Okay. Good morning, everyone. I'm Mark Murphy, software analyst with J.P. Morgan, it is a great pleasure to be here with the management team of Paycor. We have CEO Raul Villar, as well as CFO Adam Ante. Thank you so much for making the trip and being with us. Yeah. Thanks, Mark. Yeah, thanks for having us. Maybe you could start with just giving us a very brief overview of Paycor and the markets that you operate in. We'll go from there. Yeah. Paycor is a SaaS cloud-based HCM provider that focuses on the SMB segment. We were founder-led for the first 29 years, until 2019, when I came aboard. We're really focused on accelerating our growth, and our value proposition is focused on empowering leaders to build winning teams. We provide tools from sourcing of new employees all the way through employee retention. Thank you for that. I wanna begin by asking you a little bit on the core differentiators. When we look across this landscape of these of the modern SaaS payroll and HR providers, we notice each one of them tends to emphasize something a little different in terms of of a core focus. You know, one of them is kind of emphasizing lately a digital wallet. One of them is emphasizing employee self-service. We kinda think of Paycor differentiating in three to four ways, and what I wanna try to just touch on each one of them briefly. The first one is being the focus on leaders or managers. Mm-hmm. You're emphasizing that much more so, but I think more so than any company I can think of. Why did you choose that? Is it to help them, you know, try to deal with the shortage of skilled labor? Is it to help them, like, with the sourcing, attracting, you know, kind of retaining better talent? Sure. What's an example of how you would empower a leader? Yeah. first, we did a lot of extensive research on what drives employee performance, and it was shocking, but it's not doing your own payroll. It's really focused on your leader. When you talk to employees, what drives their engagement across an organization is whether they like or dislike their supervisor. We decided to develop tools that help that supervisor be more productive, reduce all the mundane tasks that they have to do for people management, and then enable them with tools to be more effective with their employees. Some examples are, at the front end, you know, we provide them with AI-based sourcing to really simplify the process of finding the right people for the roles that they have open. We go through a process that enables them to align the new employee with the goals of the organization or that specific department. We provide simple, easy-to-use SMB OKRs that enable that alignment to occur. We provide digital coaching templates online for the leader to have one-on-one sessions, to document those sessions, and then to provide feedback. Our most recent acquisition of Verb is a microlearning tool that then enables the leader to provide a pathway to development for the employee. We're all in on employee effectiveness. We believe that engaged employees drive better outcomes for our clients. All of our focus is on empowering the leader to be more effective and spend more time with the employee. Yeah. Those are great examples, and it's pretty logical. It's hard to argue with that. Another area that comes to mind for us, Raul, is the vertical expertise. How did you end up with it, you know, organized this way, where it's really healthcare, manufacturing, food and bev, and professional services? Is that a more a reflection of the legacy of the company being... or I should say, the roots of the company being Great Lakes, Ohio, and those are just the businesses you see there? Part B of that is, would it change as you penetrate... you're penetrating these Tier 1 cities that are really more on the coastlines? Yeah. There's a couple of inflection points. First and foremost, payroll historically is mass customized. As the HCM suite has broadened, you know, to include recruiting and benefits and workforce management, there's a unique opportunity to differentiate by industry, which wasn't previously available in HCM, which is why no one ever did it. You know, we wanna provide that differentiation in our platform. Our open platform enables us to integrate with the tools that those four industries specifically want. Okay. We picked those four because they're 50% of the TAM, they're outsourcers by nature, and we just wanted competitive differentiation from our peers. What would be next up in line if you were gonna add a 1/5? You know, I think it's a little early to say, but, like, wholesale trade would be a really strong one. Ultimately, we like the four we have. We wanna continue to go deeper in the four. You know, they're a nice balance between, you know, hourly and salary, so it gives us a little secular opportunities. Now, another comment that comes up. It's hard not to notice that the product gets some pretty tremendous ratings and reviews. It's a very solid product. The one element of it we'll come across at times is that it has a deeper API layer, deeper API integrations. Can you flesh that out for? There are some people in the audience that are, you know, not super deep in the weeds on technology. What does that mean? Is it, is it more open? Like, mean you have a more open platform and less of a closed system or something else? Yeah. We definitely have the most open platform, the most integration points. As HCM has become a more important platform within an organization, our clients wanna be able to move