Good day, and welcome to the TriNet Fourth Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I'd now like to turn the conference over to Alex Bauer, Head of Investor Relations. Please go ahead. Thank you, operator. Good afternoon. My name is Alex Bauer, and I am TriNet's Head of Investor Relations. Thank you for joining us, and welcome to TriNet's 2023 fourth quarter conference call. I am joined today by our current President and CEO, Burton M. Goldfield, our CFO, Kelly Tuminelli, and our future President and CEO, effective tomorrow, Mike Simonds. Before we begin, I would like to address our use of forward-looking statements and non-GAAP financial measures. Please note that today's discussion will include our 2024 first quarter and full year financial outlook and other statements that are not historical in nature, are predictive in nature, or depend upon or refer to future events or conditions, such as our expectations, estimates, predictions, strategies, beliefs, or other statements that might be considered forward-looking. These forward-looking statements are based on management's current expectations and assumptions and are inherently subject to risks, uncertainties, and changes in circumstances that are difficult to predict and that may cause actual results to differ materially from statements being made today or in the future. Except as may be required by law, we do not undertake to update any of these statements in light of new information, future events, or otherwise. We encourage you to review our most recent public filings with the SEC, including our 10-K and 10-Q filings, for a more detailed discussion of the risks, uncertainties, and changes in circumstances that may affect our future results or the market price of our stock. In addition, our discussion today will include non-GAAP financial measures, including our forward-looking guidance for adjusted net income per diluted share. For reconciliations of our non-GAAP financial measures to our GAAP financial results, please see our earnings release, 10-Q filings or 10-K filing, which are available on our website or through the SEC website. With that, I will turn the call over to Burton. Burton? Thank you, Alex. Fiscal year 2023, including the fourth quarter, was highlighted by strong and accelerating new sales growth, near-record customer retention, and prudent expense management. I am particularly pleased with these results, given we successfully executed in the areas that are under our direct control. By emphasizing our value proposition, expanding our sales force, and improving our go-to-market efforts, fourth-quarter new sales growth exceeded our forecast and my high expectations. We successfully executed on our plan to enhance customer service, which resulted in near-record customer and WSE retention rates across all customer sizes. With the difficult 2023 economic environment, we responded by managing our expenses prudently and made every dollar of investment count. Given our strong execution across all facets of our business, we believe our stock in 2023 represented significant long-term value. We bought back over $1.1 billion in TriNet stock. As you know by now, today, I announce my retirement as CEO of TriNet, effective midnight tonight. As CEO of TriNet for over 15 years, my overarching vision was to build an enduring company, one that thrives for decades, and one that is fundamentally different. I view this as a very high standard, but more importantly, it is actionable by every colleague at TriNet. This standard impacts who we hire, how we train and invest in our colleagues' growth and development, the balance of short-term versus long-term investment to achieve our strategic plans for the future, and most importantly, how we treat our customers and partners, providing them unparalleled value and a vision for a long-term relationship. TriNet introduced to the PEO industry a vertical go-to-market strategy where we focused our sales and services on 6 core dynamic industries: technology, financial services, professional services, life sciences, nonprofits, and Main Street. This remains a hugely successful approach to the market and has given TriNet a customer base consisting of the most dynamic SMBs in the U.S. economy. Because of this approach and the effectiveness of our execution, we have been able to attract dynamic salespeople, keep them longer, and ultimately grow our team. During the fourth quarter, we leveraged our go-to-market approach, benefited from our larger, more mature sales force, and we delivered new sales ACV growth up 55% year-over-year. I am pleased to report that this drove 2023 full year new sales ACV growth to 32% year-over-year.... More importantly, our sales momentum continued into January 2024, where we realized the best new ACV performance in our company's history. New sales in the month of January grew by 56% when compared to the previous year. I look forward to continued new sales momentum, which is not only driven by strong sales execution, but also exceptional service and a very strong brand. Enduring companies are associated with strong brands, and at TriNet, we have built the strongest brand in the PEO industry. In recent Harris Poll, TriNet's unaided awareness was 82%, the highest in our company's history. But for me, it is not enough to have brand awareness. I have always wanted TriNet to be viewed as a trusted advisor for our customers. I was pleased to find that in the same Harris