Okay, welcome back, everybody. Very pleased to welcome Danyal Hussain, Head of Investor Relations at ADP. Danny, thank you so much for being here. Thank you, Ramsey. Of course. Let's start with the macro backdrop. That's where everybody seems to start, and I'm going to do the same thing. What are you guys seeing from a macro/employment perspective? Yeah, I think starting backwards from the latest labor market data that we've got, BLS jobs feel very healthy. I think 175,000 jobs added in April. NER report, something very similar, 190,000 jobs. And if you were to just contextualize where we're at today, it's looking, generally speaking, very healthy. So the last several months have been anywhere from 200,000-ish jobs, 300,000 jobs. If you were to go back to pre-pandemic, we had this very long bull run in the labor market, and you were looking at something similar, so 200,000-ish jobs added per month. And obviously, every quarter, every month is driven by different industries. I think right now what we're seeing is some contribution out of things like healthcare. I think construction has been doing well, and leisure and hospitality have been doing extremely well since troughing in the pandemic. A little bit softer contribution from some other industries, perhaps the more interest rate-sensitive ones like professional services and tech, but all in, when you add it up, it's still adding up to good growth in absolute terms. And then what we look at for planning purposes and other purposes is whatever forward-looking indicators there are for labor as well. So the JOLTS report put out by the BLS is looking reasonably healthy. I think it was 8.5 million job postings out there, which is still more than one for every unemployed person. So generally speaking, it's still in a good spot. It has come down quite a bit from where it peaked, which I think was over 11 million jobs. So it's gradually making its way lower, but it's still a good indicator for demand for labor, which obviously portends hopefully good growth in labor in the coming months. We have similar data internally at ADP. We have Recruiting Solutions, job postings, etc., that we look at. We don't publish these metrics, but when we look at it internally, it does correspond to what we're seeing in things like the JOLTS report. So again, all in, labor is in a reasonably healthy shape. And we did see, fortunately, and it looks like inflation came down in line with expectations. And hopefully, what that means is the Fed does not have to tighten too much, and labor can keep going relatively strong in these coming quarters. I hope so too. I've always had the view that with your company, that payroll processing is kind of the historical core of the model. It's obviously still a very critical, large critical business for you. But there's this sort of human capital management solutions as an increasingly important growth driver, let's put it that way. Do you guys segregate out sort of HCM from the core? I mean, I know you don't report it out that way, but is it a fair way to look at it like that's where there's a real nice secular opportunity that you're executing on, HCM versus core payroll? The short answer is yes. So for us, we see growth opportunity in a lot of different vectors. One is still in that traditional payroll opportunity. If you look globally, we pay over 41 million people around the world, over 25 million here in the U.S. And there's, I think, over 3 billion people that work around the world. So a huge amount of opportunity is in driving core payroll growth. And over time, since its founding, ADP has expanded, of course, from payroll. They started offering other solutions like time and attendance. We branched out into a whole lot of other industries, as you well know, things like brokerage services that we helped pioneer. We had a dealer services business. We were really attracted to anything that was recurring and high quality in nature. Over time, we divested a lot of those and really focused on this emerging industry, which is HCM. HCM for us means, generally speaking, it's software that enables an HR department to do its job well. Payroll is foundational. If you think about any company, you can get away with not providing top-tier time and attendance or not having a benefit solution for many companies. You cannot get away from having payroll. Payroll has always been the core to the HCM suite in our perspective, which is good because it's one thing that we do really well. Over time, as we've tried to generate higher revenue per employee and revenue per client, it's pretty clear that we still look to this opportunity to drive HCM attach rates higher. And so lately, we've been seeing a lot of tailwind in things like 401(k) retirement, which has a lot of legislative tailwinds. Still a lot of runway there, but it's an example of something that's really a hot hand for us as we speak. We've offered workers' compensation and other insurance services to small businesses. It's something that integrates really well into our small business platform. And then when you go into the mid-market and enterprise space, that's really where you have real HR departments that care about things like talent acquisition, benefits administration, compensation planning. And so we have a lot of these bits of the HCM suite that we've sold into the base over time and remain an opportunity for us. We haven't really disclosed attach rates on the whole for all of these different HCM solutions, but we have given a few numbers here and there. Just for context, most recently, I think we disclosed that 401(k). We had 150,000 clients in that business. We're providing the 401(k) record keeping for 150,000 different small businesses out of the 850,000-plus that we serve today. Less than a 20% attach rate, clearly a lot of room to run. If you were to look at something like workers' comp insurance, we have over 200,000 clients there, still 20-ish% attach rate, so a lot of room to run. Elsewhere in the HCM suite, in the mid-market and enterprise space, you have a really wide range of attach rates. Some things we have very high attach rates, and others are newer and emerging, things like benchmarking where we think we have a lot more room to run. We feel optimistic. We can keep driving that revenue per employee and revenue per client higher. end of the spectrum would be offering outsourcing. That's where you take over the HR department for some of these