that data to other components, whether it be an ERP, a point-of-sale solution, a practice management tool in healthcare. There's a lot of different areas that they want to integrate their HCM system records so they don't have to rekey, and they can create back-office efficiencies. We continue to invest in our platform. We continue to expose more elements of it, and we want people, not dissimilar to Salesforce, to be able to continue to build onto our platform and integrate with our platform so we can extend it across the hundreds of micro HCM categories that are available. Okay. Let's bridge from there and talk about a bit about the Tier 1 cities and the broker channel. You've had this very clear vision, right? You came in, you joined Paycor. The marching orders were pretty clear. The strategy of moving from. There were these roots in these smaller Midwest cities, right? Which I think you call Tier 2 and Tier 3 cities. Mm-hmm. The goal was to try to penetrate the Tier 1 cities, and you've defined that as the 15 largest cities in the U.S. It's clear you've done a remarkable job, and the trains have been running on time. What is the formula for success as you're continually expanding the sales teams, right, that you have in L.A., Boston, San Francisco, Philadelphia, et cetera. What is that formula? It starts with identifying, you know, the leader of the organization, and then we wrap four to 6 quota carriers around that leader. We start to gain traction in the market. We can point marketing resources to specific markets and over-invest in that market to create both brand awareness and demand generation to seed the team. Then as that team, you know, anniversaries on their first year, we look to promote someone from within that team to be the next leader, and we'll go to the second office within that city. That's been the formula that we've executed against. You know, we've moved Tier 1 coverage, you know, from about 15%. We felt like we were adequately covering with salespeople 15% of the Tier 1 opportunity. We're above 35% now. We got plenty of opportunity in front of us, and so we're excited the model works, and we continue to execute against it. I like how that strategy starts even internally with a focus on leaders. Mm-hmm. It's pretty elegant. You know, I wanna ask as well just how far along you think you are in Tier 1 cities. How much runway is there? You have a presence now in all 15, right? Mm-hmm. They're producing more than half of bookings. Correct. I'm not sure we, you know, knew that you could do that that quickly. How much higher can you realistically move that metric? Well, we're gonna triple the sales coverage in Tier 1 markets, we're gonna expect to see, you know, more and more bookings coming out of Tier 1 markets. We feel, you know, confident that there is a multiyear runway of headcount growth that enables us to continue to maximize coverage and get more at-bats. That's really what we're looking for is we wanna be in the conversation. Mm-hmm. Yeah. What I would add, Mark, too, is that even though the coverage has improved, it doesn't mean that those sellers are yet at full productivity. They're still growing. They're still aging into, you know, a full productivity, which takes, you know, 18, 24 months. It's really their third year before they're. Mm-hmm. really hitting it. you can triple the number while also growing the productivity of the existing people. Absolutely. Yeah. Okay. Feels like good runway. As you move into these Tier 1 cities, I'm always trying to picture what the dynamic is like because it should be bringing you know, into competition with some bigger competitors. I'm thinking of Paycor, Paylocity, UKG. How do you approach that kind of a dynamic? I mean, why shouldn't it have been more difficult, you know, than it has been to just kind of move right in? Yeah. The good news for us is, you know, Paylocity, Paycor, ADP, they all have national coverage, and we've competed with them even when we were just Midwestern. The competition hasn't changed, we're just on more battlefields right now. It would be a good question for them and because we're here, and we're coming. Okay. What, what are your sources of new business? I know we know some of it is ADP. We know some of it is elsewhere, but, it is one of the questions we always get. Sure. How long does that continue? You know, it's the gift that keeps on giving, just the churn itself from ADP. Even if ADP is somewhat healthy or somewhat stable, the churn coming off of it is a huge source. There's this whole other world outside of that. Can you help frame that up for me? Yeah. I think, for the last 20 years, our predecessors, you know, simplified the message to all of you and said, "Hey, we're simply winning share, you know, as a modern solution, disintermediating from ADP." That was a massive oversimplification of what really happens. You know, if you think about non-farm payroll, there's 156 million Americans that work, and ADP processes payroll for 25 million. It's just not that significant. Hmm. Paychex processes for $12 million. There's a significant opportunity, and the opportunities are bigger for both regional service bureau and people that still do it in-house. Whether it be with pen and paper or an ERP or an in-house software program, those two markets are much bigger. Our win rates reflect that. We get... The majority of our wins, 80% of our wins come from what we would consider legacy, ADP, Paychex, regionals, and in-house. Regionals and in-house and ADP are