Poll, TriNet's reputation is the strongest in our industry. TriNet brand triggered the highest positive emotional response of all the key players in the PEO industry. Said differently, our strategy is working, and I am very proud. We have come a long way with our brand, and TriNet is in an excellent position to leverage this brand now and in the future. Just this week, we were informed by Newsweek that we were ranked number 1 in the Excellence 1000 Index for 2024. The global companies listed in this index exhibited a firm commitment to best practices in business and financial growth. Newsweek partnered with the Best Practice Institute to conduct this index. I am particularly proud of this recognition, and it highlights TriNet's success in balancing employee satisfaction, R&D investment, ethical impact, and customer excellence, among other factors. TriNet will always work to keep our customers at the center of everything we do. We are continually evolving and enhancing our service model, striving to ensure that our customers are being served in a fashion that exceeds their expectations. As I discussed on our last earnings call, our Net Promoter Score saw a significant year-over-year improvement, and for 2023, we realized the second-highest customer retention rate in company history across all customer sizes. Throughout my years at TriNet, I have stressed the importance of technology innovation and the importance of owning our own technology. This is strategically important so that TriNet is in control of our future as the market continues to evolve. There are few examples of organizations in any industry that have fallen behind the technology curve and have been able to maintain predictable growth and profitability. At TriNet, technology is the bedrock that provides scale in service of our exceptional customer base. It enhances the accuracy, expediency, and breadth of value our service team delivers. With the acquisition of Zenefits, we accelerated our commitment to technology innovation, specifically around API integration, benefits administration, and advanced payroll constructs that are flexible and easy to adopt. TriNet is well on the path to developing a unified platform with an advanced data model that can serve our customers throughout their business lifecycle, including PEO and HRIS. I am proud of the many acquisitions over the years, and particularly proud of the colleagues from these acquisitions who still today are an integral part of TriNet's value. This trend started with Gevity in 2009, and many of our current senior leaders came from this acquisition 15 years ago. This is the embodiment of an enduring company where colleagues can grow and prosper personally and professionally by committing to our mission. TriNet is exceptionally well-positioned as a tech-enabled business services company with growth, predictability, profitability, and strong free cash flow. This can only be provided by a company with dynamic technology, complemented by extraordinary service delivered by an incredible team. All of this is to say, I am confident that TriNet's best days are ahead. I feel the company is in an excellent position, with strong momentum, to facilitate my retirement. With today's announcement of Mike Simonds as TriNet's next CEO, TriNet took another extraordinary step on our journey as an enduring company. Mike brings extensive SMB market and insurance experience, as well as strong credentials across all facets of management. I'm confident Mike is the right leader for TriNet as we enter into the next phase of our growth. I will still be here working with the company through the end of March 2025 to ensure a smooth transition. With that, I will pass the call to Mike so he can share a few words with you. Mike? Thank you, Burton, for your extraordinary leadership at TriNet these past 15 years. Yours are going to be big shoes to fill, and I very much appreciate your commitment to stay on as an advisor to ensure a seamless transition. I've spent much of my career working with insurance benefits and HR technology, and certainly have always appreciated TriNet's excellent reputation in the market. The more time I spent in conversation with the company and others in the market, my excitement grew about this business. A strong brand and culture, excellent cash generation, and a large market opportunity still in front of us. My primary focus initially will be supporting the team as we onboard the customers associated with our record January, as well as getting out to meet with colleagues, customers, marketplace partners, and our investors. I look forward to opening up a dialogue with all of you in the coming weeks and months. Now I'll pass it on to Kelly to take you through our financial results and guidance. Kelly? Thanks, Mike. I know I speak for all colleagues in welcoming you to TriNet. During 2023, TriNet continued to excel in the areas we controlled. We accelerated new sales growth, we kept customers longer, and we managed our expenses prudently while still investing in our growth and digital transformation. As it relates to capital, we published our financial policy and capital allocation approach to our investors. We issued $400 million of bonds and renegotiated and borrowed on our revolving line of credit, and we repurchased over $1.1 billion of our stock. This execution reflects the continued maturation of the company's financial management. We built towards these actions over