All right, terrific. Let's get going. Thanks everybody for joining. My name is Tien-Tsin Huang. I follow the payments processors and IT services names at JPMorgan, and I was just telling Maria here that, you know, covering ADP all this time, I feel like it's an obligatory name to talk about tech, and for me at least for ADP. Thanks for being here with us, Maria.
Thank you for having me.
No, of course, it does mean a lot to me, seriously. Maria Black, President, CEO of ADP. We have a lot to talk about. A lot of the questions are gonna be familiar to you, but did wanna hit all the big topics that are out there, if that's okay.
Sure.
Let's just kick it off the usual question around the macro, state of the macro. You see so much in terms of working with small business, enterprise, of course, powering all these employees. What are you seeing? Any changes, where are you encouraged? Where might you be a little bit more careful?
Yeah, fair enough. As many of you know, we do have a front row seat to the macro environment in terms of what's happening with respect to labor, wages, things of that nature. But that said, we actually are not in the predictive modeling. We're simply reporting on really what it is that we see inside of our business, but also the research that we do with the National Employment Report in conjunction with the Stanford Digital Economy Lab, et cetera. Couple things that we see, I think we see a generally stable environment. We've been talking quite a bit about that this year. Specifically as it relates to our results, we're guiding to a 1%, roughly 1%, pays per control growth.
For those of you that aren't familiar with pays per control, it's the measure of how many pays are per company at ADP. Think of it almost as a same-store growth type of measure. We see that relatively stable and somewhat flat. We were pleased to see an uptick in the second quarter and third quarter, which allowed us to ultimately raise that guide back up to that roughly 1%. You know, in the context of prior years, I think it's somewhat muted still in terms of the overall stability of the environment. We do also do the National Employment Report this morning. We also reported the weekly numbers, the weekly number is 42,250.
As of last fall, we started the National Employment Report Pulse, or what we lovingly refer to as the NERP, and the NERP actually showed this week a little bit of a strength, if you will. There's some pockets of strength. The April report was 109,000. I think the general semantics there are relatively stable, still somewhat a low hire, low fire type of environment. I think one of the questions I get all the time as you look at the monthly data, in addition to what we do weekly, every month as we report the monthly number, we double-click by industry, by segment, et cetera.
One of the questions I get all the time is what's happening with respect to IT sector. The IT sector is still actually adding jobs. If you were to look at the last quarter, it was 11,000 in February. From a March perspective, it was 16, and then 4, I think, in April, that ultimately is still adding. I think there's some sectors that are growing, some sectors that aren't and have a little bit more pressure from a growth perspective. We see some of that in the trades, hospitality, things of that nature. All that to say, I think our lens is that it's a relatively muted environment. It's relatively stable. There's certainly a lot happening in the world of work. That is the conversation of the day.
Sure.
We have that front row seat. We were pleased to see the results on the booking side that kind of speak to how we think about the demand as it relates to kind of what's happening in the world of employment. I'm sure we'll get to that.
Good. No, thanks for sharing the tidbit on IT.
Yeah.
There's hope after all. It's really important. Yeah, we'll dig in on a lot of that, Maria, but I wanted to just kick it off, right? I wrote this down. You framed this as a defining moment for HCM.
Yes.
I think you called that on the call, that caught my attention. Can you elaborate on what you mean by this and how you're positioning ADP to win that moment?
Yeah, absolutely. It is a defining moment for human capital management. I just mentioned it, the topic of the day is work and what is happening to work, what's happening to labor, what's happening to jobs, tasks within jobs. Getting this moment right for our industry is an imperative, and we are built for this, as it relates to kinda ADP, not just what we do, the lens that we have, the work that we do, the data, and all the structural advantages that allow us to really position ourselves in this defining moment for HCM. Why is it a defining moment?
