Jason Kupferberg: Understood. That’s good color. Just a follow-up on float yield. It looks like it was actually a tick down slightly quarter-over-quarter here in Q1, amid a higher rate environment. But just curious what the callouts might be there.
Danyal Hussain: Hey, Jason. That just relates to the mix between short-term and extended in long. So in Q4, we were a little more levered to overnight partly because of this debt ceiling issue. We had to be deliberately skewed shorter duration. But in a typical Q1, we would generally have a lower short portfolio. And so there is seasonality in the average balance wouldn’t read much into it. The year-over-year number is a much more relevant metric.
Jason Kupferberg: Thanks, guys.
Operator: Thank you. Our next question comes from Tien-Tsin Huang with JP Morgan. Your line is open.
Tien-Tsin Huang: Hi. Good morning. Forgive me, if I’m asking another clarification on the PEO side. Just –what the — was the slight softness in the bookings also related to the PS and tech sectors and also with the pays per control within PEO, is that more of a healthcare participation issue or just labor weakness in those sectors?
Maria Black: I really apologize, you actually blipped out during the first part of your question. Would you mind just repeating — yeah, there was a word missing so.
Tien-Tsin Huang: No, I probably didn’t ask it very well. Just wanted to make sure the bookings softness on the PEO side, was that also in the professional services and tech sectors. And then also just on the pays of control, was is a labor weakness or health care participation?
Maria Black: Yeah. Listen, so I’m glad you’re asking this question actually because I just want to reiterate, we were very pleased with our PEO bookings. And so there wasn’t softness, there was strength and growth in the PEO quarter bookings. In terms of how we skewed the year, it was slightly lighter than we had positioned our planning, which is why it contributes the way that it does to the overall worksite employee growth. But, it’s — again, the worksite employee deceleration is really about the PPC story. And so I just want to reiterate, we were actually very pleased with the quarter from a PEO bookings perspective. In terms of the industries, I think it’s a mix. I think we continue to see the PEO execute with respect to the industries that we target which tend to be into those categories.
As it relates to, this comment around kind of within the PEO, the deceleration that is happening faster in professional services and technology versus the broader base of the PEO. Again, I don’t want to give kind of the numbers of what that is, but it isn’t like the entire base is sitting in professional services. It’s just that subset, if you will, of the base. And it is really, again, kind of triangulate to the macro that we’re seeing and the same type of data coming out of ADP Research Institute, out of the BLS and it’s really about hiring. So it’s less about, call it, layoffs and it’s really where the professional services and tech industries, we’re doing massive hiring, call it, a year ago, six quarters ago, it’s really a lack of hiring that’s happening in those businesses.
Did I answer that question?
Tien-Tsin Huang: Yeah. [indiscernible]
Danyal Hussain: Tien-Tsin, just on the participation piece of it, the pay per control wouldn’t be impacted by participation rate, but the reported revenue would be. So to the extent, workers are taking plans, cheaper plans or fewer plans. And there’s a little bit of that. You do see it in the revenue per WSE, but the WSEs themselves wouldn’t be impacted.
Tien-Tsin Huang: Thank you, Danny. I didn’t ask it. Well, that’s perfect. That’s what I was looking for. On the — we get questions around pricing as well. That’s why I was asking about the participation side of things and if there’s a difference there, it sounds like it isn’t. On the international front, just my quick follow-up. Just I think Sweden was the call-out in terms of acquisition. Why is Sweden important to own? Just I’m not as familiar with some of the specific countries that you’re targeting. And I’m curious if this is just part of a — maybe a broader plan to aggregate international payroll.
Maria Black: Absolutely. So listen, I have to take this question because I think you may know that I’m actually — I was born and partially raised in Sweden. So I thought it was prudent to make it the very first country that I announced. I’m actually completely kidding. This was obviously well in motion before my time. But I — it sounds like I might be closer to Sweden than you are. And for us, it is an exciting time for us. We have had this partnership with BTR for quite some time for us to be able to acquire the payroll business of BTR is exciting because the Nordics are growing, and this does give us a physical footprint into Sweden, which allows us to expand further into the Nordics and really take advantage of the growth trajectory of those economies.
So this is obviously payroll, but also in the beyond payroll opportunities that we will have in years to come. So really excited about the acquisition not just because it’s near and dear to my heart, but moreover because the Nordics represent growth, and it’s exciting to think about us having a physical presence there.
Tien-Tsin Huang: Thank you.
Operator: Thank you. Our next question comes from David Togut with Evercore ISI. Your line is open.
David Togut: Thank you. Good morning. You called out strength in ES bookings, particularly in the small business market with RUN. Could you provide some texture into the bookings trends you saw in mid-market with Workforce Now and then up-market with enterprise? And any insights you have into international bookings in the quarter would also be appreciated.
Maria Black: Absolutely. So yes, we did have great strength in the down markets, kind of moving on up in the mid-market. Certainly, we have continued solid demand in the mid-market. That’s inclusive of our Workforce Now platform. It’s also inclusive of our HR outsourcing offering. So I spoke a bit about the ASO models, the HRO models earlier in that mid-market also support — is supported by the PEO. So we do see continued demand from the mid-market. I think the way I always think about it is not getting any easier for companies in that mid-market to navigate being an employer today. And so we expect continued strong mid-market growth. I think in the up-market, since you asked about the enterprise space, one of the call-outs we made last quarter was about the strength that we saw in our next-generation HCM offering, and we did see that strength continue into this quarter, which we think is fantastic.
We also see strength in the pipeline in that space year-on-year. So excited about what we’re hearing from our clients, the sentiments around the offerings that we have in the enterprise space. And then I think I touched a little bit on international earlier, but our international business did grow nicely in the first quarter. Again, it was a benefit of a little bit of an easier compare year-on-year. But we also had, as I mentioned, a really strong finish and a strong fiscal ’23 in our international business. Again, what I measure is partly the results. But as I think about the look forward, it’s really about pipelines and what I would say, our international pipeline year-on-year have a fair amount higher than they did a year ago, which gives us the strength to really feel good about our international bookings to remain healthy through fiscal ’24.