the three biggest sources, and they bounce around, but it's not an ADP-only game. You're saying the regionals and in-house are bigger combined than ADP? Correct. There's more runway to go after there. Significant. You know, we just signed an NBA franchise last week, and they do payroll in Excel. Just think about it. Like, it's stunning. What was great is they didn't really want the NBA- Are they? ... players to do their own payroll. Should I assume they're-? Shocking. They're not in the playoffs at this point? They're not in the playoffs. They did not win the lottery either. Okay. Let's talk about the macro and demand. What have you observed? If we think back about coming out of COVID, because that actually had a very big gyration on employment, and that affected the HR industry. Big effect, very temporary. If you bring that current to today, what are you observing, and what are you seeing in terms of business confidence, willingness to spend, but also that employment side of it? Maybe Adam, that's a good one for you. Yeah. Yeah. I mean, we think about it sort of in two dynamics. 1, of course, the demand for new business. Is the demand cycle changing? Is there anything, you know, happening there? Then there's the sort of organic labor market and what's happening within the labor market itself. Of course, I think there's a lot of speculation on what's gonna happen, but the labor market has been extremely tight for, you know, really the last couple of years coming off of COVID. Yeah. COVID being really a mass depression, specifically for HCM and payroll companies, because we, you know, lost, like, 15% of the portfolio really overnight. Mm-hmm ... as layoffs were happening. As of late, it's been more of a headwind in that it hasn't been growing considerably. Like, in the small market, in the micro end, we've seen a little bit more softening. Folks are not hiring and pulling back marginally, but it's really been all on the margin. You know, I would say in a normal labor market, where you're growing in the low single digits, like over time, we're picking up low single-digit growth, you know, contribution in the- Mm-hmm ... you know, what the industry calls pays per control. Mm-hmm. Right now we're really not seeing anything, there. It's been consistent, close to 0. No pullback... Yeah ... necessarily, but limited growth where it has been an opportunity. The demand side has remained fairly consistent. There was a really big, you know, set of bookings effectively that pushed out of core in the COVID period, and we picked up over the next summer or the summer of 2020. Beyond that, there hasn't been a massive pull forward like some folks have seen in software, more specifically. Yeah. It, it's been remarkably resilient and stable for you. Well, how do you think about your own demand dashboard? I mean, I'm wondering, we all wish we could see it. Like, what's your mechanism for tracking the environment? What I mean is, I don't really mean the employment environment. Yeah. I mean, because your growth is predicated on booking new logos. Yep. When you think about pipeline building, website visits, lead flow, qualified leads, coverage ratios, deals moving through the funnel, you're probably looking at CAC, you're probably looking at sales rep performance and economic indicators. What is it that you have in that dashboard? Yeah. I mean, we start with impressions. Impressions generate MQLs, Marketing Qualified Leads. We have four flavors of those that we track. Okay that have varying degrees of interest. We specifically then go to first appointments. I'm sorry, can I? ... through the seven. Yeah. When you say impressions, you're talking about outbound advertising impressions. We're talking about. ... inbound to your website? Yeah. Impressions at the mass level, and then visitors to paycor.com. Okay. We track both metrics. Okay. Because you ultimately need to drive awareness to get people in markets to paycor.com. Okay. We track both. We go right through. There's four different types of Marketing Qualified Leads we have, and it really is where they are in the buying funnel. We track each one religiously. Actually, the best ones are at the top of the funnel. Mm-hmm ... with least awareness, so we wanna proactively go out and reach out to them directly. We send those out to our sellers. We track first appointments, and then we track, you know, through the deal stages all the way through the funnel. You know, we track the pipeline management. I would say that we measure everything, 'cause if you don't measure, it doesn't matter in sales. You know, we're all over those measurements. Anything to add? Yeah. No, I mean, just We've wrapped a lot of software, of course, around driving productivity around the sales force, enabling them, and then making sure that we can track all of those measures. We've seen really strong demand continue to grow inside of that pipeline, like we've mentioned, our pipeline coming out of the quarter. You know, as we're hearing the talk about what's gonna happen in the future, you know, of the market or this potential recession that we've been talking about for a while. Mm-hmm ... you know, tracking that front-end demand and the pipeline has been critical for us. Yeah. It's continued. Yeah. Which of those are the best leading indicators in terms of, I guess? It sounds like you're saying it's the top of the funnel that is a little, actually a little less qualified, where you feel like you could do the most damage. Mm-hmm. These are like