Paychex, Inc. (PAYX) Earnings Call Transcript & Summary

This is Tien-Tsin Huang. I cover the payments processing and IT services sector at JPMorgan. Really excited to have Paychex back at the conference. So John Gibson, President and CEO, is here with us and the rest of the team, Bob is here as well. So thank you all for joining. I've respected and watched John in action for quite a while back on the services side. I know you've done a lot on the international front. We've talked about PEO and the acquisitions that you've done there, and I'm excited to talk to you about the Paycor acquisition. So we'll go through the questions that we've gathered from the investor audience and -- and if there's any question at time at the end, I'm happy to take them. But let's get by to it, if you don't mind, John.

Sure. Absolutely.

Thanks again for being here. So I have to start with the macro question, right? Paychex has got an amazing view of the economy from an employment standpoint. So give us a state of the union on what you see across your SME base?

Yes. Well, the state of the small business labor market is relatively healthy and stable. We've really not seen any signs of -- recessionary signs. It's interesting. I was just looking today, number of employee adds are higher than the [ turns ], good punch in, punch out data on a daily basis. You look at our index, which is kind of the parameter that is kind of -- we kind of use in April that actually ticked up. So we actually saw employment acceleration in the under 50 market, which probably surprised a lot of people. I think when I look at the market overall, and I've talked about this a lot, when we came out of the election, there was a lot of optimism. But when we looked at the data, we didn't see people acting on that optimism. So we weren't seeing acceleration that one would have expected. And then when we get through liberation and all the talk of the tariffs, we didn't see the deceleration as well. So we're not seeing it either in the hard empirical data that we monitor on day. We pay one in 11 private sector workers in the U.S., have one of the largest HR outsourcing businesses. But we're also not seeing it in our engagement with our clients in terms of our clients engaging and trying to think about either downsizing or retrenchments. And I think some of it has to do with tension we talked about it. Small businesses are highly resilient. And when you look at what they went through during the pandemic, where a lot of them let go of employees and then struggle to get quality employees back. So when we tend to talk to our clients, they're all about how do I retain these employees because we know how difficult it is. So I think even in a shallow economic downturn, I think small businesses are going to have a more stable employment than I think we've traditionally seen because of that concern.

Yes...

Again, no signs of recession at all.

No, which is great. And you have a great view on it, and I appreciate that comment you just had there, John, on the SMB because it has that stigma, I think. And I think the resiliency is probably underappreciated. And I think we've learned a lot since COVID. I would think you would agree with me on that. But you've been CEO now for what, 2.5 years or so. I'm curious just from a priority standpoint, given all the learnings we've had and what you just went through, has that changed your priorities at all? I'm curious if you've reordered them in any way?

Well, first of all, you said 2.5 years, and it seems longer than that...

Yes. Time...

It must be CEO years are like dog years, I guess, everyone is like 7. But the fact of the matter is, as you know, I've been part of the senior executive team for well over a decade and have been very actively involved in our strategy and kind of how we've repositioned the company from, as you know, a kind of a traditional services, service bureau type of company to really a tech-enabled company, which has really bolstered our advisory services. So I was part of that strategic move with the company. The company has only had 4 CEOs in its 54-year history, and 3 of us sit on the Board. So consistency, steady growth, steady margin expansion is kind of the Paychex way. So...

Hallmark.

Yes, it's the hallmark. So I don't intend to change that anytime soon. So it seems to be working.

Yes. I mean like you said, 3 of the CEOs sitting on the Board. I mean, having -- even with Mr. Golisano and the team, I think it's stuck with what's worked and I've always respected that. So just bringing it up. You mentioned service and how the company has evolved and having tracked it for over a couple of decades it actually has quite changed a bunch. As an outsourced provider of HR tech, right? You're competing against other service providers. You're also competing against software players. Some of them are going to be here at the conference, John. So can you tell us, as you see it on the ground competitively, has that changed at all? Whether it's against your traditional players, maybe more on the in-house side? I know SMB is a little bit difficult with software, but there's a lot of do-it-yourself players that are out there that are attacking at it from different angles, including some of the payment companies that we cover. But what do you see? How do you evaluate the landscape?

