Automatic Data Processing, Inc. (ADP) Earnings Call Transcript & Summary

Good morning, everyone. This is Tien-Tsin Huang. I cover the payments processors and IT services sector at JPMorgan. And really excited to kick off day 2 of the TMC Conference with Automatic Data Processing. With us from ADP, we've got the President and CEO, Carlos Rodriguez, back. So super happy to have Carlos. Good morning. Hope everything is great.

Everything is great. Thanks for having me.

Yes. No, it's an honor to have you. So we have a fireside chat plan. We'll be taking questions from the Ask a Question portal, so I'll be watching that here as we go. Feel free to ask away. Otherwise, we'll get right into it. Carlos, as with the obligatory question on the macro, I know you've got a really great view of the economy. I'm curious, where do you see room for optimism? Where do you think caution is warranted given where we are in the recovery?

I think there's probably more on the optimism front. If you're medium to long term, I think it's more about optimism than it is caution, but clearly -- I mean, let's get the cautions out of the way first. There's a lot of -- in the restarting process, there's a lot of disruption obviously. We're all seeing the supply chain stuff. We saw even the last employment report from the BLS that it was a little bit disappointing, which I think is really more timing or some kind of seasonality thing. So clearly, there's difficulty, I think, in getting such a huge economy back up and running. But again, if you're kind of more medium term, I think that it's hard enough to be optimistic when you see the amount of stimulus put into the economy. From a -- just from an impact on GDP standpoint, just kind of mathematical, it's hard to not be optimistic. Especially for a company like ADP, the one thing that's been kind of consistent over -- when we go back and look multiple decades at our bookings and pace for control and really a lot of the key metrics of the company, you would expect, since we're tied to the employment sector, the employment sector is tied to the economy. And when you have a strong economy and you have strong GDP, things go pretty well. And again, subject to some of these kind of ups and downs and volatility, I think that it's hard to imagine the labor market isn't going to come roaring back. I mean we are seeing, and I think I mentioned this on the last earnings call, huge increases in job postings in our HR systems of record. So this is not necessarily the people paid yet, but these are companies looking for people. And then we also have a screening business that does background checks, and we see similar increases there. So to me, it's really a matter of when do those people get on the payroll. There's no question -- we're hearing anecdotally clients talk about difficulty finding people, but that will sort of self out also. It's the old story of kind of supply and demand and the way the economy works. So we're pretty excited, pretty optimistic. I know the Fed is on hold here for a while. But again, if you're medium term, as you know, we benefit from higher interest rates. So a little bit of a -- a whiff of inflation is not such a bad thing for us because I think eventually it will create a pickup in interest rates, at least in the medium-term interest rates. And then the last thing I would say is the background in terms of politically for us, which we try to avoid getting into the politics of stuff, but it's an administration that I think that is probably more supportive of employment, let's just call it regulation or public policy that I think uses more government input into employment and work and so forth. That net-net is a real positive for us. So we are pretty happy about that. It doesn't make a huge difference. I mean we've made it through multiple changes. Republicans, Democrats, it doesn't matter for us for decades. But on the margin, it's -- I think it's helpful, right, to have that as a backdrop where people are going to hopefully be kind of looking for help with what might be a more complex environment for employers. So we welcome the Biden bump, which is what we're calling it here internally.

Yes. In the long period of time I've covered ADP, that's one thing I've learned, that you think through the cycles, you get benefit of outsourcing, but it does feel like it could swing a little bit more in your favor given what you just said there. So before we get into those kind of details, I thought just to level set everyone here, March quarter results were better than we and, I think, you guys had expected, Carlos. So maybe quickly summarize for us 2 or 3 things that stood out as being better than expected.

