Samad Samana

Schrader said client base is roughly flat with revenue-per-client growth split about evenly between pricing and share of wallet; direct.

Management addressed Module attach rate trends and PEO vertical exposure.

Follow-up on Module attach rate trends and PEO vertical exposure.

Gibson: install-base pricing realization on plan and still higher than pre-pandemic levels. Added product capabilities to support price increases. Payroll business sustaining value realization. Softness is in new client acquisition revenue per client, not in existing base renewals.

Schrader: investor feedback did NOT drive the guidance change. Driven by actual business trends, MS revenue per client softer than plan, and agency drag on PEO & Insurance category. PEO itself exceeded expectations (high single-digit growth). PEO went from 3% in Q1 to 6% in Q2 and will accelerate further as MPP anniversaries.

Management addressed Paycor recurring revenue growth slowdown and Management Solutions organic growth cadence.

Follow-up on Paycor recurring revenue growth slowdown and Management Solutions organic growth cadence.

Follow-up on Paycor FY26 revenue contribution assumptions and sales retention.

Management addressed Paycor FY26 revenue contribution assumptions and sales retention.

Schrader deferred to Q4 for category-level FY2026 guidance. Said MS ex-Paycor has opportunity from client base, product attachment, and pricing. Gibson emphasized integration complexity will make clean segment reporting challenging going forward.

Schrader confirmed nothing unusual in expense timing. 1% expense growth (ex-acquisition costs) was in line with plan. No expenses shifted between quarters or deferred in anticipation of close.

Gibson said pricing/discounting environment is more stable than prior quarters. Noted that industry profitability pressures are driving rationality.

Schrader confirmed Perks contribution is not material in FY25. Monetization is via payroll deduction from employee sign-ups during onboarding.

Named the contributing areas (retirement services, insurance services, ESHRO) and said the FY2027 assumption is a repeat of the broad-based mix.

Fully quantified: came in a little north of 130 basis points versus the roughly 100 basis points framed at Investor Day, with FY2027 assumed similar.

Peter explained multiple small offsetting factors: PPC narrowed lower, but client fund interest lifted by balances and FX slightly favorable. Q2 will have extra processing day and SUI timing headwinds to grow over.

Maria said demand is relatively stable with no meaningful changes in deal cycles in Q1. Pipeline aging from FY25 continued but is now the normal pre-pandemic pattern.

Peter acknowledged Q4 bookings were below internal expectations but emphasized Investor Day was focused on medium-term 3-4 year targets, not individual quarters. Drew no trend linkage between Q4 finish and medium-term objectives.

Maria described expanding Lyric into global MNC space, partnerships with ERP players and system integrators. Said too early to quantify FY26 distribution impact but plans to continue evolving distribution and uptake.

Don confirmed no changes to ADP hiring plans; entering budgeting cycle next week at full speed. Would slow hiring if conditions deteriorate but no current signals warranting changes.

Maria confirmed pipeline is both upgrades and new logos without disclosing split; noted strong CHRO receptivity and market validation of Lyric as the most modern HCM technology available.

Maria confirmed current referral structure with plans for deep product integration; Run will be embedded in Clover and vice versa. Also positioned as beginning of broader ecosystem strategy alongside banks and accountant channels.

Maria confirmed Lyric is resonating with strong client adds and pipeline building; expected to contribute to bookings this year but still early days to scale and dent overall financials.

Don confirmed M&A philosophy unchanged: seeking additive acquisitions in tight adjacencies with recurring revenue models. Largest deal by absolute dollars but company is much bigger now.

Maria positioned Lyric as a market-ready, human-centric platform with flexible workflows and GenAI capabilities, noting strong analyst reviews and pipeline growth post-HR Tech launch.

Gina said it was all three drivers, with some inherited sales staff from M&A and hiring ahead of the ramping security and risk business.

Bill outlined priorities: revenue acceleration via AI, margin expansion toward Rule of 60, SBC reduction to single digits. Gina said M&A integration is #1 priority with new CSO Krishna Gidwani.

Gina declined to give quarterly NRR, said trends are stable. Deferred detail to Financial Analyst Day. Noted budget for AI coming from labor savings and point solution consolidation.

Bill emphatically stated no large M&A on roadmap and no more white spaces needed for security platform vision. Acknowledged rapid succession of Moveworks/Armis/Veza caused market concern. Gina said Armis expects ~100bp subscription revenue contribution and up to 50bp OM headwind in 2026, absorbed by 2027.

Bill confirmed AI selling is now standard across the organization. 55x growth in assists since May, 1,700 customers live, and every employee has an AI learning journey with credentialing. 90% of IT, customer service and HR processes done by agents internally.

Gina acknowledged incremental prudence versus 90 days ago due to government shutdown impacting procurement timelines. But emphasized Q3 federal grew over 30% YoY and demand is strong, timing concern only, not demand concern.

Amit confirmed no rewrite planned, both Moveworks (70% of customers already use ServiceNow) and Logik.ai have existing integrations. Architecture evolution and roadmap optimization will happen naturally over time.

Gina acknowledged extra token consumption has not been significant to date but explained agentic AI requires many more assists per task, which will drive the consumption hockey stick. Amit reinforced that each agentic call requires many assists.

Bill provided a general narrative about agentic AI creating fundamental business model reinvention and 1:5 ROI ratio, but did not cite specific customer budget shift examples, instead framing the opportunity philosophically.

Thomas said Voice AI strength is broad-based, with self-serve Voice up over 50%, but gave no split between new and existing customers.

Khozema gave no cohort split but said enterprises are the big spenders and likely carry the day; Thomas added large ISVs embedding voice.

Thomas cited AI assistants handling most inbound leads and many service tickets, but gave no 2026 sales and marketing outlook.

Thomas said it is a balance: existing enterprise accounts expanding into voice, and new self-serve customers, where voice grew 40%.

Asked by Billy Fitzsimmons on for Samad Samana. CFO said data by country, industry and customer through April show no macro slowdown.

Asked by Billy Fitzsimmons on for Samad Samana. CRO credited accelerating self-serve, AI startups building voice apps, and new larger direct customers.

Harley clarified that agentic checkout uses Shopify storefronts with identical economics. Emphasized Stripe partnership deepening and UCP becoming industry standard.

Harley acknowledged varied tariff exposure across merchants but could not quantify sourcing data. Highlighted that more than half of US buyers have incomes exceeding $100,000 as insulation.