customers that are less informed. What do you think is the best leading indicator when you look at that dashboard? First appointments. First appointments? Yep. Mm-hmm ... we can measure right from first appointment all the way through. We have a cadence. We know, you know, our win rates, you know, have accelerated from, you know, low 20s to, you know, over 50. Mm-hmm. We just need to get there. Okay. First appointment is the best indicator of future success. It's basically an at-bat. It's an at-bat. Okay. Now, what about the micro segment? That's the one part, you've had some sluggishness there. That's less than 10 employees. Part of me says, "Well, how would you not have that," right? You've had a increase in interest rates. You're probably gonna have a slower lending environment. Maybe that's already started in that segment. That should be catching up too, the typical, you know, very small business. Do you think it's played out and kind of stabilizing now, or do you think it downtrends a little bit just because we are in the wake of SVB and this regional banking crisis? By the way, I understand it's a small and- Mm-hmm. It's not the most important part of your business at all. Yeah. I mean, it represents about 5%- Yeah. -of our portfolio. It, it doesn't feel like it's stabilized quite yet. I mean, we have seen that out of businesses and that space has been up a little bit higher over the last three quarters or so. It, it doesn't have really an impact on our overall business. We actually have put in strategies to move those clients onto new pricing strategies for us that... Like our bundled solutions, that's actually increased price and probably accelerated a little bit of the move away for that microsegment. You know, like I said, we have seen more out of businesses inside of in that space, but It feels like it's probably still early. Mm-hmm. The credit tightening has really happened over the last couple months. We haven't seen massive movements since then. You know, likely to maybe pick some harder in the back half of the year. Yeah. I mean, we're fairly optimistic. I mean, Paychex would be a good indicator there, but, you know. Mm-hmm. -had fairly strong SMB results yesterday. I think that that's a. They have a much bigger sample size. Yeah. That's a better bellwether for us. Ultimately, again, it's a small part of our business. We've intentionally by design, you know, focused above 10 employees, just because we think that's a much better book of business for us long term. Yeah, for sure. You've been very successful with that. What do you think about the hiring and labor market? Because you've continued to hire, right? You're not one of the many software companies that's been doing layoffs. You've had healthier end markets. You've continued to hire. You've got a lens into this. You've got a window into it, right? Because of the size of your install base. What are the signals that you see on the labor market kind of heading into the back half of the year? Yeah. I mean, the number one thing our clients ask for is employees. I mean, they're still looking for employees. And, you know, in our own, you know, in our own company, you know, we continue to grow. We're finding talent, you know, across the board. I would say it's a competitive environment to identify and attract talent, which is, you know, really, you know, part of what we're helping solve clients the problems for. That's what they're looking for. They're looking for more labor. I mean, although we have low unemployment, I mean, it's like, it's just low labor participation, right? Mm-hmm. We're not really, you know, growing jobs at a huge rate. If we can get more people back in the workforce, I do think that, you know, some of the labor dynamics will open up a little bit. What do you think when you see unemployment at 3.4%? It's a 54-year low. And again, I think we understand, and Adam, you were helping with us on this topic a minute ago. You know, it can move things by a point or two, right, in a normal environment. It's not the biggest factor at all on your growth. It pales in comparison to the new logo bookings where you're saying the dashboard is pretty healthy. I mean, doesn't the Fed need unemployment to move higher probably just to get down, get inflation in line with their target? Yeah. I mean, that's clearly their mandate. It could come to Raul's point with more folks going back into the workforce, which is lifting the unemployment rate versus Non-farm payroll declining. I would assume that it would be probably some combination of both. More folks have less programs that they're sort of feeding off of. They need to go back to work. That's gonna raise the unemployment rate. They're not you know, coming in at the same rate. I think for us, what's more important is what actually happens with the Non-farm payroll. Does it decline significantly? Okay. Let's touch on for a moment your retention rate as well, because this is super important, we think, for the business model. Payroll has always proven over decades and decades, it's proven to be very sticky business. In my simple mind, it's because of all the integration points, you know, back to ERP, back to that backbone, and then you've got all the data, right? You've got all the employee records. You've got all the payment histories. Companies aren't eager to go in and make this a change in their systems. You've had net retention rates in the high 90s. Does that sound right? Net retention in the high nineties. That's right. Yep. Can