times to and of lead have have generation to contact someone, that and the you gone a a been done prospect we from in

for That’s complete Marty. thank that, very you answer. Yes,

will you the follow-up Just I guys and let go.

get as because the a in-house, on SMB – sure Just there it, is selling season. market to make you about Can you of today? question of it on just lot, is what I outsourcing a percent the lot remind I just the talk fresh want and am outsourcing versus I this define us, going through

the for many and years. consistently pretty XX% has to Well, themselves to been and still the has XX% outsource business do not that XX% of XX% number it changed market small XX%, always

has Now, got to the the the have people but pandemic I think would trend continue seen value definitely up-to-date that data, going I that’s once and haven’t a adjusted given that’s then as most changed. I of have it, that’s – they what’s feel

had So, and it’s of the definitely always outsource, think that shifted. It pretty I kind been good last outsource meaning not here in shift XX% a XX%, quarters. probably and a two

Thanks sense. Makes for your time.

Okay.

Mark Our Baird. of next line of the from comes question Marcon

just Marty morning, clients what’s sophistication up, client that’s with are average Efrain. they Are that Excel Wondering Intuit are you the QuickBooks over? what typically? using they using level they in-house good are you Hey, using and in are what picking the of and regards seeing terms to or the switching spreadsheets, and of

calculator I be going of Intuit, anecdotal. doesn’t kind the think do with HR need with the understand and probably combined more than hey, those. a of say because say, got but has of is something need it else. be it’s kind it’s I more mix now handle kind payroll. rules of think taking family have the but themselves to all need somebody always really limit close, Mark, would it I it’s it it, say, We I I to manually I client to track payroll don’t of all of over they lot need don’t for it leave? and a spreadsheet them I themselves do a out regs that’s times And the anything. or pushed it’s up I leave could What kind then it’s Intuit of and And do just need I Excel in of It’s really type thing. handle or or mix because of XX% figuring multi-state to could with on something, keep a children be about they more these home used thing how the coming it. this? of stay an particular that rules? How COVID in. by just haven’t – hard XX% to that parental But

standpoint. just that really helping employees mobile need calculator, that these my more been are just do don’t how it’s a and I from of think asking I combination for I not need – to things So, a

Pay-on-Demand, expecting – are now asking to for So my and they be employees example. for are –

have started and various stubs We We X access I employees they are of this to on normalized, part-time haven’t more instead more being asking and asking for Pay-on-Demand. call. shifts touched offer working on are are for that even worked They mobile. in a checks shits hours, Pay-on-Demand. where because their that asking They

offering We search. now Google are

are and got So, to employees can’t if what Siri for and I paid are say have I that paid. These flexibility Hey, able I say things – be with using. Google, they available. do I younger, been would ask what what guess want asking when demand, or – and I to Google that got they that more I That’s those now

on are brought you Since the of Pay-on-Demand, what the up, that? using percentage clients it now

know, but still it’s pretty small, growing. You it’s

don’t themselves. done ability the we’re clients I like, clients think risk seeing it’s the the I our I offering today, no – think the to being with way. to feel that especially – more clients It’s way have it. it are

X because of I to employees hours starting I that work somebody is XX now. work XX starting I it full-time I of hey, to more interest. a working get employees not And think here. I to X simple do am only small from hours check, right that are more hours my now where environment like that very the are if just money am need standpoint, still at right I more waiting up. get children It’s available pick this attention, it’s aware working for week It’s says, it’s it can or may only particularly again it, asking of clients this being how but realizing to it would and home, with X weeks becoming because will instead or hours,

up, trying get starting So, to small it’s pretty at the it’s And to we are point. there word out but this available. that think still I it’s catch

out of of were self-service percentage in warrants And the self-service, that doing are it getting are versus new clients versus largest just you that terms competitor you you new break getting that. the regionals? of what can your Appreciate clients

you. of right I in that don’t front me. have don’t know I if Efrain,

I No, have that don’t detail.

– – it are outsourcing of in don’t – we have pretty would that’s But have that I well. the as that value front a And to would think try are say, of newer new It’s as sales first would got see I normal me. I have and saying, more a I the for at digits that. have I we driving look growth is to time. we about double would the have good right from we if definitely uptick lot is talked business outsourcing the up,

why getting reason not Yes, Mark, where in recognize are environment of that you formation are we on we unusual the business crisp a an part is up. new answer is

Yes.

at there a right have in and And the from benefiting are addition to the in solutions for we to we everything that seem that right – we the think right is else, time, market. place the

percentage during units were up this new last And are quarter? What they up.

going to were ask. You

not to So, going give exact the answer number. good. are the is we you

So good means single-digits, certainly more than Mark. low

single And low than how digits, ACV? More about okay.

I am about sorry, what? how

client Average base.

ACV.

average the I acronym missing? know client I not sure maybe what am am means base, The I or

bookings selling. book of Annul the you are contract In other that sales… words, of value

Okay, Yes, No, no, no. yes. okay.

