Sara Grilliot - Carlos A. Rodriguez - Chief Executive Officer, President and Director Jan Siegmund - Chief Financial Officer.

David Togut - Evercore Partners Inc., Research Division Siva Krishna Prasad Borra - Goldman Sachs Group Inc., Research Division David M.

Grossman - Stifel, Nicolaus & Company, Incorporated, Research Division Georgios Mihalos - Crédit Suisse AG, Research Division Smittipon Srethapramote - Morgan Stanley, Research Division Jason Kupferberg - Jefferies LLC, Research Division Gary E. Bisbee - RBC Capital Markets, LLC, Research Division James R.

MacDonald - First Analysis Securities Corporation, Research Division Lisa Dejong Ellis - Sanford C. Bernstein & Co., LLC., Research Division Sara Gubins - BofA Merrill Lynch, Research Division Bryan Keane - Deutsche Bank AG, Research Division Kartik Mehta - Northcoast Research Mark S. Marcon - Robert W. Baird & Co.

Incorporated, Research Division Tien-tsin Huang - JP Morgan Chase & Co, Research Division.

Good morning. My name is Kevin, and I'll be your conference operator. At this time, I'd like to welcome everyone to ADP's First Quarter Fiscal 2015 Earnings Webcast. I would like to inform you that this conference is being recorded. [Operator Instructions] Thank you. I'll now turn the call over to Sara Grilliot, Vice President of Investor Relations.

Please go ahead..

Thank you. Good morning. This is Sara Grilliot, ADP's Vice President, Investor Relations, and I am here today with Carlos Rodriguez, ADP's President and Chief Executive Officer; and Jan Siegmund, ADP's Chief Financial Officer. Thank you for joining us for our First Quarter Fiscal 2015 Earnings Call and Webcast.

Before we begin, please note that ADP is planning to host a Financial Analyst Conference in New York City in the spring of 2015. We will provide further details in the coming weeks.

Carlos will open today's call with an overview of our first quarter accomplishments and financial performance, and Jan will take you through our detailed financial results and our fiscal 2015 forecast. I'd like to remind everyone that today's call will contain forward-looking statements that refer to future events, and as such, involve some risks.

We encourage you to review our filings with the SEC for additional information on risk factors that could cause actual results to differ materially from our current expectations. With that, I'll now turn the call over to Carlos..

Our solutions will help you make decisions that will drive business success. So now for ADP's performance in the quarter. I'm pleased with the good performance we had to the start of the fiscal year. ADP reported revenue growth of 9%.

Worldwide new business bookings growth was a solid 11%, and we continue to successfully drive client migrations to the cloud while improving profitability. During our fourth quarter call, I described our refined 3-pillar strategy focusing on the HCM market.

I think the best way to discuss our first quarter growth in new business bookings is in terms of how it aligns to each of our strategic pillars. First, in the U.S., we saw growth across all of our strategic platforms, RUN, Workforce Now and Vantage, with solid attach rates, particularly for our benefits and talent modules.

Performance in the upmarket was strong, with sales of Vantage contributing to our overall growth in the quarter. Second, our business process outsourcing solutions, which we offer across all segments of the market, from small to large businesses, had strong results during the quarter.

The PEO continues to perform well with small businesses, and we also saw increased demand for our comprehensive services in comprehensive outsourcing products in the mid- and upmarket. Finally, we continue to leverage our global presence to offer clients HCM solutions where they do business.

Our multinational solutions performed well in the quarter, with growth coming from small to very large multinational corporations. During the quarter, we continued to migrate clients to our newer cloud-based solutions. At the end of the quarter, more than 460,000 businesses were supported by our cloud services.

We also continue to deepen ADP's engagement with clients and end-users through our success with mobile. We now have more than 3 million users on our mobile app, an increase of more than 18% in the last quarter alone.

Our first quarter achievements are a reflection of an effective strategy, combined with the commitment of 52,000 ADP associates who are pushing everyday to deliver on behalf of our clients. And with that, Jan will now walk you through the first quarter results..

Thank you very much, Carlos. As you just heard, we had a solid first quarter. Before I get into the detailed results, I would like to call your attention, though, to our cash and marketable securities balance of $4.4 billion at September 30, 2014.

This includes $2 billion of assets related to outstanding commercial paper in support of our extended investment strategy for the client funds portfolio and is footnoted in our condensed balance sheet. This borrowing was repaid on October 1.

In addition, with the completion of the spin-off of Dealer Services to CDK on September 30, the results of operations of the Dealer Services business and spin-related costs associated with this transaction are now reported within discontinued operations. My comments will therefore be in reference to continuing operations.

Now for the quarter's results. As Carlos mentioned, ADP delivered solid revenue growth of 9% for the quarter, nearly all organic. We achieved a pretax earnings growth of 12% and earnings per share growth of 13% on lower effective tax rate and fewer shares outstanding compared with a year ago.

In connection with the spin-off of Dealer Services, ADP sold a portfolio of notes receivables to a third-party, which contributed approximately $0.02 to our diluted earnings per share. Our combined worldwide new business bookings growth was a solid 11% over last year's first quarter.

Employer Services revenue grew 7% from additions of net new recurring revenues to our global HCM solutions and our BPO offerings. Each of our businesses contributed to this quarter's growth.

We remain focused on providing a world-class client experience, and we are pleased that our client revenue retention increased 70 basis points over last year's first quarter, though retention is lumpy from quarter-to-quarter and the first quarter generally has the smallest volume of losses. Same-store pays per control in the U.S.

was strong with an increase of 3.1%. In Europe, same-store pays per control continues to flatten out, but still declined 0.2 percentage points in the first quarter.

However, we are pleased with the overall revenue growth in our International business where we are seeing positive momentum in Asia Pacific and Latin America, as well as continued success with our multinational offerings.

Growth in the average client fund balances was 7%, driven by our net new business growth, especially in the small and upmarket, as well as pays per control growth. Pretax margin expansion in Employer Services was 120 basis points in the quarter.

Our businesses performed well, driving solid revenue growth with controlled increases in our operating costs.

We continue to invest in our new products and in our sales force, and we anticipate year-over-year earnings pressure in the second fiscal quarter from these investments, which will result in about $30 million of additional expenses in the second quarter compared with a year ago.

The PEO continues to perform very well, with revenue growth of 18% in the quarter. Average worksite employees grew 15% to 345,000.

