Financial Data and Key Metrics Changes - The company reported an 8% revenue growth in Q4 2025 and a 7% revenue growth for the full fiscal year [5][18] - Adjusted EBIT margin expanded by 40 basis points in Q4 and 50 basis points for the full year [5][18] - Adjusted EPS grew by 8% in Q4 and 9% for the full year [5] Business Line Data and Key Metrics Changes - Employer Services (ES) revenue increased by 8% in Q4 and 7% for the full year, with margins expanding by 50 basis points in Q4 and 100 basis points for the year [18][19] - Professional Employer Organization (PEO) revenue grew by 7% in Q4 and for the full year, with average worksite employee growth of 3% [19][20] - PEO margins contracted by 20 basis points in Q4 and 60 basis points for the full year due to higher zero-margin pass-through benefits revenues [19][20] Market Data and Key Metrics Changes - The company achieved approximately $2.1 billion in new business bookings for employer services, representing a 3% growth [6] - Small business suite and domestic enterprise offerings saw solid bookings growth, while HR outsourcing experienced a softer finish [6][7] - International bookings improved in Q4 but did not offset earlier softness in the fiscal year [6] Company Strategy and Development Direction - The company is focused on accelerating employer services new business bookings growth in fiscal 2026, with a healthy pipeline and strong client retention [7][11] - Investments in HCM technology, AI capabilities, and global payroll capabilities are key strategic priorities [10][11] - The company aims to leverage its extensive dataset to enhance product offerings and client experiences [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a dynamic and growing market with opportunities for innovation and client support [13][14] - The macroeconomic environment remains uncertain, but the company is positioned to deliver solid financial results while investing for future growth [20][25] - Management expects a slight moderation in the macroeconomic environment but remains confident in achieving revenue growth of 5% to 6% in fiscal 2026 [20][25] Other Important Information - The company has made significant strides in client satisfaction, achieving record highs [7] - The acquisition of workforce software is expected to enhance capabilities and contribute to growth in multinational markets [10][50] Q&A Session Summary Question: Demand and HRO softness - Management noted that the softness in HR outsourcing was due to complex opportunities with long sales cycles, but the pipeline remains strong with active deals [28][31] Question: Confidence in bookings reacceleration - Management highlighted product maturity, investments in sales headcount, and technology as key factors for confidence in bookings growth [33][36] Question: Pricing contribution in fiscal 2026 - Pricing assumptions for fiscal 2026 are expected to be in the 100 basis points range, reflecting recent trends rather than pre-pandemic norms [45] Question: Retention performance - Retention results were broad-based, with no specific callouts, and management was pleased with the performance across all segments [46] Question: Workforce software integration - Early results from the integration of workforce software have exceeded expectations, contributing positively to bookings and sales [49][50] Question: PEO guidance and pass-through revenue - Higher expected contributions from zero-margin pass-through revenues are driven by medical health insurance inflation and state unemployment insurance costs [99] Question: Embedded payroll and Clover partnership - The partnership with Clover is progressing well, with expectations for broader deployment and contributions to bookings in fiscal 2026 [102][104] Question: Sales channel management and partnerships - Partnerships are enhancing visibility into results and pipelines, allowing for better forecasting and opportunity identification [110][111]

Financial Data and Key Metrics Changes - The company reported a solid third quarter with 6% revenue growth, 10 basis points of adjusted EBIT margin expansion, and 6% adjusted EPS growth [7][17] - Employer Services (ES) segment revenue increased by 5% on a reported and organic constant currency basis [17] - PEO revenue growth was 7%, exceeding expectations, supported by higher wages and strong retention [20] Business Line Data and Key Metrics Changes - New business bookings for Employer Services showed solid growth, particularly in U.S. offerings, while international bookings experienced softness due to macroeconomic uncertainty [8][9] - PEO revenue excluding zero margin pass-through growth was 8%, with average worksite employee growth at 2% [20] - The integration of Workforce Software is progressing well, enhancing the overall offerings [51] Market Data and Key Metrics Changes - The company experienced a decline in international bookings, attributed to macroeconomic uncertainty, but maintains a strong pipeline for future growth [9][27] - U.S. clients continued to hire, with pays per control growth remaining at 1% [10] - Client funds interest revenue increased due to stronger average client funds balance growth, leading to an updated growth expectation of 5% to 6% for the year [18] Company Strategy and Development Direction - The company is focused on leading with best-in-class HCM technology and providing unmatched expertise in outsourcing [11] - The acquisition of PEI in Mexico is aimed at strengthening global payroll capabilities and enhancing local expertise [12][13] - The partnership with Fiserv is expected to accelerate sales and expand the embedded payroll solution [14] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is macroeconomic uncertainty, the underlying economic factors remain strong, with low unemployment and continued hiring [38][40] - The company expects pays per control growth to continue at below normal levels next year due to economic conditions [22] - Management