Automatic Data Processing Inc

NASDAQ:ADP

Earnings Call Transcript 2021-Q2

[Operator]

Good morning. My name is Michelle, and I'll be your conference operator. At this time, I would like to welcome everyone to ADP's Second Quarter Fiscal 2021 Earnings Call. I would like to inform you that this conference is being recorded and all lines have been placed on mute to prevent any background noise.

After the speakers' remarks, there'll be a question-and-answer session. [Operator Instructions] Thank you. I'll now turn the conference over to Mr. Danyal Hussain, Vice President Investor Relations. Please go ahead.

[Danyal Hussain, VP, IR]

Thank you, Michelle. Good morning, everyone, and thank you for joining ADP's second quarter fiscal 2021 earnings call and webcast. Participating today are Carlos Rodriguez, our President and Chief Executive Officer and Kathleen Winters, our Chief Financial Officer.

Earlier this morning, we released our results for the quarter. Our earnings materials are available on the SEC's website and our Investor Relations website at investors.adp.com where you will also find the investor presentation that accompanies today's call, as well as our quarterly history of revenue and pre-tax earnings by reportable segments.

During our call today, we will reference non-GAAP financial measures which we believe to be useful to investors and that exclude the impact of certain items. A description of these items along with the reconciliation of non-GAAP measures to the most comparable GAAP measures can be found on our earnings release.

Today's call will also contain forward looking statements that refer to future events and involves some risk. We encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ materially from our current expectations. As always, please do not hesitate to reach out if you have any questions.

And with that, let me turn the call over to Carlos.

[Carlos Rodriguez, President and CEO]

Thank you, Danny, and thank you everyone for joining our call. This morning we reported results reflecting our continued strong business performance and momentum, with our second quarter revenue and margins both outperforming our expectations, as our business continued to demonstrate resilience in the face of ongoing economic headwinds.

We reported revenue of $3.7 billion, up 1% on a reported basis and flat on an organic constant currency basis, with adjusted EBIT margin down 30 basis points. Coupled with a slight increase in the effective tax rate versus last year, our share count reduction our adjusted diluted EPS was flat versus last year, much better than the decrease we were expecting.

During the second quarter, we continue to see signs of improvement in the overall operating environment, with the positive implications for pays per control, new business bookings and retention.

Our pays per control metric performed slightly better than expected, as it improved sequentially to a decline of 6% versus the larger declines we experienced in Q1 in the latter part of fiscal 2020. Underlying employment trends in Q2 were consistent with what we experienced in Q1, with larger enterprises somewhat slower to show improvement, but with small and midsize businesses demonstrating a healthy level of hiring.

We performed well on employer services new business bookings. Even though bookings declined 7% this quarter, this was well ahead of our initial expectations earlier this year, and in line with the revised expectations we communicated last quarter. And it's important to point out, that our new business bookings for the first half nearly matched last year's half, despite the very difficult environment.

As we had anticipated, more modest sales contributions from items we noted last quarter, such as new business formations and multinational deals, coupled with a resurgence in virus case levels, contributed to lower growth rate compared to Q1. But underlying trends have remained strong, including improving demand in our mid-market and HRO solutions, as well as continued acceleration and leading indicators and a solid sales pipeline more broadly.

Moreover, with the change in U.S. administration and the continuing dynamic regulatory environment, we expect momentum for our solutions to improve as companies continue to recognize the value of partnering with ADP, given our deep compliance expertise and reliability. And as a final point, what we believe to be the most challenging six months of the fiscal year behind us, we are now even more confident in our expectation for bookings performance to improve further. As a result of all these factors, we are raising our new business bookings guidance range by another 5% to 15% to 25%.

Pays per control and bookings trends were both positive, but retention was the main highlight for us in the second quarter, with ES and PEO retention, both reaching record levels. We saw strong performance across the board with the biggest improvement for the EF segment coming out of the U.S. down market and mid-market businesses, as our clients' satisfaction scores remained at record levels across the board.

Following this incredibly strong performance and an early read of Q3, we're very pleased to be able to raise our retention guidance significantly, a sign of our improving competitive position. And the retention we are now expecting would represent a record high ES retention for a full year.

Now onto another critical topic and one that remains a key focus for us. Our product teams continue to execute well and we reached a number of milestones this quarter. I'll start with RUN and Workforce Now, our two highest revenue platforms.

For RUN, we continue to make a range of enhancements to make client onboarding seamless and in some cases digitally automated, improving the implementation process for tens of thousands of RUN clients we bring on every year. We also meet further enhancements this quarter to our account and connect platform, already a big differentiator for us and we now provide even more insights to our critical accounting partners.

For Workforce Now, we continue to build momentum by leveraging our next gen payroll engine. And as we discussed earlier this year, we are live with hundreds of clients who have been very pleased with the solution and continue to rate their experience very highly.

In addition, we launched a new workforce management solution that along with our next gen payroll engine, enables real time punch the net payroll calculations all delivered from the public cloud.

And, based on feedback from our clients and sales associates, we believe a significant portion of the hundreds of sold next gen payroll clients were incremental to what we would have sold without next gen, which of course has positive implications for market share and competitiveness in the mid-market, as long as we continue to execute.

Also, we continue to scale up our Next Gen HCM, in this quarter we went live with our first client in Mexico. Importantly, we did this with enhanced speed to market, as we partnered with a third-party to localize and implement, which speaks to the power of our federated architecture and the need of global capability of our Next Gen HCM and Next Gen payroll platforms.

For our data cloud platform, we had a number of exciting new launches. To support our clients around ESG objectives, we launched a pay equity storyboard that allows clients to identify equal pay gaps, and calculate effective distribution models to close these differentials across their organization.

We also continue to leverage the power of data cloud outside our core HCM base. And earlier this month launched a partnership with New York Stock Exchange owner ICE, which will pair ICE data services market expertise with ADP's HR and compensation data.

We are very excited about continuing to explore opportunities related to our differentiated and robust data set, which is the most expensive in the industry to drive insight both within and beyond traditional HCM use cases.

This quarter we also continued to receive industry accolades and won a number of awards for our solutions, including G2 and Capterra awards for the number one user rated workforce management solution. We continue to reach all time high client counts on all of our key platforms, including RUN, Workforce Now, Vantage, GlobalView and of course, Next Gen HCM. And within our HCM platforms, we continue to reach a new client count milestones for individual solutions, such as retirement services.