Yes. Well, look, I think there's a lot of ways to attack a very large market. And what customers want and what different segments wants differs by not only the segment but by the owner and what they're looking to do with their business. It also differs from their life cycle. So did you mention do-it-yourself. We have sure, payroll do it yourself, a digital-enabled software. So when you look at it, what we've really tried to put together is the most comprehensive, flexible and innovative set of HCM solutions available in the marketplace. So that regardless of whether or not someone is starting up and we can talk about small business startups and there's this entrepreneurial spirit. There's more businesses starting today than they were 20 years ago. All the way now to the largest, and we're really excited about the Paycor acquisition because it extends us further up market. So we estimate now with the extension of about our $10 billion TAM with Paycor, we got about $100 billion TAM. Then you lay on top of that, our advisory services. And that's been an area that we've made a lot of progress and investment made some acquisitions to extend our capabilities. Because what we're finding clients of all sizes are wanting is not just the technology to enable their efficiency and enable their engagement with their employees. But HR professionals, owners of businesses, CEOs are taxed today, and the complexities of the employee-employer relationship are as difficult as I've ever seen them in my entire career. And so navigating that -- so you can automate the task, but you can't automate the strategy and how am I going to deal with this engagement issue that I'm having with finding qualified employees. So that's where our advisory services comes in. So now you layer world-class technology built for any type of situation. Then you layer on top of that the ability of the advisories. And now you throw on top of that our massive data set, and now the capabilities of AI. Now we can actually present solutions to our HR advisers proactively it reach out to the client, talk to them about retention or engagement strategy. So I've never -- look, my view is from an industry perspective, as you said, I've been in a long time. I've seen the point solutions. I've seen the one massive ERP. I've seen open systems, close systems, do-it-yourself, total outsourced, global outsource, seen them all. EORs come in, went out, came back. They're back again. I've seen the whole evolution of trying to manage employees in a global scale. And it's only gotten more difficult, more complex in the technologies that can get applied to it have never been greater. So I'm extremely bullish on the industry. I'm extremely bullish on where we're positioned. Like I said, I think we now have one of the most comprehensive -- there may be somebody would debate me on that, but I do believe now we have one of the most comprehensive sets of products and solutions for any company of any size.

Well, one argument you can make if we're doing that debate would be retention. And thinking about retention and I think having followed the name so long, it feels like we've been at an elevated level of retention for quite some time. And you just talked about the advisory piece, the data, the AI and everything else. But what would you attribute this higher level of retention to? Is there a rank order in your mind for that, John?

Well it's interesting. You would say our industry is more competitive than ever. You would say there's all these -- all these start-ups. There's all of these tech start-ups, all these people eating away. We have the best retention we've had in the company's 50-some year history. Why is that? It's fundamentally value. It's value based. The fact of the matter is what I said before. Because of the breadth of our products and services, we can flex with the client as their needs change. So we start off with a startup company, and they continue to grow. We have products and services that do that. They want to expand their reach to other states, other geographies, we can help them do that. So I really think what customers at the end of the day, what they realize is they come back, they've got a great technology platform at Paychex, solid foundation. They've got great support on that technology, being able to maximize utilization of it, how they're using it. Their employees taken care of very well, which is important. And then I think we offer these advisory and the ancillary products and services that make them very sticky. So I think it fundamentally boils down to once we get a client into our ecosystem, they stick, they stay and they buy more. That's our growth engine. And it has been for 54 years.

Yes. So let's then dig into Paycor, the thesis on buying Paycor now, given how well like you said, everything is going. You did mention you're expanding the TAM to $100 billion. I appreciate that. But what does Paycor bring that you couldn't develop or go after on your own?