clients. The revenue you earn per employee is substantially higher. Now you're at multiples of just offering core payroll. It's something that we've been doing really well for many years, not only in the PEO business, which we've now been in for over 20 years, but also for this what we call HRO business, where we're providing more of an à la carte service and outsourcing bits and pieces of the HR function for our clients. A lot of runway there as well. Retention has been. It's an important metric for you guys, and you've just outperformed over the last couple of cycles. What's driving the success there? What do you think has been the bigger sort of differentiating factors there, and then what do you expect moving forward? I mean, I know it's always tough to keep it going in perpetuity, but what do you think? Yeah. So again, for context, we had a record-level retention rate last year of 92.2%. And our aspiration as of our last investor day back in 2021 was to have a retention rate anywhere in the range of 91%-92%. We felt like that was a reasonable range. Of course, there's going to be some variability year to year, and there are macro considerations like bankruptcies that have an effect. But broadly speaking, our portfolio has gotten stronger. Our clients are happier than they've ever been. And that's the biggest driver of retention rates. We think we have more opportunity to drive those client satisfaction levels higher. Over time, if you pick any one of the ADP businesses that we operate in, so small business, mid-market, enterprise, international, our goal will be to try to drive that core retention rate higher, driven by a stronger platform, improvements to the product, and then a better service offering as well, to do everything we can to keep those clients happy. We've actually done a really good job of that. The other thing to consider, which we also outlined back in 2021, is there's a mix impact. Structurally, you're going to have lower retention in something like small business where you have more bankruptcies. That's just a natural part of the business. We're okay with that. We generate high margins despite those higher bankruptcy levels. The question is, what does the ADP portfolio look like five years from now or 10 years from now? Does our small business continue to grow as a share of the overall pie, or does the overall portfolio maintain more of a steady state from where we're at today? So those are the type of things that would affect the retention rate above and beyond us just driving up client satisfaction. But clearly, we're focused on that client satisfaction component, and we feel pretty good about where we're at today. Let's talk a little bit about PEO. It seems to have its own cycle in a sense that might not be fully aligned with your larger segment cycle. Walk us through with PEO. I guess, A, is that a fair way to look at it? And B, just walk us through with PEO sort of some of the dynamics that have shaped performance in that business and maybe where we are now in terms of looking forward a couple of quarters. It is definitely a fair way to frame the PEO. So there are certainly elements of what I would consider the traditional labor cycle that affect the PEO. So everything from the health of small businesses, which is generally where we sell this, to the amount of employment growth that we're getting, all of those will have direct effects on the PEO business's growth rates. Above and beyond that, to your point, there are other things that are unique to the PEO model. Specifically, you have to consider the overall healthcare inflation environment because we provide medical benefits to our clients. And then you have to consider things like Workers' Compensation and state unemployment insurance, which we likewise provide. These may not be strategic things to a small business, but they, of course, want to have a good rate. What we charge is going to be a function of those market rates. In some of them, as an example, workers' comp, you have had a very long cycle of softening pricing because claims have generally been very healthy in workers' compensation. That has an effect on our revenue. It doesn't really affect the overall value prop or the growth of the business, but it's just something to consider on a short-term basis when it comes to revenue growth. The most important thing for the PEO is that we're able to offer our clients something better than what they would be able to go and obtain on their own. We're generally saving them a ton of time and effort. We're managing effectively the HR department for them. We're giving them great benefits, Fortune 500 quality benefits. We're giving them competitive workers' compensation. We're providing state unemployment insurance for them. So we're making life easy, and all of that comes at a premium price. For the most part, we think this is providing tremendous value for small businesses, and there's still a ton of opportunity to drive growth structurally in the whole industry. And so we're focused on doing that. And in the meantime, yes, in the individual year, maybe subject to the ebbs and flows of labor growth in certain industries or in Workers' Compensation price trends, all of that may have a short-term impact, but it doesn't detract from the long-term growth opportunity of the PEO. Is there any comments that you can make on the current enrollment season? How are things going? Not much I can share. You're right that right now, we are going through our annual enrollment. And our job is to meet our clients, share with them our perspective on what plans make the most sense, provide any insight that we can to help them keep their employees happy, but also manage this very expensive benefit that they offer to their clients. And if we do it right, we can help our clients manage through years and years of medical inflation, but still provide a very good value offering to their employees, keep their own employee attrition levels at reasonable levels, and keep these clients happy. So what tends to happen is we go through this process with our clients. Inevitably, we will lose some of those clients who either opt to no longer offer benefits, insurance to their employees, or alternatively, they may go price shop for a cheaper plan elsewhere. Generally speaking, we have a dedicated team of people that do this really well year in and year out. That's our job this year as well. Fair enough. When I look at your ADP's