Moving on, I'd like to once again acknowledge our associates for their ability to stay focused on finding innovative solutions and driving higher NPS in what has been an incredibly challenging and dynamic environment. It's because of this execution that we were able to demonstrate such resilient performance year-to-date with revenue flat, adjusted earnings per share up and retention at record levels.

Now, with the worst of the pandemic related headwinds hopefully behind us, and vaccine programs positioning us for continued recovery, we are increasingly focused on reaccelerating growth in the quarters and years ahead. To that end, we have already reinvested some of our Q2 outperformance into product development acceleration, a digital transformation push and selective sales and marketing expansion ahead of our key selling quarters.

While it's too early to talk about fiscal 2022 in any detail, we expect our fourth quarter revenue growth to accelerate significantly and our goal will be to sustain that momentum. We are very pleased with our performance year-to-date and the fundamental strength of our business, and we are very optimistic about the quarters ahead.

And with that, I'll turn it over to Kathleen.

[Kathleen Winters, CFO]

Thank you, Carlos, and good morning, everyone. Q2 was another strong quarter across every major business metric. While we will still see some pandemic related headwinds for the balance of the year, we are more confident in our outlook given we believe the toughest part is behind us. Our performance thus far into the year reaffirms the resilience of our business model, the strength of our product, and the ability of our sales and service teams to perform even in the toughest of environments.

We remain confident in our ability to execute as we move forward. In the second quarter, our revenues grew 1% on a reported basis, flat on an organic constant currency basis, which is significantly better than our expectations coming into the year and better than even the revised expectations we had as of last quarter.

Once again, ES retention rates represented favorability as did very strong performance from our PEO. We managed expenses prudently, while making important incremental growth and productivity investments and delivered margins that were better than our expectations. Our adjusted EBIT was down just 1% despite pressure from a decline in client funds interest.

Our adjusted effective tax rate increased 20 basis points, compared to the second quarter of fiscal 2020. Our share count was lower year-over-year, driven by share repurchases. And as a result, our adjusted diluted earnings per share of $1.52 was flat versus last year second quarter.

Moving on to the segments. For ES, our revenues declined 1% on a reported basis, and 2% on inorganic constant currency basis, representing continued sequential improvements driven by record level retention, and the more modest 6% decline in pays for control versus 9% last quarter. Client funds interest declined 23%, as average yield declined 50 basis points versus last year.

Our balance growth however, improved significantly to be flat this quarter. Supported by better retention, better pays for control and the lapping of our Netherlands money movement operation closure in October of 2019. Employer services margin was flat for the quarter, significantly ahead of our expectations, supported by stronger revenue and prudent costs control.

Our PEO, also had another very strong quarter. Total PEO revenues increased 5% to $1.2 billion, with average worksite employees improving sequentially to 571,000, down 2% year-over-year. The strong results were also driven by better retention, which was at record levels, as well as slight sequential improvement in pays per control, that remains down mid-single digits versus last year.

Revenues excluding zero margin benefits pass-throughs improved to up 2%, well ahead of our expectations. This outperformance was driven partly by better WSE performance, but also due to favorability in wages paid for WSE during the quarter. PEO margin increased 100 basis points in the quarter, driven by better revenue as well as continued expense discipline.

Given our overall performance in the first half of the year, we have taken the opportunity to ramp up certain investments to supplement growth and productivity coming out of the pandemic. Relative to our expectations heading into the year, we are investing to accelerate certain R&D initiatives. We are also increasing investment in digital transformation as we continue to apply technology to enhance self-service and take work out of the system.

Additionally, we are investing further in sales headcount and in certain marketing programs ahead of our key selling season in the back half of the year.

Let me turn now to our updated guidance for fiscal 2021. As we've said, with two quarters now behind us, we feel more optimistic about the full year. Although we still anticipate certain pandemic related headwinds to persist for the rest of the year, we do expect some of these headwinds to moderate.

For pays per control, we continue to expect a decline of 3% to 4% for the year. For the first half of the year pays per control performed slightly better than our expectations. But with the improvements seeming to moderate into the calendar year-end, we are making no change to our full year outlook at this point.

Out of business losses have been better than expected throughout the first half, and at this point we see minimal risk for a significant deterioration during the year, given what we've seen early in Q3 and with stimulus potentially providing additional support to small businesses.

On client funds interest, while the U.S. Treasury yield curve has recently steepened, there is no material change to our expectation for a realized average yield for the current fiscal year. However, we are again revising our balanced growth higher, primarily on stronger client growth.

Let's now look at a revised fiscal 2021 guidance. For ES, we now expect revenue to be flat to up 2% for the full year, versus our previous expectation for flat to down 2%. That's driven by a few factors. Having had strong bookings performance six months into the year and seeing continued improvement in leading indicators, we now expect our new business bookings to be up 15% to 25% compared to our prior forecast of up 10% to 20%.

This additional 5% raise reflects the incremental investments we've made in sales and marketing, as well as an overall increased confidence for the next two quarters, particularly as our clients and prospects continue to deal with changes in legislation governing the workplace, making the payroll and HCM Solutions we offer and the compliance expertise we provide even more compelling.

We now expect our ES retention to be up about 100 basis points versus flat to down 50 basis points, this improvement is driven by both the strong Q2 performance as well as reduced concern about Q3 losses as early signs indicate continued strong performance. This full year outlook would represent a new record ES retention level, and we are very focused on achieving that goal.

And for our client funds interest, which primarily impacts the results of our ES segment, we are again raising our outlook on a higher average balances expectation following the strong Q2 retention performance, as well as continued recovery in wages paid. There was no change to our expectation of an average yield of 1.6%. We now expect our margin in the employer services segment to decline 50 to 100 basis points for the year, representing a 50 basis points improvement versus our prior forecast.

For our PEO, we now expect revenue up 3% to 5% versus our prior forecast of flat to up 3%. And we expect average worksite employees flat to up 2% versus our prior forecast of down 1% to up 1%. We continue to expect our average worksite employee metric to be negative in Q3, and then turn positive in Q4. Our revenues excluding zero margin pass-throughs are now expected to be up 3% to 5%, compared to our prior forecast of down 1% to up 1%.

This significant increase is due to factors consistent with what we described for the second quarter. Higher WSE count, but also higher wages and therefore, more revenue on a per WSE basis. For PEO margin, we now expect to be up 50 to 100 basis points in fiscal 2021 versus our prior forecast to down 50 basis points to flat. This raise is driven primarily by stronger revenue performance.

