Good morning. My name is Jenny, and I will be your conference operator today. I would like to welcome everyone to the Insperity Second Quarter 2024 Earnings Conference Call. Currently all participants are in a listen-only mode and we will open for questions following the presentation.

[Operator Instructions] Please note this conference is being recorded. At this time, I would like to introduce today's speakers. Joining us are Paul Sarvadi, Chairman of the Board and Chief Executive Officer; and Douglas Sharp, Executive Vice President of Finance, Chief Financial Officer and Treasurer.

At this time, I'd like to turn the call over to Douglas Sharp. Mr. Sharp, please go ahead..

Thank you. We appreciate you joining us. Let me begin by outlining our plan for this morning's call. First, I'm going to discuss the details behind our second quarter 2024 financial results.

Paul will then comment on our recent accomplishments including an update on the implementation of our Workday strategic partnership solution and on our outlook for the remainder of the year. I will return to provide our financial guidance for the third quarter and an update to the full year guidance.

We will then end the call with a question-and-answer session. Now before I begin, I would like to remind you that Mr. Sarvadi or I may make forward-looking statements during today's call, which are subject to risks uncertainties and assumptions. In addition some of our discussion may include non-GAAP financial measures.

For a more detailed discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements and reconciliations of non-GAAP financial measures, please see the company's public filings including the Form 8-K filed today, which are available on our website.

Now let's discuss our second quarter results in which we reported a 34% increase in adjusted EPS over Q2 of 2023 to $0.86 above the high end of our forecasted range and we reported a 29% increase in Q2 adjusted EBITDA to $66 million.

The earnings outperformance compared to our expectations was primarily driven by lower than expected benefit costs continued strong pricing and lower operating expenses. As for our growth metric, the average number of paid worksite employees increased sequentially over Q1 to approximately $307,000.

The increase included net growth in our client base although at a level significantly lower than Q2 of 2023 and lower than our expectations for the typical summer hiring period. Client retention remained at an expected 99% for the second quarter.

Worksite employees paid from new sales although at a similar level as Q2 of 2023 came in below expectations. And in a few minutes Paul will comment on the current business environment impacting our prospects and clients and the sales and marketing efforts in place to sell into this environment.

Gross profit increased by 16% and as a 1% decline in paid worksite employees was more than offset by continued strong pricing and lower benefit costs when compared to Q2 of 2023, which included a spike in health care costs.

The combination of our other direct cost areas including workers' compensation and payroll taxes were generally in line with our forecast. Q2 operating expenses were managed below plan increasing 13% over Q2 of 2023 including $14 million associated with the implementation of our Workday strategic partnership.

Our year-to-date operating expenses now include $19 million associated with the strategic partnership along with the ongoing investment in our long-term growth and our service and technology offerings. The second quarter of 2024s effective tax rate came in at 28%, which was above Q2 of 2023's rate of 25%.

We continue to provide returns to our shareholders through our regular dividend program and the repurchase of our shares. During the quarter, we paid out $23 million in cash dividends and repurchased 151,000 shares of stock at a cost of $14 million.

We ended Q2 with $211 million of adjusted cash, an increase of $40 million over the December 31, 2023 balance. And we had $280 million available under our credit facility. Now, at this time, I'd like to turn the call over to Paul..

Thank you, Doug, and thank you all for joining our call. Today, I'll begin with comments on our solid second quarter and first half financial results in a challenging environment in the small and medium-sized business marketplace.

I'll follow-up with our plans to capitalize on our market opportunity over the second half of the year, and I'll finish with an update on progress on our Workday strategic partnership and the prospects for growth next year and beyond.

Our Q2 financial performance was strong exceeding the high end of our expected range in adjusted EBITDA and EPS even while coming in at the low end of our range for paid worksite employee growth.

Our strong pricing and direct cost management produced upside at the gross profit line and combined with lower operating expenses to achieve financial outperformance over last year and our guidance. Our 1% decline in paid worksite employees over the same period last year was primarily the result of our large account attrition.

At year-end, we discussed last quarter, combined with the continuing effects through Q2 of the challenging economic environment in the small business community. Last quarter we reported details indicating stress in the small business marketplace from a variety of economic issues, including interest rates and inflation.

This was evident from our real-time internal data reflecting nominal net hiring, activity, low levels of overtime pay and a relatively low level of commissions paid to the sales personnel at client companies, which we believe reflects a weak economic climate.