While AI is absolutely getting infused into the world, and certainly into the world of work, and as jobs continue to shift, you know, perhaps converge, as tasks are starting to change within the scope of a given job, everything is becoming more complex, not less complex. The need, by the way, to still manage human labor.
is greater than it's ever been, and the complexity of that is greater than it's ever been. Again, that's kinda what ADP is built for. We are that workforce infrastructure, so that's a big piece of it. Said differently, as AI gets infused into work, we don't see the need to manage people and payroll and the very functions of HCM to go away. We actually see them becoming even more important, and we feel that every day. You can feel it, by the way, even in the, in the regulations. If you think about the complexity of processing payroll, you do have to get it right.
Right.
Not just good enough, not 90%, but actually 100% accurate 100% of the time. That involves not just the efficiency of a calculation, although that is arguably pretty complex too because it has all sorts of regulations and an ecosystem to it that oftentimes are even in conflict with one another. As AI is emerging, all of that complexity and new regulations and new interests by whether it's data privacy, data lodgement, or it's the regulators that sometimes sit at odds with each other at the federal and state level, just even in the EU this summer, the EU Pay Transparency Directive is coming into play. All of this is the complication really within payroll, and getting it right is an imperative.
It's not a nice to have, and there's no really room for creative outflow. I think that brings me kind of to the last piece, which is, what I often refer to as the final mile of getting payroll down, which is the connection to all of these regulators, carriers, brokers, banking institutions. You know, whether, you know, in terms of who ADP is and ultimately how we show up in that moment, all of those connections across literally tens of thousands of entities that we communicate with to get that payroll 100% accurate. Not just anyone can actually plug into a bank or move money. This is all the stuff that we know in payments land. That's who we are.
For, you know, in terms of HCM and getting it right, I would say, you know, ADP is well-positioned within that, but this is a moment that is more complex, not less complex. The need to manage people doesn't go away. Candidly, where there's complexity, ADP thrives, and we're really built for this moment.
Yeah, and there's no tolerance for errors.
There's not.
To your point, has to be fully compliant, right?
Has to be fully compliant.
That's what you do. I think thinking about the quarter, Maria, and I was thinking about rereading it, preparing for this discussion, thinking about the KPIs that came through, I mean, so much of it really refuted some of the AI concerns because pricing was net positive, right?
Yes.
Retention was net positive. You talked about CSAT scores being up as well, which is sort of counter to all the fear that might be out there. That's natural. What do you think is structurally different now for retention and pricing to be better?
Yeah, again, if you kind of zoom out for a minute, and again, think about everything we just discussed with respect to HCM and this defining moment and everything becoming more complex, there's a tremendous amount of value and opportunity that's created. We believe in values-based pricing. We always have. We believe in all the investments that we're making are going to create things like productivity, things like efficiency, and that is creating inherent value for our clients. That is the commitment that we have. By the way, that is our business model. We see that show up in bookings. We see that show up in client satisfaction scores. We see that show up in retention, and we see that show up in kind of the structural return, if you will, in the execution that we're on.
We were really pleased in the third quarter.
Yeah
to have an opportunity to share some of the things that we're seeing in terms of the KPIs, whether that's, you know, the results and the momentum that we feel in the bookings, or it's the results in retention or even the guidance on the margin side as we continue to push efficiency into our business, and we're sharing that with the clients. Our clients are feeling that value equation, so it does feel structural. What I will also say is, you know, leading up until this moment, we also made tremendous investments into our products, into our services, and now we're doing all of that again with AI, and it's going to yield those same returns.
You know, it's early days as it relates to, really being able to discern the AI efficiencies that we're gaining, but we were pleased to share in some of that in the last call, with respect to the digital transformation in our down market. I think it's just the beginning of that conversation and the results that will prove themselves to be structural for us.
Sure. Sure. 'Cause I've always thought, Maria, that from a pricing standpoint, that that's always been a hallmark for ADP.
Yeah
I've followed it. Because of the complexity and the investments.
That's right.
you're able to, you know, pass through some of that cost, you know, back to the user. The natural question from some investors now is that will that change with AI? Will that lower the barriers of entry to our competitors to offer some of these ancillary services that you do price for? Maybe more will be done in-house. What's your response to that?