Well, I think we could have gone after anything on our own. We have a great balance sheet. We have a lot of ability to deploy capital, but you always have to make that -- a build versus buy decision. And we thought it was a great opportunity to pick up a great asset in the industry that was going to give us a lot more capability further upmarket than we've traditionally played. And that was an area we were investing in. So that's very typical to what we do. Whether you go back and we were working on our technology solution, our digital solution on the low end of about 14, 15 years ago, an asset came to the market, SurePayroll, we acquired that asset, leveraged that asset today, continue to operate that brand. We had our own PO or HR outsourcing division. It was predominantly concentrated in a few geographic states. When I came in, that was an area we really wanted to expand and grow. We were growing it organically, as you recall call it, a very good clip, double-digit rates. But when I looked out and said, how is it going to take us to get a national footprint? And then lo and behold, the largest privately held PO came available at a relationship with Mark Perlberg who was a great gentleman who just passed away, greatly missed from the industry perspective. But we had a great relationship, and they were ready to transact and instantaneously, we became a national HR outsourcing provider with that acquisition. So it was a timing opportunity an area we were already strategically wanting to go and acquisitions allowed us to accelerate that. And so the Paycor acquisition is a great acquisition. We already had nice size in the upmarket. This really strengthens our capability upmarket. It also extends our product suite in ways that we were looking at. So they have some great things and more complex talent management and workforce management, particularly very complex time keeping with larger companies that now we can take into our ecosystem. And then there's a tremendous cross-sell opportunity for us to take all of our products, all of our advisory products, or all of our other products and move it into their ecosystem. Then you add to that, they had a strong relationship with the broker channel. We have a stronger relationship with the CPA channel and banks. We had a broker channel program, not as large as theirs. And now we've got new go-to-market capabilities and referring partners. So very excited. We completed the deal a week later, they had their Paycor Connect Conference, which was for all their top customers, and their broker channel, we went down there. We had not even started cross-selling at that point in time because we're still in the process of training the sales organizations. We had the conference in 2 days later, we had our first PO sale. And I know from being there and talking to the inside sales team, they're clamoring for the ability to have the advisory services. Because what they're hearing from their clients is that they've got the technology support that they need, but the HR organizations are extremely stretched. So they're looking for additional support. And that's where our managed services. That's where our HR outsourcing solutions go in. So they're really excited about being able to -- it actually created some partnerships with some other firms to be able to meet that need. And now we're going to be able to really come in and I think really offer a full suite of services to their customers. So you increase your TAM $10 billion. We probably sped up our road map by 5 to 7 years of what it would have taken us for us to get there. You establish yourself a new go-to-market partnership network that extends your referral network. And then you have tremendous cross-sell opportunities, both their products and our client base and our products and their client base. And we just think it's -- it's like I said, we're going to be better together. I believe that.

Yes. No, so you went through the complementary distribution and the cross-sell opportunity there, John. Just thinking about, for those maybe less familiar, you'll have platform decisions to make and some branding decisions to make. Of course, this integration have done. You've done a good job, of course, with Oasis, and you mentioned SurePayroll back in the day. How risky is this acquisition in your mind, whether it be from a cultural platforming technology execution standpoint?

Well, I'll take the first one you mentioned cultural, which is the hardest one to always judge, right? The other things, we know these business, we're in this business. We've been in this business. We had a scaled up market business. So we knew the business. So it's not like we couldn't run it on our own. But what I would tell you is one of the key things when we went through the process was really talking about the culture and the people, and that has really exceeded my expectations at this point in time. So we've actually added 2 members of their executive team. Adam Ante, who was their CFO, is going to be our business unit president. He's going to be running our large enterprise, which we branded at Paycor in the upmarket. So that's how we're going to go to market in the upmarket is we're actually much like we did with Oasis. We reverse engineered RPO in the Oasis brand. We'll do that on the Paychex side, on the enterprise side of the marketplace. And then they had a lower end market business as well, and we'll move that into our ecosystem. So that's very similar to what we've done with other acquisitions. And so very happy, we've got Adam on the team. He's on the Executive Committee now. We're bringing that business unit. They had a great guy in product, our product person was transitioning out from a retirement perspective. And so Ryan Bergstrom is going to be our Head of Product for all of Paychex. And so he's working on the integration of the roadmap. And like I said, now when I look at the technology roadmap and I look at the investment, because there's no synergies in technology. Although, we have exceeded, we will -- we have exceeded the initial numbers that we provided to The Street, and very excited about the cost synergies, we're really trying to figure out how do we drive further innovation. They have a capability, they're Paycor embedded which is another exciting thing for us is one of the areas we were looking to start investing in, which really gives us then the capabilities to go to other partners and allow them to embed our HCM ecosystem into their technology platforms to create a seamless customer experience on the other end. So I'm excited about that. They had just been starting to launch that, and that's something that we're going to continue to look at how we can develop and expand as well.

Yes. And I think when you guys -- you took some of the guidance up and you're honoring of course, Paychex's hallmark with everything you've done with margin and accretion and protecting margin, et cetera. And of course, it will accelerate growth. But I'm curious, just bringing back to bigger picture, John, and thinking about margins, and there's so much going on in tech right now, and I'm sure we'll talk about AI. But with this best-in-class margin, is there room for you to potentially sacrifice margin and accelerate growth? It doesn't look like you're doing that here with Paycor. But is that ever a consideration? Is there stuff that's out there and available for you that you could invest in, but you're choosing not to respect the hallmark? But again, with all this tech available, maybe there's a chance to accelerate growth. How do you balance that sitting in your seat?

