The value prop isn’t the same. With respect to Convera as a partner, just to speak to that one a little bit, we have thousands of clients, and those thousands of clients have thousands of entities spread across multiple countries around the world. And if you think about the complexity and the difficulty of paying their people in some of these small countries and then getting the payments to the various social security providers in those countries, having somebody like Convera who can help a large European or a large US multinational manage the treasury function in those small countries around the world without having to set up all the banking, et cetera. So, someone like Convera acts as a great partner for us to facilitate those cross-border payments in a very – in a compliant way, et cetera.
So, I think that’s very positive for us. So, we do have some partners in international like Convera as I just mentioned, but we still see it as a great opportunity for us to continue to grow.
Maria Black: That’s right. If I may, one of the things, I think what Don is suggesting is really the opportunity we have with international. And so, when you put it in the context of the business that we have in the US there, there is a tremendous opportunity for us to think more broadly in international partnerships as the one Don just outlined with Convera, is a big piece of that. What I would also add is that from an international perspective, we did call out the performance specifically in Q2 on international. That’s, by the way, bookings. That’s on the heels of a solid Q1. What I would offer as well, we have record retention. We have record customer experience and client experience in international. So, I think we have a tremendous value proposition in international.
By the way, some of the recognition I cited during the prepared remarks is really about how best-in-class our offer is with respect to the international offering we have. So, that said, as Don mentioned, we’re not satisfied. I think there’s more opportunity to us to scale and grow our beyond payroll offerings, partnerships that are a big piece of that, but undoubtedly, we’re performing and competing very, very well internationally.
Ramsey El-Assal: Fantastic. Sounds like good things ahead. Appreciate it.
Maria Black: Oh, you know what, let me just comment because you mentioned Roll in international, so I just thought I’d mention that really quickly, which is, we are very excited about the down market in international. Roll is one way that we’re getting after that. And the pilot programs that we’re running are teaching us a lot as we think about the down market and international.
Ramsey El-Assal: Okay, perfect. Thank you.
Operator: Thank you. Our next question comes from Bryan Keane with Deutsche Bank. Your line is open.
Bryan Keane: Hi guys, congrats on the solid results. Don, I just wanted to ask about average balances. I know we were expecting a little bit of a headwind from the payroll tax deferral. Maybe you can quantify that as part of the reason for the drop of balances down 2%. And then what’s the go forward there we should expect? Is there a more of a headwind from the payroll tax deferral for balances and maybe expect a similar decline in the back half of this year?
Don McGuire: No, I think you were right to call out the payroll deferral, payroll tax deferral. That definitely was behind the decline quarter-to-quarter. We don’t – that’s now behind us. So, that’s not going to be there. So, we are expecting 2% to 3% balanced growth throughout the balance of the year. So, we think that’s very positive. I think the big callout though on the whole CFI program is just the fact that since we spoke last, five-year and 10-year interest rates are down about 80 bps on both of those. And so, I think that’s a little bit of the headwind and that’s roughly the $20 million or so that we’re calling down the float number for the balance of the year. But still very optimistic about growth. Certainly, the reason that it’s not growing as quickly perhaps as it did last year, we’ve certainly seen some moderation in wage growth, and we’ve talked about even though pays per control are behaving as we expected, they are certainly lower – pays per control growth is lower than it was in the back half, but will be lower in the back half of this year than it was in the back half of last year.
So, those would be the major influencers, if you will, to the full balance as we go forward to the back half.
Bryan Keane: Got it. And is that part of the moving of the ES margins to the lower end of kind of the range you talked about? I think you talked about rates there. Just what was the surprise from three months ago on rates that that maybe caused you to push the margins towards the lower end or where you think the lower end, the new margin range?
Don McGuire: Yes, so, you’re right. I think the float certainly is a component of us guiding to the middle of our range, for sure. So, that’s a component. We don’t try to second guess the markets. We use yield curves that are out there in the market to estimate what we think our returns are going to be. So, no real surprises, other than seeing what’s happening in the overall market. And then we’re taking the forward yield curves and applying those to our balances, and that’s where we land.
Bryan Keane: Great. Thanks for taking the questions.
Operator: Thank you. Our next question comes from Scott Wurtzel with Wolfe Research. Your line is open.
Scott Wurtzel: Great, thanks. Good morning, guys, and thank you for taking my questions. Maybe just wanted to start off on some trends that we’ve seen so far in the selling season. Seems like through 2Q it was pretty positive on the booking side, but maybe wondering how we’ve sort of tracked into 3Q, and then also what you’ve seen maybe from competitors, any changes in pricing, go-to-market strategy and all that would be helpful.
Maria Black: Yes, good morning, Scott. We feel good about the demand environment overall at this point. I think companies are still hiring. We saw that this morning actually as well. And companies are still investing in their people, their talent. They’re investing in HR. I think there are a couple things I’d highlight to you. The down market, definitely companies are continuing to hire and they’re continuing to buy. We had tremendous second quarter results. By the way, that business has been executing incredibly well really for many, many quarters. And that’s our run offering, but it’s also all the things that are attached to run. So, think insurance services, retirement services. All of the down market is doing incredibly well.