several years, having negotiated borrowing terms, issuing long-term debt, and enhancing our forecasting capabilities. To top it off, we just announced today the initiation of a quarterly dividend of $0.25 per share. The initiation of our dividend signifies two things for TriNet. One, we manage a business that generates significant and predictable corporate cash flows, which enable the funding of a dividend. And two, with that dividend, we now have diversified capital return options for shareholders, consistent with our financial policy. Now, let's dive into our fourth quarter and full year financial performance in greater detail. Total revenues grew 2% year-over-year for the fourth quarter and 1% for the year, in line with our guidance range. Total revenues performance for the year was largely characterized by the offsetting impacts from lower average WSE volumes and higher rate and mix contributions. Our lower overall average WSE volumes was due to workforce reductions in some verticals of our installed customer base and a lack of hiring in others throughout 2023. This was a result of the challenging economic environment, particularly in the technology sector. Professional Service Revenues in the quarter and for the full year were flat year-over-year, in line with our guidance. Consistent with our total revenues performance, Professional Service Revenues were impacted by lower volumes, largely driven by the lack of customer hiring, offset by modest rate increases in HRIS performance. Our HRIS performance for the year was driven by three factors. First, the renegotiation of certain broker arrangements during the third quarter. Second, our success at lifting price to properly reflect the value of our HRIS services provided. And finally, our HRIS performance benefited from a full year of revenue in 2023 when compared with the timing of our acquisition in February of 2022. Regarding WSE volume, we finished the year with approximately 348,000 WSEs, slightly down year over year. This reflected a continuation of the trends we experienced throughout 2023. We saw net positive contributions from new sales. Customer hiring was significantly lower than historical levels, but modestly positive and retention remained strong. Last quarter, we introduced a broader WSE definition, which reflects those receiving PEO services and using the value of our PEO platform. As we build our new platform and think through the opportunities to drive revenue by delivering value to an even broader base, we will continue to work through our existing categorizations and adjust as appropriate. We do earn revenue on each of these WSEs at varying levels. As we refine our processes and expand our product offerings, the incremental service fees we receive on these WSEs will be additive to PSR. The recategorization of WSEs added just under 12,000 to our final tally. On a legacy apples-to-apples comparison, we finished the fourth quarter with 336,000 WSEs, down 4% year-over-year and flat sequentially. For the fourth quarter, our insurance cost ratio was approximately 87%, lower than our forecasted range for the quarter of 88%-92%. For the full year, our insurance cost ratio was 84.3%, slightly lower than our latest guidance range for the year of 84.5%-85.5%. The lower insurance cost ratio in the quarter reflected an uptick in healthcare utilization, particularly in November, more than offset by favorable workers' compensation prior period claims development. This workers' compensation trend was consistent with our full year experience. Turning to operating expenses in the quarter, we continued to prudently manage our expenses in response to the challenging economic environment. We saw that our client hiring would remain choppy throughout the quarter, and therefore we began to scale back or cancel some of our discretionary hiring and project spending while still ensuring we were investing in critical go-to-market capabilities. The recalibration of our expense run rate strengthens our cash flow position as we wait for our clients to resume hiring. As such, for the fourth quarter, operating expenses declined 6% year-over-year, and for the full year, operating expenses grew a modest 2%. Now let's move on to earnings per share. Fourth quarter GAAP net income per diluted share exceeded the top end of our guidance by $0.31 to $1.31, up 68% year-over-year. Our fourth quarter earnings outperformance versus our guidance was driven by expense recoverability and the workers' compensation performance I just discussed. This brought full-year GAAP net income per diluted share to $6.56, up 17% when compared to 2022. Fourth quarter adjusted net income per diluted share also exceeded the high end of guidance by $0.27 to $1.60, up 44% year-over-year. This brought our full-year adjusted net income per share to $7.81, up 10% versus 2022, exceeding the top end of guidance by $0.26. Turning to capital allocation, today, we announced the institution of a quarterly dividend of $0.25. The record date will be April 1, payable on April 22. With the institution of our new dividend, TriNet capped off an extraordinary year as it relates to our capital allocation strategy. Our capital priorities remain unchanged. We will always invest in our business for growth, we will explore accretive M&A, and we will return capital to shareholders through both share repurchases and our newly instituted dividend. During 2023, we publicly articulated our financial policy, which