you comment on how that's trending? You're adding all these other products now, right, that are beyond the core payroll. You have been for a long time. You've been successful there. I think in theory, that should help. You're moving upmarket, I think we wonder if that would help also. Yeah. We still think that there's a couple points that we can improve as we continue to focus on, you know, lifting retention on the growth side, bringing in larger clients. I think that that's gonna continue to be an opportunity for us. We've seen net retention remain high. The client sales motion, like going back into the base, we've invested in that, you know, more over the last, call it 18, 24 months. We really think that that's a continued opportunity. We've added significantly to the product suite over the last couple years and gotten a lot deeper in talent. We've added just 4 or 5 new products just this year alone, and we really haven't, you know, scratched the surface on our ability to get back into the base. There is a lot of opportunity. We think that there's, you know, ways for us to continue to improve that. Net retention over the last year has remained, you know, really consistent in the high nineties, so. Do you have any feeling of how it would, how well that might hold if we, say, we're end up going into a moderate recession, right? You don't get the, you don't get the, you don't get the soft landing, you don't get the mild recession, but you're also not getting the kind of severe collapse, just kind of like a, like a normal recession. Is there any data or any history on that? Yeah. I mean, the way that we think about it, about half of our losses tend to come from either out of businesses or acquisitions or consolidations. You know, if that were to accelerate because of the market and drive more out of businesses, I think that's probably how I would think about it. In terms of the size, you know, if you compare it to the COVID period, where unemployment went to 15% and, you know, folks were shedding employees, we still grew a couple points that year. We were growing at that point around 17%. Mm-hmm. All of it, all of that went away because the demand stopped almost immediately, and the organic, you know, sort of fell out of the bottom. We still grew in the sort of 2% range. I think that that would probably be the most extreme example that we could think of in terms of the impact. Yeah. Unfortunately, I was in HCM during the dot-com bust and the financial crisis, so many years ago. I would say You're still standing. Yeah. Yeah. Somehow or another. I would say that you'll see pressure, which we're already seeing in the micro segment, 'cause access to capital. Typically, you see enterprise companies shed quickly, because they hire in advance. Mid-market companies are fairly durable. They. Mm. after the need. Oh. I would say it would take a projected long recession to start to pull back in the mid-market at any significant rate, just because this weird labor dynamic where they've spent a lot of time trying to hire back up, and I think they hire on need. Yeah. We feel like we're certainly not immune. We do believe that, you know, the two tails, which are a smaller part of our business, is where you tend to see more of the action in a recession. Interestingly, you're in maybe the most kind of relatively insulated part of the pyramid. Yeah. Between, you know, small, mid, enterprise. Yep. Yeah. Okay. Maybe we can touch on the move-up market because I alluded to that a moment ago. When we look at the average pays per control, which simplified term employees per customer maybe is an easier way for people to think about it. That has increased from 68. If I go back about two years, we think it was at 68. We estimate it now it's around 79. I actually think you said it was at 79. You've kind of been de-emphasizing the micro market, which is a good fundamental change. You've been moving up market. How do the economics of that movement up market kind of roll through and accrue to your benefit as we think about the model? I. If we try to trend that out, I mean, is it crazy to think about that reaching 100 if we give it... I know it would take a bunch of years, but is it crazy to think, you know, 5, 6 years that could get to 100? I don't think it's crazy. I mean, I think the biggest dynamic there will be what does happen in that micro segment. While it's only 5% of the revenue, it's like 1/3 of the total customers that we have. That is one of the driving dynamics, is what happens with that micro segment. If it grows at all, if it just stays flat, it will continue to drag. If it were to shrink a little bit- It's gonna help. I think it could really lift, the overall, you know... Mm. pays per control, employees per customer. You know what we see, there's a couple dynamics. One, as clients get larger, they typically have more pricing power, especially on the payroll side of the buying, you know, dynamic. You'll see that the PEPPM will decrease. An interesting trend, though, relative to our existing portfolio, is that customers are also buying more than historically because of our point-of-sale and go-to-market solution. The bundle suites are more complete, the deal sizes are rising pretty well for similar-sized clients now. That's one of the benefits of continuing to move up market. The deal sizes are increasing. Of course, as you hit, you know, really 20, 50 employees, retention lifts pretty dramatically. We get the benefit of retention. The LTV to CAC looks significantly