Yeah, it's a great question, the question around price is one that we think deeply about. I think the way we've always approached it is really along the lines of our design principles, which is about putting the client at the center. Staying close to what the client at that center would have as an expectation for price. Again, we believe in transparent, value-based pricing. We always have. I spent a lot of time in the field with our clients just this past quarter. We had our large enterprise meeting just in March. February before that, we had our big international meeting. We just completed our mid-market meeting.
What I hear from the clients is, "Continue to bring value, and if you need to take price for that value, sign us up all day long.
Yeah.
Sharing in that efficiency with our clients, that's exactly what we are on that journey. We were pleased, and, you know, we're guiding to 130 basis points of price this year, kind of up a bit from 100. That's what you're referring to with the KPIs.
Yeah.
It's because we're bringing value. I, you know, from our lens, changing our pricing model for something that hasn't happened or doesn't exist yet doesn't seem to make a whole lot of sense to confuse the market, confuse our clients, when in the end, to us, it's really about continuing to drive the value and the commitment of what it is that we do into our clients and ultimately sharing in that journey with them. That's kind of where we fit in. That's how we think about it. That doesn't mean we haven't studied all of these things, but we find them more confusing to the market today.
Yeah
than necessarily helpful. You know, in terms of this comment of others being able to do the things that we do.
Yeah
you know, we are doing all of those things. We're infusing AI into very fabric of our products, our services, how we think about our business, how we deliver these values to ultimately take price. Where there's efficiency from AI, we're already embarked upon that journey, and we will feel that as well. To me, it's really not about the speed and how fast and the efficient and the productivity. In terms of what sets us apart is really, again, that final mile that you can't really do with AI. That and the domain expertise to ultimately create all of these efficiency tools you can't do without our data set and the structural advantages that we have.
Yeah. I mean, the proof is in the fact that, right, the pricing is net up and retention is up.
That's right.
Right, that's the best combo for ADP. Just staying with one last point here on pricing and thinking about AI and some of the tools that you're starting to externalize, should we expect that ADP will monetize those distinctly, or is that gonna be part of your normal pricing cadence?
The answer is both. I think the first part I would say is everything I just said around transparent value-based pricing, we will continue to monetize it through our natural recurring revenue model. That's about more bookings.
Yeah
clients staying longer, happier clients leads to referrals. It's a very, you know, happy ecosystem, if you will. That is absolutely a piece of it. That said, there are opportunities. We talk a lot about AI. You know, a lot of the questions tend to be about disruption and risk and all these other things. AI is a tremendous opportunity for us from a growth perspective. As things do become more efficient and automated, there are opportunities for things that we do, you know, potentially specifically inside of one business today that we can extend the reach across multiple businesses. I think there's unlock that can happen from a monetization. How we price for that, I think long term will be, you know, somewhat determined, but I think there are new revenue lines that could come in.
By the way, we've seen some of this.
Yeah.
We've seen some of this work that we've done with our big data set as we've taken that data set and created tools for our clients around benchmarking and analytics. I think, again, that journey will continue to evolve and drive growth. We also monetize the data set with taking friction out of call it mundane processes, such as employment verification. I think we're just scratching the surface on how to ultimately monetize data, which data is really the backbone of the AI. I think there's as much growth opportunity as there is sufficiency and productivity opportunity.
Okay. Good. No, I appreciate that answer. Let's talk about another important metric I know that you care a lot about, which is new sales.
Yes.
I think, most recent quarter, you framed it as solid.
Yes
stuck with the full year guide, which still has a pretty wide range. I get this question a lot, so I'll ask you, just what would drive you to land on the lower end versus the higher end of that? How much is macro versus, you know?
Sure
some of the specific forces that you're pushing to get to that high?
Sure. It is, it is that season. We are in the final few weeks here, final stretch of the fourth quarter. We were pleased with the bookings from a year-to-date perspective. We had good momentum, solid, I think, using your word, in Q1, Q2. We built on that momentum in Q3, and we were pleased. We were pleased because it was broad-based. I think we had a couple shout-outs in the third quarter to some places that I think are back to structural advantages that are really point to just how broad the results of ADP are, but also the advantaged pieces of our business. One was international. It was great to see. It's a lumpy type of market for us.