included our commitment to manage our business at a leverage ratio of 1.5-2x adjusted EBITDA and return up to 75% of free cash flow to investors. For the year, we generated $539 million in corporate operating cash flow, an 8% year-over-year increase, and we generated $697 million in adjusted EBITDA, representing 1% year-over-year growth. In summary, we exit 2023 in a strong financial position. Now let's turn to our 2024 first quarter and full year outlook, where I will provide both GAAP and non-GAAP guidance. In the first quarter of 2024, we expect total revenues to grow in a range of 0%-3% year-over-year, and professional service revenues to grow in a range of 2%-8% year-over-year. Our first quarter revenue growth guidance includes contributions from new sales growth and strong retention, offset by the limited contribution from CIE as weak customer hiring trends persist. In Q1, we are planning for healthcare utilization to increase over recent experience. This will result in an insurance cost ratio between 82.5% to 86.5%, reflecting our seasonally lower ratios at the beginning of each year. This brings our estimate of first quarter GAAP net income per diluted share to be in the range of $1.81-$2.55 per share, and first quarter adjusted net income per diluted share to be in the range of $2.10-$2.85 per share. Regarding our full year 2024 guidance, we are forecasting our year-over-year total revenues to be in the range of down 1% to up 4%, with our professional service revenues to grow in the range of 1%-5% year-over-year. We expect our insurance cost ratios to follow seasonal patterns and reflect favorable cost ratios in the first and second quarters as participants work through deductibles. We then foresee a return to higher insurance cost ratios in the third and fourth quarters as deductibles are exhausted and when pooling limits reset in October. We should continue to benefit from strong workers' compensation performance. These trends bring our full-year insurance cost ratio forecast to be in the range of 86.5%-88.5%. This ICR projection is about 2-4 points higher than our 2023 result, reflecting increased healthcare utilization, higher provider costs, particularly for outpatient services, and higher pharmaceutical pricing as we see continued adoption of GLP-1s as an example. We will watch this closely throughout 2024 and assess any refinements needed as we determine quarterly pricing changes. Regarding our expectation for operating expenses, we will continue to manage our expenses prudently. As such, we expect a modest, low single-digit increase in operating expenses for the year. Given these anticipated trends, we expect full-year GAAP net income per diluted share to be in the range of $4.57-$6.08 per share, and adjusted net income per diluted share to be in the range of $5.80-$7.35 per share. Our guidance for adjusted net income per diluted share includes a net benefit of between 25 and 30 cents per share at the midpoint, versus a benefit of 13 cents per share last year as a result of our 2023 share repurchases. For 2024, we're assuming in our guidance a level of share repurchases that will continue to offset normal dilution arising from stock compensation. Before I pass the call back to Burton for his concluding remarks, I would like to take a moment and thank him for the leadership he has provided TriNet over the years, and for the successful partnership we forged over the last 3.5 of those. We accomplished a lot in such a short period of time. ... Your vision for building TriNet into an enduring company redefined what a PEO could be and created over $6 billion of enterprise value during your tenure. I know I speak for all TriNet colleagues when I wish you nothing but happiness in your well-deserved retirement. Burton? Thank you, Kelly. TriNet is a unique company made up of incredible, passionate people. Throughout my over 15 years leading TriNet, our colleagues have been dedicated to solving problems for small businesses across the country, providing unparalleled service to our customers, building value for our shareholders, and most of all, supporting each other as we build this enduring company. I could not be prouder of the work that our team does every day, helping entrepreneurs to fulfill their dreams and ensuring that our country continues to be the center of innovation for the world. I am grateful to every one of our colleagues who have allowed me to lead them by channeling our combined passion in service of our customers. In today's world, a diverse team of almost 4,000 committed people can do miraculous things. As I end my last earnings call, I would like to thank my colleagues at TriNet. Thank you for what you do for our small business customers across the country every single day. I know you will continue to do this and will thrive in the future. I am excited for my own future with my wife, Carol, and my family, including my first grandchild. I am particularly excited to work with TriNet over the next year and watch all of you continue to grow and prosper. I am happy to take your questions now. Operator? Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star then one on your telephone keypad. If you're using a speakerphone, we ask that you please pick up your handset before pressing the keys. If at any time your question has been addressed and you'd like to withdraw your question, please press star then two. Today's first question comes from Kevin McVeigh with UBS. Please go ahead. Great. Thanks so much- Hey, Kevin. Hey, Burton. Let me add my congratulations. I mean, you, you've been a steward across TriNet for a long time, created a lot of value, and congratulations on your retirement, your first grandchild, and, you know, just a terrific, terrific job. And, you know, rarely do CEOs go out on their own terms, and it's just a terrific outcome for you. So congratulations on that. Thank you. Hey, Burton, this might be a little unfair, but what do you think has been your greatest sense of upside from when you set out 15 years ago? I mean, and you can't say the stock because that's obviously been terrific, but just you know, you've been so early in the sector. Just any thoughts on that, more for the broader audience than me, 'cause I think it just, you know, there's just gonna be a real knowledge void as you transition into retirement. Well, thank you, Kevin. And look, I can retire because of this amazing team. I can retire because the culture is focused on the customer. I can retire because we weren't following anyone. We were trying to lead the industry with unique technology, the vertical strategy, the service model. And I am just... I, I, it's, it's not about me, it's about a culture that's been created where this company is going to do great, and I would never do this if I didn't think it would continue to grow and prosper. So, I think, like any CEO, what have I done well? I haven't changed the mission or the vision every year. I haven't said, "Go after this shiny object or that shiny object." For a while, I was a little bit of a lone ranger in the technology needs to be the substrate of scale and service to the customer. So we've been investing in technology during my entire tenure. I don't have to catch up right now, but you're. I really appreciate your, your comments. I believe that our tech-first approach with great service and scale and the leadership around this executive leadership table, combined with Mike coming in the door, is a great combination. I'm, I'm really proud of that. I'm proud of the team more than my individual contribution. That's terrific. I'm gonna leave it there because the rest are just numbers and, you know, just- Oh -both ones. Thank you. You're awesome, Kevin. No, thank you. Thank you. Our next question today comes from Kyle Peterson with Needham. Please go ahead. Hey, Kyle. Thanks. Hey, guys. Good afternoon. I guess I'll pick up with the numbers, you know. But, you know, wanted to touch on the guide a little bit and see kinda what you guys had assumed for CIE for the current year. I guess it sounds like you guys are being fairly conservative based on client conversations. But just wanted to see if you guys had kinda modeled in any improvement in the back half or kinda what your expectations are as we sit here today. Hi, Kyle, it's Kelly. Good to hear from you. Great question, because it's something we watch every single day. As we're thinking about CIE overall, 2023 was the lowest CIE year TriNet has ever had, and I think it's just, you know, proof of our resilient model, frankly, that we were able to still grow. ... revenue and profits and get there. As we're looking into 2024, what we're really forecasting on the low end of guidance is really low single-digit CIE. At the high end of guidance, we're at middle single-digit CIE, and you know, think that it is skewed towards the back half of the year. Great. That's really helpful. And then, you know, just to follow up, you know, great to see the dividend announcement today. I just wanna kind of pick your brain on, you know, capital return, you know, priorities for the coming year. I guess last year was a big year, obviously, for the buyback. I guess, is the dividend going to be the big or the prominent priority today outside of, you know, offsetting with dilution? Or how are you guys kind of thinking about returning capital to shareholders for the current year? Yeah, Kyle, right now, our guide assumes related to capital return, just the offset of dilution, 'cause due to the timing, stock price, a variety of other factors, we don't actually bake that in. But we just laid out our financial policy in the middle of the year, so our priorities really have not changed. We're gonna first invest in the business to drive growth. We'll look at accretive M&A, but as it relates to returning capital to shareholders, we will look at both share repurchase opportunistically, as well as the newly instituted dividends that we're doing. So, you know, our target is, on average, 75% return of free cash flow to shareholders, and we'll look at the tools we've got to see what the best approach is. Great. That's really helpful. Leave it there. Thanks, guys. And Burton, congratulations, and enjoy the retirement. Thank you so much. Thank you. And our next question comes from Jared Levine with TD Cowen. Please go ahead. Yeah, I just would like- Hey, Jared ... to dig in a little bit to start. Yeah, first I wanted to say congrats, Burton, on the retirement, but in terms of the FY 2024 guide, can you give us a little more color in terms of what you're assuming in terms of average WSE growth, and kind of how to think about the cadence of WSE levels for 2024? Yeah. Well, you know, as you know, we don't forecast WSEs or give a future guide on WSEs, Jared. But the way that we're thinking about the pieces of it is, you know, given the sales momentum that we've got and the strong January that