Insperity, Inc.

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. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. At this time I would like to introduce today's speakers. Joining us are Paul Savoddy, Chairman of the Board and Chief Executive Officer and Douglas Sharpe, Executive Vice President of Finance, Chief Financial Officer and Treasurer. At this time I'd like to turn the call over to Douglas Sharpe. Mr. Sharpe, 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. Our 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. Savoddy 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 8K file 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 86 cents above the high end of our forecasted range and we report 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 for 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% 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 healthcare 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 -to-date operating expenses now include $19 million associated with this strategic partnership along with the ongoing investment in our long-term growth and our service and technology offerings. The second quarter of 2024's effective tax rate came in at 28%, which was above Q2 of 2023's rate of 25%. We continued 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. In recent quarters and as we have seen before during periods such as these, we have seen an increased level of hesitancy in 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. 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 booked 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 a 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 are 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 and spare in the marketplace and increase 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 disparities 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 and enablement team are well on the way. The disparity 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 disparity 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 are 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 are 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 InSparity Workday co-selling relationship directly to the sales teams 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. InSparity can meet the needs of many of these prospective clients now, even before the joint solutions 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 PO 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 GoToMarket 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 .5% to .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 forecasts, primarily in the areas of salaries and G&A. We will continue to focus our efforts and plan spending on the implementation of the Workday Strategic Partnership. Based on these factors, we are now forecasting full year 2024 adjusted EPS 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 .5% to .5% compared to Q3 of 2023. As for Q3 earnings, we are now forecasting adjusted EBITDA in a range of $32 million to $45 million, and adjusted EPS from 21 cents to 45 cents. 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. We are now opening up for questions. If you would like to ask a question, please press star one on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For any participants using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a

moment whilst we poll for questions. 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 Workside 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. 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 Workside employees. But the biggest issue was 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, in your prepared remarks, you touched 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, you know, 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, you know, I would say that, you know, we've been effective in especially, you know, 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, you know, we're 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, you know, 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, you know, all that weighs into, you know, 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. Looks like, you know, you lower the worksite employee outlook, but we're able to maintain the, if not, might as well improve the EBITDA and EPS outlook. And so I'm just wondering if there's any less conservatism in the health care piece of the business as an offset, or if that's primarily a function of some of the cost actions and salary and GNA 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 health care 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 as the cost side of things. If you remember going into the year, I commented on initial medical health care cost trend in the four and a half to six percent 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, you know, we see that continuing, that sort of 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. We came off of, if you remember, we came off of the first quarter with some of the experiences behind this change health care thing. And we, I think we appropriately reserved for any delays in processes in the result of that of that issue that came up. I feel like, you know, we're still conservative in that number and what we recorded at the end of second quarter for our IBNR. So, overall, you know, we, we always want to be intent going into the year conservative in our estimates, both on the health care side and the workers comp side. And, but it has been trending favorably over the course of the year thus far. And, 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.

Yeah, 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 when we're to be conservative in our outlook relative to the benefits.

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

Good morning and thanks for taking my questions. 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, you know, 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, you know, we just hit that six month point and we, you know, had a, you know, leadership meeting to evaluate where we are, where we're going, what to really put the hammer down on, etc. And definitely, it was, it's very encouraging as to, you know, moving forward on all of the fronts that we envisioned in this strategic partnership. Have all the, everything moved as fast as I wanted to? No, nothing ever moves like that. But, you know, 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, you know, a 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, you know, 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, you know, 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 -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, you know, 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're 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.

Does anyone want to comment about Continent 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 appreciate the discussion with regards to the investments as well.

So

as

I mentioned, you know, we talked about our different segments, and so there, you know, there will be, and there is an ongoing effort of communication that introduces and then reinforces and supports the introduction of partnerships, 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 you know, that dynamic is something we'll be talking about for next

year.

Okay, thank you very much. Your

next question is coming from Jeff Martin of Ross Capital Partners. Jeff, your line is live. Thanks.

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.

Yeah, so if you recall coming into this year, we were estimating our costs 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 dollars for this year. As I just reported through the first, through the second quarters, second quarter, it's in the area of 19 million dollars 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 dollars 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 in 2025, relative to the 60 million we're investing this year, it should be generally in that same ballpark.

A couple. And then so for my primary questions, I'm curious where you are with the implementation of the workday solution internally. I know that's something that you were starting with to familiarize the 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, you know, 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 onto workday. And as I mentioned in my prepared remarks, we are on track for early next year as planned. And you know, we are even in the process now of having people leadership trained in a certain way so we can in the fourth quarter be training the whole staff to be moving

onto the system. Yeah, so, you know, if you remember

last year, our pharmacy trends were elevated. Particularly dealing with the specialty drugs like the ozempics and the wellbutrines, etc. So we had an elevated trend obviously last year. Thus far this year, we've seen more of 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 that pharmacy trend this year. Last year it was about 17%. So you can see that trend has come down. Some of it's the comparisons, you know, -over-year comparisons, but that's what we're seeing and that's what we're are modeling in for this year.

Thank you.

Thank you very much.

Your next question is coming from Toby Summer of Truist Securities. Toby, 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 mean 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 hopefully it's at least some effective, although we didn't really build that into the 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 know, 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 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 25. However, I believe we're going to see certainly see some good activity levels. You know following up leads and you know in our world that usually converts into adding business. So you know, 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 work day. Remember for most companies it takes you know 12 to 18 months, you know just to even get on. So we're getting near that range and that's when you know, 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, thank you for that color there and then just maybe a quick one on the guide. So just quick math looks like the midpoint of EBITDA is about sort of two 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 was you know is lower because of the starting point primarily and that's why it kind of shifts out when that growth acceleration begins into 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, you know all but you know, we beat the quarter by six million. The year is only going up two. 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, you know if we're 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 you know still you know, we're hopeful to see upside from what we're where the guidance is, but we believe this is the appropriate guidance based on you know where we're starting the last half of the year.

I appreciate the time.

Thank you very much.

And our next question is coming from Mark Marcon of Robert W. Baird and Company. Mark, your line is live.

I was wondering if you could talk a little bit more about you know the strong gross margin, gross profit per worksite employee you know during this past quarter. Were there any accrual reversals or anything along those lines that benefited and then more importantly you mentioned that you know clients are hesitant, but pricing is actually stronger and I was wondering if you could just you know talk a little bit about what's driving the improved pricing that you're getting relative to plan.

Yeah, I mean as far as your comment with respect to any adjustments, obviously, I think you recall going back to this change healthcare breach. It was appropriate for us when that was going on to make a very conservative estimate on IB&R because obviously when that happens there's a change in the payment process, but by our insurance carrier to the participants because the whole flow of information from the provider to the insurance carrier whatsoever was impacted by that. And so we feel like at the end of the first quarter we made an appropriate conservative IB&R adjustment to take that into account. Going into the second quarter, it proved that it was definitely conservative, but to the extent where 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. 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. Yeah, the second part of your question on the pricing side.

Yeah, because

it sounds like that's going

well.

Yeah, 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, direct cost related allocations, etc. And every month, of course, we have new and renewing business. you know, 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, you know, deal with the economic climate. And as we mentioned last really a couple quarters ago and and reinforce last quarter, you know, we're able to do things to be aggressive, you know, 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 as the premium service offering in the marketplace. We do more than anybody else. You know, 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 you know 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 past few.

Yeah, so listen on the renewing business, you know definitely up as our strategic plan is and then on new business, you know actually you know 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. Salvadi 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.