It was really great to see the progress in the third quarter in international, although it always kind of remains a watch area for us for all the obvious reasons. In addition to that, Compliance Solutions was a call-out for us. Compliance Solutions is that business that performs that final mile. Again, a business that's performing very well in the context of what's happening right now. We also talked about Retirement Services and Insurance Services. These are the beyond payroll offers in our down market, and those are having, you know, really fantastic results. It was broad-based. The Employer Services, HR outsourcing, you know, did well in the third quarter. You know, what we're looking at is stepping into this fourth quarter with good momentum, solid pipelines. Pipelines are really about the mid-market and upmarket.
Downmarket, we're measuring activity, volumes, you know, all lead volumes, things of that nature.
All of that feels good. I think we feel good about our sellers and their ecosystem. We've made tremendous investments into our sales force, both in head count, tools and technology. Just a year ago, we talked a lot at the Investor Day about what we call The Zone, which is a proprietary platform that we've built inside of ADP to ingest AI into the sales motion, into that go-to-market motion. The easiest way to think about that is serving up the right lead to the right seller at the right time with the right offer to drive a better outcome from a sales productivity. A lot of knowledge, learning. Made investments into technology, made investments into the ecosystem of partners that help distribute our offers. That's bank channels, broker channels, SIs, CPAs, things of that nature.
Again, when I think about everything that we've lined up to step into this fourth quarter, why the wide range, I think the first thing I would say is I'm not sure how wide it is. 1 percentage point is actually roughly $21 million. If you imagine 8,500 sellers with the backdrop I just described at the ready to go get it done this fourth quarter, that's exactly what they're doing. That's how we feel about it. The difference literally could come down to, you know, less than a handful of deals, right? In terms of the difference between, you know, 4, 5, 6, or 7. We kept the range wide. It felt prudent to do that given everything that is happening in the world and just kind of the sensitivity of that 1%.
Rest assured, everybody's at the ready and out there, myself included.
All right. Good. No, I'm sure that's the case, so, you know, fingers crossed that no surprises. I have to ask, and I think I asked it on the main earnings call too, Maria, and I'll ask it here again. Just the competitive intensity that's out there.
Yeah
The balance of trade sort of phrasing we've used in the past. How does that-Feel? I'm asking because you have some private players that are out there talking about big growth rates.
Sure
and some success they've had in growing ARR. Of course, we track all of your peers as well, you know, some of which aren't in the public limelight anymore. Have you observed any change? What are you paying more attention to? What should we be paying more attention to competitively?
Yeah, it's a great question. I think I answered it similarly on the call that day, which is we like competition.
Competition is fuel for innovation. It keeps us nimble, it keeps us on our toes, it keeps us learning from each other. It is an incredibly competitive space. The one thing that's very unique to ADP is that we are the one competitor that spans all of the segments-
Full spectrum.
the full spectrum from, you know, the very small company on Main Street to the very largest employer with, you know, 1 million employees on a worldwide scale. We do have a lens across all of the competitive set, and it is highly competitive. Is it more or less pressure today than it was a year ago? I think it's, you know, perhaps there's certain competitors that are operating slightly different from how they were operating a year ago. Some that is because some have gone private, some have gone public, some have merged, rebranded, whatever these things are, but it is a highly competitive I don't know that I see anything really unusual there. This time of year, many operate kind of on our sequence from a closing out the fiscal year or coming close to it here in this quarter.
There's always a lot of promos and incentives. From a balance of trade, we do well. We continue just like you. We're looking at every single one of them. There's always an opportunity to get better, and there are several competitors that we are, you know, deeply studying how they go to market, how they think about certain things, how we solve for it. Sometimes we solve something through a marketplace partnership and eventually realize that, gosh, we should have that as core functionality. I think we all learn from each other. It keeps us all innovative, and it keeps the sport fun, I think is how I said it on the earnings call. It's a highly competitive space, and we like to win.