I think the #1 thing was really bookings, and it's really the leading indicator of future growth for us. As you know, we're a recurring revenue model, so our business -- our revenues don't drop like a rock like maybe other businesses that are selling kind of one at a time, which is a great thing in a downturn like we just went through. I mean, we basically have positive revenue growth still despite being connected to the economy and connected to employment, into the labor markets. And it's really because of the recurring revenue nature of the business. So on the way up, for us to get back to where we want to be in terms of revenue growth, we really need the bookings to be really strong and we need retention to stay strong, which it has been strong. And so that really was, I think, the most uplifting thing for us to see that demand is there, and I think it's a combination of all the things we just talked about. It's the reopening of the economy. It's maybe a little bit of the backdrop with the environment being a little more complex for employers. All the things around PPP loans and tax credits, it's not been an easy environment for employers, and I think they're looking for help. You combine that with a number of states that had already opened. So now of course, as you know, in the last couple of months, it's pretty much complete opening across the entire country. But even in the first quarter, we had a large segment of the country that had reopened from a business standpoint. I think we got some tailwind from that as well. So that really would be the thing that I would point to as being kind of the most satisfying, most uplifting thing for us in terms of future growth potential for us is really those bookings coming back as strongly as they did. The retention, which has really been kind of at record levels here for several quarters, we've had this thesis that some of it is probably a tailwind from inertia in terms of people not making decisions. But frankly, we haven't really seen -- including in the quarter, in the first calendar quarter results, we really haven't seen any drop in retention. So that's also incredibly satisfying. I think some of that is related to all the work we did during the pandemic to help clients. And I think we build stronger, better relationships. Our NPS score stayed strong and, in some cases, continued to rise, which is not an easy feat during the pandemic. So it's really hard to tell how much is the tailwind from inertia versus our own doing, but we're pretty optimistic about that, too, because we think we could hold on. So hopefully, most of this retention gain, which when you combine that with strong bookings growth, I think really bodes well for revenue growth in the future.

Great. So let's dig in on retention a little bit. Like you said, record highs. Investing before this whole structural versus cyclical piece, what's driving it? I know you've moved a lot of your clients onto strategic platforms as well. So talk about how you think about this retention as the world reopens here. And maybe competition picks up again, but you also have more clients on strategic platforms with higher engagement as well. So have things changed post pandemic?

I think that it's a great point because most people don't go back that far in terms of trying to connect the dots for ADP. And I did go back and look at our retention rates back in kind of '15 and '16. That's around when, if you recall, we had a combination of a couple of things that created some headwinds for us. One was ACA. We had a huge surge in volume which was difficult for us to keep up, and I think that had an impact on our service levels temporarily. And we also, at the same time, were migrating many of our clients from our legacy Workforce Now platform to our current version of Workforce Now. And that had some -- I think, some -- particularly when you combine it with the ACA activities, I think it had a negative impact on our retention back then. So the good news is that it feels like the structural potential for retention is higher than maybe we've seen in the last 2 or 3 years, and it feels like we're experiencing some of that, and we don't intend to give up on that. So -- but again, as you know, there's a lot of moving parts here. There's also the strength of the economy, the level of bankruptcies because we have a downmarket, small business segment that can be subjected to challenges that when you have, for example, like a recession, the out-of-business can affect them. But there's no recession on the horizon. And I think the structural issues around our major account business and our downmarket business around migrations is really behind us. And so that, I think, raises my optimism that this retention level is hopefully sustainable, if not at exactly the same level but somewhere close to it. So we might have a little bit of giveback if there's kind of a return to normal of the level of bankruptcies, which I don't know if you've been watching those numbers, but it's been pretty -- it's really completely counterintuitive that bankruptcies declined during the pandemic. But that's what happens when you have massive government stimulus and support to the economy, which is absolutely appropriate. But as that kind of gets withdrawn and you go forward, call it, 12 to 24 months, may have a little bit of giveback there, but that's only a portion of our business. And I think in some of our other businesses, we're feeling pretty good. When we look at our client satisfaction levels and we look at kind of the historic potential, if you will, of retention, it gives me a lot of optimism.

Good. No, it's good to hear. And so I know we just -- you just touched upon a little bit as well with some of the new strategic platforms. I wanted to ask you, Carlos. I think I always enjoy your perspective on the heavy investments you've been making on the tech stack at ADP. And I know that everyone is going through this digital journey, a cloud journey, maybe the pandemic has accelerated some of that. But talk to us about sort of this journey to modernize a lot of your platforms. I know it started many years ago, but you've got a plan going forward, so catch us up on where you are in the journey.

