Financial Data and Key Metrics Changes - The average number of paid worksite employees increased by 1.2% year-over-year to 312,842 in Q3 2025 [3] - Adjusted EPS for the quarter was minus $0.20, and adjusted EBITDA was $10 million, both below forecasted ranges due to higher-than-expected benefits costs [4][10] - Gross profit per worksite employee decreased from $247 in Q3 2024 to $208 in Q3 2025, primarily due to increased benefits costs of $20 million [4][10] Business Line Data and Key Metrics Changes - New client sales results were encouraging, with a significant increase in accounts queued for first payroll, despite a slight decline in worksite employees from new clients compared to Q3 2024 [3] - Client retention remained strong at an average of 99% per month, consistent with prior year results [3] Market Data and Key Metrics Changes - The overall hiring environment was challenging, with net hiring within the client base being negative in Q3 2025, slightly weaker than Q3 2024 [4] - The health insurance industry reported an unexpected rise in healthcare costs and loss ratios, impacting Insperity significantly [6][15] Company Strategy and Development Direction - The company is focused on attracting and retaining the right clients at competitive prices to achieve sustainable profitability [7][8] - The rollout of the new HR Scale solution is expected to enhance Insperity's PEO offerings and drive growth, particularly in the mid-market segment [20][26] - A new agreement with UnitedHealthcare aims to reduce claim costs and mitigate risks, which is projected to positively impact margins [18][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unexpected increase in healthcare claims costs and its impact on financial performance, indicating that this trend is expected to persist into 2026 [15][33] - The company is optimistic about a rebound in 2026, driven by strategic pricing adjustments and the rollout of HR Scale [17][37] Other Important Information - Operating expenses decreased by 4% year-over-year in Q3 2025, with significant reductions in salaries and G&A costs [8] - The company returned $22 million in cash dividends to shareholders in Q3 2025, with a total of $68 million year-to-date [9] Q&A Session Summary Question: Clarification on earnings shortfall recovery - Management indicated that the earnings shortfall primarily relates to benefits costs and expects to recover a majority of this in 2026 [38][39] Question: Impact of cost trends on new sales - Management expressed confidence that pricing changes would not significantly impact new sales, citing strong sales performance and high renewal rates [40][41] Question: Initial responses from the joint marketing pod for HR Scale - Positive feedback was received regarding the unique solution developed, with early pipeline filling ahead of expectations [42][43] Question: Adjustments to benefits repricing - Management confirmed ongoing adjustments to pricing based on healthcare trends, with expectations for higher pricing in 2026 [44][45] Question: Healthcare pricing expectations for next year - Management anticipates a low double-digit increase in benefit costs on an apples-to-apples basis for 2026 [44] Question: Managing lower profitability clients - Management indicated that the focus is on retaining profitable clients while managing out lower profitability ones [48] Question: Investment framework for HR Scale - Management clarified that ongoing operating expenses for HR Scale would be lower than previous estimates, with a focus on balancing investment across projects [55][57] Question: AI's impact on employment and business creation - Management noted that while AI's impact on employment is uncertain, it could lead to new business creation, providing a buffer against employment efficiency [59][60]

Core Insights - Workday, Inc. has been recognized as a Leader in the 2025 Gartner Magic Quadrant for Cloud ERP Finance, achieving the highest position for Ability to Execute and furthest for Completeness of Vision [1][3][13] Company Overview - Workday is an enterprise AI platform designed for managing people, money, and agents, unifying HR and finance on a single intelligent platform [7][8] - The platform is utilized by over 11,000 organizations globally, including more than 65% of the Fortune 500 [8] Financial Transformation - Workday accelerates finance transformation for organizations, enabling them to protect and grow their value through intelligent data and insights [2][3] - The platform supports finance leaders in balancing core responsibilities while enhancing their influence across the enterprise [3] AI Integration - Workday's next-generation ERP is redefined for the AI era, simplifying complex accounting and finance processes to help CFOs make faster, more confident decisions [7] - The introduction of agentic AI solutions, such as Contract Intelligence Agent and Financial Audit Agent, aims to increase efficiency and mitigate risk [7] Customer Impact - Workday empowers organizations to make timely financial decisions, manage costs effectively, drive profitability, and support global growth goals [2][3]

Core Insights - Infosys has announced a strategic collaboration with Metro Bank and Workday to modernize Metro Bank's finance operations, transitioning from legacy systems to a unified, cloud-native platform [1][9] - The collaboration aims to streamline business processes, centralize financial data, and automate key functions, enhancing decision-making and supporting future growth for Metro Bank [2][3] Company Overview - Infosys is recognized as a global leader in next-generation digital services and consulting, with over 320,000 employees dedicated to amplifying human potential and facilitating digital transformation for clients in 59 countries [5] - Workday is an AI platform utilized by more than 11,000 organizations globally, including over 60% of the Fortune 500, focusing on managing people, money, and agents [4] Strategic Goals - The implementation of Workday solutions will accelerate financial closing and reporting, strengthen governance, and improve risk management through enhanced controls and audit trails [2] - Metro Bank's partnership with Infosys and Workday is part of a long-term growth strategy aimed at unifying core finance operations and simplifying daily operations for employees [3]