Lyric is something that's new.
Yes
I would put in the category of, you know, TAM expanding for you.
That's right.
going after some newer spaces that you previously weren't in. What's the progress report on Lyric?
The progress report on Lyric is fantastic. I'm so glad you mentioned it. It's one of my favorite topics. We're really pleased with what we're seeing with respect to the results in terms of the new sales to date, moreover the pipelines, and also the conversation on the market. The one thing that's unique about Lyric, outside of the fact that it's the most modern platform for enterprise clients that exist today, and it's most modern because it's the newest, but it's also how it's architected. This concept of being able to have a product for a CHRO or really for a company that's architected at the employee level that allows for the worker to actually move between teams, what we call dynamic teams. A said worker is able to have multiple reporting managers.
Multiple reporting managers actually contribute to their performance management, things of that nature. That's becoming even more common and more imperative with the advent of AI. As jobs, and we study the world of work very deeply in conjunction with the Stanford Digital Economy Lab, and our belief is that jobs are not being disrupted at the end-to-end level. They're actually being disrupted at the task level. If the world of work in the future is a collection of tasks as opposed to a collection of jobs, a product like Lyric is meeting that moment in the most modern way because it allows the task to be assigned to the workers that has that skill and utility.
Yeah.
That is what the new world looks like, and that's what leaders are turning to. You hear this directly from our clients. I mentioned all the events that I've been to. That's not to to show off all the places I've traveled, but rather the conversations we're having with our clients. They're leaning on ADP to be that trusted source to help them navigate this defining moment for HCM. Specifically, as it relates to the enterprise clients and the MNC clients, we're the only offer out there. You take Lyric, which is that TAM expander into the upmarket enterprise HR space for ADP. You marry it to Global Payroll, which we're uniquely positioned to do across 140 countries. You add in Global Time and the product and acquisition that we did almost 2 years ago called WorkForce Software-
Global Service. We're the only ones who have that. It for sure has changed the conversation with our clients. They're leaning on us to navigate this time with the most modern platform in that space, which is Lyric at the foundation.
Good. Good. No, you speak with a lot of excitement around it, so I'm glad I asked. Look, I think, you know, the more progress you show on that, I do think there's a lot of focus on that and interest in it.
Yes.
Thanks for going through that. Maybe let's pivot a little bit to the product side and think about.
Okay
the roadmap there and what you're excited about. I know we get questions on ADP Assist.
Yes
Where does that fit on the roadmap? What else would you highlight above and below that?
Sure. I'll start by just reiterating what I said, which is we've spent the last decade or two investing tremendously into having modern platforms across each one of our segments. Really proud of the work we've done. The results that we're seeing are a byproduct of those investments, whether it's the client satisfaction, the retention, the bookings, things of that nature. Enter ADP Assist, which is the overarching framework for our ADP AI offers inside of our platforms. What I would suggest to you is that we're just getting started, but we're pretty excited about what we see. We have ADP Assist deployed across our platforms in each one of the HCM domain pillars, if you will.
If you think about the domain expertise that we have in HCM across payroll, time, benefits, HR, tax, again, I could go on and on, but each one of these really garners this ability for us to infuse AI, take our data, our structured advantage data of doing this for 77 years, and infuse AI into the very fabric of our products and our services. You know, what we were pre-pleased to share in the third quarter were some specific stats around how we're actually changing the flow of work as it relates to how payroll gets processed. If you take as an example, ADP Assist for payroll, this ability to reconfigure how work actually happens or how the function of payroll flows.
Shaving off for those that are using it 30 minutes per payroll cycle. These are you know, I know this is a financial conference, but if this was a payroll conference, like, the crowd would go wild right now with excitement because these are meaningful, impactful ways that we are changing the workflows, and we're making it easier to do work. You know, similarly, we have an ADP Assist search capability that's meaningfully changing how you can actually get to the information, the level of speed that you're able to actually process payroll, get the information you need to do changes in that workflow. I could go on and on. What I would tell you is we are really excited about what we see.