Well, I'm always surprised at why people say you have to balance the things, why can't you have both?

Okay.

I mean we're a consistent high Rule of 40. Yes, that's what -- is now what all technology companies strive for...

Yes, it's [indiscernible] it was always harder for me to absorb that, but now I appreciate [indiscernible] yes, you guys have been way above that.

I'm just rising way above that. For decades, and I guess our point is I don't think we have ever felt that those 2 things are mutually exclusive. That you shouldn't strive and push yourself both to position yourself in markets where you can grow at an acceptable rate and where you can grow profitably. No question. Sometimes it's very struggling when you're in irrational markets where people will spend more on a Google word to get a customer. And so you have a higher cost of acquisition that I know you'll ever get in the lifetime value of that customer. Because I've been doing it for 50 years. I know how long they'll stick, I know how long they'll be sold. I know how long they're going to go out of business in the small in the market? Or I'm going to pay a salesperson, what I have to do to get them away from the other provider. The good thing is right now in our industry, there's this thing that we're getting more balance. And now there's a little more balancing growth and profitability. And I think we're very well positioned there. So we believe that we can continue to grow the company high single digits and continue to expand margins for the foreseeable future because we've been doing it for decades. And so we're not going to give up and force ourselves into choice. I never feel constrained because I get asked this question a lot from investors. I've never felt constrained in the boardroom or anywhere else about investing in the business. But our filter, if you're going to sit in my seat, my filter is we're going to invest for a return on investment. It's an interesting thing. We're not spenders. We're investors. And my team heard me say that before. It's really easy to be a spender. I have a lot of people come in the boardroom and pitch and I did to me, and we're going to spend money. That doesn't mean you're going to make money. And so I think we always have a return on investment mindset in what we do, and that's why we're -- just in our DNA.

And Bob's always reminded us that of that. But yes, I know Paychex definitely is always very disciplined on that and respect the company for it. On the -- just to play forward here on the -- let's talk about the tech stack. It is a tech conference, John, and thinking about modernization and automation and AI and all this stuff. And maybe AI, we can talk about separately. But just the tech stack itself, now that you're looking at Paycor and understanding maybe where you are, where are you in the modernization journey?

Well, I don't think we've never been better positioned than we are today from that perspective. And I would go back to what I said I've been here over a decade, and this has been an area of transformation for us, and we've been investing a lot in technology. Sometimes I don't think we get all the credit that we should get. We both build it. We've both acquired it, and we've integrated it. And I believe when you look at now with the addition of Paycor, what I said, we have the full spectrum of capabilities across the entire HCM regardless of size, regardless of need. And we've done that in a manner that I think creates an open network. I'm really excited about the speed. So -- and we're talking in quarters. Like in one quarter, we're going to be able to integrate our ancillary products in the Paycor system. And in the course of 6 months, we're going to be able to do the reverse on theirs. That's how open their system was, that's how open our system is today. So I think we have a tremendous technology platform. The other thing that I think that doesn't -- that goes unrecognized because we don't talk a lot about it, and it's not sexy. But we've invested a ton in the back-office operations. When we looked at synergies, particularly -- and what I find in a lot of the tech companies in our space is that everything is on the UX side. Everything is on that feature side, right? So we've not only kept up with that. But we've also been investing in all of the back office, money movement capabilities, the ability of all the tax. I mean, we transact and move $1 trillion of money every year around our economics. Last year it was over $1 trillion between all of our businesses that we have. So all of the investment we've made there is why you see a lot of the margin expansion that we have, the efficiencies. And I would tell you that when we went through some of the disclosures post close, and begin to show the technology team at Paycor, what we were doing on a back-office efficiency perspective and the way we were doing banking, and the way we were doing payments and the way we were doing all the other things, they were pretty amazed. The other thing we don't get credit for is it was a huge investment that we made over the last 10 years to totally re-architect the back end of our system in parts of our front in the system to enable our clients' employees to become customers digitally. So the good thing about the way the world was is we would go to a customer and client, and they have 10 employees and all those employees were tied to that. We kind of build employee per se. We can deduct something. So we really saw this opportunity to create this marketplace because a lot of our small, medium-sized businesses, they can't afford to put the benefit suites together that large companies can. But we certainly can. We have the 30th largest insurance agency. We have some of the best relationships with the carriers, but we had no mechanism to have that employee buy from us and then for us to have a relationship with that employee from a commerce perspective. So we started working on that. It took a lot of work. A little bit -- we chip a thing that was one we chip that little bit at a time. Last July, we introduced the Paychex Perks product. It's a marketplace for our employees. Every time they come in into a role, or they have a life event we use AI to figure out they change a deduction. We know they probably had a baby. Now there's all kinds of things like life insurance and other things we can present to them. It's done in an open enrollment form. The employers are able to now go to their employees and saying, I'm offering you these benefits, but it's costing them nothing, right? Because we deduct and take the payments directly from the employee. So we launched that in a beta in July. I think we started to roll it out in phases to our roughly 13 million employees of our customers. We have over 180,000 customers today buying something in our marketplace. And that was just with the first 20 products. And we have about -- we have about 100 different products that we want to test and learn and figure out where the right things are. So where are we? We have more capability upmarket. We're more integrated, we're more open. We have more access to new markets and new customers than we've ever had in the 54-year history of the company. I like where we are.

