Automatic Data Processing Inc Q3 2022 Earnings Call Summary

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

Question: Eugene M. Simuni - MoffettNathanson LLC - Analyst : I'll start with a macro level question. So ADP obviously has its finger on the pulse, with very large [slice] on the U.S. economy. So it's always very interesting to hear you guys' perspective on kind of a real-time read of what's going on across the different pockets of your client base, especially now that we're experiencing kind of volatile macro environment. Would you mind providing us with a little bit of that commentary, what are you seeing today across your client base markets of strength and weakness?

Question: Eugene M. Simuni - MoffettNathanson LLC - Analyst : Got it. Got it. Very, very helpful. And then quickly for my follow-up, staying with the macro theme, inflation is obviously running high. So maybe for Don, can you give us a quick overview of how inflation you think influenced -- impacted your results this quarter? What were the puts and takes in the P&L from inflation? Don Edward McGuire - Automatic Data Processing, Inc. - Corporate VP, CFO & President of Employer Services International Yes. So we've done a couple of things over the last quarter. As we said, we were going to on the last call. And we did an off-cycle salary increase to make sure that -- we kept our associates happy in whole. So that was positive. We also had some bonus programs and some sales commissions-accrued programs that were certainly anticipated and booked in the quarter. So we are -- from a cost side, we were able to do those things and still delivered the improved margins. So we think that was very positive for us to do. The other side of this, of course, is price increases, and 2 aspects for the price increases. Certainly, we haven't yet -- although planned, we haven't yet initiated large price increases with our installed base. We will make sure that we do those things, accordingly reflecting inflation, and most importantly, reflecting to make sure that our clients still get great value from us in a competitive environment. And what we did do, though, and we signaled this in the last call as well, we have increased the pricing on some of our new offers, the offers we -- the sales we had in the last quarter. But that's having a very minimal impact on Q3 and certainly won't have an enormous impact on the full year either. So we are making sure that we're focused on pricing, both in the base and with new opportunities and new prospects, and making sure that we're adjusting our wage levels to keep our employees and deliver the good service that we've delivered that is contributing to the high retention rate that we have.