You know, some of the things that I see across ADP Assist, I've been in this business for coming up on 30 years, I have to tell you that these were business plans and dreams that I had, you know, many years ago, it is changing the flow of work for our clients. It's making things more efficient, we're just getting started.
What are some of the proof points that you would think that, "Hey, we'll show you this over the next 2 to 3 quarters to really show that it's being adopted"? Is there anything that we can track or that you're tracking?
Yeah, I mean, I think some of the things we cited in the third quarter, we're gonna continue to try to bring these proof points. One of the ones that stood out to us was this efficiency specifically in the down market as it relates to the digital transformation that we've been running in the implementation.
actually have probably talked about that on stage, the last few years that I've been here. I have to tell you, there was a time that I thought that it was 30% that we could do digital onboarding, using, you know, the likes of OCR and machine learning and other types of digital transformation tools. That kind of with the early phases of generative AI, you felt that kind of moved to 60%-70%. I will tell you today, we have line of sight of being able to, you know, almost entirely automate that. We cited some of those results in the third quarter in terms of the efficiency gain in that business.
You know, those are the type of proof points I would look toward in terms of whether it's, you know, raising up our margin profile or it's specific call-outs by business or time, right? It's, it's always about, kind of the chunks of this stuff leading to big results, and that's what happens when you have well over 1 million clients.
Okay. Yeah. No, there's obviously a lot of data and touch points there. No, we're gonna keep asking about it. Let's, we got seven minutes left. There's some other subjects we should definitely hit. PEO is one.
Yes.
Of course, you know it very, very well, Maria. We've been saying it's, you know, it's still great solid growth, but not industry leading.
Yes.
You are the biggest player out there, so everyone's paying attention to what you're seeing there. Brendan does a great job now covering the PEO group in our, in our space. Is there something you're doing to stimulate growth? Assuming there is some secular demand there, given the higher cost of healthcare, and it feels like it should resonate really well in this environment. Would you agree with that?
It does resonate very, very well in this environment. There is secular growth. The demand is there. Value proposition is stronger than it's ever been. If you dial back to the entire conversation that we've had today about it only getting more complex as AI is being infused into the very nature of work and how work gets done, if you're a small to medium-sized company, this is the best way possible to to help you navigate all of that complexity and inclusive of all of the regulatory requirements in this PEO model where you share in that responsibility in that co-employment piece. That's a big piece. Certainly, with the rising healthcare costs, the demand for alternate ways to satisfy that need to compete for talent, such as through a PEO. The secular demand is there.
We were pleased with our results as it relates to bookings within the PEO. In terms of the overall growth rates versus others, I think the reminder I always give is we're not all structured the same.
Sure.
We're very specific in terms of who we target, for a PEO offer within ADP. As you know, about 50% of our new clients in the PEO come from the existing ADP base.
Right.
Going back to kind of the tools that we have for our sellers of that PEO offer to the right client at the right time is to say that not every single client that sits inside of ADP, although a lot more than we have addressed today, there's tremendous TAM even inside our own house or TAM expansion inside our own house, but not everyone is a fit for the PEO. It kind of takes that perfect profile. We tend to skew, you know, somewhat white collar kind of into the, you know, somewhat blue collar, but we don't necessarily address all the same spaces that some of the other PEOs. We could if we wanted to. The answer is we don't.
We believe that, you know, the model that we have with a fully insured program on the health side and how we think about workers' compensation risk is what's allowed us to maintain the durability of the PEO that we run over all these decades that we've run it. I think for us it's, you know, continued focus on the bookings, which is exactly what we have. We have all the incentives aligned. The demand is there. You know, at some level, the PEOs just have that pressure of even more muted pays per control growth in those industries that we address. Some of it is patience as we wait for that.
We're squarely focused on, continuing to accelerate bookings and of course, you know, keeping as many of the clients as possible, through what is arguably a very strange time.
Yeah
pressurized time, as it relates to healthcare.
Yeah. Okay, that's good. Still obviously a focus, but, you know, there's so much going on in small business.
