Operator: Thank you. Our next question comes from Andrew Nicholas with William Blair.
Daniel Maxwell: This is Daniel Maxwell on for Andrew today. Sort of similar to the last question, but specifically on WSE growth in the PEO and ASO client base, if you can break apart, how much of that is coming from existing clients versus new clients and attrition? And any color on why there has been a preference for ASO over PEO and the reasons you expect that balance to normalize? Is that just coming from increased confidence in up-selling to PEO? Or is there anything else in there?
Efrain Rivera: Yes, Daniel. So, we’ve seen healthy growth in WSEs across ASO and PEO. We don’t separately break them out, but both have been growing. So, we’re seeing positive results on that side of the equation, splitting it out between new adds versus existing base. The reality is that because the existing base is so large, it dwarfs the impact of new adds from a WFE perspective, especially when you consider loss. And so, we’ve seen good growth on WSE that makes us, as John said, more positive about the general value of our HR advisory services like both cross ASO and PEO. I’ll let John talk through shifting preferences in a given year between ASO and PEO.
John Gibson: Yes, Daniel. I think that what you’re seeing is — and again, some of this is just speculation on our part, but when we see clients that had our insurance and we go through enrollment and where they had 25 employees that bought the insurance, now they have 22 or you see clients that had your insurance in the PEO and decide that they no longer going to have insurance or offer insurance for your employees. I just think you’re in a position where given some of the uncertainty, people being cautious of adding a benefit. Now it’s interesting, they know they need to have benefits to attract or retain employees. So, 401(k) is doing very, very well. It’s a lower cost benefit. It’s a lower commitment. And now when we take the SECURE Act 2.0, technically, if you’re a 20 to 50 million company, a person company, you now can basically get a 401(k) setup and have all of the setup costs and the annual cost covered through tax credits.
So, those are things they’re adding. But the health insurance, because of the size of the expenditure and the fact of matter is once you start offering it. It’s a pretty long-term commitment you’re making. I think there’s a degree of hesitance to that. And again, as I said, I think there’s more we can do in going out and looking for more innovative product sets that gives access, affordable access to health care for our employees and our teams are working on that. As we go through the new enrollment. But again, the issue you’ll have there, that’s going to be enrollment, we get into the fall of this calendar year and into the second quarter of our fiscal year. Does that help?
Daniel Maxwell: Yes, that’s helpful. And then just generally on capital allocation, anything on the attractiveness of buybacks going forward or any M&A opportunities that have become more attractive in the last few months in the pipeline?
Efrain Rivera: Look, with respect to buybacks, I think we’ve talked about what our philosophy is in general. And at this stage, we’re evaluating a range of opportunities from an M&A perspective and if the right opportunity, I’ll let John talk to that, what we’re looking at. But the right opportunity comes along. We obviously have the dry powder to be able to make something happen.