Sure. I mean, I think that, again, if you look at ADP over the very long term, I think you kind of get an easier picture than me. People tend to look at things in very short increments, and I think they get confused and they don't have the benefit of the entire picture. And so ADP has been through multiple changes in technology because we're 70 years old. So we went from no technology to multiple changes in technology because technology has always been an enabler to what we deliver to our clients, right, in terms of the outcomes. We're a provider of software technology but also an outsourcer in terms of we take on responsibilities for things like compliance. And we deliver what we consider to be "service," right, which is we solve problems, which we did during the pandemic. So we've made it through these multiple changes. And I think cloud technology is really just the most recent change. And every time there's a change like this, it looks like it's the biggest change ever. And by the way, it's always a big change, and it always creates more opportunity. And it hopefully also creates opportunities not just for bookings and for expansion of the business in terms of growth but also back office, right, rationalization and efficiency, which is what has benefited ADP for decades now, right, leveraging technology to gain efficiency as well, not just from a frontline client experience standpoint. So we really saw -- and it's been definitely a multiyear process, as you described, and a multi-hundred million dollar investment, but it's not really the first time we've done it or that we've been through it. And I think the company has a long history of successfully getting through this. And the way we've always done it, which we're doing it this way, is we kind of go through the process first in the small business market, then we went to mid-market. Now we're in kind of the upmarket and international. And we do it that way because we have an existing client base, and we have to bring our client base along with us. Like we like the fact that we have $15 billion in revenue. We like the fact that we have strong cash flow, that we've been paying a dividend for almost 50 years. And so we definitely want to take advantage and adopt technology for the benefit of our clients but also for the benefit of our back office. But it's very important for us to bring our clients along with us. And in some cases, we were -- I would say we were not moving fast enough. In other places, I would say that we moved pretty quickly, and I think we're a little bit ahead of the game. And as usual, you can't get it perfectly right. But I would say in the downmarket, in our small business division, I'd say we were pretty far ahead of most in terms of providing, for example, capability to do payroll on mobile devices. I mean today, that's kind of a given, but in 2009 and '10, it wasn't so common. So -- and of course, there's other places where maybe we haven't moved as fast as we should have. But one thing is for sure, we did make the investments, we have made the investments and we're closer to the end of realizing those investments in the beginning. So that's part of why I'm so optimistic because if we were having this conversation 5, 7 years ago, we'd be -- we're already starting some of these big investments we've made in cloud, but the conversation would have not been as exciting because we knew that some of these development cycles are -- which I don't think we're the only company, take some time. And then it also takes time to move all of those clients onto those new platforms. Now we've made incredible amounts of progress in a substantial part of our business, and we still have work to do. But I think we've kind of fully adopted, if you will, the potential from technology, if you will, particularly cloud and public cloud specifically.

Yes. Yes. I don't want to take for granted that a lot of heavy lifting is going on behind the scenes, that you've been doing that in the background and still working through the pandemic and everything else. And I think you still have the payroll in the cloud, the tax engine in the cloud. All those things are happening, which sort of leads to my next question around bookings, Carlos. Just as you've gone through this, you're still working, of course, with more to come. Do you feel like the bookings performance should improve? Or perhaps maybe the visibility is a little bit better with bookings recovering as you go through some of these updates?

Well, I mean part of the reason why we did these -- I want to them updates. Call them whatever you want. But these investments are a combination of 2 things. One is we clearly want to help our existing clients have a better experience and provide them better solutions. It's also about growing the company. And so you could imagine that part of our strategy around the investments we've made in technology was around creating more growth opportunity for us. And we've seen some signs of that. First of all, if you get back to our downmarket business, our small business division, I mean you really saw that growth pick up substantially when we first made the investments in the next-generation platform, which we call Run Now, but it was a next-generation platform at the time. And then when we finally moved all of our clients onto one single platform, the growth really, I mean for us, took off. I would have to -- I'd use that word, took off. And we frankly never looked back. Like, we're still having incredible success in that business. Now in the mid-market, where we now have finally completed our migrations and we have a modern tech stack with now, as you mentioned, our new Next Gen Payroll engine, combined with Workforce Now, which is really a Next Gen platform itself, I mean that combination now, we're seeing early signs of getting incremental business that we wouldn't have otherwise gotten. And so we thought we were pretty good before, but as always, you're trying to get better. And part of the investments we made was to kind of broaden the addressable market for us in some ways. And so obviously, we have some time in order to make sure that we get the parity in terms of feature functionality on that payroll engine. But as we're getting close to that feature function parity, we're also beginning to see that it's opening up the market, I think, to a broader set of players than maybe we were seeing before. So as an example, I think I'll use kind of -- so I don't say anything different from what I said before. We saw -- I believe it was in the first quarter that we said and I think it's still true that somewhere around 25% of our bookings in terms of new logos in the mid-market are logos that we believe -- again, we haven't scientifically gone through each single one, and there's no way to prove it, but we think that those are incremental to what we would have otherwise sold have we not had our Next Gen Payroll platform combined with Workforce Now. So that's very encouraging. And it's same picture in the upmarket, where we're still in very early stages in terms of implementing kind of our first dozen clients or so. So there's still a lot of work and there's still a lot of challenge in front of us in the upmarket but, again, similar signs where you see us getting in the door and having sales conversations and actually getting sales of clients that we otherwise may not have sold if we didn't have kind of the new modern tech stack. And so some of it's feature functionality, but a lot of it is really just about modernization, I think, which is the way you refer to. And I think that overall creates a bigger opportunity for ADP. So having said that, it's easy to forget, we're not a startup, so we get excited about incremental improvements in bookings growth. We'd love to have our bookings double, but that's really not right -- when you're close to the size that we are, it's really just about feeding the machine, right, and continuing the growth that we've had for years and years. And I think we can do that with these new products that we've built.

