Paychex, Inc. (NASDAQ:PAYX) Q3 2018 Earnings Conference Call - Final Transcript
Mar 26, 2018 • 09:30 am ET
Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question coming from the line of David Togut from Evercore. Your line is now open.
Thank you. Good morning.
You called out 7% growth in new bookings for the quarter. So, two questions, number one how does this compare versus your plan? And then second since you don't regularly give out this metric, does this mean you'll start to disclose this going forward?
Not necessarily, but I thought I was trying to give some sense of the sales momentum coming out of the quarter. What the 7% was, was the small business sales to new businesses. So, we had a nice growth in the payroll sales to new small businesses that were just starting up. And I think that tells a couple things. One, that the number of new businesses continue to start up, and two, that we're getting a bigger share of those new business start-ups than we were last third quarter. That was the difference. So, we're up 7% in sales to new businesses on the small end over third quarter of last year.
And how does that compare versus your plan for the year?
Well, we don't talk about our plan outside of the business, David, but we were pleased with it. It was definitely better than we had last year, and you could expect plan would have been very similar. So, it was a little stronger than we had anticipated from new business start-ups.
Understood. And then you mentioned growth in revenue per check. Could you put some numbers around that for the February quarter?
Yes. We don't disclose necessarily the number that we are measuring that against, David, but I think what we're saying is we're getting more price out of customers. That's the point that we're making there.
Got it. And quick final question. 20% client count growth at the PEO pre-acquisition. Can you just maybe flesh that out a little bit? Any specific reasons why the growth is that high? Do you expect that to be sustainable?
Well, we're very pleased with the performance of both the sales team and for our PEO organic as well as HROI. But this was organic PEO and the retention team. So, we had a very good retention. I think the way we've been pricing in the insurance changes, the benefit plans that we've been able to offer, and the very effective way that we've serviced clients and sold to new clients. I think there's a growing demand for, as we've talked about on other calls, the PEO service, particularly with all the changes in health care and tax reform and all of these things, clients, especially in that mid-market, are looking for more of a PEO than they ever have in the past. So, we've picked up more clients, saved more clients, and we've seen growth in the clients that we have in the worksite employees.
Understood. Thank you very much.