There is
maybe staying with small business, last year we talked about the RUN/Clover-
Yes
Partnership and, we demoed it in your offices. There's been some management change, of course, at Fiserv.
Yeah
since. Has your enthusiasm around RUN/Clover changed at all? What's the latest with the partnership?
My, the only thing that's changed is my enthusiasm only continues to grow. We're really pleased with the partnership. We've accomplished a lot since we initially came together and started talking about the partnership, inclusive of the demos. The demos are real now. Back in October, we put Clover into the RUN platform. In December we put CashFlow Central. Did I say that the right way? We put RUN into the Clover platform, and we put CashFlow Central into the ADP platform in December.
Right.
We're broadly now deployed against each other as what they call the back book. We have the sales motion aligned. The teams are executing incredibly well together. It's still early days as it relates to a meaningful impact across the, you know, the volume that either Fiserv has or we have. Do we believe that this ecosystem approach to solving for that entrepreneur, for that small business as they're navigating, if we have the ability to serve up more things for them to do, whether they're inside of ADP payroll or the converse inside of the Clover platform, that can only benefit us. The embedded strategy in general is, you know, part and parcel of a broader strategy across ADP.
We believe in embedded inside ecosystems, not just the one that is about Fiserv, but certainly other systems, whether, you know, be it banks or other places that we have the ability to serve up to make it easier for that small business. Excited, for sure, and excited because the opportunity's still in front of us.
Okay. Good. I will ask Mike about it.
Please
this afternoon. I'm glad to hear it. On the maybe a couple minutes left. Let's do capital allocation, I suppose. Thinking last quarter, you did step up your buyback a little bit.
Yes
Right, Maria? We did notice that. Should we consider that a signal of, you know, more interest in buying back shares as opposed to doing M&A?
I think we stepped it up and we were excited to leverage that piece of our shareholder return, and we stepped it up through the end of 2026. It's kind of what we referenced as well as kind of nodding to how we think about it heading into 2027. You know, our broader capital allocation strategy is sharing with our shareholders. That's one way to do it, is in share buybacks. The other is the dividend. We're very proud of being Dividend Kings. Back in November, we announced the 51st year of dividend. Again, that's another big piece in terms of the commitment we have to shareholder return. We're always thinking about acquisitions.
We're always thinking about what makes sense for us within the strategic direction of HCM and adjacencies around it. We do acquisitions in terms of tuck-ins. I think the most recent one we did was in Mexico. We acquired a company called PEI. We're always looking at whether it's tuck-ins or it's the big acquisition of WorkForce Software. Structurally, that was the largest acquisition we ever did, almost 2 years ago at this point of $1.2 billion. Again, I already mentioned, you know, just how well that fit into our strategy and how that's changing the conversation in that enterprise and MNC space. We're always looking, we're always opportunistic, as well as thinking about how it fits in our strategy.
In conjunction with that, we're also very committed to our shareholders and making sure that we're delivering on those commitments through things like share buybacks as well as dividend.
Yeah, no, that's the staple for ADP. you know, 30 seconds left, thinking about and we talked about a lot of things, Maria, so thank you again for the time. I know the company has been through a lot of different tech cycles, macro cycles.
Yes.
There's always a question of certainty versus uncertainty. Given all of that, where are you more confident in terms of sort of your, the bets that you're making as we go into, you know, the next 12 months?
We are very confident.
Please
although I think it's implicit and inherent in some of the commentary I've made, is this concept of trust. We've been doing this for 77 years.
We have the data set. The data set is what's infusing our product and innovation cycle, but clients are leaning on ADP to help shepherd them through this strange time as undoubtedly the world of work is continuing. I call it a defining moment. Human capital management is having a defining moment, and they trust ADP just like they've trusted ADP through every innovation cycle and technology cycle, and by the way, economic cycle, to be the ones to help them navigate.
Yeah. Perfect. Can't cheat trust.
Trust
the most important piece.
It is.
Maria, thank you for the time.
Thank you.
I appreciate you being here.
Appreciate it. Thank you.