growth versus public peers, it seems like you're holding your own. It's not taking a little share. What does the competitive environment look like for you? And there might be some layers to that question. I mean, we were just talking about PEO, and there might be some other dynamics in PEO versus the rest of the business. But how does the competitive landscape look? Has it changed at all, or you guys just have tightened up the screws and are executing beautifully? The competitive environment for the whole HCM industry has not changed a whole lot, except that it's become a lot more consolidated over time. So if you were to rewind even 20 years ago and you spoke to an ADP seller, they were going head-to-head against tough competitors at that time. Now, the big difference between ADP today and ADP 20 years ago is that product has become so much important, more important over those years. And we've done a lot to consolidate onto fewer platforms and ultimately have better products, HCM products, in the market. And we did that when it became a much more important part of the overall value prop. So I would say that we've improved just in time. Had we not, then obviously, we may have had a more difficult balance of trade with some of these competitors. But the point is, we have improved substantially. We consolidated all of our down-market clients onto one single platform, and then we did the same in the mid-market as well. And those clients are happier than they've ever been. Retention levels, we mentioned last year, were at record levels in our mid-market and in our international space. And we're losing fewer clients to those key competitors, even though those competitors have grown their sales forces aggressively and have been coming after us. So absolutely, we've done a lot to drive that client experience. And our objective is to keep the momentum going, lose fewer clients to those competitors, and ultimately win market share. On the rate environment, well, not even on the rate environment, really, on your strategy with your float portfolio to basically ladder it out, maybe help us think through how that maybe give us a little mini briefing on how your portfolio is sort of structured and help us think through how a fluctuating rate environment maybe impacts your laddered portfolio. Yeah. I like this question because I do think there's a misperception about how the next few years will look for ADP when it comes to the impact of potentially falling rates. But structurally, in the industry, higher rates are better for the most part if they're not detracting from GDP growth and client growth. We have a float portfolio that's comprised primarily of the taxes that our clients owe to the 10,000+ jurisdictions around the U.S. and around the world. It's highly complex. We impound these funds, and then we make the disbursements when they're due. And in the meantime, we have a portfolio that's over $30 billion on average but fluctuates quite a bit. So in some days, it might be in excess of $80 billion. In other days, it might be as low as $10 billion. So there's a high degree of variability. Accordingly, you can take a very simple approach to that portfolio, which is to just invest some of it, longer duration, and then the rest of it sit in overnight investments. That's the approach many of our competitors take. The drawback to that approach is that you are now subject to short-term interest rates. There's very little laddering, as you described, in those types of portfolios. Right now, with short-term rates higher than medium-term and long-term rates, it doesn't look like a terrible strategy. But obviously, again, it exposes you to potential headwinds in the coming years. Our strategy, which is different, is to actually invest more of the portfolio further out in the yield curve. There are certain days where we actually have to borrow money in the commercial paper market or the reverse repo market to meet those tax or payroll obligations, perhaps for a day or two. Ultimately, what that strategy does is it allows us to invest more of the portfolio at a longer duration. The way it works is that we reinvest only a portion of that portfolio every year. Interest rates shot up a couple of years ago. We have not turned over the entire portfolio yet. If you look at the next couple of years, we have investments that are maturing that were yielding 2% or less in many cases, reinvesting at over 4%. So even though there is this possibility and likelihood that the Fed will cut short-term rates at some point, that'll be, we believe, more than offset by the reinvestments we're making at the medium and longer end of the yield curve, assuming today's yield curve holds, which obviously is a key assumption as we look ahead. You also have some commentary in your filings about a quarter-point rate move versus what the impact on the portfolio is. We do, yeah. So we shared the sensitivity to a 25 basis point movement. That really shows the impact to just the next 12 months, pre-tax income. A better way to think about the ADP portfolio is just take the entire portfolio, $35 billion approximately, and then multiply your 35 basis points. That's the eventual impact as the portfolio ladders. And so that gives you an appreciation for just how much upside we could have if rates hold where they are today. What about, I guess this sort of dovetails in with that question on the competitive environment. What about pricing in general and your sort of philosophy or capacity to take price? How do we think about price right now? Price is an interesting conversation for us. We've had different approaches, if you look back over the last couple of decades. At one point, we used to get more contribution from price, and then we dialed it back specifically because we realized we were keeping these clients for so long at such high incremental margin. Giving them price increases on an annual basis that were too high left us susceptible to competitors coming in and undercutting us on price alone. We lost many clients that way. We recognized that it was probably more accretive for us to rely less on price increases on an annual basis but drive a higher retention rate. That would result in a higher lifetime value for the clients. There was this period of time then that we pulled back on price increases, and we were getting only 50 basis points of net price increase per year. This is the period that led up into the pandemic. Post-pandemic, of