Our client survey information indicated a high level of optimism going into the second quarter and the potential for at least stabilization of these metrics. However, prospect and client decision-making reflected a higher level of uncertainty in Q2 and net hiring in our client base weakened further than expected.

Now, in recent quarters and as we have seen before during periods such as these, we have seen an increased level of hesitancy and hiring and buying decisions by the small to medium-sized businesses. This also often leads to more aggressive sales tactics and pricing in the marketplace further lengthening the sales cycle.

Now, even in the face of these headwinds over the first half of the year, we had what I believe is a significant level of success in sales. Both paid worksite employees from previously booked sales and new book sales over the first half of the year are in line with levels for the same period last year.

These comprised approximately 90% of targeted booked sales and paid worksite employees from sales for the first half of 2024. Even though we have a 4% increase in BPAs out in the marketplace, I believe these are solid sales results against the backdrop of the uncertain economic and political climate.

Our client retention has continued to be strong in Q2. However, nominal net hiring within our client base combined with the lower than targeted paid worksite employees from previously booked sales, caused a lower starting point for paid worksite employees as we head into the second half of 2024.

The lower starting point for the second half will have an expected dampening impact within our residual income business model. We now expect lower average unit growth for the balance of the year and the shift out one quarter before significant sequential worksite employee growth would be reestablished.

The more important dynamic for consideration is the outlook for growth into next year and beyond. We believe we're very well positioned to have a strong second half in sales and retention, which lays the foundation for potential growth acceleration in 2025.

Our confidence going into the second half comes from applying the learnings from the recent difficult period to improve sales and retention to reignite growth even with no help from net hiring in the client base.

We have four significant initiatives that we believe will enhance performance for the all-important fall selling and retention period over the balance of the year. First, our implementation of BPA assigned accounts through our account-based experience marketing and sales strategy I mentioned last quarter, and the corresponding training.

This initiative retooled our sales motion and mobilized our entire BPA team for the balance of the year. This was a bit of a distraction in the second quarter, but now represents a new level of opportunity to improve performance going forward.

Secondly, our marketing success over the first half of the year generated more marketing assisted discovery calls and booked sold employees than the first half of last year even in this challenging business environment.

We have a new national brand campaign ready to launch that we believe will differentiate in spirit in the marketplace and increased sales opportunities over the balance of the year. Third, we have completed a thorough evaluation of the sales and retention dynamic across the different segments of our client base.

This has led to different approaches for each segment to incentivize prospects current clients and sales staff over the balance of the year. And last but not least, our new strategic partnership with Workday has the potential to contribute to our sales and retention efforts ahead.

Yesterday we reached the six-month point from signing our strategic partnership agreement with Workday. We completed a thorough evaluation of our progress with the face-to-face meeting of senior leadership from both firms last week in California.

We are excited with the progress to-date and the commitment and investment being made by both firms to go to market together with a co-branding co-marketing and co-selling game plan.

All four of the key initiatives including our corporate tenant for Insperity's internal use of Workday the client tenant, which will be embedded into our PEO solution for the larger client target market, our go-to-market plan and the establishment of our deployment enablement team are well on the way.

The Insperity corporate tenant deployment effort is on track and we expect to begin using the Workday platform early next year. The application tenant is being built and we plan to begin the next round of testing shortly. We are continuing to build our out integrations for key systems.

Administrative training is ongoing and employee training is scheduled to commence in Q4. We believe that our experience through the deployment of the corporate tenant will provide Insperity valuable insights into the deployment and servicing of our clients on the future PEO client tenant.

We are making excellent progress on the PEO client tenant design and deployment efforts. We've used the learnings from the delivery of our initial foundation tenant to further shape our proposed solution design. The joint solution product definition is taking shape and we're well down the road on the design and development of the solution.

We plan to continue to build out our client implementation and support strategy and train our providers to deliver services through the platform. We'll continuing to refine our pricing model for the solution to appropriately represent the value to our clients.

The product implementations and system integration efforts required to enable the joint solution are well underway and our teams are tracking progress against our project plans. We have started the pre-selection process to identify beta clients that could be a good fit for migration to the new joint solution and support our product design process.

We have begun sharing leads between both companies and are continuing to refine our processes to act on these qualified opportunities.