Yes. And look, with whatever $6 billion bookings, maybe these are big numbers, so I think we're obviously tracking the growth very closely. I'm just curious what -- you mentioned the new logos is always an interesting stat. And I think you introduced this balance of trade, the concept that I like to talk to investors about. But do you think that there'll be an opportunity to change -- turn the dial and improve that balance of trade over time, Carlos?

I believe so, that's exactly what our goal is. And so we are very focused -- as you know, we're focused on a lot of them. So ADP is focused on -- because of who we are. We can't just focus on one thing, right? So we're focused on margins. We're focused on our capital structure. But we're very focused now also on growth and particularly on logo growth because it's really the key to the future for ADP because we have an enormous opportunity to cross-sell additional things and increase share of wallet. But we really have to continue to win head-to-head in the market in terms of new logos. So it's a very big focus for us. It's why we built these new products. And I think we're seeing some signs, right, that we're making some headway here, a combination of the products but also just becoming, I think, more focused, right, on that. So as an example, you can do things with your sales force to create focus, let's just say. And that has worked out well for us as well in terms of helping us and in terms of this balance of trade cost that we're talking about now. And so one of the, again, challenges for us because of our size is these are always kind of tricky conversations. So we have had some competitors who, at various times, we've had a negative balance to trade. And some of that is because if you consider a balance of trade is how many clients do we take from them versus how many they take from us. There's a few now that are big enough in terms of competitors, you know who they are, where there's no excuse. Like we have to get to a positive balance of trade. There's others in earlier stages of their development where if they have 1,000 clients and we have 800,000 clients, it's hard. There's no -- I'm not making excuses because my Board doesn't like excuses either, but it's a little harder, right? Like when someone -- when a competitor of ours goes out to the market to try to hunt for a client, all I have to do is walk around, and they stumble on to ADP clients. And for us, it's a little more challenging, but we're 100% laser-focused on that. And I think you'll hear it more in our language, in our discussion the concept of balance of trade and also new logo growth, which is a big focus item for us. And we were seeing pre-pandemic, I think I said this on one of the earnings calls as well, including the earnings call right before the pandemic hit, that we're beginning to see in the mid-market specifically some improvement in our balance of trade. And then I think all bets are off after -- by the way, the balance of trade didn't deteriorate. But when your overall bookings are going down, who cares what -- I mean, I guess we still care it didn't deteriorate, but it wasn't the #1 metric we were focused on, but it is at the top of the list again now.

Yes. No, good. I remember you making those comments, so it's really stuck out for me. And this has led to some questions that people have been asking here from investors around pricing. And just give us an update on pricing given what you just commented there at this point in the cycle. And is pricing a lever that you can pull, Carlos, especially with rising rates, to maybe drive demand in your favor?

Yes. I think, listen, it's a good question. We have an industry that I think is, I would call it, orderly. And for sure, as you know, price is always a lever. I've never been a believer that if you want to be fair -- I think we are in fair margins and we have fair pricing, and many of our competitors do as well. There are plenty of our competitors who try to undercut us because, again, typically, in the early stages of their growth development, that's a way for them to build market share. And sometimes we have to respond to those events, but in general, we like earning a fair price and earning fair returns for our shareholders while we also deliver value to our clients. And that's really our #1 goal, not to engage in any kind of short-term, whatever you want to call them, price wars or -- and so forth. So I think we have a strong balance sheet. We are -- we have a lot of operating leverage. And so I would hope that no one ever wants to engage with us. Because if somebody wants to engage with us in that kind of tit for tat, we will win in the end. But the good news is it's really the industry really focuses on the value that we're creating for our clients, both us and our competitors. And that's really how we all sell. We all differentiate from each other based on our technology stack and, frankly, for us, based on our service and implementation capabilities. And there is -- none of the models are right or wrong. We all have different -- I like -- that's why I love this industry. This is a classic example of people finding ways to differentiate themselves and not just building the same car and trying to sell it because it's a different color, right? Like we have, I think, good differentiation in terms of reputation, in terms of capabilities, in terms of product, and I think that's really the way to compete. And then hopefully, you charge a fair price where you earn fair returns. I mean our margins are not egregious, but we're also not losing money. Like, there are some industries and some businesses where you wonder if they're ever going to make money. I think it's pretty clear, we know how to make money at the prices we charge.

