Good morning and welcome to Paychex's first quarter fiscal 2027 earnings call. Participating on the call today are John Gibson and Bob Schrader. Following the speaker's prepared remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you Would like to withdraw your question, please press star two on your telephone key pad. As a reminder, this conference is being recorded, and your participation implies consent to our recording of this call. I would now like to turn the call over to Bob Schrader, Paychex's Chief Financial Officer. Thank you for joining us to discuss PaycheX's first quarter fiscal 27 results. Our earnings release and presentation are available on our Investor Relations website. We plan to file our Form 10-Q with the SEC within the next couple of days. This call is being webcast live and will be available for replay on our Investor Relations portal. Today's call includes forward-looking statements that refer to future events and involve some risk. We encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ from our current expectations. We will also reference non-GAAP financial measures. A description of these items, along with a reconciliation of non-GAP measures, can be found in our earnings release. I would now like to turn the call over to John Gibson, Paychex President and CEO. Thanks, Bob. We delivered a solid start to fiscal year 27 with double-digit growth in operating income and earnings per share. Total revenue growth of 6% was driven by strong revenue growth in PO and insurance solutions and continued progress against our strategic objectives, including accelerating AI across our business and executing on our go-to-market strategy. More broadly, our performance reflects the strength of our differentiated high-value advisory solutions. This year, we are focused on three growth drivers, data and AI leadership, go-To-Market evolution, and advisory differentiation to strengthen our competitive position, deliver more value to customers, and expand earnings over time. First, let me talk about data and AI leadership. We see AI as a way to augment the capabilities of our advisors and customers and help them operate more efficiently, make better decisions, and deliver more value and improved outcomes. We believe our combination of proprietary workforce data, purpose-built HCM platforms, and advisory expertise creates a differentiated advantage for paychecks. WISE, our AI-powered intelligence engine, now draws on more than 50 trillion proprietary data points across payroll, HR, benefits, and other workforce workflows. Because that data is domain-specific and embedded in real customer activity, it enables us to deliver AI-driven automation that is more actionable. As our AI agents take action with our experts in the loop, they create a continuous feedback cycle that helps improve outcomes and strengthens our solutions over time. We believe that is where AI creates the most value, not as a standalone tool or search engine, but as intelligence built directly into the system of record and the moment where action needs to happen. We are very proud to be recognized for our AI leadership, as WISE was recently named one of HR Tech's top HR products for 2026. Another source of differentiation is our ability to combine AI with trusted human expertise. As more routine work becomes automated, we believe the value of expert guidance increases in areas where businesses are navigating complexity, such as labor, tax, benefits, and workforce management. That is why we see AI as enhancing, not replacing the role of our trusted advisors, and that's why we believe our combined technology and service model is difficult to replicate. We're already seeing early proof points that this strategy is creating tangible value. This summer, we piloted Intelligent Pay Cycle to proactively address the top sources of payroll errors. Based upon the results from more than 50,000 businesses, WISE helped prevent approximately 90% of those payroll errors Based upon that success, we are expanding those capabilities across additional use cases across the company. This week, we announced WiseHire, an eugenic recruiting solution designed to help SMBs find and hire qualified talent faster. Solution uses AI recruiting agents to help customers source candidates, screen applicants, manage outreach, and schedule interviews, all while keeping employers in control and providing access to human recruiting expertise when needed. We are also extending WISE into business applications where customers already work, such as Microsoft, making WISE easier to access for our customers and their employees. We are further accelerating AI across our service model and operations. We now have more than 2,000 agents and features deployed across the business. Wisogenic payroll continues to enhance operational efficiency, increasing automated payroll processing by nearly 20% from January through August, while also maintaining high service quality and accuracy rates. As this scales, it enables us to automate transactional work and free our teams to focus on more proactive and higher value advisory support. Our second area of focus is our go-to-market evolution. We continue to advance our go to market strategy by positioning Paychex not simply as a provider of products, but as a strategic partner helping businesses succeed. Through our one PaycheX approach, we are equipping all of our sales and customer success teams to take full advantage of the breadth of our technology and advisory solutions. With this approach, we are better aligning customers to the right solution from the beginning of their relationship with Paychex. Our partner ecosystem also remains a strategic advantage. Our CPA, bank, and broker relationships drive a significant portion of our leads and generate higher win rates. Investment in those channels drove higher referral activity year-over-year. We continue to build momentum in the broker channel, signing our third national broker partnership in six months with IMA Financial Group. We saw strong growth in broker bookings supported by higher average deal size and strong ancillary attachment. At the same time, we're expanding our reach through embedded, partner-led, and stand-alone channels, creating additional pathways for future growth. And finally, advisory differentiation. Customers are looking for more than just software. Our advisory and benefits solutions remain an important part of how we help businesses navigate increasingly complex workforce needs. By combining innovative technology with human expertise, we provide trusted support across ASO, PO, and retirement, often serving businesses with limited or no in-house HR resources. All three advisory solutions delivered strong revenue growth this quarter. We continue to see traction in the enterprise segment for our advisory solutions, which reinforces the strategic rationale of the paid core acquisition PEO remains a key growth driver and delivered industry-leading high single-digit worksite employee growth and delivered record retention we also saw strong upgrades of ASO clients into PEO relationships reflecting the trust we've built with clients and the value of our full service advisory model. In addition to all these things, we improved client retention, we continued to see price realization and strong product penetration, all of which contributed to the strength of our results this quarter and continues to demonstrate the value we deliver for our customers. I'm pleased to see our progress recognized externally, including being named the Times World's Best Companies and Newsweek's America's Greatest Companies list, reflecting the strength of our brand, culture, and operating performance. In addition, our human capital management platforms were recognized by Nucleus Research and Nelson Hall for innovation and capability in talent and workforce management. Stepping back, we believe Paychex has never been better positioned and continues to offer a compelling investor value proposition. With our multiple durable recurring revenue streams and businesses, industry-leading margins, strong free cash flow, disciplined capital allocation, we see continued opportunity to expand our earnings power through scale, mix, productivity, and AI-enabled efficiency. We have a focused strategy, a resilient operating model, and increasing momentum in the areas that we believe matter most for long-term growth and profitability. I'm proud of the work that the team has done this quarter. I will now turn it over to Bob to discuss our financial performance and outlook. Thanks, John. I'll begin with our first quarter results, and then I'll turn to our updated outlook for fiscal 2027. For the first quarter, total revenue increased 6% to $1.6 billion, driven by the strength in our advisory solutions, particularly PEO. Management solutions revenue grew 4% to $1,2 billion, given by product penetration