course, inflation picked up, and we felt like that was an appropriate time to realize more price than we had in that pre-pandemic era. It's unclear at this point what the new norm looks like. All we can say is the last two years, we've gotten more price, closer to 150 basis points. We're obviously thinking hard about what to do for next year, and we haven't made up our mind. We are going to price appropriately given the fact that we are in a competitive market. We think about the lifetime value, and so we are always going to be thoughtful in how we balance all of those things while, of course, appropriately realizing the value of what we're providing to our clients. Changing channels, the non-U.S. opportunity, that's something that comes up relatively frequently. You're already there. It seems like there's an opportunity to be more there. What ending are we in, and what's the general strategy when it comes to non-U.S. markets? We share what we call the pillar view of our revenues. We have over $2 billion in our global payroll business. Generally speaking, that has grown about in line with the rest of our overall business. Within that, there are faster-growing parts of the international global business, and then there are more mature, slower-growing parts of that business. The faster-growing part is the global multinational piece. That's where we're serving companies that actually have a presence in multiple countries, and they're looking for one vendor to meet all of those different payroll needs. We have a couple of great platforms, one called GlobalView and one called Celergo, which we acquired back in 2018 to replace one of our own homegrown solutions. The sum total of those multinational businesses is, roughly speaking, half of our overall global business but growing faster. Over time, we expect there to be continued secular growth in that part of the market. As more companies prefer to work with a single vendor rather than cobbling together a number of different vendors around the world, we think it's a great solution, and we think we can continue to grow that business at an attractive pace. When you look at the in-country payroll solution, where we have a presence in France and a presence in Germany and a presence in a whole host of other countries, in many cases, those are growing at a slower pace because they're mature platforms. We haven't invested a ton in sales and marketing in those individual markets, but they still represent growth opportunities for us. Over time, we think there's an opportunity to move those businesses over to more common platforms and then invest a little bit more in sales and marketing and accelerate that growth as well. You asked about small business versus mid versus enterprise. Generally speaking, outside the U.S., we don't have as big of a small business presence. That is an incremental opportunity for us that we have spoken a bit about recently. The real material driver to the growth of our international business over the next couple of years is likely to be the mid and enterprise part of the market that we already compete in today and us just driving good bookings growth among multinationals and companies in some of those big European markets. Do you get at the SMB opportunity in these non-US markets via M&A? Is it the type of thing where you build it out organically, or do you go in and try to scoop up an existing player? We have acquired a lot of smaller international partners or competitors in the past. The opportunity to expand into the down market specifically is something we're thinking about organically because it's something we do really well here in the U.S. So we believe we can port over some of that technology and use our existing footprint as a launchpad to build a small business outside in some of these markets. When we think about M&A, a lot of these partners that we have today as part of our global payroll partner network, they're just good businesses, well-run. We know them well, and they compete in markets that might have attractive growth. And so we think it's appropriate for us to just acquire those partners outright and expose ourselves to the attractive growth of those local markets as well. We've done a few of those in the past several years in Sweden and in South Africa and Italy and India. There's more of those opportunities on the horizon as well. We just have a minute or two left here. But give us an update on next-gen payroll and Lifion. I know those products have been a long time kind of coming down the pike, but it sounds like things are sort of firming up there. Where are you at with implementation there? Those are both very strategically important products for ADP. Next-Gen Payroll, for context, is going to replace our core payroll engine that we have in the U.S., which we've had for many, many years and is extremely resilient and powerful and has a lot of revenue riding on it. So naturally, the transition as we sell our Next-Gen Payroll engine is getting a lot of focus within the company. But this is going to be strategically important for us, not just for the next few years but for the next few decades. So this is going to be a core part of the ADP technology stack for many years to come. We're making steady progress, but we're doing it right. When it comes to next-gen HCM, which you referred to as Lifion, that is a platform specifically for the US enterprise part of the market where we are going after the full HCM opportunity that historically, we didn't pursue quite as aggressively. So we historically had a number of platforms for payroll in the enterprise space, and we think we can do more. And we built this platform from a clean sheet of paper to address what we think clients in the enterprise space want. We built it with the future in mind. And so what we're seeing now is clients are adopting it at a pace that is really starting to pick up. We had good sales in Q3. We're feeling the momentum and building out the implementation, as you described. And we're starting to feel a lot more optimistic about this very consistent growth trajectory that we've got. It'll start to become a more meaningful part of our enterprise growth story in the years to come. We're feeling good about both of those. Expect to hear more. Fantastic. I think we're about out of time, but I appreciate it. Thanks so much for being here, Danny. It was a great conversation, as usual. Thank you, Ramsey. Thanks, everyone.