Yes. No, very clear. Very clear colors, and I respect that. So just to wrap on that, with rates rising, it's been a while since we've seen or at least the potential for rates to rise, we've been in declining rate environment for a long time. And you did put in the very smart, laddered approach. But with rates rising, of course, there's earnings power from that there as well. But that is a form of pricing that's not transparent maybe to the -- all the clients. So does that change your thinking around go-to-market and prices in general?

It might when that day comes. So I just want to always leave yourself optionality here. But I would tell you that in the laddering , this is a classic ADP, right, we're trying to run a business here for the long term, not "try to time" anything including interest rates. And so it helped us a lot to be laddered on the way down even though it doesn't feel like it helped a lot because I think we had an over $100 million decline in interest income, but it could have been a lot worse, as you know, if we had not had a laddered portfolio. And now on the way up, I think we're going to get definitely help and tailwind from interest rates rising like we did for the prior couple of years, right, before the pandemic. I mean I've been here now, it's hard to believe, 10 years in my job. So when I first went into my job, we were still on the downturn in terms of interest rates and the impact that was having. And we had, I think, 1 year a $90 million headwind and in the next year, we had a $50 million headwind. And then eventually by 2017, 2018, as interest rates were gradually rising and we kind of anniversary-ed all of those investments from kind of the great recession at lower interest rates, we're starting to get a little bit of tailwind and a little bit of help. And then we could have made a bunch of forecasts and made a bunch of pricing decisions based on that trajectory, and then we would have been very wrong when the pandemic hit. And so I think we want to be a little more disciplined in terms of if interest rates were to structurally rise to kind of where they were, which I pray for every night, 15 to 20 years ago, if you get a Fed funds rate at 3% to 4%, which is not impossible but seems implausible right now, but if that were to happen, and we had $30 billion in balances like we have compared to $15 billion 10 years ago, you'd have to rethink everything. We'd be so profitable that some of that obviously is for our shareholders. Some of that is for investment. Those are decisions that I hope we face someday. But it's pretty clear -- I shouldn't say clear because it seems like I'm forecasting interest rates, but there's more upside than downside, it would seem for us. And I think the math I've used is, it was 2008 or '09, our average yield, and it's almost impossible for you to believe, was 4.5% on -- I believe our balances were somewhere around $15 billion or somewhere below that. Now our balances have doubled and we're at, I don't know, 140 -- you probably know, I should have it in front of me. But I mean, it's crazy in terms of what's happened in terms of the decline. And you can see what's happened in the profitability of ADP. It's gone up, and our margins have gone up since then. So that can just give you a sense of what the upside potential is if we happen to get lucky and we get tailwind from interest rates. But that's not part of our -- not the way we plan the future at ADP.

Yes. No, look, there's a lot of earnings power, and you guys have managed through that cycle, thanks to the ladder approach and thanks to your focus on that, which I had to ask the question just around given what you just said on margin philosophy and the importance of margin expansion in any rate environment you just sort of suggested it. But given the need to invest and position the company for the longer run, has the philosophy changed at all on weighing margin expansion versus investing, Carlos?