and price realization. And as John mentioned, we saw a high volume of ASO to PEO upgrades in the quarter, as well as strong PEO referral activity from our HCM sales teams, which contributed to strong PEO growth. PEO and insurance growth in the quarter was 12% to $368 million, primarily driven by strong growth in PEO worksite employees and increased PEO insurance volumes. Interest on funds held for clients increased 5% to 50 million, driven by stronger reinvestment yields on our long-term portfolio. Total expenses for the end quarter increased 1%, as higher PEO direct insurance costs and continued investments in our go-to-market expansion and strategic priorities were largely offset by lower acquisition-related costs and continued AI efficiencies. Operating margins for the quarter increased 280 basis points to 38%, and our adjusted operating margins increased approximately 130 basis points to 42%. driven by productivity and cost discipline, even as we continue to invest in our strategic priorities. Diluted earnings per share increased 14% to $1.21 per share, and adjusted diluted earnings per share decreased 10% to$1.34. Our financial position remains strong with cash, restricted cash, and total corporate investments of approximately $1 billion in total borrowings of approximately $4.6 billion at quarter end. Cash flow from operations were $414 million and were impacted by the timing of client and corporate tax payments. And our capital allocation strategy is centered on delivering long-term shareholder value. This quarter we returned $424 million to shareholders through cash dividends. We continue to focus on the drivers of long- term shareholder returns within our control including strong earnings growth sustained dividend growth and disciplined capital deployment our 12-month rolling return on equity remains robust at 47 i'll now turn to our updated outlook which assumes the current macro environment including stable demand and flat employment levels we are reaffirming our full year fiscal 27 guidance with updates to segment revenue growth to reflect continued strength in PEO and the latest short-term interest rate change. For fiscal 27, we now expect PEO and insurance solutions revenue growth be in the range of 7% to 8%. This is up from our prior guidance due to continued strength and PEO. As a reminder, comparisons become more challenging over the remainder of the year as we lap the prior acceleration in PEO from stronger MPP enrollment. Interest on fund sales for clients is now expected to be in the range of $200 to $210 million, which includes the most recent 25 basis point increase to the Fed funds rate. The remainder of our outlook is unchanged. However, I would like to provide some additional color on the categories. If the strength that we saw in Q1 in PEO upsells and HCM referrals continues, we could see PEO and insurance solutions trending toward the high end of the updated range with management solutions trending towards the low end. And as I think we've discussed many times with many of you, we view that mix shift favorably as PEO represents not only our highest value solution, the best retention solution that we have, but certainly our highest lifetime value solution. Now let me turn to provide some color on the second quarter. Second quarter revenue and earnings growth reflect a difficult comparison to prior year due to two one-time items that were recognized in Q2 of last year. One, we had a revenue synergy benefit from the acquisition that was recognized in the quarter, as well as the realized gains that we had in Q3 from the repositioning of the portfolio that we did. We would expect Q2 revenue growth to be approximately 4% with an adjusted operating margin of approximately 40%. Excluding those two items that I just mentioned, second quarter total revenue growth would be in line with our first quarter growth rate. And as always, this outlook reflects current assumptions and is subject to change. Our business fundamentals remain strong. We continue to operate from a position of financial strength supported by our durable recurring revenue, strong cash generation, and disciplined investment in the areas we believe will drive long-term growth. With a resilient operating model, continued margin opportunity, increasing momentum in AI, go-to-market evolution, and advisory solutions, we remain confident in our strategy to drive long term growth and shareholder value. And with that, we'll now open up the call for questions. Thank you. If you'd like to ask a question, press star 1 on your keypad. To leave the queue at any time, press start 2. We do ask that you limit yourself to one question and one follow-up. Once again, that is star 1 to ask a question. We'll go first to Andrew Nicholas with William Blair. Your line is now open. Hi, good morning. I appreciate you taking my questions. I wanted to start on the HRMS quarter. I'm curious if this was in line with your expectations. What additional color could you give us in terms of the underlying drivers of the 4.3% growth number? And if you could speak to the implied ramp throughout the rest of this year, considering you did maintain the 5% to 6% outlook? Yeah, maybe I'll – you want me to start? Yeah, you start. Yeah, Andrew, listen, I think management solutions was, I would say, slightly below our expectations, and I think it's due to the two things that we talked about in the prepared remarks. It's really the strength of the PO, and it's really important and I don't know if you can hear me, but I think the PO and I think it is driven by two dynamics. We certainly saw a strong performance in upgrades from ASO to PO, that was certainly ahead of our plan, and it was up significantly year over year. And then the other dynamic that we saw during the quarter is we're seeing a higher level of referral activity from our HCM sales teams into PO. That was up almost 50% year over year, and that's actually driving new sales into the PO. And it was really broad-based across the board. Certainly, we're benefiting from our enterprise reps out in the field, not only selling technology, but really selling the full breadth of our solutions, including PEO. And so that we're gaining a lot of traction there. As we mentioned in the call, we do view that as favorable overall, just because of the economics around the PEO business. So it was probably slightly below our expectation, but P.O. obviously overachieved our expectation and that's why you see some of the changes that we made to the full year guide. As far as the acceleration in the back half, in management solutions, I mean, we continue to see strength in ancillary attachment and although P.E.O has been strong, ASO in retirement continue to be strong. A lot of that's coming from the revenue synergy opportunity. You know, we've been adding sales headcount, you know, over the last year. Those heads are ramping, getting more productive. Our retention trends are very positive, and we would expect that to continue. And then we have a lot of new stuff, other revenue streams, like our Perks product, you now, our employee Perks product. That's probably our strongest growing product that we have. We just launched that into the PayCore platform, you know, into 2.5 million employees. We announced WiseHire this morning. We have our 650 products. So we expect all those products to continue to gain traction as we move into the back half of the year. Yeah, I think, Andrew, the thing that happened to us, quite frankly, is that the execution of our go-to-market evolution exceeded our expectations. You know, what we're trying to do there is we're trying to put stronger focus on higher lifetime values. solutions we're really driving training enablement and incentives so that all of our reps are presenting the best solution across all of our sales team and also our customer success team so we're trying to enable every one of our sellers and everyone that's in direct contact with our clients to be able to represent each one of products and services I think anyone knows anything about paychecks is that used to be a lot more siloed and and compartmentalized, if you will. We'd get a client, we'd become a payroll client, then we'd go and sell them ASO, then we would sell them PO, and we'd kind of move them up the ramp. And we've done a lot using AI as one of the tools we're using to enable our reps to be able to speak to these different solutions and capabilities, the same thing with our customer success reps. So quite frankly, that actually exceeded our expectations. Bob mentioned it. Our ASO to PO conversions were double our expectations, And then we were even better in the referral side of the shop in terms of the enterprise, 100 plus, the sales teams that we have out there referring POs. So you've got a situation where that immediately, you've got a geography question in terms of management solutions versus PO. So when