We will update that as Mark. through go we the year,

So, a we going basis. provide to that are on not quarterly

great. Okay,

a I good That’s the put in will Okay. that just acronym one. lexicon.

winter end percentage – like stimulus Can is? not it And also positive. you the to Marty, here you of about not It employment sound terms discussion How you Okay. with through. fall how are thought do finally, expecting the interview and really the heard I And all the kind – should of expecting clients are then your that with some think crucial or how it crucial are but comments clients. the of through. regards thinking the your the you’re like really really come PPP. for – stimulus you just interview about that you sounds and it think said was you because What like regards this and growth discuss to at comes we are sounded that, in in to

those just I So, two put trying together? to am

Yes.

expectations. that understand I want to which saying We clarify is environment I comments sitting The etcetera. the here we mean, great, versus something. everything not are just Mark, operating. Hey, we’re are positive

Our that it’s the and environment. suggest comments than we the positive, are expected better because navigating results are through we

everything rosy great. So, I that is make picture not we just macroeconomic sure a want painting to are

the effectively challenges. through We idea environment. convey. we navigating are understand That’s saying that are to want We the we the

Yes. it’s than better we that And expected.

in We very too interviews. are that quarter to we expected recovery is doing this interviews, right, been performed my expectations. with less well of many all stronger compared you triangulating problem and a first the it’s and our much But

stimulus. we first right, additional to need about at saying it, impact. are that’s are About general. forecast, not built they additional are get have are a but saying important What big going And that in was not XX% stimulus. that be think You that we that’s get they the into in have impact. just saying they have XX% surveys, and what big say have to are general they in our that of XX% we that – it’s built to loan. Efrain in clients, our not going seen the or going We a XX% end About

already out, hardest thought the to happening – look second estimated forecasting what really we a particular, third in better that’s year, we growth was there second thing what’s first the unpredictable did can where fairly the fourth the of one, in as That’s quarters, fourth half second, into is is and So, we the We year-over-year. quarter. – going quarter. the that see of positive than probably because the What’s predictable. much be we kind quarter

year, to Now, a it’s fourth predict. hard quarter tough it’s to a previous compare but better obviously

mid-sized Efrain It’s I the like easier think hey, impact an It was in in is is I Is at needs businesses don’t needs more to the for didn’t to beginning, the quarter. was have stimulus to that – a needed. the have absolutely So, forgive I just going going another loans. happen? saying to know. that small build it flexibility, we big stimulus second that think and to have way

should us it more and help give even us happen, that we point. at it this But if weren’t So, does including tailwind.

the Great you I all things control. appreciate job terms of that. can in

Okay. Thank you.

a it. Appreciate It lot. Mark. means Thanks

comes Our next question from…

other any there questions? are Operator,

the Credit Our Kevin from Suisse. next question McVeigh, comes line of

Great, thanks.

I client way sales, Just Alright, a different just I keep as to it Efrain, have opposed the how of is it And mix in just to size you that a better that method? Hey, frame will DIY just couple much maybe just boost coming guidance was on the of of about those the contribute is and sales the management? did margin – what help over expense, will there more or did performance are keep terms in just or average follow-up. traditional expense tight. tight. talked to record the but this ways, a

for an going kind impact that obviously, to the Yes. where to it That’s But of channels margin rather sales. tended be it’s was larger. those forward. see which doesn’t of through if in, and you smaller It than of the coming sustained where positive I continue say, change on see of of because necessarily in profile would tend because kinds more came it performance, contribute the business. to we

in Awesome. the Thank interest it I will leave there time. you. just of

thank Okay, you.

of comes from of next question the Matthew Goldman Sachs. O’Neill Our line

hear Yes, gentlemen. me? Can you sorry. I’m hi,

ahead, Yes, go Matt.

my Thanks beyond and I just question. many I throughout, things way time resiliency obviously, unprecedented of time here. been we really so business realize curious, and answered asked impressive much have so taking was are for here. the

kind may kind base when have to recipient at you that? or those is around there Protection, point quantifiable the the businesses be quantifiable percentage of a internally that’s about current of any struggling, metrics you studied this to that of Paycheck that is that are guys there Going with respect of dynamics back of any the kind been think

about to I companies to about we that think when huge Matt, that what the – I – have partnered report. based think provided distressed XX loans right the and get We to get in that’s We the the those things. I it’s but out and others those we loans not in a or real number, it. fact that, me. loans percentage number But about of on – large don’t we data loans through that – do good did think base, able felt FinTech it. front well, loans those with I see have was worked about took to When able help those to across of in I including our are It we sorry were them out what trying We track provide reports, think to took help that loan some do I don’t as clients through about Vista to don’t needed you we we actually there. we you and secure help of base billion how outstanding. Credit is billion of that clients track there. the many have the that the a a I whole am expect first $XX businesses know numbers be We know tough said, payroll know to We loan. three know not our

up on that. follow to try will we So

will there. Okay. I Thanks so it much, guys. leave

Thanks, Okay. Matt.

That sounds great. Thank you.

time, Operator, we the Operator, yes. think the at point. will given think, going this I I we close – to call are

is there on Are anyone the – there else call?

Operator?

a have David Stifel. the do from We final of of line question Grossman

Okay, we will take that.

Thanks.

longer is to already this Sorry, even sorry. than prolong mean I I am it going. didn’t

we you, prolong. For will

follow-up just really half a the growth single-digit previously. year. and clarification really earlier the in I previous question I at actually said you the guidance the what year call I to growth for half back of misunderstood all second you. the the have about Thank and low just the of Like had perhaps wanted had in Jason, we

perhaps, was back the with half, months for share what ago? just X you Efrain, So guide could your

back flat the be half to low Yes, that single-digits. to I the just year of think we said I very expect

Efrain, hey, anything different extent you not saying than the are you to you said. So, say,

little a with this Let’s conviction bit I just say more say it time.

enough. fair Alright,

Thanks leave again. Let’s there. it

Okay. a lot. Thanks

our will this quarter you will taking safe replaying interested in archived be it conference for call call. for for days. in of conference point, are calling if the first you the approximately to and this stays we webcast and in. at Hope And release Thank the you Okay, in your interest Paychex. time everyone close for thank XX call, press participate

and Thank This conclude today’s conference call. you, ladies does gentlemen.

may You now disconnect.