Don McGuire: Yes, that’s fair. I think if you look at our reinvestments, our current reinvestments are still at 4%, which is higher than our average yield today. So, there still are opportunities. Our float is expected to continue to grow over the next 12, 24 months. Certainly, it’s going to grow a little more slowly than we would’ve expected at the end of last quarter, but there’s still upside from float, which is perhaps not as much upside.
Dan Dolev: Great. Great results, again. Thank you so much.
Operator: Thank you. Our next question comes from Pete Christiansen with Citi. Your line is open.
Pete Christiansen: Thank you. Good morning. Two questions. Now that we fully lapped ERTC, I’m just curious if you’ve noticed any changes in client demands or competitive tactics, particularly in the down market?
Maria Black: Yes, good morning, Pete. The ERTC, as you know, and I think what you’re referencing is the new deadline that was pulled forward five quarters actually. So, the deadline actually as it stands is potentially today. I think we’re still waiting for the final kind of execution, if you will, of that new deadline. But arguably, we’re having to execute on behalf of our clients with today in mind. And so, there’s a tremendous amount of volume that we are pushing through on behalf of our clients, and it has put pressure into the system, which is hard to watch and witness, by the way, as it relates to the very clients that are supposed to be helped by this and the challenges that they’re facing trying to navigate it. So, we’re doing everything we can in our power to help and process these claims.
In terms of financial impact for us as it relates to ERTC, it isn’t a financial impact to us. I think it’s very de minimis as it relates to our overall revenue, as it relates to our overall incremental. We really, from a standpoint of what we’re looking toward, it’s about supporting our clients. And so, I think some of our competitors have used it more as a business and a revenue than us as it relates to how we’re thinking about it. But undoubtedly, the advancement of this deadline to today has not been ideal for really anyone engaged in it.
Pete Christiansen: That’s helpful. And then I’m curious, the combination of HCM and payments functionality, has certainly been a theme. EWA is obviously a big portion of that and now cross border. Do you see opportunities to increase penetration there or to add more capabilities either through partnership, M&A, furthering payments, and I’m thinking perhaps even like in disbursements, those sorts of things? Thank you.
Maria Black: From a strategic standpoint, Pete, what I would offer is continuing to solve for our clients and employees and how they engage with us. If you imagine across ADP, we pay 41 million wage earners in the US. That’s 25 million. I think last time we talked about our Wisely offering, what we disclosed was that we had 1.5 cardholders or something like that. So, to just kind of give you the opportunity scale of it, we believe there’s tremendous opportunity to increase how we’re engaging with our clients, whether that’s through the likes of Wisely, it’s through the likes of EWA, as you’re suggesting, or it’s any other type of payments and things that we can do to make it easier for our clients and employees to move through the world of work, right?
And so, the way I think about it and the partnerships that we’re actively out there in the market talking to and thinking about, anywhere we can add value in our clients and employee life and flow. So, as they move through their day and they clock in through ADP’s mobile app, which by the way, we have 10 million users that are actively using our ADP mobile app, so as they’re engaging with ADP, are there opportunities for us to insert value there? Whether that’s things like EWA, it’s things like payments, it’s things like financial and wellness apps like the companion app we have through Wisely. These are all top of mind for us as we go through our strategic discussions and as we think about partnerships in the future for ADP.
Pete Christiansen: Thank you so much. Super helpful.
Operator: Thank you. We have time for one last question, and that question comes from Ashish Sabadra with RBC Capital Markets. Your line is open.
Ashish Sabadra: Thanks for taking my question. So, just a multipart question on PEO and following up on some of the commentary earlier on solid bookings and moderating PPC, sorry, paper control headwinds. As we look at the WSC growth, we have continued to see a sequential improvement there, better than what we saw last year. And just given the commentary, is it fair for us to assume that we should continue to see that improve as we go through the year? And then on revenue per WSC, I was wondering if you could comment on, looks like pricing trends are positive, but if you could comment on any other puts and takes participation, anything else that could help drive better revenue per works at employee. Thanks.
Maria Black: So, the answer to your question is, yes, we do expect that the booking contribution, coupled with a bit of stability on the pays per control side, coupled with retention getting more favorable on the back half, all of those things should lead to the re-acceleration that Don mentioned earlier, that we’ve been pointing to in the back half. I think in terms of other componentry within the PEO, you mentioned a few of them. There’s payroll per works on employee. There’s workers’ compensation. There’s State unemployment. Some of these things are things that we’re still waiting to really see the outcomes. I’ll give you an example. One of those is State unemployment in terms of – obviously, we sit here today forecasting what that looks like.
Most of those rates are issued throughout this quarter. And so, while we have some line of sight, in the end, we don’t know entirely what the State unemployment outcome – we do expect that it creates a little bit of a – rates are going down year-on-year again this year. But again, only time will tell. Sometimes the States, as an example, make very strange decisions that aren’t always in line with what’s happening from a broader labor and unemployment perspective. So, all that to say, I think – I don’t know that I could sit here today and give you any componentry that seems strange or out of the norm. I think they’re all things we’re watching as we look toward the re-acceleration in the PEO in the back half.
Ashish Sabadra: That’s very helpful color. Congrats on the solid results.
Operator: Thank you. I’d like to turn the call back over to Maria Black for any closing remarks.
Maria Black: Yes. So, really quickly, I think I’ll end with how I ended my prepared remarks, which is a huge shout-out to all of the associates and the entire ecosystem across ADP. So, that’s ADP associates, partners, channels, all of the stakeholders that really contributed to what was a good, solid Q2, but also a good, solid first half. I’m really excited about the back half and what we’ll accomplish, not just in fiscal 2024, but moreover in calendar 2024. It’s a time and it’s an exciting year for ADP. This year is the year that we actually round our 75th anniversary. And then when I think about who this company is over the last seven decades and 75 years, I can’t wait to see what we’re going to do in the next 75. So, look forward to sharing in that celebration with all of you as we head into 2024 together. Thank you.
Operator: Thank you for your participation. This does include the program and you may now disconnect. Everyone, have a great day.