For our consolidated outlook, we now anticipate total ADP revenue to be up 1% to 3% in fiscal 2021, versus down 1% to up 1% prior. And we anticipate our adjusted EBIT margin to be down 50 to 100 basis points, versus our prior guidance of down 100 to 150 basis points. We now expect our effective tax rate to be slightly lower at 23% for the year, and we continue to assume a net share count reduction in our guidance.

Net of all these changes, we are raising our adjusted diluted EPS guidance to be down 2% to up 2%, versus our prior guidance of down 3% to 7%. We are very pleased to have been able to raise our guidance again, given the combination of better-than-expected macro conditions and our strong execution six months into the fiscal year.

We remain confident in our strategy, growth prospect and ability to execute. Coming into the fiscal year, we had braced for a number of economic headwinds, but stayed focused on our strategy and growth. And we maintained our investment in our product, our sales force and our associates, in order to support our key goals of delivering excellent client solutions and growing market share.

As we have done since the pandemic started, we plan to continue to support investment in products and sales. We look forward to keeping you updated on our progress.

And with that, I will turn it over to the operator for Q&A.

[Operator]

[Operator Instructions] We'll take our first question from the line of Bryan Bergin with Cowen. Your line is open.

[Bryan Bergin, Cowen]

Hi, good morning. Thank you. I'll ask two upfront here. So first on bookings, can you talk about composition of bookings in 2Q versus 1Q? And give us a sense if you can dissect the strongest and weakest demand across client size?

And then, just looking at the SG&A level this quarter, can you comment on the drivers of the sequential dollar growth there? I heard the comments on accelerated investment. Is that primarily sales force headcount addition or other areas of spend?

[Carlos Rodriguez, President and CEO]

Sure, let me take the - I'll take the bookings maybe and I'll let Kathleen talk about the SG&A. On the bookings, and I think some of this is just the lumpiness if you will of the results, because there's no - there are a couple of things that happened but it's hard to call it a trend right, because we only have really two quarters if you will of post-pandemic results. But in essence, our mid-market business performed a lot better. So, workforce now and the mid-market business did much better in this quarter than in the last quarter.

And then, if you remember, last quarter we talked about that we got some help from our international business and in particular we called out multinational deals, and that was I'm not sure we gave any color around that, but that was strong double-digits is the way I would put it, last quarter helped the last quarter's growth. And this quarter it was kind of slightly negative.

Now in the context of what's happening in Europe, which really started to shut down and started to have challenges before the U.S. in terms of the resurgence of the virus, we're pretty happy with that. Like we're pretty proud of our sales teams over there that they were able to accomplish what they did in the second quarter, but sequentially it was not as strong as the help we got in the first quarter.

We also had really strong bookings in the first quarter in our down-market business, we had some, what I would call modest help from some - what we call client conversions or we call client-based acquisitions, which we do on a regular basis, but they don't come in every single quarter, so we got a little bit of help from that. And I think I also mentioned last quarter, I think I've been doing this for nine years mentioning that whenever we have a strong finish to a year, we typically get off to a slower start. And the opposite is also true, when we have a really bad year, we tend to get off to a stronger start.

A lot of our business is counted at the time of sale and start, but some of our businesses, as you know, like in the up market, there is some flexibility if you will in the sales force. We don't necessarily endorse that, but there is some flexibility for salespeople to book something in call it July versus in May. And because of the way the incentives work and so forth, sometimes we get a little bit of movement from sales into the next fiscal year, if we have a bad fiscal year and the opposite is also true. We'll have a strong fiscal year. We tend to have a hard time getting started in July.

But I think we've been - so this is nothing new. We've been I think transparent, giving you all the kind of the color that we can around bookings. I will tell you that when we cut through all that, so we're trying to look at no different than you would do with for example, earnings, where we trying to see what's the core business doing excluding client funds interest, what's happening with the core business excluding pressure from pays per control. We do the same thing in bookings, like what's happening in the core underlying bookings.

And we see very positive momentum there, in terms of lead generation, digital leads coming in activity by the sales force. So we're optimistic that the momentum will continue into the third and fourth quarter. Of course, the caveat being, the virus has to cooperate in terms of and the vaccine rollout has to continue to stay on track. But I think overall, if you cut through all the - it's not fair to call them onetime items, but if you cut through all the noise, our momentum in the second quarter, in terms of bookings was stronger than it was in the first quarter, even though it might not be what the reported number shows.

And I'll let Kathleen talk about the SG&A.

[Kathleen Winters, CFO]

Sure. So on the SG&A side, I mean, you do have a lot of things within that SG&A. But I would think about it this way. The overall view or picture is that from a selling standpoint, I'll talk about kind of full year, and then we can talk about linearity. But from an overall standpoint, we continue to invest in sales, as we've mentioned, and that is both headcount investment, as well as continuing to look at marketing investment and doing some of that.

So you've got that investment in sales, but you've also got the work we're doing around transformation, which would be offsetting that investment, as well as just discretionary cost control that we're very focused on doing as well. So kind of overall, you've got investment, headcount and marketing, you've got transformation work that we continue to do, and discretionary cost control.

That does change if you look at or not change, but the SKU first half the second half is a little bit different, as we do have significant bookings growth in Q4, our expectation, and so of course, that's going to result in higher Q4 selling expense for us.

[Bryan Bergin, Cowen]

Thank you.

[Operator]

Our next question comes from Bryan Keane with Deutsche Bank. Your line is open.

[Bryan Keane, Deutsche Bank]

Hi, guys. Good morning. Just want to make sure I understood, the employee service bookings for the quarter came in line with expectations, but you guys did decide to raise the full year. So just want to make sure I understand the pipeline, the visibility there that's causing that raise.

And then on retention to record levels. Are you seeing anything in particular on the competition front that is having less of an impact in years past that's driving the higher retention? Thanks so much.

[Carlos Rodriguez, President and CEO]

Sure. On a pipeline question, we do have some visibility. But some of this is really about extrapolating momentum, because in the down market, it's really more about headcount and productivity than it is about pipeline or as in the M&C in the up market. I mean, I'm not telling you anything you wouldn't be able to figure out yourself.

So we have a fair amount of visibility in some part of our business, but in other parts of our business, we based on our experience about productivity metrics and headcount and so forth, we have confidence, obviously, in the guidance that we're giving and the raise, otherwise we wouldn't be giving it.

