John Gibson: Yeah. And I would just add, neither one of these things are new to us. We kind of get dragged into this. When COVID hit, if you remember the PPP program and the banks were struggling to figure out how to access it, and we put a program together, and that started a partnership with several fintechs. We did both technology, integrations, et cetera, and that led to a more of a partnership approach. And then, we have several partners that if we have clients that meet our risk profile and are wanting to maybe need to fund the payroll or something like that, we’ve got partners that we can introduce them to. So, we got kind of introduced to this concept and certainly then the macroenvironment, what Efrain just said, banks, rising interest rates, and we just know we have a lot of great customers out there, small, mid-size customers are strong businesses that just really struggled to get access to capital at affordable rates.
And so, that started just through a partnership piece. And then we had the Advance business, which was kind of doing this for staffing companies and we’ve been in that. It has been a great business for us. It’s a great acquisition business for us. Introduced us as a payroll customer. There’s just a lot of positives there. And those are adjacent. And so literally, it’s one of those classic, you’re at a conference and you know people who know people and the timing seemed right. And just based upon the need we saw and the fact that we thought there were opportunities for us to potentially help our strong customers continue to grow their business. We’ve already been introducing them to partners. Why not introduce them to ourselves and get a piece of that action?
So that was kind of the strategic rationale. And it’s a small, like you said, very small at this point in time.
Scott Wurtzel: Got it. That’s super helpful. Thank you. And then, just as a follow-up. I mean, just one quickly on the float portfolio. When we think about the recent Fed commentary and dot plot showing maybe a sustained higher rate trajectory than maybe we were expecting a few months ago. I’m afraid, I know you’ve talked about in the past wanting to position the portfolio more on longer duration securities. I was just wondering if this — the recent Fed commentary sort of gears you even more towards sort of the longer duration securities in the portfolio rather than shorter duration? Thanks.
Efrain Rivera: Yeah. We are reviewing monthly to figure out based on and looking at the same dot plots you are to see what happens. I would just go back to something I’ve said from the point that the Fed started raising rates. The problem isn’t taking advantage of the rates going up, the problem is what happens when it comes down. And so, we are positioning the portfolio, we will position the portfolio, and I’m sure Bob will do the same, to be able to manage it in an orderly way on the way down. So, we are looking at — this is a time when you want to go longer, if you can, even if perhaps there are opportunities on the short-end of the curve, because at some point, it will come up, and that’s what you got to figure out how best to manage, and that’s what we are working on.
Scott Wurtzel: Great. Thank you, and congrats, Efrain.
Efrain Rivera: Thank you.
Operator: And we’ll take our next question from Tien-Tsin Huang with JPMorgan. Your line is open.
Efrain Rivera: Hi, Tien-Tsin.
Tien-Tsin Huang: Hey, good morning. Thanks. I just wanted to follow-up on the acquisition, the $200 million acquisition here, and the strategic fit with Paychex Advance. I remember when that deal was announced and there was a lot about payroll funding and factoring and whatnot. Is this now more about early wage access and some of the more modern funding opportunities for employees? Just want to make sure I understand what you’re adding specifically here.
Efrain Rivera: Yeah, the short answer is no. So that’s a separate initiative. At some point, we’ll talk about when it becomes more significant. Now, Tien-Tsin, this what they do is more focused on receivable. So, obviously, we dipped our toe in the water with staffing firms, but we saw an opportunity that broader than that, because our — all of our clients have to one degree or another, receivables, and it can become a source of financing. And we’ve got the data to make it work.
Tien-Tsin Huang: Okay, very clear. So, this is an AR opportunity?
Efrain Rivera: Yeah.
Tien-Tsin Huang: Understood, okay. No follow-up for me. Just want to wish you, Efrain, all the best, of course, for the next chapter. And I’ve said it before, you’ve been really helpful for us for a long time. So, thanks for that. I definitely going to miss talking to you.
Efrain Rivera: Thanks, Tien-Tsin.
Operator: And we’ll take our next question from Peter Christiansen with Citigroup. Your line is open.
Peter Christiansen: Good morning. Welcome, and congrats to Bob, and certainly congrats and thank you to Efrain. John, I wanted to dig a little bit into your thoughts on SMB lending in general. Obviously, this news of big money center bank is getting into the payroll business a bit more and SMB lending is often thought as a nice adjacency here. Should we consider the possibility that Paychex may further delve into SMB lending, whether it would be merchant cash advances or other types of working capital solutions? You see that in Paychex’s future?
John Gibson: No, well look, I think what we are trying to do is make sure that we are focused on what do we need to do to help our clients succeed. And as I said, whether that’s through partnership or if there’s opportunities for us to participate in that process integrating that with our technology, those are really the things that we are interested in. And when we hear our clients, and we are engaging those clients through our advisors on a constant basis, say, this is an issue for them, we go and search for answers, and partnerships are part of that. And as I said, we have several partnerships with fintechs that we are doing and relationships with large banks. I can go deeper on that if you want to know about banking and banks and payroll.