an ASO client upgrades the PO, the revenue is about three and a half times, and you're moving from one bucket to the other. When you look at an HCM sales rep that's out there potentially going to put them on an HCN platform and they refer it to PO, again, that's even more than three and a half times the revenue uptake. And so if we can get the client in the right solution up front, the advisory solution, we think that's the right thing to do, and that's actually exceeded our expectations in the quarter. And if that continues, I believe that's a good thing for the company and a good think for our shareholders. I agree. Thanks for the color. For my second question, I just wanted to touch on PEO a little bit further. One of the bigger themes we've heard in kind of talking to private companies in this space over the past couple weeks is the potential for healthcare renewals to accelerate from the low double-digit level during the upcoming renewal season. So I guess a two-part question, are you seeing or hearing of that dynamic from your business heads? And second, how do you see that affecting paychecks retention in your PEO business, your ability to take share, and maybe the broader sales environment as, you know, medical rates continue to move higher? Thank you. Yeah. Well, look, medical and health and really providing benefits to employees is a major issue that's facing our markets. And that's why our advisory solutions and our benefit solutions are resonating so strong. And at our scale, I think we have a demonstrated track record over a long period of time of being able to manage that cost and give some sort of comfort. I think there's no question when you see the type of health inflation that we're seeing in the marketplace, that causes people to look around. What I would tell you is we're at record level PO retention, and that beat our record of last year in the first quarter. We are just beginning our first renewal. If you remember, we have two renewal processes, one in October and one in January. What i can tell you, is i think we've managed our book well, and our rates are going to be highly competitive in the marketplace. And I think that's going to give us a competitive advantage there. So this is a big issue. I think it's going to drive more people shopping and looking for alternatives to access economic benefits. And the good thing is I think we have the products and solutions to be able to do that. So I think part of this acceleration is all the things you just talked about. That's why I think when our HCM reps are out there and they're talking to clients about what their problems are, we're hearing, hey, health inflation is a problem. Can you help me here? Guess what? I can. Let me get one of my PO partners in to talk to you. And I think that's resonating. Thank you. Our next question comes from Daniel Jester with BMO Capital. Your line is open. Please go ahead. Oh, great. Thanks for taking my question. um so i guess i wanted to go back to all the commentary around ai and it's great to see all the product advancements there can you just spend a moment like talking about two things i guess number one is the advancements in all of these technologies are you actually seeing an improvement in your win rate or your seller productivity i guess number two is you know can you speak to sort of how these are resonating with your customers what's repeat usage like on some of of these new tools. I just want to get a sense for the customer demand. Thank you. Yeah, so I think we, I said some of this stuff in our opening remarks, just as background, our WISE platform just won the HR Tech Top HR product for 2026. We're just beginning to launch that. We just started that process. What we've seen thus far, we've got about 50,000 of our clients that were utilizing our advanced payroll processing capabilities, and we're actually capturing 90% of the errors up in advance. So what that's doing is driving two things, better customer outcome and less back office work for us organizationally. So that's the kind of uptake. We just started with the PayCorps WISE assistant. We've just started a small group of clients early days. The feedback has been extremely positive. We're just starting to launch. We just launched the PayCore Wise Pro into the marketplace in August, so we'll start seeing that in the September timeframe. What I'm most happy with is the work that we're seeing going on internally right now. Of course, we've been adopting this internally faster than we probably have from a product perspective, and we now have over 600 active agents in the company a quarter ago. We have over 2,000 today. We've now deployed AI to over 10,000 of our employees, and we're encouraging them through a governance process to figure out how they can enable those tools. And we're seeing 20% reductions in payroll, manual payroll process, using our eugenic payroll capabilities and tools. So we're seen a lot of pickup internally. And I think when we begin to embed this into our workflows at the customer level, our customer is going to see a similar type of uptick in the benefits that they're going to have. So I think we're early there. We just announced today our WiseHire product. That's going to be an ogenic recruiting solution designed for small and mid-sized businesses. It's going to help them find qualified talent, which is another big issue we hear. And again, when you look at that, it really takes you from the start of engaging a client, posting a job, looking for a qualified candidate, screening the candidate, scheduling the interview, and takes you all the way through the onboarding process into all three of our platforms, all of that embedded into WISE. And so again, that's going to save time, that're going to go to faster hire for our clients, and they're going have better outcomes. So we're in the early stages, I think, of deploying this from a product perspective, but what I can tell you, what we've seen internally, the uplift we're getting in terms of our ability to drive better outcomes for our customers, drive efficiency across our specialists and our advisors, it's pretty powerful. That's really great. Thank you so much for that. And then maybe, Bob, to you, appreciate the color on the second quarter. Maybe anything more you can share about what we'd be thinking about sort of enterprise bookings. And, you know, I think the last couple of quarters, PayCore was viewed as you've been improving from a bookings perspective. So, I guess, how did that perform in the quarter? As I think about the second corner, and maybe in the third quarter, any color about how we should think about those enterprise bookINGS re-ramping? Thank you. Yeah, I mean, enterprise bookINGs were strong. in the quarter, you know, certainly up double digits for sure. And particularly, you know, we saw strength in the broker bookings as well in average deal size. So I think all those trends were very positive. And I think that gives us some level of confidence, you know, as it relates as we move into the second half of the year. You know, we had the question around the acceleration. You You know, some of that is based on what we saw in Q1. Booking strength in the enterprise space was overall, and I'll just answer the question that I assume is coming. Overall, when we look at the enterprise growth for the quarter, it was in line, you know, our 100-plus across all of our businesses was in line with what we Saw in Q4, and that was in the high single digits. So we're seeing a lot of positive trends in the Enterprise space, and that is certainly contributing to the strength that we're seeing in the PEO business as well. A lot of that is coming up market. I think Andrew put a note out earlier this week about PEO playing up market further above 100, and we're definitely seeing that. We saw that in Q1. So those trends were very positive. Thank you. Our next question comes from Brian Keene with Citi. Your line is now open. yeah hey guys good morning um bob can you just walk us um the fourth quarter managed services growth i think was about five and a half and now we're a little bit under four and a half i think it was four and change um just to walk through and how much of this is just literally we're going from hr solutions business the aso business is getting pulled we're going one pocket to another over to PEO, and so really there's not that much difference going on. Yeah, I mean, that's exactly it, Brian. I mean you hit the nail on the head. It's a little bit left pocket, right pocket, and, again, we view it as positive. I think the organic growth in management solutions was probably around 5% in Q4. There was probably a little Bit of better price realization in Q5 versus maybe what we thought or what he came through in Q1, but most of the change is really this mix shift between management solutions and PEO, really with the ASO, not only the ASL