remains optimistic about the strong pipelines and execution against them, particularly in the enterprise space [100] Other Important Information - A CFO transition is underway, with Peter Hadley set to succeed Don McGuire effective July 1 [5][6] - The company received several awards for its HCM technology, indicating strong market recognition [15] Q&A Session Summary Question: Can you provide more color on the softer international bookings? - Management indicated that the softness is due to macroeconomic uncertainty, but strong pipelines remain for a solid finish to the year [26][28] Question: What is the growth opportunity for the embedded offering with Fiserv? - The company is excited about the partnership and sees significant opportunities for growth across various distribution channels [30][32] Question: How is the company addressing client hesitancy in hiring? - Management noted stability in their client base, with continued hiring despite some apprehension regarding large deals [38][40] Question: What are the expectations for PEO business in the current environment? - The company reported solid growth in PEO bookings and strong retention, indicating a positive outlook [46][48] Question: How does the company view the competitive landscape, particularly in the down market? - Management acknowledged the competitive nature but emphasized their strong offerings and client satisfaction as key differentiators [102][105] Question: What percentage of bookings come from international markets? - Approximately 88% of the company's revenue is derived from the domestic U.S. market, with the remainder from international [110] Question: How will margins be affected going forward? - The company expects some recovery in margins but noted that certain costs will persist, impacting overall margin profiles [111] Question: How is client behavior evolving in the PEO segment regarding benefits enrollments? - Management reported strong retention and stability in benefits offerings, indicating a positive response from clients [85][87]

Financial Data and Key Metrics Changes - The company reported a solid third quarter with 6% revenue growth, 10 basis points of adjusted EBIT margin expansion, and 6% adjusted EPS growth [9][19] - Employer Services (ES) segment revenue increased by 5% on a reported and organic constant currency basis [19][21] - PEO revenue growth was 7%, exceeding expectations, supported by higher wages and strong retention [21][22] Business Line Data and Key Metrics Changes - New business bookings for Employer Services showed solid growth, particularly in U.S. offerings, while international bookings experienced softness due to macroeconomic uncertainty [10][11] - PEO revenue excluding zero margin pass-through growth was 8%, with average worksite employee growth at 2% [22] - The integration of Workforce Software is progressing well, with strong interest in time and attendance solutions [13][55] Market Data and Key Metrics Changes - The company experienced a decline in international bookings, attributed to macroeconomic uncertainty, but maintains a strong pipeline for future growth [11][30] - U.S. clients continued to hire, with pays per control growth remaining at 1% [11][20] - The company anticipates a continued focus on growth in the Latin America region following the acquisition of PEI in Mexico [14][66] Company Strategy and Development Direction - The company is focused on leading with best-in-class HCM technology and providing unmatched expertise in outsourcing [12][17] - The partnership with Fiserv is expected to enhance distribution and accelerate sales through integrated solutions [15][34] - The company aims to maintain strong client satisfaction and retention levels while investing in products and people for sustainable growth [25][73] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is macroeconomic uncertainty, the underlying economic factors remain strong, with low unemployment and continued hiring [42][44] - The company expects pays per control growth to remain below normal levels in fiscal 2026 due to economic conditions [24][25] - Management remains optimistic about the strength of the pipeline and the potential for growth in the fourth quarter [30][102] Other Important Information - A CFO transition was announced, with Peter Hadley set to succeed Don McGuire effective July 1 [6][8] - The company received several awards for its HCM technology, indicating strong market recognition [17] Q&A Session Summary Question: Can you provide more color on the softer international bookings? - Management indicated that the softness is due to macroeconomic uncertainty, but strong pipelines remain for future growth [30] Question: What is the growth opportunity for the embedded offering with Fiserv? - Management expressed excitement about the partnership, highlighting the potential for significant growth through integrated solutions [34] Question: How is the company addressing client hesitancy in the current macro environment? - Management noted stability in their client base, with continued hiring and strong pipelines, despite some apprehension regarding large deals [42][44] Question: What are the expectations for PEO business in the current environment? - Management reported solid growth in PEO bookings and strong retention, indicating a positive outlook for the segment [51][52] Question: How does the company view its hiring plans in light of current conditions? - Management confirmed no changes to hiring plans, maintaining optimism about business performance [85] Question: What percentage of bookings come from international markets? - Management stated that approximately 12% of revenue comes from international markets, with the majority being domestic [113] Question: How does the company plan to manage margins going forward? - Management indicated that while some margin pressures exist, they expect to recover some costs through integration and operational efficiencies [114]