It goes back to the -- ironically, it ties back -- like a lot of things do, there are -- things always tie back to each other. So the discussion about technology, we have made -- the investments we've been making in technology are not just about increasing bookings and increasing value for our clients, but it's really in the back office from an efficiency standpoint. So we've had kind of these digital initiatives, if you will, that have led to -- again, we talk about them, and I think we probably need to talk about them a little bit more. Some of them are big, but it's a lot of also small ones, right? When you take out friction in terms of requests for service from clients that can be automated, right, which is very easy to do today with technology, we've made enormous progress in implementation. Like we would have never, 10, 15 years ago, thought about automated implementation. And we have a substantial portion of our small business clients are now implemented without any human intervention. And so -- and as you know, from our new roll product, which we call Roll, that we've rolled out, that's also a fully automated, fully digital platform. So I guess the answer to your question is my optimism around margin isn't any diminished even though I would prefer to have interest rates helping and a strong economy and pace to control and some of the things that we've had as headwinds. But again, I would just look at the facts. Like if you look at the profitability of ADP throughout the last 5 years, including throughout a pandemic, I think it tells you that the company has a lot of operating leverage but also a lot of opportunity to still create efficiency while still maintaining strong levels of client satisfaction and strong bookings because that's the #1 -- the key to this business model is strong retention and strong bookings. And that is the ultimate way to drive strong margins. But it doesn't hurt to digitize and, I think, to automate and to create efficiency, which is what we've been doing now for probably -- I mean we've been doing it for decades, but it's been a step change for us in the last 3 to 5 years as a result of some of the technology we've been able to apply to our business.

Yes. Yes. With 5 minutes left, let's talk about some of these new products, if that's all right. We get a lot of questions on this on-demand payroll. And we have some of the companies that are probably talking about it at the conference. You have this paycheck on-demand product. So how does that work? How important to the priority is that for you, Carlos? And how do you make money on that?

I think like a lot of things, when they are in the early stages, it's hard to know exactly what the adoption rates will be and when, but I think we're of the mind that there's no question that there's value in on-demand payment and in flexibility in payments. And all of our modern platforms are built in order to -- I mean, ironically, when we made these investments, call it, 5 years ago, we talked about looking forward, right, and having a good sense of where things are going. We talked about that at one of our industry Analyst Days, that you may have been there, where we talked about that was one of the main theses, right, of our investment in our -- is greater flexibility in terms of payments. So somebody wants to get paid every day, they should be able to get paid every day. The problem is that like a lot of other things over the course of history is about what's the right assumption around pace of adoption because, as an example, an on-demand payroll, one of the challenges you have is you have a funding -- what I would call a funding or credit challenge because if -- using an example of a small business, we were having this discussion the other day. You go out and you talk to a small business who has, I don't know, 20 employees, and they're competing to try to get talent. And so somebody tells them, hey, you can pay your employees every day, and that will make it more attractive for you to hire people. Okay. Great. Now I can pay people every day. The problem is do I want to pay every day. I mean it's a small business -- because most small businesses, midsized companies and large companies have -- it's old fashioned to talk about cash flow, right? Like because we talk about earnings and we talk about accounting and GAAP. Well, the real world works based on cash flow. And I can tell you that I don't think that's going to be an overnight problem is going to be resolved, which is what is the funding mechanism. And I think what's happened is some of our competitors are experimenting with either doing it themselves or through -- we actually do it through partners, where you have what I would call a funding partner, which really takes what it appears to me to be a credit risk, right? So if a client wants to pay like they normally do, once a week or every 2 weeks, their normal pay cycle, if the employee wants to get paid sooner, someone's got to front that money. And the question is who's going to front that money and whose balance sheet is that risk on. And of course, you can sign promissory notes, and that's a different business model than ADP's business model. And as always, you never say never. But right now, we are working with third parties. We have the technology capabilities, but we're kind of watching -- there's also, by the way, a lot of regulatory and legal issues that you have to be careful with. Is it a payday -- is it payday lending? Is it -- are you -- the fees you're charging, if you're charging fees, are the users', right? Even if they interchange fees through a pay card, if it's a pay check that's being deposited on that pay card, and then you're charging fees on that card, that could be viewed as users, right, in terms of the fees are too high because people expect to get their paycheck free and clear, right? And that's -- in most states, there are laws that require you to provide somebody a cashable check where there's no fees involved. And so there -- I think there's just a lot of questions that still need to be resolved. But I will say there is no question, whether it's in 6 months, a year, 5 years or 10 years, that more people will be paid in more flexible ways, and we've built the technology and the capabilities to do that.

All right. No, that's great to hear. It's good. I think we don't quite appreciate some of those challenges, so good to hear you go through it. I think we're out of time, Carlos. I wanted to ask you about work market. I wanted to ask you about Wisely and what's going on with financial wellness, but I think we'll have to save that for next time. So hopefully, we'll get you back sooner rather than later and for sure in person I hope as well, Carlos.

Thank you.

So thanks again for the time and spending a few minutes with us this morning.

I appreciate it. Thanks for inviting me.

Great to see you, Carlos. Thank you.