higher. I mean, we'll increase by 2X versus, you know, under 20 employees. The retention, in that space, or, excuse me, the gross margins in that space as you think about servicing those mid-market clients, that's really where our service model is designed. You pick up a bigger deal size, better LTV to CAC on retention, and then better margins overall. Favorable trends across the board. You mentioned the PEPPM there, let's go over next into the PEPPM. List, $44. Realized PEPPM has been expanding. That's. We care a lot about that too. Reached over $21 recently, that's just our math. Typical customer, how would you allocate that? If we think about your the various components that you have. What are people really paying for and seeing value in? You've got your. You call it the core, right? Mm-hmm. Which is payroll and HR. You also have workforce management, you have benefits, you have talent management. How would you allocate it? Against the 44, the HCM core represents $20 as, like, the base package, and 95% of all of our clients are buying that package at the point of sale today. The rest is split between talent, workforce management, and the benefits. You know, from an achieved PEPPM, like, where you're seeing, you're seeing still about half of that coming from the HCM core, and then talent has really grown significantly. The interesting dynamic between, you know, talent and workforce management benefits is that clients either need workforce management if they track time, if they're doing scheduling, or they don't, and it's not a consideration. Same thing with benefits. You're either managing benefits or offering benefits or not. It's a sort of a yes or no dynamic. Talent, we're seeing significant adoption. We're seeing outsized growth there. It's grown significantly over the last. you know, four years to now being our second largest product, where it used to be workforce management. Mm-hmm. payroll and HR. Mm-hmm. Payroll and HR and now Talent solutions. That's representing more and more of the portfolio of that $21 now. Important to note, too, the $21 does include the sort of annual form filings that came in in the quarter. The average is closer to the high teens. Okay. Okay. And would you wouldn't move benefits into the core at some point? Does that not become... It's not mainstream enough that people select that quite to put it in there? Yeah, I mean, that's how we evaluate it. Yeah. The take rate on benefits is, you know, about a third. We've had a benefit-agnostic strategy to support the broker channel. Right. Mm-hmm. And so- Okay. We love the broker. Yes. Okay. They've been pulling their weight for you, right? They're carrying a lot of water. What are the biggest needle movers? If we're, if we're gonna go from the current... Again, I'm looking at the list, PEPM, and if that's currently $44 PEPM, you have a target of $50 PEPM, which may prove to be conservative, I suppose, right? What gets us from... What is gonna kind of bridge the gap from $44 PEPM to $50 PEPM? Yeah. We've really been consistent adding $3-$5 per year. We think $50 is no longer a ceiling, it's a floor. We'll continue to grow past that. We think there's still significant opportunity to continue to add talent components into the ecosystem, Verb and the microlearning being just one example. Mm-hmm. We're gonna continue to focus on AI analytics, and drive that forward. We, we feel like there's plenty of opportunities to both organically and inorganically continue to add PEPM into the overall ecosystem. Okay. Now, why don't we close on this? We're down to about two minutes. You mentioned, because this is a huge change, I think, having talent become your kind of number two offering. It's been skyrocketing. That's a sticky solution. That's something that you would expect to be happening as you move up market, right? It's a, it's a proof point of success there. You described it as flying off the shelf on the earnings call. You know, we probably have investors out there who are saying, "Well, how is that happening when we do hear about layoffs out there in the industry, right?" How is that happening at the same time? Yeah. I think it's a combination of things. You know, every company has a churn rate. Every company either adds or doesn't add employees. Ultimately, you're still going to be replacing existing employees that churn. The combination of the front end, which is really based on sourcing and recruiting and tracking those applicants through the process, is critical for companies regardless of their adding, 'cause sometimes they're just replacing. Secondly, you know, companies have realized, like in a tight labor market, the competition for talent, it's just good hygiene to have goal alignment, one-on-one meetings, engaging employees, providing good feedback, and then tools to develop. We're finding that, you know, there's different things that drive different companies that we meet with. Some are more focused on the front-end talent, some are more focused on the back end. Regardless, we believe the future of HCM, payroll, HR, and talent will be one bundle. Mm-hmm. over time. Mm-hmm. You know, it took HR a decade to get there or so. We believe that talent will be the next core component that will become part of the HCM system of record. That's a great vision to end on, and you're right on time. Super. Coming up at the end here. I can't thank you enough for. This has been super informative, and thank you for making the time. Yeah. Thanks, Mark. Thanks, everyone. Thanks.