upgrades, which John said, that comes directly out of management solutions and gets reported in PEO. I think the other dynamic that we're seeing there is just the new business that's coming into the PEO because we have all of our enterprise, or not only our enterprise reps, but all of our HCM reps out in the field selling the full solution. I mean, at the end of the day, you know, small businesses are not buying technology. I think John said that in his prepared remarks. They're buying peace of mind, and it's that combination of our, you Know, our AI capabilities with that human in the loop and really trying to find ways to help small businesses solve problems. That is really resonating, and It's driving that strength. Not only PO, ASO is strong as well, but, you know, to answer your question directly, it is really more the left pocket, right pocket. Yeah, because the total revenue, we're not really – it doesn't look like the expectations are really different at the end of the day because it's just a – it's a mixed shift between one segment to the other. Yeah, and listen, we took the PO and insurance up, and, you Know, I made some comments in the guidance around, you know, depending on how things continue being at the high end versus the low end of ranges. We're sitting here, we feel pretty good about the PO, but we have two big enrollments in front of us. We have the one here in October, as John mentioned, the one in January. You know, we don't know what we don'T know, so we're trying to be a little bit conservative there as we move through the balance of the year. And as we get through Q2, we'll kind of update, you Know, not only the total, but, you KNOW, what we see, youknow, between the splits between the two categories. Thank you. And our next question comes from Jared Levine with TD Cowen. Your line is now open. Thanks. Thank you, I want to start in terms of revenue synergies. Can you talk about the progress so far into this year, or starting with one Q so far, and any update expectations in terms of, I think, for the full year you were previously assuming about 70, 75 bps, any update expectations there? Yeah, Jared, this is John. We're going to stick with what we gave you the last time. I would say that they're going well. Bob talked about the referral side of the equation. Continue to see good strength in our advisory solutions, ASO, PO, and retirement. We also mentioned we launched PERCs into the PACOR client base. Their employees are up two and a half million. We're only not even a month into that already. What I can tell you about Perks overall, last time we talked, I think it was about over 400,000. We now have over 450,000 employees, double-digit growth in that product. And in the first 30 days, pay core adoption is outpacing the first month when we launched it in Flex in terms of employee adoption. What I'm even more impressed with, which is not surprising, quite frankly, given the larger client size, is they're actually buying, every employee in Flex is buying about two products. In the Perks, in the PayCorp place, it's three, three and a half. So we're actually seeing more uptake as well. So that's early on as well, and that's certainly exceeding our expectations there. Got it. And then I want to dig in, in terms of some of the commentary about sustaining the high single-digit WSC growth within the PEO this quarter, I guess you started calling that out last year in 3Q26. Is this a dynamic where you maybe went from high single-digit WSC growth to you call it accelerate to very high single digit growth? Because I guess it would potentially imply maybe the new to franchise sales have decelerated, but just didn't know if it was maybe more of a, you know, going from high signal digits to very highest signal digits or the new the franchise sales decelerate here in terms of still delivering that high single digit WSC growth in one queue? Well, Jerry, I'll let Bob fill in the detail, but this is what's amazing to me. Our ASO to PO conversion, so let's talk about selling inside our client base, going into paychecks, going into Paycor, and selling PO. That is 2x our expectations. What's amazing is to have that kind of growth happen inside the base, the traditional conversion and also see similar to slightly greater increases in the outside the base new logo component so whereas you know we sell more outside the basin than inside the base that's what i would have told you a year ago if you would have told me we were going to double the number of conversions i would have said that's going to flip the other way and we're going to have more internal conversions leading to po growth that is not what happened both of them accelerated in the first quarter both new logo and inside-the-base conversions. Yeah, I mean, to answer the question directly, it's very high single digits, I think was your question without disclosing the exact number. And I think the point that John made is a valid one. Despite all of those internal transfers, the new business into the P.O. still skewed more outside the base. And, again, I think that's coming from the referral activity, the value of having, you know, all of our reps out selling the full value proposition is skewed more outside the base and inside the base, which was a pleasant surprise. And I think we've seen a couple quarters of that trend as well. Thank you. Our next question comes from Ashish Sabadra with RBC Capital Markets. Your line is now open. Hey, good morning, guys. This is Bill Chee. I'm Ashish Sabadre. Appreciate you taking our question. Maybe just wanted to ask on some the comments around price realization. Could you give a little bit more color there, just maybe how current pricing trends are stacking relative to historicals? Well, yeah, what I'd say is we continue to get price realization, retention continues to improve, product penetration continues to hit our expectations. So we're still seeing the ability because I think our products and services and the quality of our service and our technology are resonating with our clients to be able to go out in the market and achieve the price realization targets that we've historically gotten. So that's where we're at. Got it. And maybe just a quick follow-up, I guess, maybe on margins outlook. I think the 44% kind of this year, 27 margins and 40% guidance with 2Q, it seems to be kind of a bigger ramp, I think, for second half. I know 3Q is usually a little bit lumpier, but any, I suppose, thoughts around cadence there? Is this more just a factor, you know, as these new AI products ramp? You're seeing that kind of flow to margins and also productivity improvements as well? Yeah, I think some of it's just the timing. I think the full year guide was approximately 44 basis points, which is probably in line with the expansion that we've normally seen historically in that, you know, kind of 50 basis point range, and we just expanded Q1 margins 130 basis points. So, you know, the Q1 expansion is greater than the full-year expansion. You can't look at the absolute number because margins are significantly higher. You can go back, if you look over the last, you know, in any year, Q3 margins are just structurally higher because of, you know, that's when we do a lot of our year-end processing revenue, and that's, you know, essentially 100% margin. So Q3 margins are, you know, structurally higher. So, yeah, really no concern. You know, overall expense growth was up 1%, And so when you're growing your top line 6% and you're only growing your expenses 1%, you can see how it's easy to get double-digit earnings growth and the strong margin expansion that we delivered in the quarter. Yeah, I want to make a finer point on that, give the team a lot of credit, and I want you to think about it this way. When you think about the margin expansion that we saw, coupled with the fact that we had PO growing at a higher rate than what we expected, our MPP program, our health program that we have in Florida, many of you know about it, right, that was at double digits growth as well. We all know that's pass-through. So we're typically, you would say, if the PO was growing at that rate, you would expect it would be difficult to get that kind of margin expansion. That's really the power that we're seeing in terms of AI. So on top of the margin expansion that we committed to at the start of the year, before we knew that PO was going to accelerate at the rate that it is, we've also increased significantly our investment in AI, and we've increased our investment in expanding our go-to-market efforts, both in terms of channel investments, embedded investments, as well as additional salespeople. So all that additional growth investment, all the AI investment, acceleration in the PO, which normally would compress our margins, and we're still committing to the type of margin expansion in the years. So that's just, I think it's a testament