Core Insights - The lawsuit Mobley v. Workday, Inc. challenges the AI-driven applicant tracking system (ATS) for allegedly discriminating against older job applicants [3][4] - This case could set a precedent for holding algorithms accountable for discriminatory practices, potentially redefining the responsibilities of HR technology [4] Summary by Sections - **Lawsuit Overview** - A job seeker claims to have faced over a hundred rejections from companies using Workday's recruiting platform, asserting that the ATS disproportionately filters out older candidates [3] - **Legal Developments** - A federal court has allowed the case to proceed, granting conditional certification under the Age Discrimination in Employment Act, indicating the potential for a class action lawsuit [4] - **Industry Implications** - The possibility of an algorithm being deemed discriminatory has raised concerns within the HR tech sector, shifting the perception of such software from neutral tools to potential liabilities [4]

Core Insights - Companies across the Asia Pacific region are increasingly adopting Workday solutions to modernize their technology stacks and maintain competitiveness in evolving markets [1] Group 1 - The adoption of Workday solutions is a strategic move for companies to enhance their technological capabilities [1] - The trend reflects a broader shift in the Asia Pacific market towards modernization and innovation in business operations [1] - Staying competitive in changing markets is a primary driver for this technological adoption [1]

I don't think that is going to be as pronounced as people say. I hear people out there talking about 20, 30, 40, 50% of the workforce going away. I think we're going to peacefully exist.In fact, I think AI will allow us to reskill, upskill, and revive skills that were missing in the enterprise today. And it will drive that step function change in human productivity. Today, Danny, >> employees are nervous their jobs are going away because of AI and they feel like they're competing against AI.And I think that ...

Core Insights - Workday, Inc. has launched a Custom AI Model Library for its Contract Intelligence Agent, featuring over 120 pre-built AI models designed to enhance contract analysis across various business functions [1][2]. Group 1: Product Features - The Custom AI Model Library allows organizations to automatically analyze a broader range of contract terms, including employment agreements, vendor security clauses, and payment schedules, thereby improving efficiency in contract reviews [2]. - The new models are pre-trained and can be further refined by customer feedback without requiring coding skills, making them accessible for various teams [2][3]. Group 2: Business Impact - The Contract Intelligence Agent aims to provide deeper contract analysis by summarizing, calculating, and classifying key terms, transforming complex documents into actionable insights for teams [3]. - This enhancement is expected to facilitate smarter decision-making by legal and business teams, enabling faster contract reviews and earlier risk detection [2][3]. Group 3: Company Overview - Workday is recognized as an enterprise AI platform that integrates HR and Finance, serving over 11,000 organizations globally, including more than 65% of the Fortune 500 [4].

Core Insights - The NZS Growth Equity strategy reported a gross return of +4.09% and a net return of +3.93% for Q3, underperforming the Morningstar Global Target Market Exposure Index which had a return of +7.60% during the same period [2][3][4] - Year-to-date, the strategy achieved a gross return of +20.18% and a net return of +19.60%, slightly outperforming the Index's +18.26% [2][3] Performance Review - The equity market rally from Q2 2025 continued into Q3, leading to positive returns for the strategy, although it lagged behind the index [4] - Key contributors to returns included Information Technology, Communication Services, and Industrials, with Alphabet (GOOG) benefiting from a favorable antitrust ruling and increased AI market appreciation [5] - Detractors included Financials, Health Care, and Consumer Discretionary, notably Constellation Software (CNSWF) due to CEO transition and Fiserv (FI) lowering growth outlook [6] Portfolio Positioning - The portfolio saw elevated name turnover, with additions like Workday and Gartner, while exiting positions in NVIDIA and several other stocks [8][9] - The strategy's resilient weight increased to ~59%, with a modest decline in IT overweight due to active decisions [9] Focus Position: SailPoint, Inc. (SAIL) - SailPoint is positioned in identity governance and administration, crucial for zero-trust security, especially with the rise of AI vulnerabilities [14][15] - The total addressable market (TAM) for identity governance is expanding significantly due to the increasing prevalence of machine identities in AI environments [18] - SailPoint's growth potential is supported by its recent monetization framework for non-human identities, with expectations for margin improvement [19]

Core Insights - Three Link has launched Workday GO, a full-platform activation that integrates Finance, HR, and Payroll into a single, unified solution [1] Company Overview - The launch of Workday GO signifies a strategic move by Three Link to streamline operations across multiple business functions [1]

Core Insights - Euna Solutions has joined the Workday Partner Program with its Euna Budget offering, aimed at enhancing financial tools for the public sector [1] - The partnership comes at a crucial time as North American governments prepare for the 2026 budgeting cycle, facing fiscal constraints and demands for transparency [1] - There is an urgent need for modern, integrated financial tools due to outdated legacy systems in government [1] Company Summary - Euna Solutions is recognized as a leading provider of cloud solutions specifically designed for the public sector [1] - Euna Budget is a Workday certified integration that aims to address the financial management needs of government entities [1] Industry Context - Governments across North America are experiencing increased pressure to modernize their financial systems in light of growing fiscal constraints [1] - The need for transparency in government budgeting processes is becoming more critical as stakeholders demand better accountability [1]