But, as couple of things that have changed since last quarter, last quarter we had - what we thought was much better results than we had expected, and we thought we had positive momentum and then on top of that, now we have a vaccine rollout. So that was not something that was it was talked about. But this is now a reality.

We also had an election that was still in front of us and that's been resolved. We also thought and people speculated there would be more stimulus and now there is, even though there's even more stimulus being debated, just as a reminder, there was a $900 billion stimulus package that was approved.

So I think if you look at what we try to do, we try to do a little bit of kind of correlation, regression, whatever you want to call it, between GDP and economic growth and our bookings, because we do believe there is some connection there. Like there's other things like the training of our sales force, the tools they have, the quality of the sales force, the turnover. But GDP is a powerful force and the GDP numbers are looking pretty strong here on a go forward basis, with perhaps the exception by some of our analysts out there of our third quarter, the quarter we're in right now.

But if you look at fourth quarter, our fourth quarter or the first half of next fiscal year for us and then the next calendar year after that, I mean, even this full calendar year GDP expectation has been raised, I think, across the board by everyone. So I think it's partly visibility and pipeline and partly our experience that we know, for example, what a reasonable expectation is for productivity per DM per sales rep. We know how many sales reps we have, we know how many new ones we're hiring. We know what we're generating in terms of leads and digital marketing. And I think we put that all together and that comes out to our guidance.

And so I think we're confident in it and we're actually very excited and positive that we were able to do that. And we're just glad that things are looking much better than they were last quarter and certainly better than they were looking in March and in April.

On the…

[Kathleen Winters, CFO]

Bryan, if I could just interject the only other detail I'd add on all of that data that Carlos mentioned that we do look at an ongoing basis, is that when we look at the leading indicators in terms of the data we have, so appointments, referrals, demos, opportunities created, as you know, our sales team are inputting leads into the system. All of those are trending better going into the second half than they were before going into the year. And so we're feeling really very optimistic, as you can tell from the raised bookings guidance. We're feeling optimistic going into the second half of the year.

In particular the digital leads are up significantly. So, again, just wanted to provide that transparency for you.

[Carlos Rodriguez, President and CEO]

And then on the on the retention side, I would say there's probably two data points that I would look at. The retention obviously is incredibly strong and it's going to be record retention for the year, assuming we have the guidance that we've just provided. We've never been at these retention levels. And I think there's a number of factors. I mean, I think our product set is much stronger and it's not just the products themselves, but it's our commitment to moving our clients onto our newer platform.

So we have a lot more clients on newer platforms today than we had a year ago, two years ago, whether a quarter ago or a year ago, it's just a continuing progression that we've talked about now for many, many years. But we've made a lot of progress and we know that the retention on our new platforms is higher than on some of our older platforms. So that's helping.

There's probably some tailwind from this pandemic related, we just can't put our finger on it. The clients are maybe not moving as much. But if you look at each business unit, like, for example, in our down market, the retention in our down market as a result of better product and better execution has been going up for probably six or seven years and is up almost 500 basis points pre pandemic, and that's gone up even more.

So the fact that we've had this positive momentum in the down market, it's a similar story and Workforce Now, if not 500 basis points. But in the mid-market, we've also had three years of improving retention pre pandemic. So I think those are signs that there is something happening in terms of our execution and our product. So, execution is part of it as well, we have to deliver I think on the commitments we make to our clients to resolve issues for them, and answer questions and so. So, it's a combination of better service, excellent service and really better products and migrating clients, I think is helping.

And then secondly, the other data point that I would point to which is really on the bookings side, a combination of bookings and retention that our balance of trade is improving with several of our major competitors for the first time in a while. I think, it's again, related to this effort that we've made to improve product, continue to deliver great service, [Indiscernible] on execution. And I think it's showing up now in some of these balance of trade numbers we're showing some improvement.

So, the reason I bring that up is because balance of trade with the combination of what we're bringing in, in terms of from some of our competitors but also what we're losing to those same competitors. That's why we call it balance of trade. So, there's a number of metrics that would tell me that our competitive position is getting better, and then resulting obviously in higher retention and hopefully also growing booking here in the future.

[Bryan Keane, Deutsche Bank]

Helpful. Thanks for taking the questions.

[Operator]

Your next question comes from Jeff Silber of BMO. Your line is open.

[Jeff Silber, BMO]

Thanks so much for taking my question. Two-part question, first is on pricing. I believe it was last quarter maybe the quarter before you talked a little bit about some of your competitors offering some pricing concessions declines. I'm just wondering if that's been continuing.

And as a follow-up, I'm just wondering if you're seeing any diverging trends by geography, especially in certain areas where we're seeing higher COVID cases? Thanks.

[Carlos Rodriguez, President and CEO]

So, let me take the second one first on divergence. Yes, we would see what we would expect to see, because we are, I think, we're big enough that we kind of really escape again the gravitational pull of overall GDP, but also of specific geographic challenges. So, in Southern California for example, we did see some challenges in terms of our bookings in the down market and into the mid-market there.

It's still impressive if we were able to sell as much as we did. As a footnote, we sold a lot of the say that we're flat, almost flat for us, it's at least, we're impressed with ourselves that our bookings are flat for the first half of the year versus last year. But there clearly are pockets of challenges. Southern California would be a challenge, the Midwest was and the Central part of the country was incredibly challenged for several months.

But we had other places that things were better as a result of maybe more economic activity, or continuing opening regardless of the controversy around that. And then, again, Europe would be a place where I would call out where I think we started to encounter some real headwinds. So, the geographies were up and not just about U.S. it's also global. So, the answer is yes, and that you should assume that we would be impacted by whatever you're seeing in the news.

And so, when you have hard lockdowns in very large metropolitan markets, that would affect us but fortunately, we're very diversified geographically and across segments. So, remember, we operate all the way from small to up market to international and so, we obviously we try to find a way to keep follow these things in balance, and have something helping us, when other things maybe working against us. So, we did see some of that volatility as you described.

On the price side, so one of the things we did talk about last quarter, we did talk about competitors and what we heard anecdotally about competitor pricing action, but we also said last quarter that we didn't get any help from price last quarter. We did get a little bit of help. It was not significant but all around, I think was around 30 basis points of help, which is about normally what we would be getting and to the revenue growth help from price.