of what we think the power of AI is and how great the team has done as the best operators in managing the bottom line of the business. Thank you. Our next question comes from Mark Marcon with Baird. Your line is now open. Good morning and thanks for taking my questions. I'm going to ask a couple of somewhat repetitive questions just because of the way the stock's reacting. So I just wanted to give you an opportunity to further clarify things. With regards to just that ASO to PEO shift, could you quantify that, just how much of ASO revenue ended up shifting out during the quarter? Is that possible? Or to quantify, like, what the lift in terms of worksite employees and non-pass-through revenue to the PEO was, you know, during the quarter? And then I've got to follow up with regards to the guidance. Yeah, Mark, I think the way that I would think about it is, you Know, part of the challenge that we have, and I'm not going to change this, because we're not managing the business quarter to quarter. And so we provide you guys full year guidance, and we try to give you the splits on a full year basis, and then we try and provide you some color on what the quarter is going to be but not kind of the splits. And so even before the year started and where I saw where you guys were landing between the two categories, I knew regardless of how the quarter came out, I knew you guys are probably going to beat too high on management solutions and too low on PO and insurance. There's nothing really I can do about that because, again, We're not managing the business quarter to quarter. I think when we came into the year, we said we expected the full year to be five to six, and we expected Q1 to be 5 to 6. We just delivered a 6. So the quarter exceeded our expectations. Obviously, there's puts and takes amongst all the different revenue streams, but overall the quarter exceeds our expectations, and management solutions was a little bit lower in PO and insurance. was a little bit higher relative to our expectations. And I think to Brian Keene's question, it really is just kind of a left pocket, right pocket shift. And, again, we view this as positive just given, you know, the strength of that model and the PO and particularly the retention. Listen, it's the highest value solution, but it is very sticky, you Know, for clients when they have all their insurances through us. It's very disruptive for them to leave. It's disruptive for their employees. And so that's why, you know, I think you've heard me say this. I'd love to get all 800,000 of my clients in the PO model because of the stickiness there. And that's part of our strategy. And as John said in one of the answers to the questions, you know, the execution of our strategy was stronger than what we anticipated. So I'm hoping this trend continues, to be honest, as we move forward, because I think it's the right answer for the company, I think it's right answer our customers, and I think is the right for our shareholders. Yeah, Mark, I I think the important message to get out there is that the mixed shift towards advisory solutions is positive to our business model and our competitive position and if the market is demanding both a combination of technology service and advisory support I think there's very few that can compete with paychecks at our scale when it comes to leading with technology and advisory solutions and that's where I see the market going and AI is just going to simply enable us to do more of that more advising because we can take more transactional work and repurpose those specialists to more higher level capabilities. So I think this is a good thing. Bob Ray said it. You look at our P&L, it's going to make the P&R better. And it is odd. I almost feel like I'm apologizing for successful execution of our advisory strategy. And we shouldn't be. We should be pounding our chest and saying, wow i can't believe we exceeded our expectations at this degree um and and so you know hats off to the team and the execution of the go-to-market evolution that we're doing um and hats off to the po team because not i mean you got to think about it they weren't set up for 2x what they were expecting and to be able to continue to have uh the record beating the record retention they had just sat doing that going through enrollments and negotiating with carriers and getting rates that I think are going to be highly competitive as we go into selling season. Like I said, that's something I'm very proud of. And again, I think we've got to continue to get the message out that the mid-shift towards advisory solutions is positive for our business model and for our competitive position, both in the short term and the long term. I appreciate that. I mean, the specific question was just if you could actually quantify the amount because you're, I mean, just given the way the stock's reacting, it's clear that some people are maybe making the assumption that, you know, the PEO lift is partially due to the insurance, you now, pass-through revenue, not necessarily a direct, you know, shift in terms of, you know, revenue on a like-for-like, margin-for margin basis. So I was trying to ask that question to give you the opportunity to directly answer that. Yeah, Mark, and just to comment on the POs, certainly our insurance volumes are up, right? So if you go back to last year when MPP enrollment was down in Q1 before we went into our two annual enrollments, we had great execution through both of those enrollments. So our MPP revenue is certainly up. MPP enrollment is up, I think, double digits. But to Jared's earlier question, the worksite employee growth is really what drives PEO revenue. And that is high single, you know, digits, you know, just shy of double digits, which we continue to, I would say, outperform the overall market there. So we're gaining share, as John said. Our advisory message and differentiation is resonating in the marketplace, and that's what you're seeing in the results. Yeah, the other thing is, Mark, and I think you understand, and several of you understand the nuance of this, when you look at PO insurance revenue at paychecks, it's not like all the other competitors. We provide insurance across the nation. That revenue, except for in Florida, you're not seeing in our PO revenue, right? That's not the case in how accounting works in a lot of the other competitive sets where they actually, all the revenue is going through. I think that's important because we're only talking about one program in Florida is the only part of that program. We're seeing broad-based across the nation growth in the P.O. And so, as Bob said, I think the proxy there is worksite employees, and we're getting administrative fee for every one of those worksite employers. So I think if that's the question, right, well, P.E.O.'s growing because of insurance inflation, that's not the case. You cannot, it's apples and oranges in terms of comparing paychecks to other competitors where all of their insurance programs are embedded in their revenue projections. I don't know if that helps, but Thank you. Our next question comes from Tien-Sin Huang with JP Morgan. Your line is now open. Hey, thank you for going through all of that. That's That's helpful, and maybe I'll build on it and ask a couple questions. Just thinking about the outperformance of ASO, and this is the outcome that you want, this mid-shift towards advisory, you overcame the higher cost of it, but help me understand how that came about. Is it just a consequence of sales incentives or sales alignment pushing this more aggressively than you used to, or is it somewhat demand-driven as well? Just trying to understand that. And also, Bob, I heard you say you'd love to get all of your clients onto the PEO model. Is there a runway to upgrade instead of PEO? I didn't think that 100% of your your clients would fit or be eligible, say, for for a fully outsourced PEO model. Yeah, well, maybe I'll start with that and then John can answer the other question. I mean, it's still relatively low penetrated tension within our client base. I mean, P.O. is largely an under-100, you know, play, if you will. And as you know our client base is largely under 100. So, you Know, maybe it's not going to be a fit for all 800,000 clients, but I think it's going to a fit a good many of them. So I still think there's a ton of opportunity there within the base. And, You know, John can add on to it. I mean I think I don't know that there's anything really different than just good execution on a strategy that we've been focused on for a long time. You know, going from ASO to PO has been part of our strategy for a Longtime. I think we've done a good job leveraging our AI models to really identify those clients that are a good fit. I would tell you what I think is a little bit different is the scale of our distribution has obviously increased with the PayCore acquisition. And