We established a campaign to formally introduce the Insperity Workday co-selling relationship directly to the sales team to educate each other on our sales motions, the goal is to drive an increased volume of leads exchanged over the next few months to test our system as we head into the very active year-end selling season.

We believe there's an incredible amount of opportunity related to leveraging each company's sales investments efficiently. Insperity can meet the needs of many of these prospective clients now even before the joint solution is available.

Workday has products peripheral to their core HCM system that make a lot of sense for our current and prospective clients as well. We are working hard to put each other in the room with prospective clients that are actively searching and see value from these offerings. We are continuing to advance our client deployment and enablement strategy.

In Q3, we will begin the design of customer onboarding playbooks for both new implementations and for existing PEO client migration to the new solution.

Another significant outcome of the first six months in the recent senior leadership meeting is the effort over the balance of the year to integrate the go-to-market plan into both companies' 2025 business objectives. So in summary, we are pleased with the first half 2024 results against a more difficult than expected business environment.

We're energized about our plans for the second half to reignite our growth into next year and we remain excited about the possibilities for the long term including our Workday strategic partnership. At this point I'd like to pass the call back to Doug..

Thanks, Paul. We now expect earnings for the full year 2024 to be above the midpoint of our prior guidance based upon the combination of our outperformance in Q2 partially offset by slightly lower earnings expectations over the second half of the year.

As Paul just mentioned we now expect our prospect and client base to be impacted by the ongoing uncertainty in both the economic and political environment.

Given these factors combined with the starting point going into the second half of 2024, we have lowered our full year outlook to average paid worksite employees in a range of 307,400 to 310,600 which is a slight decline of 0.5% to 1.5% compared to 2023.

The earnings impact from this lower worksite employee guidance over the last half of 2024 is expected to be mostly offset by strong pricing, favorable benefit cost trends and operating expense savings. During the first half of this year our pricing and benefit costs have been slightly favorable when compared to our initial budget.

We expect these factors to continue over the remainder of the year. As a result of our lower worksite employee outlook we have planned on operating expense savings from our prior forecast primarily in the areas of salaries and G&A. We will continue to focus on our efforts and planned spending on the implementation of the Workday strategic partnership.

Based on these factors we are now forecasting full year 2024 adjusted EPS and in a range of $3.33 to $3.88 with the midpoint up from our previous guidance of $3.17 to $3.90. We are now forecasting adjusted EBITDA in a range of $261 million to $290 million.

As for Q3 we are forecasting paid worksite employees down from 1.5% to 2.5% compared to Q3 of 2023. As for Q3 earnings we are now -- we are forecasting adjusted EBITDA in a range of $32 million to $45 million and adjusted EPS from $0.21 to $0.45.

Earnings comparisons to Q3 of 2023 are significantly impacted by low benefit costs in that prior period and the planned investments in the Workday strategic partnership in 2024. Now at this time I'd like to open up the call for questions..

Thank you very much. [Operator Instructions] Thank you. Your first question is coming from Andrew Nicholas of William Blair. Andrew, your line is live..

Hi. Good morning. Thank you for taking my questions. I wanted to start by talking a bit about the worksite employee guidance change.

Is there a way to maybe break out the lower second half outlook between reduced expectations for net client hiring versus softness on the new business side or sales execution front if you could maybe unpack that a little bit further that would be helpful..

Sure, Andrew. Thanks for the question. Good question. The biggest impact on the outlook for unit growth for the balance of the year is the starting point.

We also though did continue to reduce any benefit from the client hiring because that's been evident that the level of uncertainty is high and I expect that to continue at least through the election period. So -- but the biggest issue is kind of the recent activity in the client base that caused the number to be lower at the start.

And of course there were two contributors to that. Even though we had what I believe is very effective sales in this environment, the starting point is affected by lower than desired -- lower than hitting our target number for paid worksite employees.

But the biggest issue is that starting point in June, which reflected significant less hiring especially as the quarter evolved compared to last year..

Understood. And then Paul and Doug, I mean in your prepared remarks you touch very briefly I think on the competitive environment and how different firms or PEOs can be more aggressive when it's harder to close some of these deals. I'm just wondering if that I think you had talked about that last quarter as well.

But has that gotten maybe worse or more competitive versus last quarter? And how would you characterize your own aggressiveness or participation in that kind of activity?.

Yes. First of all, no, I don't think it's any more than it has been. It's been that way for a little while. I would say probably the last -- got -- started to get more aggressive about a year ago, got more aggressive as you got into year-end. And then throughout this year it's been pretty much the same. We have continued to win our share of the accounts.