And it has to help explain the retention back to the earlier conversation right? All of the back office work being described? I mean it has to be showing up with some of your NPS scores and everything else?

Yes.

So let's do -- we've got 10 minutes left. Just want to make sure we hit these last few questions. Just -- I do want to hit PEO, but let's just stay with tech and AI. I think Andrew went to HR Tech last year, and I think the conclusion was that you guys have put out a lot on the AI front. Flex Engine, AI insights and Flex products you mentioned. What do you see? I mean now that you've been out there a little bit in the marketplace, are you doubling down in certain areas? Is there more to do? Talk about what you're sort of measuring here to say, hey, we could do more or not?

Well, yes. I think when you look what we've -- I think from the tech perspective, we have the full portfolio. Now you've got to keep up, right? And I'm not sure you ever have everything you want or need because the world is always evolving. Certainly, you mentioned AI. AI is an area that we've been focused on. I always remember this, we won a tech -- HR Tech Award for the best use of AI in a product or retention insights. Now this was 3 months before ChatGPT was relaunched. And I can remember a lot of people were like, well, what's this AI thing? I don't understand it. And then 4 months later -- and even our board was a well, okay, that's kind of neat whatever it is. And 6 months later, they're going like, how do we double down on investing in this? And we have a unique opportunity at Paychex. We pay 1 in 11 U.S. private sector workers. Because of the nature of the small, midsized businesses, a lot of people work for multiple companies in any given year about 26 million employees pass through our system. So we have a comprehensive data set on this. And now we have AI on top of that. And you talk about retention. The fact of the matter is a lot of the back office uses of AI is in our customer service and in our retention. So intelligent pricing, being able to -- we basically record, transcribe all of our conversations with clients. And then we have an AI tool that immediately sends a red flag to the service provider if we're seeing flag words or we're seeing issues. So all of those things we've used AI for. And then as you mentioned, we started embedding that into our products. I think that's a great opportunity. Where we are now is beginning to really look at. We just announced the compensation capability through a partnership. So now a client when they onboard -- or hiring an employee can look at a compensation database. For small and medium -- if you're a big company, you're going, yes, so what, we have a comp survey. If you're a small business owner, you can't figure out how much is a chef making in Rochester, New York, right? Unless you talked about it. We know how much the chef is making. We know if it's going up, we know if it's going down in a given market. So we're zoning in on that. We're now then arming our HR generalists because now we have a bigger advisory team. So now we're arming HR professionals with data analytics insights that they now can have more strategic conversations with our customers with. And it gets back to the value piece. And I believe this. I believe this. AI is not worth anything if you don't have a lot of data. And it's very expensive to train these models. I believe that in this world of AI, large providers with large data, who I would account us as one of those, are going to have a competitive advantage of anyone else. We're going to be able to operate more efficiently. We're going to be able to make better decisions. I know I do by looking at the data every morning. I can get up and I can tell you how many employees were added in our system, real-time. How many terminations were there? Tell me how many people punched in yesterday? How many punched in a year ago yesterday? Those are insights that are very helpful for us in reading our business. Then when you put that in the product, and then you package that data and that insights and put it in the customers' hands, no small provider, or no point solutions provider, is going to have the wealth of that data. And the problem is all that data has been floating around our system. I call it, it's an exhaustive at Paychex. That's what it is. We probably talked to close to 5 million small businesses every year. As many as we add, we have proposals, we have close rates, we have prospects. We gather a lot of information. But there was no way to really tap into it and then really to get it down to the fact that I as CEO can make a decision on it. AI is allowing us to do that. And I think the power, not only can we use it to power our business, but when you turn it and begin to say, I can help a client power their business by giving them insights about what they could be doing to retain their employees at their restaurant, what could they be doing to attract employees at their restaurants? What could they be doing in adjusting their benefits portfolio to be more competitive? I think that that's going to be something that we're starting to be able to compete against.