so now it's not just my PO reps. We're really focused on this one-paychecks approach of really trying to sell the full value proposition. So now I've got all these enterprise reps in the past who are only out selling a technology solution that are selling these advisory solutions. And, yes, you've got to get the incentives right, and we definitely have the incentives rights so they can, if they're out in the field and they identify a prospect that's a good PO prospect and they understand, because John and I talk about this with the leadership team constantly, the value that is to paychecks, they understand that they can refer that over to the PO, and there's obviously an opportunity for them to get credit for that and get paid commissions on it. So I think it's all of the above. It's just execution of the strategy, having more reps out there selling it, and that's really driving the results. Yeah, I agree, Bob. Our one-paychecks go-to-market strategy, we've done a lot of work building strong partnerships, being able to enable each one of our sales reps and our customer success reps as well. So remember, we also, we talked about this, we moved a lot more people into advisory roles, customer success roles, and we continue to expand that as we're able to drive more transactional work down. So we have more people even in our service organization that are actively engaging clients in conversations about the products and services they want as well. So not only have we been educating and enabling all of the increase in our sales teams out in the marketplace to identify this, I think that's going. I think there's an earlier point that I think is important to understand. There is also market issues that are driving this adoption. More and more people are getting increases, and the increases have reached the point where they decide they're going to shop. So now it's like, I really like my brother-in-law, the broker, but, you know, wait a minute, the price is getting too high. Maybe I should shop. That's happening in the marketplace. So I think more people Are coming to market looking for comprehensive solutions, and I think the PO has been identified. And there was a good note, like I said, out at the NAPEO conference in terms that all the POs are beginning to see that, that larger clients are starting to explore the PO as an alternative to be able to access higher quality health programs at a more reasonable cost. Got it. That's good to hear. Then my quick follow-up, just as we go into enrollment period and your broader selling season, are you going to approach the carriers and plans and the pricing and everything else a little bit differently now that it's becoming a bigger focus? Is that a dial we can expect paychecks to change? Not the Florida versus non-Florida risk pass-through model itself, but just thinking about the broader presentation of pricing and plan design for PEO. because it seems like it's going to become more important as everybody shifts towards what you just said there, John. Yeah, I don't think we're going to change anything. I think that's been very important for a long time, and it's a key part of why I think we'RE having this success is we've been doing this for some time in terms of continuing to adjust plan designs, continue to make sure we have the right broad selections. If you go back three or four years ago, we had a lot of conversations about this and some of the changes that we need to make because it kind of went the other way for us. And so I think the team's done a very good job of both managing the book, managing the plans, and making sure that we're working with our carrier partners on the best alternatives we can put in the marketplace. So I don't see us changing our strategy. We're going to keep doing what we're doing because it seems to be working. Thank you. Our next question comes from David Grossman with Stiefel. Your line is now open. Good morning. Thanks. I'm wondering if we just go back to management solutions for a minute and maybe at least at a high level walk us through the mechanics of the growth rate for the quarter and the year. I'm thinking price realization versus revenue retention and new clients, because I know you've had a strategy of adding fewer, smaller clients, et cetera. Maybe that's having a little bit of an impact here. You mentioned, obviously, this transition to the PEO, but maybe just help us walk through that mechanic at a high level. Yeah, I mean, David, it's primarily driven by revenue for a client within management solutions, the point you just made, and us being prudent on making sure that we're adding clients that we think are going to be profitable and drive lifetime value over time. It's, you know, the 5% to 6% guide on management solutions, the assumption there would be, you know, it's roughly split between, you know, pricing and ancillary attachment. Now we have this new dynamic where we're seeing more of the ASO, you know, those were existing clients that were in management solutions. You know, transitioning over to PO. But that's really the assumption that went into the guide was, you know, roughly split between pricing and ancillory attachment. so given what you're seeing then bob you would expect you know let's just say price is the mid point of your range so-called three points of pricing and and then the balance would come primarily just from yeah roughly yeah i think that's a fair way to think about it yep okay and then you know just you know back to the po i mean we've gone through these periods of hyperinflation right on cost in the past um and just curious you know what you've seen in the po in the past during these periods and and perhaps you know is there some kind of cadence to how this plays out you know the first level response is you know we got to shop around and see if we can get something and then that kind of stabilizes and then just curious how it flows through at the employee level you know i know there have been periods when employees have had to trade down or they just opt out of the plans and just kind of curious kind of what you've seen historically when we've gone through periods like this. Yeah, I think, David, that's the one thing that is probably, Bob mentioned the word conservative. I mean, we're just going into the enrollment. And remember, the enrollment has a two-step process. One is to take the new rate to the client and get the client's agreement that this is the rate that we're going to offer their employees, and these are the plans we're gonna offer their employers. And we've been trying to do a broad set. So that's step one. we're just through that okay we're not in the actual enrollment until october where the employees then have to make a selection and that's where it's a little more tricky because you get a two stage decision making um you know there's a lot of things going on uh with the affordable care act which i'm assuming you're aware of and in the past that was an escape valve for people to get off of employer-based plans at some point in time that valve is kind of getting shut off a little bit. Quite honestly, in some states, it's not even viable. In our states, the increases there are even greater than what in the employer market is. So we are in this unique dynamic that I think employees are going to continue to look for plans within their employer plans if they can get them. I think the escape valve is a little not as open as it has been in the past. And what we're trying to predict is which plans will they select, because that does have an impact. Again, for us, that only has an impact in the portion of our book that's in Florida only. Everywhere else across the nation, it really doesn't matter which plan they select because it's not going to impact our revenue, if you understand. They're going to have insurance with us. They are going to have a great experience with us, and it doesn't mater which plan that they pick. That's not going to impact the up or down of our revenue. In Florida, it does. I don't know if that makes sense. Thank you. Our next question comes from Jacob Smith with Guggenheim. Your line is now open. Hey, thanks for taking my question. Just on the macro, with oil prices elevated for a sustained period and your 70% blue-gray collar customer base, have you seen any discernible impact this quarter for, you know, whether it be hiring decision cycles or sensitivity around price increases? Any real-time color that would be helpful? No, not at all. I would say the employment and hiring in our, both in our index and generally what we see, it's really not significantly changed through the fiscal year. You know, actually, I think we're still in this kind of, you know, environment where it's kind of low fire, low hire. You mentioned blue and gray color. What I tend to hear from our clients right now is they're having trouble finding people. There's a lot of