Paychex Inc Q1 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Owen Nicholas - William Blair & Company L.L.C., Research Division - Analyst : Great. Can you touch on the PEO performance versus insurance performance in the quarter? And I know you're maintaining your guide on that revenue line in the aggregate, but is there any change to your expectations at that underlying level in terms of growth through the remainder of the year?

Question: Andrew Owen Nicholas - William Blair & Company L.L.C., Research Division - Analyst : No, that's really helpful. And then maybe a longer-term strategic question. You talked a lot about success with digital sales. Is that something that you can apply your learnings and capabilities from to the PEO market? Or is that too involved in the sale? Or is there some middle ground that you're approaching or hoping to target longer term that could make that a more efficient process? Just wondering how that could be part of the strategy and maybe the puts and takes to consider on the PEO front.

Question: Eugene M. Simuni - MoffettNathanson LLC - Analyst : The first, I wanted to come back quickly to retention levels. There's been, I think, a pretty broad-based expectation that retention levels might start to come down across the industry really as the economy opens up, as activity picks up. Sounds like in the first quarter, you guys still achieving very high levels of retention. Are you seeing any indication of kind of high churn as activity picks up? And as you're looking out into the rest of the year, are you still expecting some deterioration in retention? Is that maybe part of the conservatism?

Question: Eugene M. Simuni - MoffettNathanson LLC - Analyst : Got it. Got it. Okay. And then secondly, I wanted to quickly ask about the ASO, PEO potential upsell opportunity. You mentioned it in the past couple of quarters that with the record strength in ASO growth, there might be some opportunity to convert some of the ASO clients to PEO clients now that folks are more interested or open to switching insurance providers. Are you pursuing that initiative? Is it yielding results? And is there more opportunity there to convert to greater PEO growth?