And so, I think what tells you this, what we're trying to signal to you there is to tell you that it was appropriate for us to pause for call it, four to five months our normal price increases. By the way, our normal price increases would have been July 1st would have been one of the main times that we do price increases. And remember, our price increases are much more modest than they were five, 10 years ago.

But at our scale, it does matter. But we delayed those price increases. It was not appropriate if you do that given the circumstances that we were under. But you fast forward to September, October, we felt that given the additional services that we were providing. So we're providing a number of incremental services at no additional cost to our clients that I believe our competitors are not providing. And so we thought that going back to our normal modest price increases was a reasonable thing to do and we did that. And you can see the impact on retention which has been none. And so that would be I think a good sign for us.

[Jeff Silber, BMO]

All right. That's great to hear. Thanks so much for the color.

[Operator]

Our next question comes from Pete Christensen of Citi. Your line is open.

[Pete Christensen, Citi]

Good morning. Thanks for the question. Nice trends here. Carlos, given the lifted view on ES bookings and retention, how would you characterize some of the trends you're seeing in the tax rate for additional - add-on modules, those sorts of things?

And how should we think about the runway for the next two or three quarters? And how you see that evolving particularly with some of your new R&D developments, new product and all that?

[Carlos Rodriguez, President and CEO]

It's a great question, because there's still a lot of room for us there. We're very focused on market share and new unit growth. But we don't mind additional share of wallet and additional tax rate, because that's helpful too. And as you know, our bookings have generally been balanced for many, many years, about half of it coming from new logos, and half of it coming from incremental attach. So we love that business.

I happen to be looking at those figures last night and it obviously varies by business unit. But as an example, in the mid-market, we're kind of in the 60% to 70% range, in terms of a tax rate for things like workforce management, which we used to call time and labor management, and benefits administration.

And we have things like data cloud and other items that we can attach as well. But I think the best color to put on that is that there's still a lot of room. I mentioned how we are doing well, not just in our new strategic platforms, but we're also doing well on some of our products that we don't always talk about a lot on these calls like retirement services, insurance services where those tax rates are very low in comparison to what I think is the potential for our client base. Because when you have a tightly integrated solution, it really is a much better experience for our clients. So it's good for us, but it's also good for our clients, which is always an important thing.

So I guess the color I would put there is we've got really good tax rates on some of the core HCM modules, like workforce management, then admin. So HR payroll, then admin, workforce management, those are kind of the core talent management is a place where we've been seeing growing tax rates, and there's a lot of room still there for people to adopt those solutions.

So, we're very optimistic and this is a key strategy for - I think my predecessor before that, which has been great for us that we have a very broad industry. Part of our reason for concentrating on HCM and focusing the company away from some of the other businesses we have like a brokerage business, and dealer services and so forth is this is a growing robust space globally, and there's plenty of room to grow. We definitely want to still focused on [Indiscernible] off of market share and logo growth. But there's an enormous opportunity for us in terms of incremental tax rate.

[Pete Christensen, Citi]

Great. Thank you.

[Operator]

Our next question comes from Samad Samana with Jefferies. Your line is open.

[Samad Samana, Jefferies]

Hi. Good morning. Thanks for taking my questions. Maybe stepping back for a big picture question a little bit in a time machine. But if I think back to the Analyst Day in 2018 and some of the company's key initiatives around the service alignment and taking costs out of the business, and getting to call it mid-20s EBIT margin. I guess aside from the world being very different with what happened with COVID.

But I'm curious Carlos if you could just think as far as those initiatives went and getting the margin structure of the business toward that. Would you say that were ex what happened with rates and what COVID? Would we be in that shape today? And I guess, maybe thinking forward, how should we think about the structural margins of this business post recovery? And can it be at those long-term levels that we talked about before? And then I have one follow-up.

[Carlos Rodriguez, President and CEO]

Yes. Let me give you a little bit of color on that, because, again, incidentally, I was doing my homework last night. So I did go back that's something that I actually have fresh on my mind. And then will correct me if I'm wrong. But I think our margin in '18, which you would have seen in that Analyst Day, was 20.7. And we're now, I think, forecasting for fiscal year '21, I'm not sure that we're forecasting it, but I think you can extrapolate based on our guidance. I'll just throw out a number. So call it 22.3, 22.5 somewhere in that range for fiscal year '21.

That's with a significant drag from client funds interest, as you mentioned, and some drag from COVID as a result of slower than we would have thought or would have expected revenue growth. So I would say that on the margin side, we would be well ahead of what we talked about at Analyst Day, excluding these items.

On the revenue side, clearly, we're not anywhere near that, hence why we had to withdraw that three-year guidance we had provided, because obviously the COVID headwinds with what happened with pays per control and just the economy in general made it very difficult. But again, it feels like this is a transitory event, as we've talked about now for two or three quarters, painful, devastating for many people, for our country, for the economy and for the world.

But it is transitory and not an existential threat. And so we expect to get right back on the track that we were on before. And I happen to think that the fact that we're a couple hundred basis points higher in margin, even with everything that's happened than we were in '18, I think tells you something about the structural margin opportunity in the business.

But, clearly a very important part of that picture is growth. We need to grow the business long-term, because growth does require investment and so you should be hearing from us as we care about margin and we think there's opportunity in terms of structural margins here going forward, but the most important thing we can do to drive long-term shareholder value here is to also grow the top-line. And we're focused on that.

[Danyal Hussain, VP, IR]

Just to clarify, Samad, our formal margin expectation is 22.0% to 22.5%.

[Samad Samana, Jefferies]

Great. Thanks, I appreciate. And that's why I asked it. To us, it sounds like the business is healthier adjusting for non-controllable factors. And maybe just as a follow-up on that on the booking in this quarter and just as you think about bookings for maybe the next couple of quarters. When you think about the performance, is there a way to think about it, in terms of driven by field reps versus digital inbound through marketing?

Are there channels, so not by customer size, but are there channels that are doing better or worse in terms of bringing more customers into the top of the funnel, and driving new bookings?

[Carlos Rodriguez, President and CEO]

Yes, I think I'll tell you what…

[Kathleen Winters, CFO]

Maybe I'll just interject on before Carlos response to that one, and I want to interject and just follow-up a little bit on the margin story, because Carlos gave a really good kind of recap and summary of the last couple of years. When you think about, we're in the 20% margin, 20.7% to pre-COVID 23% with the various big initiatives that we pursued, and you've heard us talk about that over time.

