The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst
: Can you talk about what bookings was? Can you talk a little bit about bookings in the quarter? Anything to call out on different
customer sizes and products where you're seeing strength or weaknesses?
Question: Rayna Kumar - UBS Investment Bank, Research Division - Analyst
: Got it. It's very helpful. And then just a quick -- really quick follow-up to stay within Efrain's guidelines here. Could you call out the
ERTC contribution just for the fourth quarter?
Question: Andrew Owen Nicholas - William Blair & Company L.L.C., Research Division - Analyst
: I was going to ask first on kind of M&A within Paychex. If you could just kind of give us an update on your ambitions, both in the
near term and medium term? This is definitely a compound question, but a preference between ACM and PEO and anything you
could say on valuations?
Question: Andrew Owen Nicholas - William Blair & Company L.L.C., Research Division - Analyst
: That's helpful. And then for my follow-up, I just wanted to ask on kind of the margin guide for next year. I think last quarter, you
spoke to a preliminary target of 25 to 50 basis points. I think the 41% to 42% range you put out this morning is a decent bit higher
at the midpoint. So if you could just kind of unpack that a little bit, what's changed in terms of your outlook, if anything, or if it's just
a matter of rounded numbers, and that's totally fine as well. Just trying to get a little bit more insight there.
Question: Eugene M. Simuni - MoffettNathanson LLC - Analyst
: I wanted to ask a question about the PEO. So kind of we expected kind of the deceleration here. And you highlighted again insurance,
health care insurance attach rates as one of the drivers. So was wondering if you can elaborate a little bit on that, kind of where are
you seeing softness in health care insurance attached? What kind of businesses, I think that will be helpful to hear just because there's
so much variability about around, I feel like the PEO industry in terms of this health care insurance rate attach.
And it would be helpful to hear specifically in your client base what you're seeing? And then related to that, as we are looking for
the reacceleration in the PEO and as you're kind of guiding to that, what gives you confidence that this -- there will be a pivot there
over the next 12 months?
Question: Eugene M. Simuni - MoffettNathanson LLC - Analyst
: Got it. Super helpful. And then a quick follow-up on some of the comments you made earlier on retention bookings and client growth
to title together. So when we're thinking about your guidance for next fiscal year and Efrain, you mentioned that you expect client
growth to pick up from the kind of 1.5% level with so this year, would that be a result of both improved retention and improved
sales? Or is it primarily one or the other that will drive the improvement in client growth?
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