capital investment going on. There's need for a lot electricians and a lot construction work going on in some of this AI boom. And so most of the people that we're talking to, which is why we launched the WiseHire application, is trying to find qualified people for these jobs. So we've not seen anything in the macro environment, still not seeing any signs of a recession. In fact, in the quarter, our out-of-business and financial stress losses were actually improved. And if you remember right, they were improving in the back half of last year. So I actually feel a little bit better about where the floor is. Now, we've said all that. I mean, we have got a lot of things globally that are on edge. And just depending if there was an oil shock or some sort of other hyperinflationary shock, I think, you know, who knows what would happen. But I think you just look at even the data the Fed is looking at. I think the reason why they felt comfortable with the quarter point was the foundations of the economy are very strong and the employment picture is very strong. So the feeling that the economy and the appointment mandate that they had could handle an additional quarter point. And really, it was an opportunity to try to focus on driving inflation down to the 2% target. So I don't see anything in the current data that I'm seeing that would say we're in a recessionary or in some sort of problematic situation from an employment perspective. I appreciate the color. And then just on the broker channel, with the two national partnerships you signed last quarter, another one this quarter, are referrals accelerating? and how is that activity compared to maybe a year ago, and is this an upward trend you expect for the rest of the year? Referrals are up 43%. Thank you. Our next question comes from James Fawcett with Morgan Stanley. Your line is now open. Hi, everyone. It's Michael Infante. I'm for James. Thanks for taking our question. You made several comments about your intentional ISO to PEO mix shift given the higher retention and lifetime value nature within that segment. But how are you thinking about the risk of clients downselling into lower-cost offerings within the PEO, specifically if we do get a little bit of incremental macro shop, which is something we've obviously seen in prior cycles? And are you embedding, you know, any of that downsell activity into the existing outlook? Yeah, I mean, we haven't seen that yet. I mean I guess if it happens we'll factor it in. And I think John made the comment around record retention, and that's not a one-quarter thing. That's been going on for a number of years in the PO business. So both the strong worksite employee growth, the demand, and each quarter we keep saying record retention. And we always sign up for better retention than the year before, but the PO has been on a trend here the last couple years with improved retention. And, you know, we haven't assumed any further improvements as we move forward. We've just kind of baked in the trends that we've seen thus far. And so that's what's assumed in our guide. Helpful. And then maybe just a quick follow-up on PayCore revenue growth, Bob. I think I heard you say revenue growth in the high single-digit range consistent with Q4. But if I sort of recall back to your initial acquisition expectations, expectations. I think the hope was for PAYCOR to grow revenue closer to that double-digit range with the delta attributable largely to some softer revenue per client and smaller deal-size trends. So I'm just curious, given your commentary about bookings still running in that double digit range, if you've seen any changes in terms of the underlying revenue for a client or deal-sized trends for PayCOR specifically, and if and when we should expect that bookings to reveract to converge? Yeah, I mean, our enterprise bookings have been strong. I think we've made progress every quarter since we closed the deal. And I think the way we've been thinking about our enterprise segment is that we would expect that segment of our business to maybe keep in line, grow in line with the other assets that are in that space. And that's in that high single-digit range. And so, you know, you made the comment about where we were when we when we bought the acquisition or bought the asset, it obviously was was growing faster, as were the other assets in that space. And employment growth was contributing to some of the growth that that was going on in the mid market. And that just hasn't happened. As John mentioned, we have seen a little bit stronger employment growth up market, a little Bit, you know, down under 50 and it's been flat overall, but you're not getting that employment growth tailwind coming out of COVID that we saw, you know, a few years back. And it's growing in line with where we would expect it to grow. And again, not too dissimilar from the other assets in that space. Thank you. Our next question comes from Kartik Mehta with North Coast Research. Your line is now open. Hey, good morning. Excuse me. Hey, good morning, John and Bob. Hey, John, on the management solution side, you've obviously talked about that the fundamentals seem sound, price realization, attrition, checks, and I'm wondering if there's been any change from a competition standpoint or if that is still kind of what you've saw over the last six, 12 months. Yeah, to, Cardick, we've got Any real shifts at all in the competition, not in terms of discounting is very consistent in what we've seen. The offers that I see, who we run into is very similar. Really have not seen any change in the market conditions for us, both in terms of demand is still solid across all of our products and services. We've spoken to the fact accelerated demand for advisory solutions. That's been a real strong suit for us. But I've not seen any major changes in the competitive situation at this point in time. And then just to follow up, John, obviously, you've talked a lot about AI. You're investing a lot at paycheck. You know, kind of if you look today where you are from an investment and return standpoint, do you think for AI, you're still in an investment standpoint and returns are to come? Or do you Think you're at a point where returns are potentially exceeding your investment? Sure. Well, I think – so our investment in AI in this fiscal year over the last fiscal year is five times. So we're certainly in the investment phase right now. I like the early returns that we're seeing. Again, I go back – I'll just point you to the margins. Point to the Margins. And the fact that we'RE investing in AI at that pace, we'RE adding salespeople, we're improving our customer service stats we're improving our retention we're seeing our net promoter scores go up across the board we are leveraging and embracing this tool we've empowered in the first quarter 10,000 of our employees with AI tools giving them the training and education setting up a structured governance process we're encouraging them to find ways to use it to make them more productive and shift their time to more what I call proactive and advisory type of activities with our clients and prospects. And so I like what I'm seeing thus far in terms of what we're getting out of it. And, you know, again, I think we're going to continue to invest in it. We're going continue to look for AI-enabled add-on solutions like the WiseHire that I just talked about, because I do think these agentic AI enhancements that we're gonna be able to offer are going to allow us to provide better outcomes for our clients and start driving efficiency in our clients' workplaces. That's where I think the real benefit that we can, where we can bear is we can go to a small business and say, let us bring our AI-enabled technology and our advisory solutions in. And remember, a lot of our clients don't have an HR department or many of their HR departments are very, very strapped. And we can actually drive productivity in your business. We can help you hire people faster. We can make sure that you're fully compliant in real time. I think that's when we're going to see the real benefit come from is when we're driving outcomes for our clients. Thank you. Our next question comes from Scott Wurzel with Wolf Research. Your line is open. Hey, good morning, guys. Thank you for taking my question. Just a couple of quick ones. First, Just on the PEO with respect to guidance, I just want to understand what you guys are expecting in terms of this case of ASO upsells. Are you expecting it to continue at this kind of 2x normal rate back to the normal rate somewhere in between? Just any color on that would be helpful. I think, look, it's best for us right now, as I said, in the first quarter it significantly exceeded our expectations, to think that would continue, you know, would maybe be aggressive. And so we're certainly, that's what we want to happen, and we're going to continue to