But I want to add that, one of those really important initiatives that we are now working very hard, is digital transformation which has been helping us, right. As we look at our transformation initiatives, we've talked about digital and procurement really driving a lot of the benefit, kind of today if you will, a lot of that procurement does get harder as you go, but from a digital transformation perspective, that's an initiative that we believe is going to be with us for some period of time, because these projects are not fast projects to execute, they do take time to execute, and so we're optimistic that we have got a pipeline of projects and that we will continue to yield benefits for us.

[Carlos Rodriguez, President and CEO]

Yes, and I think that, I'll just pile on to that. Your comment I think earlier after you asked question and you summarize my comments, the business is definitely performing much better than it looks, because we have, these client's funds interest headwind is not just the headwind on margin, it's a headwind on revenue growth as well. So almost a 4 percentage point.

And as an example on a margin impact, our margin I think in ES would have been up and ADP overall, our margin would have been up 40 basis points instead of down 30 basis points for the quarter. So, clearly on a margin side, the picture is clouded and that picture will and the interest rate go up and down as you know, and everyone is always convince that rates are going to stay low forever, or they're going to stay high forever depending on where they are.

But we believe that at a minimum that headwind will abate unless interest rates continue to go down and then turn negative for the next 10 years, which is very unlikely as we all I think, as we all know, at least in the U.S. that's unlikely.

On your question about bookings, one thing that's important to note is we do have record leads through digital marketing coming in. So we have increased our investment in digital marketing, but we're very careful to do that to make sure that we're getting the proper ROI. But that is something that is certainly helping our sales force.

But really the message for our sales force is that we want them to meet our client, the clients and the prospects where they want to be met. And they have all the tools, all modern tools that any sales force uses. I mean, the reality is, I said this before people steal our sales force. And so we have to understand we have the best sales force in the industry, there's no question about it, and they have all the tools they need to compete effectively. And they had obviously moved to being mostly a virtual sales force over the last six months. And we make sure they had the tools to be able to do that and that's where clients want it to be met.

And if in six months, we anticipate that some of our up market and multinational clients will be okay having some digital meetings or virtual meetings, but they might want to have people visiting some of them again, we'll be ready for that as well, assuming that it's safe and that people are vaccinated.

So, there are a number of channels that we can pursue, but you should understand that our strategy is really to meet the clients where they want to be met. As an example in the down market, our clients rely on trusted advisors like accountants and brokers, we have very, very strong partner relationships with those channels, and that's how we drive results in that channel. So it really varies channel by channel, but you should understand that we are pursuing every channel, every avenue including upping our digital marketing investments to make sure that, we're getting our fair share of that without throwing money away.

[Samad Samana, Jefferies]

Great. Thanks again for taking my questions. I really appreciate the thoughtful answers.

[Operator]

Our next question comes from Kartik Mehta with Northcoast Research. Your line is open.

[Kartik Mehta, Northcoast Research]

Good morning. Carlos, you talked about net gains. I'm wondering if that's related strictly to ADP having a better set of products, or is that related to the competition doing something else?

And just my second question, you've talked a lot about the sales process. And I'm wondering, if you believe afterward, through this pandemic, get the vaccinations done, that fundamentally if the sales process will change, and that you'll use more digital versus face-to-face? Thank you.

[Carlos Rodriguez, President and CEO]

I think, I'm in the same camp as I think many other CEOs of companies that - and again, there's very - there are not a lot of companies like ADP that operate all the way from the down market into the up market. So there has to be balance here in terms of it's not one clear cut answer. But I'm in the camp, for example, in the up market with some of my other competitors, and CEOs who believe that, there will be face-to-face meetings again, and particularly sales meetings.

But I'm also in the camp of believing with lots of others that we shouldn't assume that things are going to go back exactly the way they were before. Whether it's with the way people are working, or the way people are selling, we're going to have to adapt to what inevitably is going to be some change.

Having said that, I believe I saw a statistic the other day that said that, prior to the pandemic about 10% of the U.S. workforce was working from home. And it went up to 33% at the worst part of the pandemic, and then came back down to 25%. And I kind of monitor this through other sources that show that ticked up slightly again the number of people working from home as this virus continued to surge.

But you would expect that 25% to probably go back to 15%, 20%, but not probably back to 10%. But remember that the other 70% never worked from home. And today 75% of the people are not working from home. But that doesn't mean that we haven't learned new techniques. So for example, an initial meeting or a follow-up meeting, or maybe even an implementation meeting with our client, I think we've all learned that. It's much more effective to do that for both parties virtually.

But it's hard to believe that we're going to go back exactly to where we were before. It's also very hard to believe that we're going to stay exactly the way we are today. And again, I hate to give you wishy-washy answer because I think we're going to have let that play out. But we are like lot of other things, we're maintaining optionality and equipping our sales force to be prepared for either of those eventualities.

And I think you had a first part of that question that…

[Kartik Mehta, Northcoast Research]

Client growth, whether its product?

[Carlos Rodriguez, President and CEO]

Oh client. On the client growth side, again we are - I think I mentioned in one of my script, that all of our strategic platforms, so if you think about RUN, Workforce Now, Globalview, I forgot the other ones I mentioned, but the platforms that we are that are strategic that we're investing in, not just the Next Gen ones are all growing, and they are growing very robustly, and I don't want to people understand that.

And part of the challenge is that, we have a large company and we have other things that maybe aren't growing as fast, or we have a drag from a platform that we're trying to get off of. And we unlike from others try to report the fact as they are. But maybe take a little bit of liberty what others are doing, and giving a little bit more color about just the things that are going well. But if you did that, like we'd only focused on the growth of, for example Next Gen, it would be 800% growth, or if we focused the growth of Workforce Now, across the board, not just in the mid-market, because we also use Workforce Now in the up market, and we use Workforce Now in our PEO, you would see robust growth even in the middle of a pandemic on a Workforce Now.

So, I think we're making progress but we're a large organization with large market share and included that exposes our flanks, and we have to be very good at making sure that we protect our flanks which I think we're doing a good job of, as evidenced by retention. But when you look at the go-forward and the growth of our strategic platforms, there is a lot of reasons for optimism that we will I think be able to compete effectively on a go-forward basis.

So, I am not sure I can give you lot more detail of that, because this is more detail than we normally give, because we like to just be straight shooters and the growth is what it is, whether it's on client counts or a revenue. But if you want a little bit of additional color underneath the covers, the strategic platforms are doing very well against our competitors.