Burton talked about, we've really narrowed the gap between new sales and customer attrition. And CIE definitely helps bring that up as well with the assumption that we've got right now. So, you know, we're not really forecasting WSEs, but you can tell probably from our both our professional service revenue growth forecast, as well as our assumption around total GAAP revenue, you know, roughly assuming how that comes in with a real low, low single digit on the bottom end for CIE. Got it. And then in terms of the FY 2024 ICR guide, does that assume a health insurance margin that's aligned with what was contemplating your long-term ICR target of 88%-90%? Yeah, when we... You know, related to 2024, really probably the difference in terms of us versus the, you know, 88%-90% is the expected continued favorability from, from workers' compensation. Now, we are looking at, definitely healthcare prices increasing. We're looking at increased pharma, pharma prices, et cetera. So that is contributing significantly to the year-over-year drop, 'cause we're not anticipating, you know, 15.7% NIM or, or 84.3%, insurance cost ratio going forward. So the, the increase in health prices, et cetera, are really driving that piece. If I could sneak in one more here. In terms of one of your competitors last week announced a partnership with Workday. Just thoughts on that announcement in terms of that competitive advantage and on new client sales for organizations with, you know, 100+ WSEs. So I'll take that. There is plenty of opportunity for all the competitors in the space. We are still less than 50% of quotes are against a direct competitor, and the opportunity to address that space from a TriNet standpoint is completely in our hands with our software and our vision of Denali and where it's going. Other competitors are taking a very different approach to that, and I believe that our expertise, our service, and our core technology will lead us to a very, very competitive place as you go upmarket over the next couple of years. But there's, there's plenty of room for everyone, and I welcome others to address that segment of the market as well. Great. Thank you. Thank you. Our next question comes from Andrew Nicholas with William Blair. Please go ahead. Hey, good afternoon. Hey. I wanted to extend my congratulations as well, Burton. It's been a pleasure working with you. I do want to ask a question on the quarter and the guide, though, on the sales force in particular. Sounds like new ACV growth is very good. January momentum continued. It—How much of that are you baking into the guidance at this point? And if there's any way to kind of translate some of those ACV growth numbers into the professional services growth guide, that would be helpful for us to make that linkage. Why don't you start? Yeah. So it, it's a great question, and there's a couple of pieces to that. First, the strategy around the sales force and sales leadership is working. We are up 19% in net new sales capacity. That's a pure capacity number. Efficiency is also up, so you're seeing dramatic increases year-over-year. January was way up, as we talked about, and that's against a really strong January last year. So there's a lot of momentum in the net new ACV and the onboarding of our new clients. Additionally, attrition is way down, and retention is incredibly strong right now, so we're entering the year from a very strong position. It is really nice to be ahead of the curve at the beginning of the year, which is a continued momentum from Q4. So I see this continuing to accelerate, and where we feel that we need to be really conservative is in the CIE or the hiring in our installed base. It's an area that is less under our control. It's an area that will come back. There was strong sales in tech in January. It will take a matter of time, but controlling the costs and being realistic about the unwinding of the net new ACV into profitability is built into the guidance, and I'll turn it over to Kelly. Yeah, I mean, I think the critical point, Andrew, is that at the level of ACV that we're seeing in January, we're really narrowing the gap that we've talked about between new sales and attrition of our customers. So, you know, to Burton's point, when hiring comes back, it's gonna be terrific, but we're not planning on that right now. And, in terms of what's baked into our forecast, you know, we were well aware of our January results when we created the guidance that we came through, so that is fully baked in to our professional service revenue forecast right now. But you're seeing the growth year-over-year. You know, if you dig into the underlying assumptions, we're assuming low single-digit price increases. We're assuming expansion of products and wallet share, as we're offering new things to the market. We're looking at our broker channel as another source of value there. So all of those things add up together to make our professional service revenue growth great. That's really helpful, and then maybe as a follow-up to that, Kelly, specifically, it sounds like you've narrowed the gap in terms of new sales relative to attrition. Is the expectation maybe not this year, but in 2025 and 2026, that gap can be positive, and then you can layer on kind of a normal CIE on top of that? I guess it goes to Burton's kind of medium-term- Yeah Ambition, search and go low double. Yeah, it's you get it exactly. That's really our goal, is to, as we've been investing you