The increasingly complex HR regulatory environment and the compliance needs of small- to mid-sized business, combined with solid execution of our distribution model and the strength of ADP's offering, are key drivers of this growth. In addition to the solid revenue growth, pretax margin in the PEO improved 90 basis points in the quarter.

The quarter's margin expansion was a result of increased operating and sales efficiencies. We're quite pleased with the results of our business segments for the first quarter. We're also pleased that overall ADP pretax margin improved by 50 basis points over last year's first quarter.

Although our high-margin client fund interest revenues were slightly positive in the quarter, for the first time since 2008, the impact on ADP's pretax margin was still a drag of about 30 basis points, as these highly profitable revenues grew at a slower rate than overall revenues. We expect to see this drag lessen as the year progresses.

So let me make -- let me take you through our outlook for fiscal year 2015, which was updated on September 29 to exclude the Dealer Services business. For total ADP, we anticipate total revenue growth of 7% to 8% compared to fiscal year 2014 to revenues of $10.3 billion.

Pretax margin for total ADP is anticipated to improve by 75 to 100 basis points from 18.4% in fiscal year 2014. Although we benefited from a lower effective tax rate in the first quarter compared with last year, we still expect a rate of 34.6% compared with 33.9% in fiscal year 2014.

Diluted earnings per share is expected to grow 12% to 14% compared with $2.58 in fiscal year 2014. This forecast of 12% to 14% includes a $0.02 benefit resulting from share repurchases funded by the $825 million in dividend proceeds ADP received as a result of the spin-off of CDK.

However, the forecast does not contemplate further share buybacks beyond anticipated dilution related to equity comp plans and the dividend proceeds from CDK.

And although our share repurchases in the quarter were lower than in prior quarters, ADP remains committed to its shareholder-friendly actions, and it is clearly our intent to return excess cash to our shareholders, depending obviously on market conditions.

The high end of our revenue and earnings forecast ranges anticipate renewal of certain high-margin WOTC tax credits in the second half of the fiscal year. And although foreign currency fluctuation had a minimal impact on our first quarter results, a stronger U.S.

dollar continuing throughout the balance of the year could put pressure on the full year revenue forecast. And finally, as I mentioned earlier, we anticipate having about $30 million of additional expense in the second fiscal quarter, which will moderate our earnings growth in that quarter. So now for the business segments.

There's no change to our forecasted growth of new business bookings. We are still anticipating about 8% growth over $1.4 billion sold in fiscal year 2014. There's no change to our previous forecast for Employer Services. We still anticipate 6% to 7% revenue growth and 100 basis points of pretax margin expansion. Pays per control in the U.S.

is still anticipated to increase 2% to 3%. For the PEO, we are still maintaining our revenue growth guidance of 13% to 15%, as we continue to assess opportunities related to the increasing complexity of the HR regulatory environment during the remainder of the year.

And we are still anticipating up to 50 basis points of pretax margin expansion for the PEO. There is no change to our previous forecast related to the client funds investment strategy. The detail is available both in the press release and in the supplemental slides on our website. Now I will return it over to the operator to take your questions..

[Operator Instructions] We will take our first question from the line of David Togut with Evercore..

Are there any significant changes we should expect, Carlos, in the way you manage ADP post the CDK spin?.

I think the only -- I think we've communicated that -- I think we -- part of the reason for the spin-off is for us to just have more focus in terms of our time, our dollars, our energy on our HCM market and also to allow CDK to do the same thing in their industry and their business.

So I can't -- I don't think there's really any radical news to really provide you other than that.

We really believe that it's not a -- it wasn't a financial engineering transaction per se, it was really a strategic decision that we expect you to see improvement in our performance over time, because I think that increased focus and energy in investment in HCM.

We did it obviously because we think it's going to pay off and have better results for our shareholders, but it's not a 1 quarter or 2 quarter decision. We can't point to anything that's happening in the first quarter or the second quarter specifically as a result of the spin-off.

We just have confidence and faith, and I think our Board had confidence and faith that this will create greater value over the long term by having the 2 businesses separated..

Understood. And just as a quick follow-up, you highlighted your progress in the ongoing migration to the cloud and mobile.

Can you just remind us of the benefits from this migration, whether it be improved customer retention or upsell opportunity?.

I'm not sure we have enough time today for -- to talk about all the benefits. But I'll talk about a couple, and maybe Jan can jump in because there really are many that we've now actually experienced and seen because it was all theory a couple of years ago, and now I think we're seeing some of the benefits.

So starting with the fact that, if you think about in the old legacy products, the process of upgrading clients and rolling out new products was cumbersome, difficult and expensive. And I think our new kind of cloud-based version of those products are just much easier to roll out, much easier to upgrade.

So there's huge benefits in terms of just frictional ongoing costs. The word cloud and SaaS, I think, can mean a lot of things to a lot of different people.

But I think to us, it also means not just the technology, but also the consumer-grade experience, which means that they're easier to use, result in hopefully better serviceability and less need for support because they're more intuitive. So that I think also is something that we're beginning to see some benefits of.

I think the most important reason for us to migrate these clients is because we believe these new platforms that we have are very successful commercially in the market from a sales standpoint in terms of new business. And if there's that much demand and they're so great for new clients, they must also be great for existing clients.

So we just want to have all of our clients on our best products, is really the main driver for the migration strategy. I don't know if Jan has any other items to add..

I may want to add a little bit about the mechanics of where we are. So we did migrate another 20,000 RUN clients this quarter and really coming to the homestretch now to finalize that migration right along the plans that we had.

So that we may not be 100% completed in this quarter but we'll be very close to execute, as we have talked now for many years. And we have seen an addition to a great client experience, of course, also a slight decrease in the complexity of business, which helps in the margin expansion from the down market. That's for sure.

The migration of our mid-market product, PCPW, on to Workforce Now also continues at a good clip. We migrated about 1,500 clients there.

And just as a reminder, we do see actually, when we migrate these clients, improvement in our retention rates and we -- about 30% of the clients actually utilize right at the migration upsell opportunities to buy broader product portfolios.

And I think those factors you see really reflected in our overall results and certainly contributed to a smaller degree, but to some degree, in our good retention performance, as well as our good sales performance..

Our next question comes from S.K. Prasad Borra with Goldman Sachs..

A couple, if I may. Firstly, on the new bookings, you had a strong first quarter, but you made no changes to the full year guidance.

Is it just being conservative or is there a seasonality aspect we need to account for? And second one, can you provide some color on the attach rates associated with these new products? What is the difference between selling a standalone payroll offering and attaching things like benefits and talents to the payroll offering?.

So I'll let Jan talk about the attach rates. In terms of the seasonality of the results, there is some seasonality. So our first quarter is our smallest quarter, not by a dramatic amount, but it is smaller than the other 3 quarters in terms of the total dollar amount of sales that we get from the first quarter versus the full year.

So there is a bit of a seasonality impact. We also had a, what I would call a relatively easy compare because we had, as all of you know, a difficult first quarter last year. And so we feel like our forecast is still quite good, but also I think in the right range.

So we're feeling good about our momentum in our results, but I don't think it's appropriate to extrapolate an 11% first quarter growth rate in new business bookings to anything higher than what we've provided in terms of guidance in the range.

We don't have anything to lead us to believe now that, that should change because we obviously know other factors in our sales force like, for example, how much headcount we've added.

And although we have had some positive surprises in the past around productivity, there tends to be a natural governor on sales results depending on what your headcount numbers are. So I think we have some metrics that tell us that I think our guidance is the right guidance..

On the attach rates, we really attach HR products at all segments to our products. And it's, of course, a very different experience if the product is completely seamlessly integrated in the workflow of the user. So it is not even a different product, there's just a different feature functionality that we open up in it.

And we see in the upmarket, where we had a good quarter also for Vantage sales, stability in the attach rates, so ranging between 50% and 80%, depending on the product component.

And in the mid-market, we saw actually slight increase in the attach rates for really all the core product components, benefits and time and attendance and talent namely for it.

So the strategy of having a platform and to upsell or to have an easy ability for the client to expand their relationship with ADP has really proven to be successful for us, an important component of the sales growth that we observed this quarter..

Our next question comes from David Grossman with Stifel Financial..

Just looking at the PEO business, I assume the strong 1Q at least -- or the strong growth in the first quarter versus the guide for the year at least partially reflects the increasing difficulty of the comparisons.

So I guess, one, is that in fact the case? And can you also update us on what you view as the underlying drivers of that business, and again, the sustainability of those drivers as we get through this year and into next year?.

Yes. I think the -- I think you're right, the compares do matter. I think there are a couple of other factors that are helping that we seem to be cautious about. One of them is that there is a premium tax that has been added to the health care offerings, this is by the carriers who then pass those costs through to the PEO.

And as you know, the pass-through costs are relatively important in that business. Having said that, the worksite employee growth is still quite strong in the PEO, so it's not coming alone from inflation in our pass-through cost, but the inflation in the pass-through cost is a factor.

So I would tell you that a better way to look at this business over the long term is to look at worksite employee unit growth, which is really the driver of growth in this particular business as a good proxy for what to expect in terms of the range.

And I think when you look at it that way, and you look at the difficult compare that we have in the third quarter versus the previous third quarter, because we had a very good net new business result last year in this business, because of a variety of reasons around tax restarts, et cetera, tends to have a relatively large influx of new business and also we have a reasonable amount of loss that would take place on January 1.

So you take all those things combined, kind of where we are trend-wise in terms of worksite employee growth, the fact that our pass-throughs are a little elevated right now and the difficult compare that we have on January 1 in terms of net new business, I think we think that the guidance that we're providing, I think, is appropriate..

And then how about the sustainability going into next year? So we've got perhaps some distortions this year, but as you look into next year, do you see any changes in the landscape that would dramatically change the trajectory of this business?.

So let me just go back in terms of -- I think I know what you mean by distortions, but just to reiterate one more time, the business is clearly performing -- is really firing on all cylinders in terms of absolute growth in units, margin improvement, new business bookings results. It's -- so they're really performing well.

So I was really only addressing the issue of the specific growth of the first quarter in comparison to the full year results. So we expect this business to continue in the same positive momentum that we have guided to.

So my comment was really more around whether the guidance was appropriate versus whether we're excited or positive about the business, because we are. And we don't expect or see any decelerations or issues in the near term in that business over the next several quarters or even into next year.

But obviously, this is, I guess, why we talk about forward-looking statements. It's a long way away to start talking about next year. We obviously don't give guidance about next year, about the PEO or any other business. But we don't have any reason to believe that we can't continue the positive momentum.

The backdrop for this business with health care reform has helped for sure in terms of activity of people looking for solutions and options around health care, just the regulatory compliance complexity that has grown not just the result of ACA, but just government regulation overall just continues to drive small businesses to look for solutions that can help them, allow them to focus on their business.

And the PEO is about as good as it gets in terms of being able to really have someone else focus on those issues for you..

Great. And if I could just ask just one quick follow-up. And I think you got it. Jan answered part of this question previously.

But now that we're pretty well into the deployment of some of the new HCM platforms, can you help us better understand how much of the ES growth comes from unit growth versus revenue per unit in contrast to kind of prior years, if you will?.

Yes. So I -- we didn't get the question in our year-end call, and I can answer it now. Of course, last year, we had approximately -- unit growth of approximately 5% year-over-year, so a very solid client expansion, driven largely by our success in the downmarket, of course, where the most of the units came from.

But we had really growth actually across all segments. And the answer is very hard to do because in the upmarket, we have higher market share and the proportion of upsell to clients is higher versus in the downmarket, it's virtually all new unit growth driven in the revenue growth. So like a curve, it balances out.

And so it's a mix of it, and the mix hasn't really changed, as you see, because the unit growth has continued now for the third year in a row at these levels or slightly accelerated, if you want. And so it's not -- 50-50 is not the right way to do, but it's a balance of growth..

Our next question comes from George Mihalos with Crédit Suisse..

I understand the easier comparisons in the first quarter related to new sales and also to retention.

But I'm just curious, did the business perform above plan relative to your internal expectations in the first quarter, given the -- more of the second half difficulties around the comps?.

Let me just -- let me start off by saying, again, in terms of clarifying my language when I -- and I think it's a financial term of hard to say easier compare, which is not well understood by field leaders because they certainly would not interpret the results as easy.

So the -- as you can imagine, this -- to deliver the sales results regardless of what your sales results were last year, which is a financial question, is hard because you have to execute. Same thing with retention and client losses.

Having said all that, since you're asking a direct question and we feel compelled to give you a direct answer, the direct answer would be that, yes, both the sales and retention results exceeded our internal plans, but I want to qualify that by saying that they exceeded them by an amount that is not significant enough for us to rethink and change our guidance.

It's the nature of our business model that -- this recurring revenue model is so positive in so many ways, but it's also very, very difficult to change the trajectory in the numbers in one quarter, and that is exactly what happened this quarter.

So we're very pleased when we exceeded our internal plans and budgets, but I don't know how many times I've had to be on this call and mention that retention in one particular quarter was down by 10 basis points because of a large loss or because they're lumpy. So what's good for the goose is good for the gander, it goes both ways.

We happen to have had a good quarter and it's no reason to start moving, I think, expectations. At least from our perspective, that's where we stand today..

Okay, I think we can appreciate that. And just as a follow-up, a question for Jan.

Any reason why in the future you would not be open to adding leverage on the balance sheet, solely for the purpose of accelerating returns to shareholders, buybacks and the like?.

Yes, what you mentioned is correct. In principle, we, of course, changed as part of the spinout of Dealer Services to CDK, our credit rating, and we have now a AA credit rating, which allows us more financial flexibility.

And we are aware in evaluating the benefits that it has for us, offers a certainly greater financial flexibility either for returning cash to shareholders or pursuing strategic acquisitions. So we're aware and we're evaluating it, and we have a constructive dialogue about the opportunities.

And when we feel we can generate shareholder value with it, we certainly think about these elements..

I think Jan and I both, I think consistently for several years now, talked about how we view the world in terms of total shareholder return or TSR, which obviously, dividends and share buybacks are an important component over long periods of time of driving our TSR to what our objective is, which is to be top quartile.

So we appreciate the question because we're very sensitive to those topics and certainly are looking at all of our options to help, in addition to our revenue and margin improvements, to find other ways to really drive our TSR to that top quartile performance..

Our next question comes from Smitti Srethapramote with Morgan Stanley..

Your pay per control growth was quite strong at 3.1%.

Can you just comment on what drove that growth rate this past quarter?.

Well, it was strong and is, I think, a strength in line with the strengthening of the overall economy. ADP's clients tend to outgrow the U.S. economy over long run, so we are blessed with a very healthy set of clients. And the improvement was kind of -- we attribute more to the overall continued improvement in the U.S.

labor market, and it happens to be a very good number..

And again, just to add context, the -- when you look at it over the last 2 or 3 years and quarter-by-quarter, it's higher than it has been for sure, but only by 30 to 40 basis points. It's kind of hovering in the mid-2s, and so we had a 3.1%.

Again, I would just caution everyone that based on a lot of experience that we have, do not take 1 quarter and extrapolate.

And if you feel compelled to extrapolate, you should know that the impact of 1 percentage point growth in pays per control is about $20 million annually, so a 30 to 40 basis point improvement if it were to remain for the rest of the year, which is hard to predict right now, would really not have a material impact on our result either on the top line or the bottom line for the year..

Got it. And maybe just a follow-up question.

Can you talk at a high level about the growth of the ASO or the BPO business? Does it look similar to what you're seeing in the PEO segment? And could these businesses drive an acceleration growth in the Employer Services segment?.

I think as I mentioned in my opening comments, given that that's one of our strategic pillars, we, I think, specifically mentioned that besides the PEO, our other BPO offerings are actually growing quite nicely as well. And we have those BPO offerings in the low end of the market, the mid-market and the upper end of the market.

In addition to the PEOs, the PEO is a separate segment and a different business, it obviously has tremendous synergies with the rest of ADP. But we actually have BPO offerings that are available also in the small market without core employment. We have them in the mid-market and we have them in the upper end of the market.

And I -- again, Jan may add color. But all 3 of them are performing quite well and they're -- all 3 are growing, I think, at better than ADP line rates..

Yes. And I think relative to employees served growth, which is maybe then the common denominator about it, they're very similar rates. So it's a very success story -- it's a big success story for us..

And well into the market.

If you combine our PEO worksite employees with our ASO paid employees, we don't call them worksite employees, paid employees, I think on a combined basis, I think you would find that over the last 5 to 7 years, it was a marathon, but I would say that we're probably comfortably right now, probably the leader in terms of offering BPO services in the low end of the market..

Our next question comes from Jason Kupferberg with Jefferies..

I wanted to come back to the PEO segment for a second. Obviously, the growth is strong there.

Do you guys think that you're taking share in that market? Any evidence to support that? Or do you feel that it's more the rising tide lifting all boats, just given the ACA and compliance burdens?.

I think that if you look at it over 5 to 10 years, I think we have taken share in that business. I think if you look at the last year or 2, it would appear -- again, there's not a lot of great data because most of the PEOs are private -- privately held companies. But if you look at the publics, I think that the growth rate has improved.

Some of that is -- it's hard to discern how much of it is acquisition-related versus organic. But we still feel pretty good that we're gaining share in that specific segment of our business.

But we have to acknowledge that there appears to be also a rising tide, not quite to a level -- or execution, which is I think better than average or better than market average. But the market is healthy and appears to be growing at a reasonably good clip, which is not necessarily true over the last 10 years..

Okay, that makes sense. And just switching gears a little bit to pricing. I know that Paychex mentioned on their earnings call about a month ago that they were seeing slightly better pricing dynamics in their business.

Have you seen something similar at the smaller end of your client base?.

We stay consistent with our overall strategic pricing approach. And just for reminder, that is -- approximately 1% of our revenue growth is driven by our annual price increases across all segments.

And anticipating your question in the down market, we actually did review our pricing statistics and behavior, and discounting behavior, and net pricing, and price increases for the business, and it is completely in line with our historic behavior in the marketplace, but no changes in our pricing strategy..

Our next question comes from Gary Bisbee with RBC Capital..

So RBC is a customer of your FSA product. I recently tried to log in to it through the ADP website, was unsuccessful, called the 800 number, and after several minutes trying to figure it out, it turns out we're actually a customer of the SHPS product that you acquired 2.5 years ago. I guess two-part question on that.

First of all, is that sort of unique for some reason to the FSA that that's not been fully integrated into the legacy ADP offering? And secondly, are there any implications from that in terms of the ability to migrate people to the new integrated platforms and/or upsell other products or anything else?.

It's a great question, it allows me to make a couple of comments. First of all, after the call, I'll give you my cell phone. If you ever have a problem, you can call me and I'll make sure that I get you through. I actually tried to log on to the FSA site Sunday night and had a challenge myself because they were doing maintenance.

So I did call someone and they told me that they were doing maintenance, but I have the right phone numbers if you ever need help. So the SHPS acquisition is an interesting question because we actually acquired SHPS, in large part, to get that platform.

So we are actually in the process of moving our legacy FSA clients on to the SHPS platform, which is really our platform, it's the ADP platform. Now -- so again, that was an example of where we decided to use our capital for acquisition rather than internal development because, as you know, we are doing a lot.

I mean, our R&D spend has grown quite substantially over the last 3 years, but there are many things that we need to address in terms of legacy platforms, and our spending accounts was one of them. So one of the things that came with SHPS was an HSA solution, which is very important to have in today's market because of high-deductible health plans.

So FSAs, as you may or may not know, have now been restricted in terms of the dollar limits are a little bit lower. They're still popular. I still have an FSA, but I think you have to have an HSA platform. And we tried to get -- to create a -- to get an HSA platform through acquisition, through the SHPS's acquisition.

So that's really not a platform that we're actually trying to get off of. We're actually trying to get off of our old platform. And so we're kind of agnostic in terms of where it comes from, whether it's our platform or an acquired platform. We're just trying to get on to common platforms.

And so this would be an example rightly so, where we are still not where we want to be in terms of having everyone on one common spending accounts platform and having it integrated into all of our other products. So I think it's the work in progress.

And it allows me also to address the question that we got, I think it was the first question, around migrations, which is we still have a lot of work to do.

So to be very clear because we're talking about all the progress we've made, you just kind of hit actually ironically on a chord because I asked the same question 2 years ago when we were looking at a demo of one of our products.

My question was, "Well, how does FSA integrate into this?" So we still have a lot of work to do, and we've actually accelerated our migration spend this year and we've also accelerated our R&D spend, which that one is much more clear because you see it in the 10-Q and you see it in our disclosures.

But we are nowhere near yet where we want to be, particularly when you get into the upper end of the market. I think we've made that clear over the last 2 or 3 quarters. But I just wanted to reiterate that in our upper-end payroll HR benefit spending accounts, like there is still quite a lot of work to do, but we are doing that work.

And we have, I would say, significantly increased our spend in the upmarket migrations area, and spending accounts would be one of those..

Great. And then that leads into the follow-up, which is just I think one of the bull cased [ph] arguments on ADP some investors have had is that at some point, you actually see cost decline quite a bit from turning off legacy systems and slowing the migration spend.

From that last comment, I guess, would a reasonable assumption be that, that's still more than 12 months away? Or I know you probably don't want to give us a number. But it's still quite a ways off before you would have that benefit happen if it does at all..

That is correct. And I think that what's going to be good this year is that by the end of the year, we'll be able to tell you that we shut down completely the EasyPay platform and that it resulted in the benefits of X, Y and Z. So we will be able to at least begin to better quantify some of the benefits and positives of shutdowns of platforms.

And then besides EasyPay, which is a major platform in our low end of the market, we have 3 platforms in the mid-market that we are planning on shutting down and a couple in the upper market as well. This will be the first time -- as much as we've been talking about this, it's really been about migrations and not shutdowns.

We're actually this year going to start shutting things down. And I think we'll at least be able to give you, I think, a little bit more color on what potential benefits might come.

But right now, for the next 12 months and probably sometime beyond that, our strategy is to reinvest everything that we are getting as a result of improvements into accelerating that type of activity, the migrations and the shutdowns..

Our next question comes from Jim MacDonald with First Analysis..

Just one more on the PEO. The growth of worksite employees decelerated a little bit this quarter to 15% from 18.9% even though it's sort of the summer period.

Could you talk about that a little bit?.

Yes. I think it's one of those peculiarities, I believe, of how our sales force behaves, which I talked about a little bit over the last year and probably a little too much. But our fiscal year ends on June 30, and the PEO had, what I would call, a spectacular year-end from a fiscal year-end standpoint. And I think it's as simple as that.

That was what's driving it. Because I think if you look at it trend-wise prior quarters to that fourth quarter, I think it would be more in line with where we are today. So I think if you look at it on a moving average basis over 4-quarter moving average, I think that business is accelerating in terms of its worksite employee growth..

Okay, great. And now that you're focused totally on HCM, can you talk about your acquisition philosophy? Would you be willing to add new areas, make bigger acquisitions? Just kind of what you're thinking is there..

I think, again Jan will probably add color. But our position hasn't changed at all as a result of our spinoff of Dealer or our change in our credit rating other than we clearly have much more financial flexibility now.

So I think we had always communicated to all of you and to The Street that we would be willing for the right acquisition to change our capital structure. I think what happened was we have the benefit now of our capital structure... [Technical Difficulty].

[Operator Instructions].

Okay. If we're back on, we apologize for the interruption. And we wanted to continue with answering your questions. I think, Jim, if you're still connected, I think your question was around acquisitions and if our view has changed as a result of the spinoff.

And I think my answer was that I think we're still kind of consistent with our prior philosophy, which is we want to use our capital both for organic growth and product development. But we also are open to -- and that's really our primary focus, but we're also very open to the right types of opportunities to use our capital for acquisitions.

And I think we just talked a few minutes ago about how we believe that we accelerated our progress in terms of FSA and spending accounts through the acquisition of those SHPS platforms a couple of years ago. And we will continue to look at those types of opportunities in the future.

So one of the benefits that we have, and I think Jan talked about it earlier, is that the spinoff of Dealer really did kind of ease the path for us, if you will, in the sense that there really wouldn't be -- there's likely to not be a change in credit rating as a result of our need to access the capital markets either for returning cash to shareholders or for an acquisition, unless that acquisition were to be obviously much larger than the average typical acquisition that we like to do.

So Jim, I hope that answered your question. I hope you're still connected..

Our next question comes from Lisa Ellis with Sanford Bernstein..

It's Lisa. I have a question about competitive dynamics. Are you seeing higher win rates in the lower end of the market. Do you perceive that you're gaining share there? And then in the upper end of the market, you've mentioned that Vantage had a fairly strong quarter.

To what extent in the upper end of the market do you go to market independently? Or to what extent do the competitive dynamics among the software vendors, like SAP, Oracle, Workday, et cetera, impact you in and around your partnerships, your go-to-market partnerships with them?.

Well, it's a great question on the -- and again Jan can add maybe his view. But I think on the upper end of the market, we really have a situation of coopetition with many of our -- of all the companies you mentioned.

So we compete head-on in many respects for the entire HCM bundle, but we have a variety of solutions, for example, wage garnishments, standalone tax and other solutions, that we would provide in partnership with some of our -- what some of you might consider to be our competitors in the upper end of the market.

We believe we have very good relationships and very good integration arrangements with really all of the competitors that you mentioned and a few others.

And I think we believe that, that's the right posture for us to have in the marketplace because we want to be in on deals and we want to have our foot in the door so that we have an opportunity, having the broadest solutions of any provider out there.

I think us having a logo or a relationship with the client is very important and very advantageous for us down the road to be able to attach and add on additional products. So we do cooperate as well as compete with all of those players in the upper end of the market.

And I think your other question was in the low end of the market around market share. I think consistent with our prior comments over the last probably year to 2 years, we believe that we're growing faster than the market.

And how much of that is shifts from software, pure software, to cloud-based software or to cloud-based software with support and service, which is what we provide in regulatory compliance, it's hard to know how much of our growth coming from shifts in the market versus direct market share takeaways from a specific competitor.

So we don't have that level of information, that level of detail, but we do know that we're growing faster than the Small Business market is growing overall..

Terrific. And then just a quick follow-up on the PEO.

Can you give us a flavor for what the customer retention is like in the PEO business? Like does it differ materially from the Employer Services business? And how many -- what's the mix of PEO clients that actually come out of Employer Services versus their sort of new greenfield wins?.

So obviously, we don't disclose retention segment specifics, so this would probably be a bad time to start. To give you a scent of kind of where it is, it is -- if you look at the low end of our business, the average-sized client in our PEO is about 30 worksite employees.

And so it falls squarely in what we call the Small Business market, the SBS market. The retention rates of those businesses, just because of natural dynamics that occur in that business or in that segment of the business, is lower than our average.

So I think we right now are at around 91% annual retention, so our large national accounts would have a higher than 91% retention and our Small Business clients would have lower than 91% retention. So the PEO, because of the size client that they address, would be in that category of between 80% and 90% retention, below the average.

But we'd rather not get into specifics. But we're quite pleased and quite happy with the retention rates and the trends of those retention rates. And from the few that we see that we have visibility to in the outside market, we feel ours compares favorably. And I think there was another question..

A question regarding the sources of our business. And this has to be answered like in a very clear way. Our broad field sales force in SBS and in major account has an incentive to generate leads that are suitable for the PEO. And such, the sales forces provide lead flow and opportunity into our core PEO sales force.

And that's an important component of how we generate business. But those sales forces in SBS and major accounts are both to existing clients and new clients. And, of course, in the SBS downmarket, the larger component of this is really clients that are really newly identified as potential targets to the PEO.

So the conversions of RUN clients onto the PEO is of lesser importance in this business. So this is really good, new unit growth that we're getting in the PEO..

Our next question comes from Sara Gubins with Bank of America Merrill Lynch..

I was hoping to get a little bit more color around the 11% growth in new business bookings. It sounded like it was strong across the board. Did you see much improvement with large clients? Last quarter, you had talked about new business transfer clients with more than 10,000 employees being down. And I'm wondering if you saw a change in that trend..

This is a great opportunity for me to provide some comments in the sense that I believe that some of my focus, and I take accountability for this last year after the first quarter, on individual portions of our sales results, individual business units, I think it was counterproductive both competitively and also internally in terms of a distraction to our own organization.

So that's why we worded our opening comments the way we did, which is we're trying to tie our new business bookings results and explanations to kind of our broad strategic pillars rather than kind of specific segments because it was counterproductive to have done so.

Having said that, because we spent so much time on it, I think it's appropriate this quarter, but we will try to avoid doing this, as much as we've done it in the past, in the future.

I think it's okay to be a little more specific so that you have comfort because of some of the noise that we've had over the last 3 or 4 quarters, we had strong, very strong sales results across the board both in our traditional under 10,000 market as well as with large clients, with multinational clients in benefits, in RPO really across the entire national accounts segment.

And the results were as strong in this quarter as they were weak last year in the first quarter. And that is really all I can say other than when you look at the numbers, it's quite impressive because of the gap. But that doesn't necessarily mean that in absolute dollars, if anything, other than what we want and need in order to grow the business.

It's just that we had such a bad first quarter last year that the difference is quite stark. And back in -- I guess, the best way to summarize it is we're happy we're back where we want to be in terms of our performance in our upmarket. And our intention is in future quarters to try to not be as specific..

Okay. And then 2 follow-up questions.

The first is, with Vantage, as you're going out to existing clients and asking them to convert, can you talk to us about how those conversations are going, if you're providing any incentives for them to convert and how the sales force will balance migrations versus new sales? And then second, separately, last quarter, when you had given guidance, you talked about $30 million of investment in both the first quarter, and then also the second quarter.

Did you make that $30 million in the first quarter? I'm wondering if the margin expansion incorporated that $30 million..

I'll let Jan answer the question about the investments and the margins. In terms of the question about existing clients moving over to Vantage, so we had -- at the beginning as we rolled out Vantage, I think in the first 50 sales that we had, I don't think any of them -- maybe 1 was a migration. I think in the next 50, we had maybe a couple more.

I think now we are really including in the Q some existing clients that we want to move over. But it's still a relatively limited number. Like most of our Vantage sales are new logo, new share type of deals with very high attach rates for all the HCM modules.

But there are obviously circumstances where it makes sense both because we think it's the right thing for the client and some of it is driven by just demand from clients wanting to migrate.

So for example, in our HR Tech Conference or our Meeting of the Minds conference, we show these products, we talk about them, so it's kind of -- and we're very excited about them, and they're great solutions.

So it is difficult to talk them up, and then tell people, "Sorry, but they're not available." So we are now beginning to move some clients, a limited number of clients, on to Vantage, and we are -- we're working hard to build capacity to do that because we have to do both the new share and new logo business as well as the migration.

So it's a matter of just creating and adding capacity from an implementation standpoint. In terms of incentives, the good news about Vantage and also about Workforce Now is that these new platforms really make it natural to purchase more than just the traditional payroll solution that ADP was known for, hence, our focus on HCM.

So the attach rates of time and attendance and benefits administration and talent and some of the other modules are -- in some cases, they're up to 80%. So there is a natural incentive as a result of additional revenues to the company, which our sales force gets credit for and get commissions for. So I don't think it's an incentive issue.

I think that it's really a capacity and execution management issue..

And if I went to your question of the incremental cost that we guided to at the end of our last -- of our year-end call a quarter ago, we talked about incremental expense pressure driven by our investments into IT and some acceleration of our investment in our sales force for the first 2 quarters, $30 million in each quarter.

And yes, we did incur incremental cost in this quarter slightly better than the $30 million, so we didn't quite spend as much money as we thought to. But a large component of this materialized and is in our results. And I think I would expect the same split for the second quarter, about half on sales force expense and half on IT acceleration.

If you kind of want to place it on your P&L, that's what will occur..

And another thing I would add is that we also had a couple of -- which we disclosed, a couple of things that helped us in the first quarter that are not occurring in the second quarter.

And so it will be easier to see the difficulty of the additional investments in the second quarter compared to the first quarter because we did get some help in the first quarter that we hadn't anticipated. Otherwise, we would have included it in the guidance..

Our next question comes from Bryan Keane with Deutsche Bank..

I just want to ask about the increased use in mobile.

Does that bring in -- does mobile bring any additional revenue opportunity? And then I guess, on the flip side, on the cost side, is it just an additional cost? Or can that lower the cost to serve ADP clients?.

We do believe that it has an impact on the cost side because a number of actions that people would take, both practitioners and employees, the things that they might be able to do themselves on their mobile devices are really issues that we would avoid either calls or avoid emails or chats or texts or whatever method people choose to communicate with us to ask a question or to get service.

So I think there is some benefit in terms of lower cost for ADP as a result of some of our mobile solutions being out there. But I think there's a couple of other very positive impacts.

I don't think that we can attribute directly revenue, so we can't tell you that we're advertising, for example, on to our mobile platforms and generating advertising revenue.

But I can tell you that the connections and the relationships we're building with the employees of our clients in addition to the traditional relationships we have with our clients are very, very helpful in terms of our sales and our client retention.

So as an example, if you go to the App Store, like the ADP app, believe it or not, is one of more popular business apps out there for the simple reason that people can check their -- it's not just about checking your pay and whether you got paid and how much went into your direct deposit, but you can check also your -- you can clock in, clock out if you are an employee that has a time and attendance system with ADP.

You can actually do your open enrollment and choose your benefits. You can check for a doctor.

I mean, there's just an endless number of things that you can do on the mobile devices and that just creates stickiness and a stronger relationship and a deeper relationship with our clients, not only at the practitioner level but at the employee level as well.

So we believe that it's helping us in many ways in terms of the growth of our new business bookings. It's probably helping us with our retention. But we really can't point to specific metrics to tell you that it had X impact on either of those. We just know that it's helping.

And down the road in the future, there may be other monetization opportunities. But at this point, that really hasn't been our focus..

And then just as a follow-up, curious to know now what percentage of revenue now comes international. And then with that, just particularly interested in Europe and what you're seeing out of Europe since a lot of concern about the European economy still..

So I think Jan will give you kind of the percentage and the details.

I think that we're -- we have to say that we're pleased with -- given the backdrop in Europe, we're pleased with the new business bookings results in the first quarter and with the revenue growth, which as you can imagine, are both lower than the line averages that we're reporting both from new business bookings overall for ADP and revenue growth for ADP overall.

So our international business obviously includes more than just Europe, it includes our multinational solutions, it includes Latin America and it includes Asia-Pac. And when you add all those together, those are actually quite close to our -- despite the drag from Europe, are quite close to the line average of ADP.

But I think in view of the backdrop, I would have to say that we're quite proud of the performance of our business in Europe. And I think Jan may have a little more color around pays per control, retention and those kinds of things..

Yes. I think, Carlos, you captured the vast majority on the revenue side, international revenues roughly in line with our overall ADP revenue. Europe is a slight drag but really doing well.

And that is paired with a good bottom line performance in Europe, where they kind of saw the overall results of the performance in Europe are really quite good in this quarter. And you have been -- I have been dancing around the pays per control numbers now for quite a few quarters in Europe with seeing silver linings coming closer.

And we did have 1 month where we were actually slightly positive in the quarter, so too early to call it a sunrise there, given also the kind of more historic economic reports that we receive out of Europe. But gradually, it has been improving, and we're now basically flat as I talked about a 20 basis points decline.

So flat on the pays per control side paired with the performance that Carlos described, Europe has had a good quarter..

And Jan, what is the percentage of international revenues now as a total?.

Yes, that's it, I apologize. Approximately 20% for ADP..

20%.

And then just lastly on that, so is Europe improving? Or is it actually getting worse just when you're looking at the trend line?.

If you want a trend line, ever so slightly improving..

Our next question comes from Kartik Mehta with Northcoast Research..

Carlos, you talked about the ACA [ph] compliance tools that you have now.

Do you find those tools as a retention of clients tool? Or will you be able to price? And is there a revenue opportunity with those tools?.

It is clearly a revenue opportunity. So we have -- I mean, I'm sorry, but clearly to us, maybe not to anyone else. But the level of complexity that is involved in compliance with ACA is quite high. And I think in our view, the model that we have is again as usual for us, it's not only technology, it's also expertise.

And so that really will be our differentiator. So where others might just kind of add an additional report, which makes it sometimes harder to monetize, we are really building capabilities to help people make decisions, so decision support tools as well as expertise from people.

And right now, we actually have sold a number of clients, these are incremental sales dollars with additional annual recurring revenues with our ACA compliance solutions. And I think we've only had it out in the market 3 or 4 weeks or a couple of months, a couple of months.

And so I think we're very positive or very bullish on what the take rate is going to be and the attach rate is going to be. We have had a few Vantage sales that had ACA attached to them, and it was pleasing to see the attach rates of ACA in addition to kind of the traditional time and attendance benefits administration, et cetera.

So again the caution here again would be on $10 billion in revenue and $1.5 billion in sales, if you want to -- our sales plans for ACA for this year would not be something that would register on your radar screen.

But call it, 12, 24, 36 months out, it could be an important element of our sales growth, which we will -- if it gets to that point, we will obviously let you know..

And then just as a follow-up, you talked about the improving client retention. I think you've talked about 2 things that have helped are maybe the cloud-based system and a little bit easier comps.

Is there anything else that's changed that's helping you improve retention in terms of maybe comp or how you're going about interacting with clients?.

Well, I think that one factor that I probably should have mentioned earlier, and I'll say it now, is one of the ways that I've described it to some of our associates internally as to why and one of the reasons we wanted to move aggressively on these migrations is I described our situation a few years ago as our competitors are really fishing in an ocean when they were competing against us in our legacy platforms.

Then it was kind of started to reduce that ocean to a lake in terms of taking clients that were, in my opinion, vulnerable.

As a result though, they're still getting good service and still getting solutions that help them with whatever needs they had, but it didn't have kind of the consumer-grade experience and the ease of use that I think some of our new platforms have and didn't have the integration.

And so we went from an ocean for people to fish in, our competitors to fish in, and I would say these are competitors in both the low end and the mid-market, and in some cases, in the high end but mostly in the mid-market and the low end. And we took that from an ocean to a lake.

And I think we're getting close to the point where we're going to reduce their fishing area to a pond.

And I think that is part of what you're seeing in terms of the retention rates that I think we are in a better position -- we're in a much better position offensively in terms of our product set, but we're in a much better position also defensively in terms of being able to protect our client base..

Our next question comes from Mark Marcon with R.W. Baird..

I just wanted to follow up a little bit on that in terms of taking the ocean down to a pond.

Can you talk about the migration that you would anticipate on the upper end in terms of moving to Vantage, how long you think that would take? And how do you -- how are you -- the commentary that you made about the ocean to the pond, does that apply to the upper end? And then....

Not yet..

Okay. So when would that -- when would we start seeing that apply? And then secondly, you've gotten a lot of new logos on Vantage.

Who are you taking them from?.

So I think that we -- again we hate to be boring, but we have a lot of detail around where we get our clients from in the upper market because they're obviously specific clients. They're big enough that we know them specifically where they come from, what they were using before. We also have the same information for clients that we lose.

So we have our wins and we have our losses, where they go. And unfortunately, there really isn't -- I think I said this numerous times and it hasn't changed that there really isn't one specific competitor or category even.

So we take our fair share of kind of on-premise software, but we also take our fair share from other cloud-based outsourcers like us.

And so there's really -- I wish I could tell you that there's a specific pattern, but there isn't, which is a good -- in my opinion, is a good thing, because we don't see any one competitor that is creating an enormous problem for us. And we also don't see any one competitor where it's kind of easy pickings for us.

So I think it's fairly balanced across the board. On your comment about Vantage and the upper end of the market, I do think that we still have work to do there to improve both our -- I mean, our offensive position, I think, is much better than it was.

But we are working very, very hard and investing significant amounts of dollars in making sure that we have the same kind of situation competitively in the upper end of our market that we have in the mid-market and the lower end of the market.

And at the risk of sounding too bold because I think, as you repeated it, it may have sounded a little arrogant and bold to say that we've created a pond now.

That may have been a better term to use internally than it would have been externally because there's really no way for ADP to ever be a pond for people to fish in because we are the biggest and we have the largest market share without any question.

So the question is not whether we will be viewed as a pond or an ocean, we will always be viewed as an ocean. The question is what will be the success of the fishermen in our ocean. And I think we have gradually reduced the success rate and we intend to continue to do that. But we will always be a very large target because we are very large.

And by the way, we're pretty proud of that because I think that indicates we've been doing something right for the last 65 years..

I fully appreciate that, Carlos, and I fully understood what you meant by the pond. I was just wondering in terms of that migration, how -- is this -- would this be a 2-year, 3-year, 4-year kind of process? How should we think about that on....

We've taken some actions to supplement our resources, our migration resources with, for the first time, with external resources. And we're not going to get into a lot of details about who or how. But it's a meaningful commitment with a third party to help us with acceleration of our migrations.

And we will let you know as that progresses, how it's going because it hasn't started yet. And so we're optimistic that, that will help accelerate our progress. But frankly, we don't have anything to report now. We'll let you know as that moves ahead..

Okay. And then one last one just on Vantage in terms of the new sales.

Would you expect the new sales performance on the upper end to be as strong as it would be in the mid and the small for this year?.

In the mid and the low end of national accounts or in....

No, in national accounts, would you expect it to be a strong as it will be in mid and the small in terms of your plans?.

Of overall ADP, yes, we do. In case it wasn't clear, in the first quarter, our national account of Vantage sales were a multiple in terms of growth rates of our mid and low end of market..

Our next question comes from Tien-tsin Huang with JPMorgan..

I'll be quick. Just on -- just wanted to ask about some takeaways that we got from the HR Technology Conference, which is that it seems like a lot of the SaaS and tech-oriented HR providers were starting to invest more on the servicing side with specialists, et cetera.

And I'm curious if you're starting to see a little bit of convergence, like with ADP obviously missing greatly and technology doing a nice job there. But also on the flip side, the SaaS players are going to invest more in outsourcing elements. I'm curious if you're seeing that in the marketplace..

We haven't felt it or seen it because we don't -- I think that's something that maybe all of you would have a greater sense of, but we're happy to see that other people are seeing the value in our business model and coming to our way of doing business..

Okay. No, I just wanted to check, figured you'd be a good person to check on that. And just for Jan, just on the FX side, obviously I know that you've mentioned FX could have some impact on revenue.

But how about the sensitivity to earnings on FX? Can you walk us through what the sensitivity is there?.

Yes. Thank you for the question. The good part about ADP is that our expenses and revenues on the international sides are well aligned, so the translation risk that we have on the FX is moderated, of course, by having the 2 components of the P&L being parallel.

So I said now FX rates can be volatile, so we don't really forecast them, and we take them as they come. But my comments were leading to we had minimal impact of FX in the first quarter. But at current rates, there could be some, I think maybe 1 percentage point or so if the rates were to stay where they are on the revenue side.

But I don't think we would impact our bottom line forecast for overall ADP based on the FX impact. It's not as meaningful on the bottom line. So it was really a comment just made for revenue growth that there could be an impact, but it should not impact to the same degree or to a much smaller degree really on the bottom line for us..

This concludes our question-and-answer portion for today. I am pleased to hand the program over to Carlos Rodriguez for closing remarks..

So thank you for joining us today. As you can see, we're very focused on delivering against our HCM strategy. We're going to continue to combine our expertise and our technology strength. And I think hopefully it's obvious that we're in a great position to help our clients successfully manage their most important asset, their people.

I also want to make one other comment, which is next week, I actually reach my 3-year anniversary as CEO.

And I want to thank my leadership team and the 52,000 ADP associates for all that they do every day and all that they've done over the years because the one thing I've learned over the last 3 years is it's a lot easier to sit around and prepare for conference calls and report results than it is to deliver the great results that we've had.

So I want to thank all of them and specifically also my leadership team. And I want to thank you for joining us today, and we'll see you at the next -- and we hope that you will join us for the next conference call. Thank you very much..

Ladies and gentlemen, this does conclude today's presentation. You may all disconnect, and have a wonderful day..