[Operator]

Our next question comes from Mark Marcon with Baird. Your line is open.

[Mark Marcon, Baird]

Hey, good morning, and thanks for taking my questions. So, questions basically about Next Gen payroll and Next Gen HCM. The first part is this, can you talk a little bit more, give us a little bit more color with regards to Next Gen Payroll just in terms of the number of clients that have been sold? What percentage of the existing Workforce Now base has been converted? And how you are thinking about that going through? And kind of what you're seeing in terms of the satisfaction, once you have that in place, you made some initial comments, that sounded really positive?

And then the follow-up is this basically on Next Gen HCM, just in terms of what the outlook is there in terms of new sales and new bookings? Thanks you.

[Carlos Rodriguez, President and CEO]

Sure. Thanks for the question. We thought it was optimistic before prepare yourself, because the story on Next Gen Payroll and HCM is quite positive for us in terms of the future. If you look at Next Gen Payroll, we have I think close to a couple hundred let's say over 200 live clients. So not just old but live clients.

We have over 500 that are sold. I think we said in our comments that you may not have picked up on that, we think that it's possible even though this is not scientifically provable that up to 25% of the sales we had so far of Next Gen Payroll we would not obtain without Next Gen Payroll. So I think that bodes well for I think our competitiveness and our market share.

And our clients were to have call it somewhere around a couple 1,000, I think for this fiscal year. So, it's positive momentum, again the caveat there is with Next Gen HCM we are generally going after very large clients, and in the case of Next Gen Payroll, it is really a platform that solves our kind of Next Gen Payroll needs across the board and we started and call it the core of our mid-market. So, call it between 50 and a 150 employees really has been our focus.

But having said that, it's still pretty impressive and we're pretty happy and pretty positive. Satisfaction levels are very high. And I think we just got great the momentum and the sales force is obviously incredibly excited. Even though, remember, this is still a back-end engine right. So it's still Workforce Now and in the future, it will be lifting on that are using high as an engine.

But it does provide some additional benefits to the client and a lot of sizzle as well, as we know that matters as well, given some of our competitors I think have used sizzle in their sales process. And so, we're able to use some sizzle now with Next Gen Payroll. So very excited about that rollout and about the progress there.

Our Next Gen HCM, you heard about our rollout in Mexico, which is really Next Gen HCM with Pay. So we have call it, a handful of clients now in four countries that are actually running on Next Gen HCM with Pay. Again, it's very early like to talk about only a handful of clients isn't a lot, but what was most encouraging is that in a couple of those situations we were able to use what we're calling a federated development process, which is one of the intentions whether we invest into the platform which to be able to build rapidly.

So, the Mexico client was onboarded in from super messaging [ph] the building platform, getting the client and getting them onboarded in call it six to nine months. So very, very impressive for us to be able to do that. So, we're optimistic that this will continue to hopefully help us again competitively.

And I think you also asked about how many clients we've migrated off of Workforce Now on to Pay, and remember that it's we're not migrating clients off of Workforce Now, we're just changing the underlying payroll engine that is still on the Workforce Now.

And the outlook of that is I think not many, like this is mostly new logo sales in the case of Next Gen Payroll. Again, underneath Workforce Now. So, as we go to market, it's still Workforce Now with the Pay payroll engine beneath it. And again footnote, I think I said this last quarter, Workforce Now is a Next Gen platform. We don't talk about it that way, because we haven't been talking about it that way, but Workforce Now with Pay is a Next Gen platform.

[Mark Marcon, Baird]

Got it. I appreciate it. Sounds very optimistic. Thank you.

[Operator]

Our next question comes from Kevin McVeigh with Credit Suisse. Your line is open.

[Kevin McVeigh, Credit Suisse]

Great. Thank you. Hey, Kathleen, you talked about the digital transformation a couple times. We're in argue kind of in that process and I think the last number you'd referenced was about a $150 million benefit. Is that still the way to think about it in the 150 range? Or does that get accelerated based on some of the investments in your portfolio as a result of the Q2 outperformance?

[Kathleen Winters, CFO]

Yes, Kevin thanks for that question. That 150 still follows, that was our estimated benefit for the year, the current fiscal year from digital and other transformation efforts. Where are we in that journey? I'd say we're in the early days, early I mean, as I mentioned these projects are not chats to implement projects. These are not basically four months projects that you rollout. These are how do we secure or build the right tools to take work out of the system.

How do we - well, some of it can be little faster like continuing to build that chatbox functionality and how many inquires [Indiscernible] and some of those to go faster. But some of them could be longer projects like, supporting our implementation teams with tools that we're building.

So, my view is we're in the early innings here. We've had some good success thus far. We continue to stay very focused on building pipeline of projects. And if everything all part of the company that we expect and that we go to, to say, what are you doing to digitally transform what you do. How do you take work out of the system and its front office and its back office?

So, we got a lot more work to do there, and I think that's a really good thing.

[Kevin McVeigh, Credit Suisse]

And then just one quick follow-up, maybe [Indiscernible] as it relates to that. How does that impact your addressable market, because I'd imagine it probably expands it in terms of average client size, things like that? Is there any way to frame what the transformation is going to mean, in terms of addressable market longer-term?

[Carlos Rodriguez, President and CEO]

It's a good question and something that we think about a lot, right, as I think one of the things we want to try to get is we talked about share of wallet, new logos, but we can expand our addressable market that is very helpful. And it really varies business by business. But as an example, we are, I think, in the early stages, I would say, still not ready. I think I'm not supposed to say anything about it.

But we think that in the down market, there is part of the addressable market that we could do better with if we had a more kind of end-to-end digital product, if you will, in terms of - so this would be a complement to RUN, that would compete in a segment of the market that we don't compete in today.

Likewise, if we go all the way to the up market and international with the acquisition of Celergo was intended to kind of bolster, I think, a market that is growing and that I think is expanded by our acquisition of Celergo. And the Next Gen platforms, if you will, are for sure intended to expand the addressable market.

So for example, the Next Gen payroll engine, again with Workforce Now would probably be have more appeal to an in-house user, even though people don't think there's a lot of those left, there are still people who use kind of in-house software if you will. And I think that this Next Gen payroll platform combined with Workforce Now provides more control, which is something that for the last 20 years, when we survey the market, if you will to assess what's addressable, there was always this kind of outsourcing versus in-house. And I think what's happened is that, cloud technology has blurred that line, but there's still a line there. And the ability to have the payroll platform perform some other things that people want from a control standpoint when they're in-house, I think expands that addressable market.