And I would say that we've been effective in -- especially we know, which accounts fit us best. And so we do the work to make sure that those accounts are the ones that bring in.

But winning the same percentage of our accounts that we have in that competitive environment, so it's really been more the overall activity level that affected the volume more than anything. And that's kind of natural. We also have more hesitation in making a final decision that we've seen.

We also actually had some accounts that have been sold that kind of deferred their starting point. So all that weighs into your immediate worksite employee count..

Very helpful. Thank you. And then if I could just squeeze one more in. on the guidance and maybe the conservatism of guidance from here.

It looks like you lowered the worksite employee outlook, but we're able to maintain the -- if not modestly improve the EBITDA and EPS outlook and so I'm just wondering if there's any less conservatism in the healthcare piece of the business as an offset or if that's primarily a function of some of the cost actions and salary and G&A savings that you mentioned Doug in your script? Thanks again..

Well, I think it's a combination of two. But if you look on the healthcare side, it's two things. It's the stronger pricing that we've been getting relative to our initial targets. So that's as much a piece of it is the cost side of things.

If you remember going into the year, I commented on initial medical healthcare cost trend in the 4.5% to 6% range or so. If you look through the first half of the year it's been trending at the low end of that range maybe even slightly a little bit less than the low end. And we see that continuing -- trend continuing over the remainder of the year.

Our intent is always to be conservative on that number as you know because that's where you can have a little bit more volatility from quarter-to-quarter.

If you remember we came off of the first quarter with some of the experiences behind this change healthcare thing and I think we appropriately reserve for any delays in processes and the result of that issue that came up, I feel like we're still conservative in that number and what we recorded at the end of the second quarter for our IBNR.

So overall we always want to be intent going into the year conservative in our estimates both on the healthcare side and the workers' comp side. But it has been trending favorably over the course of the year, thus far.

And even with, what we feel is a level of conservatism, we still feel like it ought to trend towards the lower end of my initial range..

I would just add that the nature of our business there's never a time where we would ever be aggressive on such a number. It makes sense in the business were to be conservative in our outlook relative to the benefits..

Thank you very much. Your next question is coming from Mark Marcon of Robert W Baird & Company. Mark, your line is live..

Good morning. and thanks for taking my question. So, two sets of questions. The first set revolves around the Workday partnership.

Paul I'm wondering, if you can talk a little bit about the quality of the leads that you're currently seeing just the level of cooperation and really appreciate the update with regards to how much you've been spending, so far on Workday.

I'm wondering if you've got any updates now that you've got greater clarity, with regards to the year in terms of how, how much you're going to spend this year and what your preliminary thoughts are for next year? And lastly related to Workday, are you going to incorporate Workday in terms of your new campaign, which you mentioned you're going to be launching?.

Great. Thanks for the question. So, as I was mentioning in my remarks we just hit that six-month point and we had a leadership meeting to evaluate where we are where we're going what to really put the hammer down on, et cetera.

And definitely -- it was it's very encouraging as to moving forward on all of the fronts, that we envisioned in this strategic partnership. I have all -- everything moved as fast as I wanted to know -- no, nothing ever moves like that. But we definitely as I mentioned, this effort to communicate with both sales organizations.

That's what drives the quality of the lead flow. And so that process has already begun and has already shown some very good signs.

There were ways we could have thrown more mud up against the wall quicker, with leads that would be less qualified, but I believe the work that we've done together really puts us in a strong position to do the level of piloting over the next month or two, and then some stronger volume of activity over the balance of the year that allows the companies to put into our 2025 plan, targets and that's critical.

As you know, people always respond to what's in their game plan. Now, we started this agreement. It's just barely in time to build things into our plan but beyond the opportunity to build them into Workday's plan. And it was going to be -- it was hard to predict some of those things in the first place.

So we are well down that road now, and very excited about how this is going to work together where the two companies, are going after this target market with a plan that both of us are working, to take both companies' product sets into the market together.

And in preparation for this joint solution that we believe is going to be a hand in glove fit for a significant portion of that marketplace, in a disruptive manner relative to lower cost, quicker timing of deployment and enablement and getting the value out of this solution being embedded into our PEO opportunity that we're bringing to the marketplace.