execute our strategies. But we executed our strategy in the first quarter. It did better. I think what you would expect that we're looking at right now is, will that come back? I think the bigger point on the PO guide is, we are very early in enrollments, and enrollments are a key part that we have to look at in October and January. And I think as we get through the next quarter, just like we always have in the second quarter, we have better clarity on what that's going to shape up and look like. Got it. That's helpful. And then just a follow-up. You talked a lot about the enterprise side and the activity you're seeing there, but just wondering if you can give some color on sort of like, call it the sub-100, sub-50 client base, just any color on you know, how bookings trended during the quarter, retention would be helpful. Thanks. Yeah. So, like I said, normal course and speed. You look at the micro side of the market, the short payroll brand growing, doing very, very well. You work at across-the-board retention as well across the board. So everything I would just say is like stable and steady course. So, you know, again, we're not seeing the acceleration that you're seeing in the PO and other areas, but I would say it's stable and consistent with what we've historically seen. Thank you. Our next question comes from Jason Kupferberg with Wells Fargo. Your line is open. Thanks, guys. Good morning. Appreciate all the color on the mixed shift from ASO to PEO. Understand why that's positive. But just looking at the total revenue growth guide for the year, I know we're unchanged at 5% to 6%. And based on the Q2 guide, it looks like we'll be at the low end of the full year range through the first half of the fiscal year. So you'd have to accelerate by call it a full point in the second half to get to the midpoint of the fully year outlook. But I do think the comps get somewhat harder in both the segments. So I just wanted to see if you could comment on the visibility there and the drivers to get you that incremental acceleration in the second half. Yeah, maybe I'll talk about it in total, Jason, to be easier. I mean, I think, you know, first of all, we exited last year at, you knows, 6% organic growth rate in Q4, and that was a 2x improvement from where we came into the year. So, you know, we actually did the quarter at 6%. We came out with a 5% to 6% guide. Some of that contemplated the tougher compare that we mentioned in Q2. And so we just delivered a quarter that's at the high end of the full-year guidance range. You know, so we juste delivered 6%, and then you factor in the tougher compare in Q2, the back half, you essentially have to deliver revenue growth in line with what you've done the last two quarters. And we feel pretty confident about that. Obviously, as we say here, I don't know that we exactly have the splits right between the categories. Obviously we're a little bit off on management solutions versus PO in Q1. I think we feel good enough about where PO is that we had to take it up. And maybe there's some additional upside there, But we are cautious, as John just mentioned, as we head into our annual renewals. We're going to kind of wait and see and not get too far out over our skis there. And so we'll come back in Q2, update on the splits. But I think when we look at it in total, what's required in the back half is very similar to what we've done the last two quarters to kind of hit the midpoint of the guide. Okay. Understood. And maybe just to drill in on Q2 itself for a second, just in the context of that 4% guide, just how would you encourage us to model the segments for Q2? And then can you just remind us what the revenue synergies were in last year's Q2, I know you mentioned the grow over there, and I just didn't recall, you know, what those revenue synergies where in Q2 26. Thank you. Yeah, Jason, you always ask, it's always a good question. You always ask me this question, and I never answer it because I don't want to set a precedent in trying to give you exact guidance by quarter between the categories. And so we're trying to help you guys with getting your models as best as you can for the quarter. We knew they were going to be off this Q1 because we didn't give you the splits. So I don'T really want to Set a precedent and comment on the splits The revenue synergy, so there's two things that happened in Q2 of last year. One, I think, you can very clearly see if you go back to last year where we did some repositioning of the long-term portfolio and we had some realized gains. I think you'll clearly see that in the queue and the press release and some of that information. The revenue synergy item, you know, when we look at the two companies, we both have had partnerships where we had rev share arrangements in place. And very similar to what we've done with our vendors, we've been able to renegotiate contracts to, at minimum, get the best terms and conditions between the two companies. In a lot of cases, leverage our scale to get better terms and condition for the combined enterprise. And we've that on the vendor side, and we've certainly done that where we have partnerships in rep share arrangements. arrangements and we did that last q2 and as part of that you know there was an ongoing benefit from it but there were some one-time benefits associated with that that were recognized in q2 and i think i mentioned the prepared remarks when you adjust for those two things um the q2 growth would be in line with what we you know approximately six percent that we we just delivered in in q1 thank you our final question today comes from brett huff with stevens Your line is now open. Great. Thanks for taking my question, Squeezie and me, and I appreciate it. I just want to make sure I understand and put a finer point on the guide for MS. It seems the layer cake there is some price, some cross-sell, and then some of the ASO to PEO. What specifically changed among those three to tell us that we're going to be at the lower end of the guide? Is it just the faster migration, or is it price realization that seems to be waning a little bit? It's definitely not price realization. It's really the uplift that we've seen in ASO to PO transfers. Okay, thank you. And the second quick question, as you guys think about selling AI into your base, how are those conversations going? I know the smaller business is just looking for all the help they can get. But are they looking for upfront proof points or are they just largely accepting some of these AI solutions just sight unseen, you know, just looking for whatever help they can have? Or do they need some proof points before they're actually putting money on the table and buying? Well, so we have bundled the AI into our various bundles and we're at the pro bundle, which we're just starting to launch in the pay core in our other. So you can get a standard bundle or you can get a pro bundle which has AI embedded into it. I think in addition, as we talked about in the last call, with our WISE platform, we are enabling certain AI and agenic capabilities across the three built-for-purpose platforms, SurePayroll, PaychexFlex, and PayCore. And we're including that as what I would say is really an enhancement and that helped us kind of drive the price value that we just talked about. So I think we're early in what I would say selling an AI-based product. We just mentioned the WiseHire. We launched 650, which is our HR compliance tool. Those are two tools that actually can be bought standalone and integrated with other HCM platforms as well, which is something new for Paycheck. So we're earlier in the innings on that. But those are what I would say more pure play, kind of AI, eugenic AI, standalone products that you can buy standalone. And we'll be taking those to market as we go forward this year. Thank you. This does conclude today's question and answer session. I will now turn the meeting back to John Gibson for any additional or closing remarks. Thank you, Angela. Well, thank you all for joining us today. We are off to a solid start in Cisco year 27. Remember, the mixed shift towards advisory solutions is positive to our business model and our competitive position long term. So I think we're making meaningful progress across our three growth drivers, data and AI leadership, our go-to-market evolution, and differentiating ourselves through advisory solutions. Just as importantly, I remain very confident in the strength of our core business and the durability of our operating model. We have a core strategy, maybe actually including it too quickly at times, disciplined execution and continued investment in the areas that I think matter most. And we believe that Paychex is well positioned to drive long-term growth and shareholder value, and I appreciate your interest in PaycheX. Hope everyone has a great day. Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.