And then lastly, in terms of Next Gen HCM, I mean, clearly, the big play there and the big investment was to expand the addressable market in the up market for us, both the larger and more complex clients, but the clients who also had HR needs that, we were not necessarily able to satisfy with some of our older platforms. So definitely, I think, a lot of opportunity and it's a key focus of our strategy in terms of how we develop our products, is to expand the addressable market.

[Kathleen Winters, CFO]

Yes. Kevin, you can think about as our digital work, our digital transformation is meant to improve and accelerate on both top-line and from an efficiency productivity standpoint. From a top-line perspective, whether it's the addressable market and accessing that through Next Gen or other feature improvements that we're making, sales cycle time, shortening that cycle time to get something through the sales process. We're working on that in our PEO business, improving via digital work, improving service.

So with improved service, therefore, improved NPS, therefore improved retention. So it's meant to target both acceleration from a top-line perspective and as we've talked about taking work out of the system and productivity.

[Kevin McVeigh, Credit Suisse]

Thanks so much.

[Operator]

We have time for one more question. And our last question comes from Tien-Tsin Huang of JP Morgan. Your line is open.

[Tien-Tsin Huang, JP Morgan]

Thanks so much. Good results and I appreciate the very clear guidance as well. Just a question and a follow-up or clarification. Just on the KPIs, Carlos, that you're most focused on the second half. Just hearing everything you talked about, positive revisions to retention, bookings. I'm curious, if there are any underappreciated KPIs at this point of the cycle that we should be tracking to gauge the sustainability of the improvement that you're talking about, as we get through the second half of the year?

And just a clarification, I think you touched upon it in the last comment here. Just the 25% of sales of Next Gen payroll that would not have been attained without it. Is - are you - are those clients on a cloud platform that are looking for a cloud like the controls and whatnot that you're talking about that that was the condition for considering? I'm just trying to understand why they didn't consider it before it if that makes sense?

[Carlos Rodriguez, President and CEO]

Yes, listen, I think unfortunately, I don't have that level of detail I'm afraid to say. We would probably maybe follow-up to give you a little more color that's why I tried to use the words not scientific. So our sales force - we are obviously very, very focused on the rollout of our Next Gen platforms. And so as we try to keep close communication and close tab with our sales force on how it's going, and they came to us and said, we think we got 25% more logos as a result of Next Gen Payroll than we would have gotten in the past. I'm guessing there are going to be a number of different reasons for that, including there maybe a little bit of a sizzle factor there, in terms of - because as you know, we run fully compliant payrolls. We help our clients with PPP loans.

I mean we were able to do everything, like our existing platforms are the most robust, most comprehensive, most effective, I believe, of course, I'm biased in the industry. But there are incremental improvements, that give people whether it's the control aspect that I mentioned or the sizzle that help sales, and it's no different than you go buy a car and there is five different models of the same car. And people buy the five different cars but you have to have new cars every now and then, and I think it's every five years whatever that cycle is, and I think that's maybe some of what's happening here.

But we'll try to get you a little bit of additional color if we can, but that was an intent to spark a kind of a new level of disclosure if you will about what percentage of our 25% came as a result of which feature. But we'll try to provide some color either in the interim, or certainly on the next call, when we're going to have many more clients on Next Gen Payroll, and we'll have a little bit more data for you.

On the question you had about KPI's, I would say, you hit on all of them, like there's lot of important ones that you just touched on that we watch and that we share with you. The other ones that I think are important are ones around productivity both for sales, but also for our service and implementation associates.

And in particular on sales, that's part of why we're talking about kind of the underlying trends improving, and us being so optimistic about the future is, there's no reason why our sales force can't get to the same productivity, they were pre-pandemic and then continue to increase that productivity as they had been doing for many, many years.

And so that's one of those KPIs that we watch very carefully is what's happening to that sales force productivity number quarter-on-quarter, and what's it expected to do in the third quarter and in the fourth quarter, and luckily, it's on track and that's something that we watch very carefully.

Likewise, the productivity per service rep and productivity of implementation, so as an example, how many new clients can an implementation rep on board, and these are all impacted by the digital transformation that Kathleen was talking about. Because our goal is to make it easier and better for our clients, and as a byproduct, hopefully reduce our operating expenses, not reduce our operating expenses, and then figure out what happens after that, because the most important driver of the long-term value here is client retention.

And I can tell you that if we maintain these client retentions, you guys should go do the math on how much faster our revenue will grow on a normal steady state basis with the same bookings. It's pretty powerful. And obviously that's incremental revenue growth that doesn't have incremental sales expense or implementation expense. So the most important thing for us to do is to make good on our commitment to our clients.

But having said that, those productivity metrics are important, too, in determining kind of our ability to drive margin into the future, because those are two big buckets of expense, our service and implementation costs.

And again, that's another item where the KPI that would really be around not just NPFs and retention, but around productivity. And the good news there is that we've been showing really good productivity improvements, while we've also been driving very good retention, which speaks to the success of our digital transformation efforts.

[Tien-Tsin Huang, JP Morgan]

Very clear. Thanks so much.

[Operator]

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

[Carlos Rodriguez, President and CEO]

Well, I think I mentioned already that it's hard to imagine where we were just a quarter ago, because I think on the same call a quarter ago, there was no vaccine, there was no stimulus approved and there was no new administration in Washington. We were still waiting for or looking forward to an election.

So, besides all of the great things that our associates are doing in terms of execution, our sales force and all of our associates, in terms of helping our clients through this and helping each other, I just thank God for where we are today versus where we were last quarter, because we know now, I think we knew some of us knew that we would be okay eventually. But now, we know for sure that we're going to be okay in terms of our friends, our families, but also our economy and I think our companies and the things that we also value on the professional side.

So, very excited about the prospects of getting through the next month or two, which I know we're going to be challenging for all of us, but also looking forward to much better times ahead to plenty of pent-up demand, to growth and productivity, to strong GDP and all the great things that are going to happen once we finally defeat the virus and move on.

So I would just close by saying, thank you to the scientists, the pharmaceutical companies and everyone else who got us to where we are today and that continue to move us forward as a country and as a globe. And I appreciate you all joining the call and listening to us today. Thank you.

[Operator]

Ladies and gentlemen, this does conclude the program, you may now disconnect. Everyone have a great day.