know, cutting back our back office to be able to, to invest in the front office and our sales force, we are trying to both narrow that gap so that new sales will actually more than cover attrition, and CIE will, will be upside. All right, great. If I could just squeeze in one more- Yeah ... on the worksite employee trend. So I know there's some noise there with the reclassification and the platform user access fee, but just under the hood, like, anything that you would say at the vertical level in terms of strength or stabilization relative to prior quarters as we think about maybe the things that are outside of your control? You know, in terms of... We saw some favorability from seasonal hiring in certain verticals. You know, as we're looking forward to January as well, you know, we're seeing a little bit of choppiness across them. No real clear signal at this point in time, and that's why we wanted to be conservative on our CIE forecast and really trend it towards the back half of the year. Understood. Thank you. Andrew, just to add one more point to that, we will continue to invest significantly in the sales engine and growth of sales reps. So you, the way you phrased it is exactly where we're headed. We need additional capacity. The additional capacity is coming on board, not only at the same efficiency but at a higher efficiency, and as long as that's the case, we will invest in the sales organization. We're doing that at the same time keeping overall costs relatively flat. So Kelly and the team have done an amazing job of reallocating dollars, keeping the service levels up, keeping referrals up, but we will continue to invest significantly into the sales channel throughout 2024, as long as the results continue the way they did in January. Great. Thank you, and congrats again, Burton. Thanks. Thank you. As a reminder, if you'd like to ask a question, please press star, then one. Our next question comes from Andrew Polkowitz with JP Morgan. Please go ahead. ... Hey, good evening, guys. First, Burton, I want to say congrats to myself, but also Tien-tsin has always admired the long run you've had, so I wanted to share his congratulations as well. And, Mike- Thank you so much. I'm looking forward to working with you, too. Yep, thanks. No problem. So I wanted to start with a question on the enrollment season. So obviously, we're through that, and I was just curious on what you guys saw as far as benefits attach rates. Were there any differences or improvements versus the last year or two? Yeah, it, it's a really good question. We're seeing slightly lower benefit attach rates. I think it really is a signal of what's going on in the economy right now. We're seeing a little bit of buy-down on plans as well, Andrew. But, but you are still seeing sort of the vertical differences that we normally see. Financial services has the highest benefit detach rate, tech's probably second, when we think about it from a vertical perspective, but they're all down maybe a point or two. Okay. Makes sense. Thanks for that, Kelly. And then, just one follow-up from me. I wanted to ask, you know, obviously, really strong ACV growth, and I just wanted to see what you attribute it most to. So obviously, sales force tenure has been improving for a while now, and you called out better client onboarding. You know, is there anything in the demand environment maybe to call out, too? Just basically the attribution analysis and that strong ACV growth would be great. So great question. As you pointed out, first is just pure sales capacity. We have more sales reps. Second is that, as we've talked about on earlier calls, the uncertainty in the business environment is driving people to the PEO solution. So complexity and uncertainty is driving people to go to this type of model. And then finally, the vertical focus is resonating in the market, and the technology backbone is providing the best service we have ever delivered in my tenure at TriNet. So referrals are up, broker channel is up, direct sales is up, and the market, I believe, will continue to give us this opportunity. And as you know, there's about 40% of the revenue or the ACV generated in Q1. We're pretty excited about where we are today to start ahead of the curve, and that's one of the reasons I'm particularly excited about how the year pans out. Additionally, you have the retention levels at record highs because people are appreciating the solution we're delivering. That's great. Thank you for answering my questions, and again, congratulations, Burton. Thank you. Appreciate you. Our next question comes from David Grossman. David! with Stifel. Please go ahead. Hey, David. Hey, Burton. Congratulations. Well, it's been a fun run, so thank you. It has. It has. Yeah. Thank you. Yeah. You're my oldest friend in the industry. You'll be missed. Hey, Mike's a lot nicer than I am, and he's smarter. Yeah, he couldn't be nearly as enthusiastic, so, Well, I didn't- That's probably true. All right. Well, we'll have a chance to catch up. Mike, welcome as well. So, just- Thank you. I know it's getting late here, so, thanks for squeezing me in. You know, I guess I have two questions. One is, there was a question asked earlier, I think, about the partnership with Workday by one of your competitors, and obviously, you know, went by buying, you know, the benefits platform and integrating that into your own business. And I'm just curious, you know, whether you saw this, you know, a couple of years ago when you initiated that transaction or whether you're seeing things different today. What's changed in the marketplace that may compel somebody that, as they scale and achieve adequate scale to self-insure, that they may decide to stay with the PEO more longer today than they may have thought, you know, two years ago? So it's a really good question. The way I see it is the complexity of the environment. If you can continue to scale the larger customers, offer them services, as well as an alternative insurance construct other than just the single-employer plan, which is awesome when you're smaller, I believe you can keep the customers longer. I think the challenge that people are finding right now is that if you're primarily people-driven, it's really hard to scale, and if you combine the people-driven approach with inflation, it's hard to maintain profits. So what we've been able to do is build a platform, use the scale of the platform in service of the customers, but not have to add 1 new employee for every 10 new customers. So you're seeing us break out of a model where our costs are climbing as the service complexity goes up because we're tweaking the platform every single day, and we have a vision for the future of the platform. And it's not only about running payroll, it's about the knowledge base and the knowledge engine that's behind it. It's about the ability to pivot based on the complexity of each customer so that you can grow with them. And you and I have talked about it, the complexity around access controls, the complexity around union payroll, the complexity around all types of other AS by the customers... is really important. What I'm particularly excited about with Denali is the API-first strategy allows us to connect with many partners out there, not tied to a single closed platform. Would you consider taking on somebody without offering health and workers' comp? I-- Well, Yeah. That's the vision. Absolutely. I think that what we're focused on is the professional service revenues, and what you're seeing is, in our forecast for 2024, we are gonna grow professional service revenues in excess of the gross revenue, which includes insurance. And that's what the barbell is about, and that's where some of this professional service revenues will come from in 2024. But as you get into 2025 and beyond, I absolutely believe that the right answer is to provide the insurance construct that the companies choose and have multiple insurance constructs for those clients. All right. Got it. And one other thing, and it's really more probably a cyclical question, but, you know, your MCR has been strong, you know, for multiple years now, right? And this is the first year that I can remember that, you know, we've faced these kinds of year-over-year declines, which is industry-wide, of course, it's not unique to TriNet. So is there anything that you want to remind us of that we should just keep, you know, keep in mind as we go into 2024 and 2025, that, you know, if we remain in this higher cost, you know, environment, you know, things that maybe we haven't seen for years, we should just keep in the back of our minds as we look forward? David, it's a great question. You know, as you know, we monitor very detailed health claims to make sure we're understanding trends, and that's one of the reasons we reprice a cohort of our business every single quarter so that we can see the trends and bake it into our insurance cost trends, et cetera. Really, as we think about, you know, things like COBRA, I think the COBRA we have today is very different than the COBRA that there was before because there's Affordable Care Act plans available to everyone out there, and so we do see less COBRA uptake than had historically seen, like during the financial crisis, et cetera. But I do expect as well there to be, you know, people buying down plans just due to the significant increase in healthcare costs. So they will be buying plans with higher deductibles, with, you know, more of a coinsurance type relationship, et cetera, you know, would be what I anticipate. But it's something we're watching very closely, especially with pharma costs, which, you know, obviously are getting a lot of press these days. Right. And sorry, just one last thing, just on workers' comp. Is there... You know, it sounds like you expect favorable experience in 2024. Did I, did I hear that right? Yeah. We are expecting, you know, continued favorable experience in 2024 related to workers' compensation. Will that be just less of a tailwind in 2024 than it was in 2023, or is it, is it a tailwind year-over-year? You know, I think it's less of a tailwind. We had some very favorable prior period development in 2020, 2023. I do not expect it at the same level as we move into 2024. We tend to be relatively conservative reservers in general, as we're looking at emerging trends in our workers' comp book. But I think, you know, our workers' comp team is one of the best in the industries as well at working with our clients and making sure we're ensuring safe workplaces, and I think that gives us a competitive advantage as well. Right. All right, guys, well, thank you very much, Burton. Good luck, and I'm sure we'll be in touch. So, thanks again. Yes. I look forward to seeing you. Thanks. Bye-bye. Bye-bye. Thank you. This concludes today's question and answer session and today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.