One more follow-up and then we'll move on just on the -- on the data side, you have so much, John. I just went through that. That's very, very clear. And I underappreciated some of the touch points. But -- and I've been asking the other companies this, right? Is it -- the next step for Paychex is it more growth oriented or cost efficiency? You mentioned productivity a little bit, but do you see a balance of where there's more potential for Paychex?

See Tien-Tsin, I don't understand why people always say you can only -- either got to be a growth company or a profitable company. How about both, right? My point is that the team is very simple. We're going to grow revenue with AI products. We're going to monetize the data. We're already doing that. That's going to be a multi-$100 million dollar business in a few years. I just know it is just by the early signs on it. And we're going to use that insight and we're going to use AI to drive cost out of the business. Now when I say that, we're really focused on the tasks side of our business. And wanting to take -- and when you talk about reinvestment, I'm wanting to reinvest that in customer success in advisory communications. When I'm having a -- when we're having a conversation with one of our clients, I wanted to be about something meaningful that's going to help them be more successful as a business, not taking a number or taking an address change for, if that makes sense, right? Their employee doesn't want it. They don't want it. It's wasted energy. So that's where we're really applying it. And then when you're in a huge transaction business like ours, if you can automate the transactions, the efficiency is going to come.

Fair, fair. No, that's good. I'll remember to ask more about balance next time. But all fair points. No learning a lot. Just I have to ask on PEO, not to skip around, but the one learning so far in a pretty extended results season -- last few seasons, Paychex has been outperforming the PEO group and I'd say, uneven results, softer results, whatever you want to call it, within the public PEOs. What's driving that? Is there something that's changed internally that's driving that outperformance?

Well, look, I think one of the things -- the two things I would say over the decade kind of work that we were doing that we focused the company strategically on was, one, is to make the company a technology company. And I think we're -- that's -- we already talked about that. The second was to really focus the company with HR at the center. I think if you would have won back a decade, people would have said, we're a payroll company, maybe some people still do. We don't consider ourselves a payroll company. We're a human capital management company, really focused on helping the employee-employer relationship improve. That's kind of where we are. And that's usually HR, right? So we've been focused on that. We think the PEO is a great opportunity to do that. The other thing we like about the PEO model is it brings scale. So again, it allows small and midsized businesses to punch above their weight in the way that we approach procurement of benefits and gives them access to better benefits than they would otherwise be available in the market today. And so certainly, we saw that many years ago, health care is a major challenge. I mean, you step back and just say what's on the minds of small, midsized businesses and it's pretty consistent. In fact, in FIB's report was out again today. Track and find qualified people, tell us hard. It's tough. Second, getting access to affordable benefit packages that helps me do one...

That's where...

It is. And third is getting access to affordable access to growth capital. It's a big problem. It's not just the cost of capital, only if I guess, worried about the interest rates. I've talked to people that and everyone else, regional banking partners that we have. It's hard for small business owners. Even if they have a great return on investment to access the capital they need to be able to do that. And as you know, we've got involved some businesses from that. So I just think as you step back at it, we're very focused on solving those problems at the center of what we do. And the PEO is a means for us to be able to do that. And as you said, we've been growing work site employees faster than our competitors.

No, it's been nice to see, I think, with the balance -- back to balance and having the Florida, the piece, it does -- and we come back to this, right? Thinking about Oasis and the execution on that. I know it's been some time, but the result has been good and we'll see if it continues. We have 45 seconds left. John, any sort of closing comments, things you want to underline? We covered a lot, and thank you for sharing your thoughts.

Yes. No, I just want to thank you for having -- having us here and giving us a chance to tell the Paychex story. It's an amazing story. 54 years ago, $3,000 as a small little company in Rochester, New York. And today, we're a leading technology company in human capital management, paying 1 in 11, private sector workers presence in Europe. Tremendous return -- total shareholder return when you look at our dividend just increased to 10%, and you're going to get a good stock appreciation at the same time. And you have a management team that is committed to a long-standing tradition. Let's grow and grow profitably. And I think that's kind of our story.

Great. We'll leave it at that. That's perfect. Thank you, John.

Thanks. Thank you.