So we're very encouraged about that. And I don't have conversion rates yet, things of that nature. So we didn't build a lot of benefit of this into our results for the year, but there's quite a bit of upside potential simply because of the account size and the ability to post sell them.

So, we're excited about it, but being cautious about the timing for that. We'd not after a flash in the pan. We're after a long-term arrangement that continually provides growth for both firms in this target market. Do you want to comment about content investments. I'm sorry, go ahead.

What was that?.

I was just wondering if they were going to -- if Workday was going to be incorporated into the campaign, but I appreciate the discussion with regards to investments as well..

So, as I mentioned, we talked about our different segments -- and so there will be -- and there is an ongoing effort of communication that introduces and then reinforces and supports the introduction of the partnership, especially to the higher end and even kind of our emerging growth customers. So yes, there are some aspects of that.

I don't -- you will not see that in the national campaign at this point. It's too early for that. But that dynamic is something we'll be talking about for next year..

Thank you very much. Your next question is coming from Jeff Martin of Roth Capital Partners. Jeff, your line is live..

Good morning. And as a follow-up to that, I think Doug was about to introduce the investment for maybe balance of this year and into next year. So I'll follow up on that..

Yes. So if you recall, coming into this year, we were estimating our cost from both our internal resources that are fully dedicated to this partnership, along with our costs associated with the utilization of Workday resources, in the neighborhood of about $60 million for this year.

As I just reported, through the first -- through the second quarter -- second quarter, it's in the area of $19 million or so. So we look forward for the remainder of this year through the third and the fourth quarters. We still like that like the investment is still in that same ballpark of $60 million or so.

We didn't quantify in specific dollars next year's investment. However, we did say that the majority of the full investment is weighted heavier in the first couple of quarters. I'm sorry, first couple of years. So as you look at it in 2025 relative to the $60 million, we're investing this year. it should be generally in that same ballpark..

That's helpful. And then for my primary questions, curious where you are with the implementation of the Workday solution internally? I know that's something that you were starting with to familiarize entire organization with Workday.

And then secondly, -- can you give us an update on health care benefits trends specific to maybe pharmacy costs, plan changes that you've implemented versus last year? And then finally, just general frequency trends..

Yeah. So the first part of your question, I can handle that on our game plan for implementation and moving all of our corporate staff on to Workday. And as I mentioned in my prepared remarks, we are on track for early next year as planned.

And we are even in the process now of having people leadership trained in a certain way, so we can in the fourth quarter, to be training the whole staff to be moving on to the system..

Yeah. So if you remember last year, our pharmacy trends were elevated. You particularly dealing with the specialty drugs like the Ozempic and the butanes, et cetera. So we had an elevated trend, obviously last year.

Thus far this year, we've seen more normalization this year and I wouldn't say all the way back obviously, those drugs are still being used, but we feel like it's less than 10% or so that pharmacy trend this year last year it was about 17%. So you can see that trend has come down.

Some of it is the comparisons year-over-year comparisons, but that's what we're seeing and that's what we're our modeling in for this year..

Thank you..

Thank you very much. Your next question is coming from Tobey Sommer of Truist Securities. Tobey, your line is live..

Yeah. Hey, good morning. This is Jack Wilson on for Toby. Maybe just a little bit of a follow-up on Workday in the fall selling season. So it sounds like it will not be in the national campaign.

Could it still be a material driver of sequential growth in early 2025? Or is that still sort of too early to see it?.

No, it absolutely can be. And I want to be conservative about -- it's difficult for me to be conservative talking about the Workday relationship and its potential because it is enormous. The timing of that potential is a little bit harder to predict and it's a little more chunky because they're bigger accounts.

So hey if it's just barely effective, it can still affect our January 1 numbers. So I'm hopeful at least some effective although we didn't really build that into the picture yet for the balance of the year because most of these larger accounts wouldn't start until January anyway. So I'm very excited about what the opportunities are.

We're working together extremely well. And we are now working things down into the operational level so that this will -- you're starting to turn on the faucet we've done all the plumbing. And now we're turning on the faucet. But you don't turn it on all the way when you start.

You turn it on a little and make sure there's no leaks anywhere and then you start to crank it up. So that's exactly what's going to be happening over the balance of the year. We're at the very minimum, we're going to learn a lot about how to make this super impactful in 2025.

But however, I believe we're going to see -- certainly see some good activity levels following up leads. And in our world that usually converts into adding business. So we are getting closer and closer to where the timing of when we're going to launch the new offering, fits within the range of anybody considering getting on to Workday.

Remember for most companies it takes 12 to 18 months just to even get on. So we're getting near that range and that's when we will be definitely co-selling and helping the customer make sure they're going the right direction that suits them. And that's what we'll be doing in '25 and we will be doing that to a degree in this fall period..

Okay. Thanks for that color there. And then just maybe a quick one on the guide. So just quick math it looks like the midpoint of EBITDA is out sort of $2 million higher than the prior guide. Is it possible to quantify the moving pieces in that..

Yeah. I mean the pieces are, of course, that the worksite employee count is lower because of the starting point primarily. And that's why it kind of shifts out when that growth acceleration begins in the fourth quarter instead of the third where we were.

But -- and when you have that volume difference that obviously is a drag but that's being offset mostly all, but we beat the quarter by $6 million. The year is only going up 2. The negative four is due to that volume and that volume is quite a bit more than that.

That was offset by the lower benefit trend and mainly the pricing side which has also been strong. And then also if we have a lower level of worksite employees, we manage expenses to match that. And so some of that also helped in there.

So there's still -- we're hopeful to see upside from what where the guidance is, but we believe this is the appropriate guidance based on where we're starting in the last half of the year..

Appreciate the time..

Thank you very much. And our next question is coming from Mark Marcon of Robert W. Baird & Company. Mark, your line is live..

I was wondering if you could talk a little bit more about the strong gross margin -- gross profit per worksite employee during this past quarter. Were there any accrual reversals or anything along those lines that benefited? And then more importantly, you mentioned that clients are hesitant but pricing is actually stronger.

And I was wondering if you could just talk a little bit about what's driving the improved pricing that you're getting relative to plan?.

Yes. I mean as far as your comment with respect to any adjustments.

Obviously, I think you recall going back to this changed healthcare breach, it was appropriate for us when that was going on to make a very conservative estimate on IBNR, because obviously, when that happens there's a change in the payment process, but by our insurance carriers to the participants because the whole flow of information from the provider to the insurance carrier that was impacted by that.

And so we feel like at the end of the first quarter, we made an appropriate conservative IBNR adjustment to take that into account. Going into the second quarter, it proved that it was definitely conservative. But to the extent where we could -- it was appropriate to reduce that reserve.

So the claims that ran off and were paid in the second quarter came off lower than what we had initially estimated, really the impact of that breach to be, okay? So yes, you'll -- there was a reserve adjustment on the medical side as it relates to that particular issue that hits the second quarter earnings, okay? What is the second part of your question? On the pricing side?.

Yes, because it sounds like that's going well..

Yes, it really is going well. And keep in mind pricing -- in our world, of course, is the total price of what we do that includes our markup and all the direct allocations correct cost-related allocations, et cetera. And every month, of course, we have new and renewing business.

So we're continuing to have very effective pricing efforts on both sides new and renewing but we're also able to be aggressive where we want to be to continue to deal with the economic climate.

And as we mentioned last -- really a couple of quarters ago and reinforced last quarter, we're able to do things to be aggressive with more of a try-and-buy approach for new customers coming on to be more competitive with the marketplace. But even so, continually maintaining our position is the premium service offering in the marketplace.

We do more than anybody else, our breadth depth and level of care that we offer to the customer is a differentiating factor. It's worth more money. But we have to make sure that that premium is within a range that is acceptable customers will make that move.

And we've been able to do that well in terms of working with the sales team and our pricing and review group to make all that work..

That's great.

How would you characterize pricing relative to say a year ago just in terms of the services that you're providing? Is that up a few percent? Or how would you frame that if you're stripping out the pass-throughs?.

Yes. So listen, on the renewing business, definitely up as our strategic plan is, and then on new business, actually about the same, just a hair higher maybe..

Great. Thank you..

Thank you very much. Well, we appear to have reached the end of the question-and-answer session. I will now turn the call over to Mr. Sarvadi for closing remarks..

Well, thank you. Once again, we want to thank everyone for participating today, and we are super excited about the last half of this year and how we're positioned in the game plan that we have the specific initiatives that we believe will drive us toward reigniting our growth plan.

We're excited about our Workday relationship and how that has evolved to this point and what that means for us going forward. So once again thank you for participating. We look forward to our next dialogue next quarter. Thank you..

Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation..