Good morning, my name is Crystal, and I'll be your conference operator today. At this time, I would like to welcome everyone to ADP's Second Quarter Fiscal 2020 Earnings Call. I would like to inform you that this conference is being recorded and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] I will now turn the conference over to Mr. Christian Greyenbuhl, Vice President, Investor Relations. Please go ahead.

Christian Greyenbuhl - Vice President of Investor Relations

Thank you, Crystal, and good morning everyone and thank you for joining ADP's second quarter fiscal 2020 earnings call and webcast. With me today are Carlos Rodriguez, our President and Chief Executive Officer and Kathleen Winters, our Chief Financial Officer. Earlier this morning, we released our results for the second quarter of fiscal 2020. The earnings materials are available on the SEC's website and our Investor Relations website at investors.adp.com where you will also find the investor presentation that accompanies today's call, as well as our quarterly history of revenue and pre-tax earnings by reportable segment.

During our call today, we will reference non-GAAP financial measures, which we believe to be useful to investors and that exclude the impact of certain items. A description and the timing of these items along with a reconciliation of non-GAAP measures to their most comparable GAAP measure can be found in our earnings release. Today's call will also contain forward-looking statements that refer to future events and as such involve some risks. We encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ materially from our current expectations. Before I turn the call over to Carlos, i'd like to remind you of our upcoming Innovation Day which is scheduled for February 10. We hope to see many of you there in person, and for those who are unable to attend, you can find more details about how to view the event at investors.adp.com. We're looking forward to sharing our progress on our investments in innovation as well as our vision for our HCM technology portfolio. As always, please do not hesitate to reach out, should you have any questions. And with that let me turn the call over to Carlos.

Carlos Rodriguez - President & Chief Executive Officer

Thank you, Christian, and thank you everyone for joining our call. This morning, we reported our second quarter fiscal 2020 results with revenue of $3.7 billion for the quarter, up 5% reported and organic constant currency. We are pleased with this revenue growth, which was slightly ahead of our expectations. Our adjusted EBIT margin increased 70 basis points for the quarter and was also slightly ahead of our expectations. Together with share buybacks and a lower adjusted effective tax rate, these results helped us deliver 13% adjusted EPS growth this quarter. Overall, we are pleased with our progress in the first half of fiscal 2020 following a difficult compare with the first half of fiscal 2019.

Moving on to operations, and starting with New Business bookings. This quarter we continue to see strength in our Employer Services downmarket offerings and solid progress on the sales of our Workforce Now solutions. We were also particularly pleased to see strong double-digit bookings growth in our PEO. With that said, we are disappointed with our 3% Employer Services New Business bookings growth for the quarter. This lower than expected growth was mainly the result of the same trends we saw in the first quarter with our international and multinational businesses including delayed decisions for some of our larger multinational sales opportunities. As we have said before, given their size, these opportunities can have an outsized impact on our quarterly bookings metric. With this in mind, we have narrowed our full year Employer Services New Business bookings outlook and now expect 6% to 7% growth as compared to our previous guidance of 6% to 8% growth on last year's $1.6 billion of Employer Services New Business bookings. We continue to have a solid pipeline of opportunities and we remain confident in our ability to execute across our portfolio.

Looking at client service, we continue to see good progress with overall strength in our net promoter scores and retention. As a result, we continue to expect our forecasted full year fiscal 2020 Employer Services revenue retention to increase 10 to 20 basis points. Now we are halfway through fiscal 2020 and at the midpoint of our three-year targets we outlined at our June 2018 Investor Day. As we are also six months away from giving our fiscal 2021 guidance and we will not be giving any updated financial outlook at our upcoming Innovation Day, I want to take a few moments here to look back and share my thoughts on our progress, since we provided that guidance.

Let's start with New Business bookings. You will recall that at our June 2018 Investor Day, we outlined that we were targeting growth for worldwide New Business bookings growth of 7% to 9% through fiscal 2021. Though we no longer regularly report a worldwide bookings figure, which as a reminder, includes the results of Employer Services and PEO segments together, we thought it would be helpful in the context of a midpoint look back to share that we have seen 8% average quarterly growth since the beginning of fiscal 2019. We are pleased with this worldwide bookings growth, together with our improvements in Employer Services revenue retention and how they demonstrate the strength and stability of our business, even as we've been going through meaningful transformation as an organization with a set of broad-based initiatives, including our service alignment initiative in fiscal years 2017 and 2018, our voluntary early retirement program in fiscal 2019 and most recently our workforce optimization and procurement initiatives.

Meanwhile, our quarterly average consolidated revenue grew 6% reported and organic constant currency over the past 18 months. As we look at some of the developments that have affected our recent growth relative to our expectations, we note that our PEO has not performed in line with our long term expectations, driven by lower than expected pass-through revenues and lower-than-planned Worksite Employee growth. Over the past several quarters, we've discussed some of the factors impacting PEO revenue growth, including the impacts from our sales incentives, recent retention unfavorability related to healthcare inflation and softness in worker's compensation and state unemployment insurance rates. With the impact of these factors, our average growth over the past 18 months in average Worksite Employees was 8% as compared to our long term expectation of 9% to 11% and the contribution to revenue growth from pass-throughs was 1% compared to our long term expectation of 1% to 3%. Despite the slight underperformance related to our expectations, we are confident in the overall prospects of the PEO business and continue to see healthy demand for our offerings. Our PEO platform is the leading fully outsourced solution in the HCM market where we combine this with best-in-class HR business partners, which together helps deliver an unparalleled service experience. Stepping back now to total revenue. We are tracking at 6% average growth for 6 quarters. We have a solid playbook with a proven track record of driving sustained growth and we will continue to focus on delivering consistent strong bookings growth and retention performance as key priorities. And moving down to P&L, during this period, we further solidified the foundations of our business as our associates continue to transform the way we work, while also delivering innovative solutions to our clients. These transformation efforts along with our steady topline growth and the operating leverage in our model have helped deliver robust margin expansion and an average adjusted EBIT growth of 13% through the end of the second quarter of fiscal 2020, which is within the range of our fiscal 2021 target CAGR of 12.5% to 15.5%. This, together with our disciplined share buybacks and a lower adjusted effective tax rate, has driven adjusted EPS growth of 18%, which is tracking ahead of our targeted growth of 14.5% to 17.5% through fiscal 2021.

As you can tell from our guidance for fiscal 2020, we currently anticipate ending the year within our fiscal 2021 three-year margin target range, one year ahead of schedule. This is no small accomplishment, given our ongoing efforts to invest in the business for the long term.

Overall, I'm very pleased with our progress to date. The journey that we have embarked upon to simplify how we work, drive innovation and grow our business is a challenging one. However, and more importantly, it is also providing us with great opportunities that demonstrate the value of our offerings to our clients as we continue to simplify the client experience. Through these collective efforts and with the continued strength of both our R&D organization and our worldwide sales force, we are enhancing the depth and scale of our ability to serve our clients wherever they do business with best-in-class products and solutions that fit their needs. Our clients in turn are recognizing these efforts as we continue to see improvements in both our net promoter scores as well as in our Employer Services revenue retention. It is due to the success of these efforts that we remain committed to additional shareholder friendly actions such as our recent dividend increases of nearly 45% over the past two years. Our track record of annual increases in our dividend puts us in a small minority with 30 other companies in the S&P 500 that have also grown their dividend for 45 consecutive years or more.

As we look forward to the future, we remain confident that our strategy is the right one as we aim to further strengthen our resilient business model in order to drive sustainable long term value for our shareholders.

Before I turn it over to Kathleen for a detailed financial review, I want to note how proud I am of the external recognitions that we received this quarter, which reflect the strong corporate culture on which our business is built. As I reflect on our recent efforts, i'm especially proud to see Fortune Magazine again named us to their Most Admired Companies list for the 14th consecutive time and also ranked us number one in our sector. This is a remarkable achievement and a rewarding recognition for the efforts of our associates who are focused on providing our clients the best solutions, both for today and for the future. I'm also particularly pleased to see our efforts reflected in the Wall Street Journal's Drucker Institute list of Best Managed Companies, where we were one of the biggest movers jumping 104 places into the top quartile. These are only some of the great recognition that we are receiving for our efforts to create opportunities for all of our stakeholders. And with that, I'll turn the call over to Kathleen for a commentary on our results and the fiscal 2020 Outlook.

Kathleen A. Winters - Chief Financial Officer

Thank you, Carlos and good morning everyone. As Carlos mentioned, we're pleased with our continued progress in delivering growth for our shareholders and this quarter was no exception. This quarter's reported revenue growth of 5% and 6% organic constant currency is slightly ahead of our expectations and we're particularly pleased, given the difficult compare to our second quarter of fiscal 2019. Our adjusted EBIT increased 9% and adjusted EBIT margin was up 70 basis points compared to the second quarter of fiscal 2019, both also slightly ahead of expectations due to the timing of our progress across our multiple transformation initiatives. Our margin improvement continues to benefit from a combination of cost savings related to our transformation initiatives and operating efficiencies. These benefits were partially offset by growth in PEO zero margin benefits pass-through expenses, increased selling and marketing expenses and amortization expense.

Similar to the first quarter of fiscal 2020, we're particularly pleased with our margin performance, given the difficult compare that we faced in the first half of the year, resulting from the outside benefits in fiscal 2019 related to our voluntary early retirement program. Our adjusted effective tax rate decreased by 260 basis points to 22% compared to the second quarter of fiscal 2019. The decrease is in line with our expectations and was mainly due to the release of a valuation allowance related to foreign tax credit carry-forwards.

Adjusted diluted earnings per share grew 13% to $1.52, and in addition to benefiting from our revenue growth, margin expansion and a lower adjusted effective tax was also aided by fewer shares outstanding compared to a year ago.

Moving on to our Employer Services segment and interest on funds held for clients. Employer Services revenues were slightly ahead of expectations and grew 4% reported and organic constant currency. Interest income on client funds grew 7% and benefited from growth in average client funds balances of 6% to $25.1 billion. This growth in balances continues to be driven by a combination of client growth, wage inflation and growth in our pays per control. Our Employer Services same-store pays per control metric in the U.S. grew 2.2% for the second quarter. Employer Services margins increased 30 basis points in the quarter driven by the same factors that I mentioned earlier when discussing our consolidated results. Our PEO segment revenues grew 9% for the quarter to $1.1 billion and average Worksite Employees grew 6% to $579,000. Revenues excluding zero margin benefits pass-throughs grew 7% to $412 million and continue to include pressure from lower workers' compensation and SUI costs and related pricing. Our value proposition in the PEO remains strong, as evidenced by our double-digit PEO New Business bookings growth this quarter. Our midmarket sales channel continues to grow following the realignment of our sales incentives and we're seeing continued signs of positive traction within our downmarket referral channel. With these factors in mind, we remain optimistic in our ability to reaccelerate the PEO in the latter part of fiscal 2020.

Margins in the PEO decreased about 30 basis points for the quarter, largely due to a difficult compare and an increase in selling expenses resulted from our strong quarterly New business bookings growth.

Let's turn to the outlook for the full year and start with the PEO. With six months behind us now and our year-to-date average Worksite Employee growth and revenues tracking slightly below our expectations, we do not expect to achieve the higher end of our previous guidance range. As such, we are narrowing our guidance and now expect 9% to 10% PEO revenue growth in fiscal 2020 and 7% to 8% growth in PEO revenues excluding zero margin benefits pass-throughs, both driven by an anticipated growth of 7% to 8% in average Worksite Employees. As we also discussed last quarter, we continue to expect lower workers' compensation and SUI cost and related pricing to pressure our total PEO revenue growth. For PEO margin, we continue to anticipate margins to be flat to down 25 basis points in fiscal 2020. As we noted in previous calls, this outlook continues to include approximately 50 basis points of pressure from smaller favorable reserve adjustments at ADP Indemnity in fiscal 2020 compared to fiscal 2019.

Moving on, let's take a look at Employer Services. We are narrowing our guidance to 4% revenue growth versus our prior outlook of 4% to 5%, driven by a combination of continued unfavorability in FX and interest rates relative to our expectations coming into the year and the lower bookings growth in the first half of fiscal 2020. We, meanwhile, continue to anticipate pays per control growth of about 2.5% and Employer Services revenue retention to improve 10 to 20 basis points and we now expect Employer Services New Business bookings growth of 6% to 7%. We continue to expect our margin in the Employer Services segment to expand by 100 to 125 basis points. We now anticipate total revenue growth of about 6% in fiscal 2020 as compared to our previous outlook of 6% to 7%. This revenue outlook continues to assume an elevated level of FX unfavorability for fiscal 2020 relative to our expectations at the beginning of the year. We continue to anticipate our growth in average client funds balances to be about 4%, the average yield earned on our client fund investments to be about 2% and interest income on client funds to be between $570 million to $580 million. We also continue to expect interest income from our extended investment strategy to be $575 million to $585 million. We continue to anticipate our adjusted EBIT margin to expand 100 to 125 basis points. As a reminder, this guidance also continues to contemplate approximately $100 million in cost savings for fiscal 2020 related to our workforce optimization and procurement transformation initiatives. We now anticipate our adjusted effective tax rate to be 23.2%. The rate includes this quarter's unplanned tax benefit from stock-based compensation related to stock option exercises. It does not however include any further estimated tax benefit related to potential future stock option exercises, given the dependency of that benefit on the timing of those exercises. We continue to expect adjusted diluted earnings per share to grow 12% to 14% in fiscal 2020.

Finally, before we take your questions, I wanted to let you know that shortly after our February 10 Innovation Day, Christian will be moving on to take an international assignment as the General Manager of one of our European businesses. I want to thank Christian for his many contributions leading our Investor Relations program and also welcome Danyal Hussain, who many of you already know as our new Head of Investor Relations. Congratulations to both of you. With that I will turn the call over to the operator to take your questions.

Question & Answers

Operator

Thank you. [Operator Instructions] And our first question comes from Kevin McVeigh from Credit Suisse. Your line is open.

Kevin McVeigh - Credit Suisse - Analyst

Great, thanks. Hey, I think one of the things we've been focused on is the retention, the improvement in the retention. Can you give us any sense of how you come to the first half scale relative to the full-year guidance?

Carlos Rodriguez - President & Chief Executive Officer

Given that, I think you can tell from our comments that it obviously improved in the second quarter. We try to get away from - with the new guidance that we started providing, I think it was a year ago, we're trying to get away from quarterly guidance, but we are still committed to giving you kind of a sense of kind of where we are and I think you can tell from, I think the prepared comments that we had a good first quarter and we also had a good second quarter, so retention is definitely a positive for us, like we talked about last quarter, in terms of some of the bright spots, our midmarket business retention continues to improve and is on track to really get to this year close to record levels. So it's very, very satisfying because we went through a very difficult time back in the day, where we did all the client upgrades and migrations and then with ACA at the same time, that was a business where we really had a real setback for retention. By the way, setback for us is a couple of percentage points. Now we've recovered all of that and are kind of on track to get back to kind of where we were at record levels.

Kevin McVeigh - Credit Suisse - Analyst

Understood. And then just…

Carlos Rodriguez - President & Chief Executive Officer

I'm sorry, to comment with the - I think, we also, in the first half have had good retention in the upmarket which was another place that's been kind of a challenge, a challenge for us over the last couple of years. So I think both of those businesses, when we combine them, they are a significant portion of our revenues and I think are having a solid retention performance.

Kevin McVeigh - Credit Suisse - Analyst

That's super helpful. Just a real quick follow-up. Despite the revenue adjustment, it seems like you're maintaining the margin guidance. I guess what's driving that outperformance, given kind of the revenue adjustments in the PEO and, I guess overall?

Carlos Rodriguez - President & Chief Executive Officer

We have - our business model is interesting because sometimes at least for the first half because we - as you can tell, we were hopeful - we're hoping in the planning on a recovery in terms of our sales results for the second - second half. But in general, we benefited in the first half from an expense standpoint from having weaker New Business bookings because as you know our business has a little bit of a soft adjusting factor. Now the new 606 rules, I think when you amortize some of these costs over time, they blot some of that impact, but there is still some impact from that. So we do - we did benefit from that and we just have a lot of good things going on from a margin standpoint. We really want to make sure that we focus on the growth as well, but we feel pretty good about the initiatives that we put in place, call it, last fiscal year that are impacting this year's cost structure and - and I think those - we've talked about those, the procurement initiatives, also the workforce optimization which was a delayering exercise where we reduced spans and controls. So we - we took three layers out and increased spans across the board including all the way to the very highest levels where we had for us a, I would call it, significant decrease in overhead, if you will, in terms of our other more senior - most senior levels. And so I think we're benefiting from all of those items and that's helping - that's helping the margin. So we feel pretty good about where we are in terms of cost and margin. We have a lot of transformation initiatives around cost and margins, and obviously we want to make sure that we can focus on growth in New Business bookings as well.

Kathleen A. Winters - Chief Financial Officer

Yeah, not too much to add to that. A lot of - Carlos covered a lot of the - the points, but we're seeing - we're seeing the operating efficiency come through. We're executing on the transformation projects that we have in flight right now, we saw a little bit better than expected margin expansion in the second quarter, primarily some timing on some of the transformation work, but, look, the team's executing really nicely on that, particularly on the procurement side and we're focused on continuing to do that and building the pipeline of additional opportunities.

Carlos Rodriguez - President & Chief Executive Officer

And just one of the little item in terms of color, you will see from the queue that - credit to the organization. But again, a lot of these transformation initiatives have been - some of them, when we talk about them, the big ones we have dozens of other initiatives that are really improving the way we work, automating things, taking out kind on a non-value-added work. And when you look at our Q, you'll see that really R&D and selling expense that have increased, and we really are holding the line on the rest of our operating expenses, due in large part, to some of these initiatives that we have underway that are making work a little bit easier for our associates and also taking some of the - some of the work out. And so that's - that's the key, because we want to make sure that we keep, and we are keeping our NPS scores and our retention high. So that's the magic formula there, I think keeping our expenses low and improving margin if it results in lower client satisfaction, lower retention is not going to help us in the long term, but fortunately - again credit to the associates and to the management team. We're actually pulling it off where we're getting both of those things right now.

Kevin McVeigh - Credit Suisse - Analyst

Super. Thank you.

Operator

Thank you. Our next question comes from Tien-tsin Huang from JP Morgan. Your line is open.

Tien-tsin Huang - JP Morgan - Analyst

Thanks, good morning and congrats to Christian and Danny. I want to ask on - I guess a bigger picture question maybe for the team just balancing - you're balancing that new tech investments and you just mentioned the transformation initiatives in the pipeline there, but just given that you're - you're early, you're on track to get to your fiscal year targets this year for fiscal '20, i'm sorry, are you more willing to invest, let's say, in the short to mid-term to maybe energize revenue growth and get that up a little bit more or is your preference is still hit the higher end of your long term margin targets? Just trying to understand how you might be balancing revenue growth and margin expansion given where you are now.

Carlos Rodriguez - President & Chief Executive Officer

That's a great - it's a great question and I think our Board obviously has that discussion with us as well. And I think our Board is very long term oriented and so as much as we're committed to hitting all the individual components, it's about balancing all of those factors to really create long term sustainable growth and we would love to have as much growth as possible. And when I - when I think about where are some of those places that we could invest, as an example, like in our sales organization, we are fully staffed. I think we're probably a little bit ahead of our plans in terms of headcount. So we clearly have some execution issues there, especially as we mentioned in our international and multinational businesses and some difficult compares over the last year, but we have really strong performance in the downmarket and in the mid-market and even in the domestic upmarket this quarter. So it doesn't feel like we're underinvesting. In fact, i'm pretty sure that we're not underinvesting in sales and marketing. We also have a brand campaign that we've invested in over the last - over the last year, which has added some expense. So I think we've - we've put our money where our mouth is when it comes to sales and marketing. And then turning to other - the other obvious places where we could invest, again for growth and product in our R&D organization, again, our R&D group would always say that we could spend more.

But when I look at the year-over-year and even the three-year growth of our investments in our Next-Gen platforms and even some of the additional feature functionality that we're adding to our existing products, including user experience, that's again a place where our investments are growing. So we are - you can see it from our depreciation and amortization line when you see it in the queue. And you can see it from our, and hear it from our word that we are - and you can see in our balance sheet in terms of capitalized software. So we believe that we are investing for the future and that we have - sometimes you have these timing issues because we do have a lot of enthusiasm, for example, about our Next-Gen platforms. But relative to the size of the company, when this is the year - this is the first year where we have, over the last 12 months this is the first time we've actually got clients now live on our - on our Next-Gen platforms including Next-Gen Payroll and Next-Gen HCM, which we call Lifion. So we're excited. We're ahead of plan. But you have less than 10 clients on one of the platforms and call it 30 to 40 clients on another one of those platforms. It just doesn't make a difference yet in terms of the sales results or the revenue results. But it doesn't dampen our enthusiasm around - around the future. So again, I guess, the long and short of it is, I don't think it's a lack of investment, but trust us that, if we see an opportunity to invest for growth, we will - we will take it.

Tien-tsin Huang - JP Morgan - Analyst

Understood. And then just maybe on that point with the ES bookings, it sounds like it's more international again. So I'm curious if this is more cyclical or is there very broad based or is it more just sort of feels like clients here that are looking for a decision. Just try to better understand the visibility here on the international side.

Carlos Rodriguez - President & Chief Executive Officer

I think the most obvious one in terms of, because it's easy to see and quantify, is in our large global view, multinational deals with a very difficult compare. Now, of course, that means that 12 months ago we were celebrating getting those deals and those sales and hopefully we talked about it, that, that was giving us tailwind at the time and I think - I think we did, but we have to go back to the transcripts and now, unfortunately, now we have a very difficult compare. Now, we just had our rethink meeting, we call it rethink meeting where we have all of our large multinational prospects and clients. And I think we walked away with a very solid pipeline and a lot of enthusiasm and so we feel - we feel good about, hopefully the second half and whether it's the second half or next year, but any less enthusiastic about our multinational solutions, but we just have a very difficult compare. That's an obvious place. We do have a couple of what we call in-country or best-of-breed locations that are also having some challenges that I think also have some difficult compares but it's hard to point at any kind of cyclical or product issues because we've been strengthening our products overseas as well, and I think investing in our - in our sales force. So again, and the European economy in particular seems to be at a minimum stabilizing, if not improving. So I don't think we can point to anything cyclical, which is why we remain optimistic about a turnaround.

Kathleen A. Winters - Chief Financial Officer

Yeah. So maybe I'll just add a little more color and talk about it in terms of kind of ES bookings overall. I guess what I'd say is that, look, as you go into the year, there is always going to be areas where you do better in areas where you do worse than you may have planned and thus far into the year, we've seen particular strength in downmarket as we've noted in our our comments. And actually,internationally. we've also seen strength in our Celergo streamline product, which was quite nice to see. And as you saw, though, the multinational global view is where we're seeing really the - the slowness or the weakness for the last two quarters now. Hard to say that it's - we're not really seeing that it's attributable to any change from an economic landscape or environment standpoint, but more so just seeing delayed decision making and it's taking time to get these larger and sometimes much more complex deals through the decision making process. So we've seen it two quarters in a row. The pipeline looks - looks pretty decent. We've got some of these deals in the pipeline, but remains to be seen exactly how much longer it takes to get them closed.

Tien-tsin Huang - JP Morgan - Analyst

Okay, thanks. See you in a couple of weeks.

Carlos Rodriguez - President & Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Ramsey El Assal from Barclays. Your line is open.

Ramsey El-Assal - Barclays - Analyst

Hi, guys, thanks for taking my question. Could I ask you to give us kind of a brief macro overview in terms of what you're seeing in your various markets, given everything that's going on in the world today. Any callouts or any changes in the environment?

Carlos Rodriguez - President & Chief Executive Officer

So when we look at - we have a few things that we obviously look at in terms of, call it, economic macro indicators. The ones that are kind of relatively stable, I would call them relatively stable, are pays per control and wage growth and we look at obviously our own data as we get ready for this earnings call. But we also have the ADP Research Institute, that publishes its own kind of wage growth information and other factors around the economy. And I think all those signs positive point to, what I would call, stability. Our pace of control was slightly lower than it was the previous quarter and the trend, but we've seen that many times before, where we go 2.5% one quarter and then we go a little bit lower the next quarter, but then it comes back to 2.5%. It does seem, and we've been saying it, and we've been wrong so far that as the labor markets tighten, there's just not enough people available in the U.S. to continue to drive the kind of pays per control growth that we've - that we've experienced. But, obviously labor force participation has been ticking up slightly and for a variety of reasons, that continued to hum along. And again, we see the same kind of indicators that all of you see around consumer spending, etc.

So when we look at across all of our domestic businesses, pays per control growth seems to be a reasonable indicator that the economy's on stable - on stable ground and wage growth, we think, should continue to accelerate, but that's moderated slightly also for the last couple of - last couple of quarters, but it's still at robust levels and should drive continued consumer spending and continued consumer confidence. We do look at pays per control also outside of the U.S. and I think there we, again, in our numbers, see some signs of stabilization in Europe when it comes through in the unemployment and pays per control metrics there. So for us, I think that everything looks - bankruptcies are - we're seeing the same things in our own business that you see through external metrics. We don't see any kind of elevation or increase in out-of-business or bankruptcies in our downmarket business, which is the canary in the coal mines. The first place you would - you would see it. So our sales are also strong in the downmarket and in the midmarket. So it doesn't feel like the - like the weakness we had this quarter is anything other than the lumpiness that we talked about around multinationals because New Business bookings would be another, I think macro indicator that, that could weaken.

We talked about our retention continuing to improve. Retention doesn't improve in a bad economy, because that's one of the - the things that really suffers as a result of out-of-business in the downmarket and that has has stayed strong and solid. So, no, no negatives that we can see in the macro.

Ramsey El-Assal - Barclays - Analyst

Okay and - and you sort of addressed this dovetailing with Kathleen who was answering your answer just now, but can you talk a little bit about the competitive environment and that doesn't - manifesting itself as a sort of pricing related actions or an intensification of maybe more an increase in opposing bidders showing up for - for contract proceeds or new business models emerging out there, I'm just trying to explore whether there is any other peripheral causes for some of that. I think what are timing related delays and things like bookings, especially maybe in Europe but elsewhere as well.

Carlos Rodriguez - President & Chief Executive Officer

Sure. So back to maybe a little bit of what Kathleen said about, there's always - there is positives and there is negatives. When it comes to competitors, it's the same thing. We have a lot of competitors in each of our - each of our segments and some years we do better, some years we do worse, but we do look at the overall balance of trade and our - our situation there is better and you would think that based on our retention results and based on the comments we just gave you about New Business bookings in our downmarket, midmarket and domestic upmarket business. So I think in - in North America, I think if you look at those results, I would say our competitor situation has improved and it shows in our net balance of trade that we - that we keep - we keep track of.

In particular I would point out, besides the continued strength in our downmarket business, which has been growing market share here for a few years, if you look at our midmarket business the last two quarters in particular were quite strong in terms of, what we call, new logos against a variety of competitors, but again, we can't point to any one competitor because we have a large set of competitors. Some of them are geographically concentrated and some of them are national, but I think we're very pleased with this quarter's performance against those competitors in the midmarket. And then in the upmarket, I would say that the addition of Workforce Now and the callout to 1,000 to 5,000 range, so the lower end of our upmarket, which we did a couple of years ago has really been an important generator of win-loss and balance of trade success for us in the upmarket. So we've - we've had a robust growth in units and revenue and sales dollars from introduction of Workforce Now into that 1000 to 5,000, which addresses a segment of the market where that - that platform really has a lot of - a lot of appeal.

Ramsey El-Assal - Barclays - Analyst

That is super helpful. Thank you so much.

Operator

Thank you. Our next question comes from Jason Kupferberg from Bank of America. Your line is open.

Jason Kupferberg - Bank of America Merrill Lynch - Analyst

Hey, good morning guys. I just wanted to drill in a little bit more on the commentary around the delayed decision making. Have you guys been down selected for these contracts already or is the actual RFP process still kind of dragging along?

Carlos Rodriguez - President & Chief Executive Officer

I wish I could tell you that I have that level of detail. I don't. So this is really ties back to the comment I made before about we have a certain number of sales people in the field, we have a certain pipeline of dollars that we track year-over-year and we know what our sales results were the previous year, in the same period, whether it was the first quarter or the first two quarters of the year. So we are attributing the weakness to delay decision making, but this is not - we do have a large contracts, particularly, multinational and they definitely move the number from one quarter to the other, but we don't have $50 million, $100 million contracts. It's not that kind of business. So we don't - I don't - I know our sales leaders have that level of detail. I don't have it available at my fingertips here.

Kathleen A. Winters - Chief Financial Officer

Yeah, I mean maybe you're asking, kind of, have we seen any particular shift and where things are in terms of stages of the cycle and stages in the pipeline. Nothing that we've seen or heard that we can draw any conclusion from or point to any trends.

Carlos Rodriguez - President & Chief Executive Officer

But we do have a pipeline of deals. I mean…

Jason Kupferberg - Bank of America Merrill Lynch - Analyst

Right.

Carlos Rodriguez - President & Chief Executive Officer

Sure, we went into rethink this year with more participants, more attendees and a larger pipeline of dollar opportunity than we had the previous year.

Jason Kupferberg - Bank of America Merrill Lynch - Analyst

Right. Yeah, no, I was just curious if you were just kind of waiting for some final signatures to make the bookings official or if it really is a matter of kind of just broader pipeline conversion. Just my second quick follow-up just on the margins, you had the 70 bps up overall in the quarter, which was better than you expected. But at the segment level, I know ES was up only 30 bps and PEO was down 30 bps, if I'm not mistaken. So I think it was some of the below-the-line drivers that got you to the 70 bps. Can you elaborate on those because I know you have some add backs in your adjusted EBIT margin calculation?

Christian Greyenbuhl - Vice President of Investor Relations

Yeah, I can help, maybe a little bit with that. It's, as you know, the transformation initiatives that we are undergoing right now, some of those are sort of back office facing as well as, if you think about procurement, and the workforce optimization initiatives. Those will have impacts to items that are, what we would deem, other in the segment view, so corporate functions, for example, that's where the delta probably sits for you.

Jason Kupferberg - Bank of America Merrill Lynch - Analyst

Okay, great, thank you guys.

Carlos Rodriguez - President & Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Mark Marcon from Baird. Your line is open.

Mark Marcon - Robert W. Baird & Co. - Analyst

Good morning. And let me add my congratulations to both Christian and Danny. With regards to the bookings just looking ahead and thinking about the comparisons for the third and fourth quarters. Are there any things that we should think from a sequencing perspective in terms of they're both - one is up 10%, one is up 11%. Is there anything that's particular in one versus the other that would make it a more difficult comp or how should we think about the bookings over the next two quarters in terms of the sequencing?

Carlos Rodriguez - President & Chief Executive Officer

I think our number one goal is to obviously maintain the momentum we have in everything other than our international and multinational businesses and again these businesses, not just because it's a big ocean between them, they are fairly separate, right, in terms of how they're managed in terms of sales and sales execution and so forth even though we have one worldwide sales organization. So we feel good that we're going to be able to maintain the momentum we have in the rest of the - the business and then hopefully we get a little bit of tailwind with some of the stuff going our way in terms of the larger deals and some of the international stuff that we - that we talked about. We do have in the second half, particularly in the last quarter, we do have a difficult compare because last year, as you recall, we purchased - it was a client-based acquisition, an acquisition of the company with our client-based acquisition of Wells Fargo's Payroll business and that helped our New Business bookings and obviously are translated into some revenue help in the downmarket and it is part of what's given us some tailwind from a revenue growth standpoint in that business. But since it was a client-based acquisition, it doesn't - it wasn't an acquisition of a business. It does roll through our New Business bookings and that was I believe in the fourth quarter.

Kathleen A. Winters - Chief Financial Officer

Fourth quarter.

Carlos Rodriguez - President & Chief Executive Officer

Yeah.

Mark Marcon - Robert W. Baird & Co. - Analyst

Yeah, that's - I'm not sure as well. So, and that's part of the reason for asking the question. So arguably the third quarter should be a little bit of an easier comp and…

Carlos Rodriguez - President & Chief Executive Officer

For some reason and they never feel easy but mathematically, you're probably mathematically correct. But we have a lot of things that we're cooking to make sure that we - that we hit the - obviously, our intention is to - is to achieve the guidance we provided and we wouldn't - we don't provided it lightly.

Mark Marcon - Robert W. Baird & Co. - Analyst

And then, Carlos, obviously you've got a longstanding sort of experiences with the PEO market. How are you feeling about the longer-term trajectory of the market? What are you seeing - what do you think ex pass-throughs, the sustainable growth rate is there and what are you seeing from on the competitive front? It seems like there's a little bit more private capital that's coming into the space. So just wondering what your - how you're thinking about that space and the legislative outlook there.

Carlos Rodriguez - President & Chief Executive Officer

Well, when you look at, again the balance of trade information there, I feel pretty good about our competitive situation. You always feel good about your own children and about your - your business, but you got to look at the fact, right. And I think the facts are - are pretty good for us in terms of our win loss in our balance of trade. So, that feels pretty good.

And then the second thing that makes me feel really good, particularly this quarter versus last year and started to feel it last quarter, is we really took a while to kind of filter through to make sure that we had our incentives properly aligned to make sure that our sales force was focused on, obviously, number one, selling the right thing to our clients, but making sure that they're properly incented to - to make sure that the PEO is something that they raise, because it is a difficult sale, because it is a high involvement sale and so you have to have the right incentives in order for the sales force to really want to sell it. And so I think we did that and I think we talked about that, it's got to be 12 months ago, I think it was. So, that feels like it's starting to filter through. And I think we talked about very strong double-digit New Business bookings for the quarter, which - that's the most important metric for the future to really give us confidence that - that the business model is still strong and intact. So, that feels pretty, pretty good.

Mark Marcon - Robert W. Baird & Co. - Analyst

Perfect, thank you.

Operator

Thank you. Our next question comes from Samad Samana from Jefferies. Your line is open.

Samad Samana - Jefferies - Analyst

Hi, good morning. Thanks for taking my question. So I wanted to maybe ask a question about the - what's been going on in terms of bookings and how you're thinking about guidance. Is there - was guidance updated just to reflect what bookings was done so far this year, or have you maybe made some changes to the guidance framework to account for some more of the variability or variance that you're seeing in multinational international deals closings? So I guess, is guidance more conservative or you're using the same framework that you've historically used? And then maybe just one follow-up.

Carlos Rodriguez - President & Chief Executive Officer

Yeah, again just a reminder, just given the last comment that I made about the PEO that the guidance that we provide for bookings is ES only, just to be clear. So if you look at our combination of our PEO and ES sales there a better picture and a stronger picture in the first half than what our guidance would depict because we provide guidance for the PEO based on average Worksite Employee growth now and New Business bookings. But having said that, I think the answer is just this year like there is no change in our thinking or our framework, given that we just think there is some large deal delays that I don't think impact our view of the future.

Kathleen A. Winters - Chief Financial Officer

Yeah, no change in framework, no change in kind of the way we're rolling up that forecast or the data we're looking at. For example, we look at things like okay, where is business coming from in terms of by segment or by geography or new clients versus upsell to existing clients. We're continuing to see fairly consistent trends in terms of the split between new and upsell. So no change in the framework, it's more so just, look, we've seen the slower out of the gates for two quarters now, lower than we expected in the international. And so we thought it was given that we're six months into the year here. We thought it made sense to give you our best view and so therefore we narrowed the view for the year.

Carlos Rodriguez - President & Chief Executive Officer

Yeah, I want to - just wanted to comment that in terms of something a little bit quirky about, as we changed our guidance to focus on ES worldwide bookings versus the PEO based on average Worksite Employees. The reason we gave you some color about the bookings for the PEO this quarter is, even though we're not going to change the way we do our guidance, is in some respects what's good for the PEO, sometimes in the short term. If business gets referred to the PEO, it can have, in the short-term, a dampening effect on Employer Services. But we still had a great result in the downmarket and in the midmarket in Employer Services. So we definitely can point to that. But again it is kind of important to keep in mind that it's really the combination of those two that are driving overall ADP bookings and overall ADP revenue growth.

Samad Samana - Jefferies - Analyst

Great, that's helpful. And then maybe if I could just ask one follow-up. I think there is a lot of excitement around what's beyond coming out of HR Tech and ahead of the Innovation Day that the company is hosting. So I just wanted to see if there is any early patterns in terms of customer profile whether it's by size or whether - whether you think about existing products that they're using whether it's Vantage or Workforce Now, maybe where are you seeing the early adopters come from and any type of profile commentary you could give on that would be helpful. Thank you.

Carlos Rodriguez - President & Chief Executive Officer

So, again, in our case, everybody maybe approaches it differently, but we started off with smaller, less complex clients and now we've actually just sold, I would call, considered to be very large clients, so call it, tens of thousands of of employees and so we've got a couple of very large sales that we've done and we have a bunch in the middle. And then we have a few smaller ones that we did in the early - in the early days. Some of the business we've sold is obviously new logo. Some of it has been, as you mentioned, off of some of our existing platforms. I don't think that I can point to one particular platform and say that like we're not targeting because we're not trying to do migrations or upgrades. We're trying to go after clients that have the right profile on the right needs, right, so that we can make them happier ADP clients in the long term. So we - we know what the capabilities are of the platform and we try to target the clients in the prospects whether they're internal, external in the appropriate - in the appropriate manner. So I guess the best way to put it is, it's kind of across the board in terms of from an internal view. And then in terms of industry or size of client, fortunately it's also kind of widespread.

Samad Samana - Jefferies - Analyst

Great, thanks for taking my questions. I appreciate it.

Operator

Thank you. Our next question comes from David Togut from Evercore ISI. Your line is open.

David Togut - Evercore ISI - Analyst

Thank you. Good morning. There have been a few questions on bookings already but this seems to be the main question of the day, but the one question that I'd like to explore here is, you're still in the critical selling season which typically runs December to February. So is there anything you see in your pipeline in the U.S. or confidence and international close rates that gives you the confidence that you can close this critical selling season in better shape than we've seen obviously in the second quarter and the first quarter bookings result?

Carlos Rodriguez - President & Chief Executive Officer

So again at the risk of getting too much into the sausage making, the - if you remember like part of our business particularly downmarket and into some of our midmarket, we report our sales when they start. So there - bookings and starts are basically equivalent. But when you get to very large deals, that's where you're really recognizing a sale. And then the revenue starts at a later date. It could be six months, it could be 12 months. If it's a very large complex international, it could be 18 months later. So to your point about the critical selling season, pretty much now and done because January month, biggest month for us, particularly for our downmarket business and the lower end of our midmarket business as well. Just because of the natural cycle of the PEO, a large number of clients, by the way, in fact, retention as well, bookings standpoint January is the critical month for us so the December- January period is the critical month for us in the PEO. And again we are in the middle of that quarters, so it's kind of hard to make comments about the quarter since the quarter isn't done yet, but I think in the downmarket and in our PEO, in particular, we had a, I'd say, a good start to the quarter.

Kathleen A. Winters - Chief Financial Officer

Yeah, the only thing - other thing I would add and this is with regard to the ES bookings, in particular. If you kind of look at the cadence of the year, last year and this year and you look at six months year-to-date, we're at about the same point this year as we were last year in comparison to where we ended the year.

David Togut - Evercore ISI - Analyst

So in other words, you see enough in the pipeline at this point and expect to close rates that drive your expectation of the 6% to 7% bookings target. Is that accurate?

Carlos Rodriguez - President & Chief Executive Officer

I think that, again, that is a level of detail to say that we have specific things in the pipeline, I think just to reiterate what we've said before. So the number one driver of our confidence in our sales results in most of our business is headcount and execution, and we believe we're fully staffed and we have that headcount in place. In the place where we've had the variability or the volatility, if you will, it does come down to what you're describing, which is RFPs pipeline etc. Yes, we do believe we have the pipeline and visibility of that pipeline to feel that we will close the gap for the rest of the year, but that's not - in our SBS business and our downmarket business, it doesn't work that way. It's really more about the volume. It's a volume business, it's really related to having the proper amount of headcount, the right digital marketing tools and spend and again there, we feel, we feel good. And we feel confident.

David Togut - Evercore ISI - Analyst

Understood. Thank you.

Operator

Thank you. Our next question comes from Jeff Silber from BMO Capital Markets. Your line is open.

Jeffrey Silber - BMO Capital Markets - Analyst

Thanks so much. I'm apologizing for asking another bookings related question. I just wanted to clarify something. I'm assuming that most of your clients are on calendar year-end as opposed to your June year-end. When you talk about the late decision-making, does this mean that the decisions are being deferred until another year from now or is it something that could happen within the next quarter or so?

Carlos Rodriguez - President & Chief Executive Officer

So the good news for ADP is we have clients with all kinds of the year-ends because we have a lot of clients. So - so really spans the gamut. But you're right that probably the average company in the U.S. has a calendar year-end, but I think most large companies and particularly multinationals which ADP would - I would consider ADP to be one of those. We typically, when we are negotiating with a vendor for a large contract, would be focused more on their fiscal year-end rather than our own fiscal year-end. And so you're right that there are some drivers around people's budgets and so forth, but a lot of procurement departments tend to focus on the vendors' year-end. And so we've seen historically, doesn't mean that it will happen again this year, is that our fourth quarter, for large domestic and especially for large multinational deal, is a particularly important quarter because prospects are recognized that even though we're not like a typical software company, that negotiating towards a company's fiscal year-end, at least in their minds, tends to be a good time to sign deals or negotiate.

Jeffrey Silber - BMO Capital Markets - Analyst

Okay, I appreciate that…

Christian Greyenbuhl - Vice President of Investor Relations

Sorry, Jeff, just one - just one reminder. I know we said it before, but the 1% impact on an annual basis in business bookings equating to about $17 million, I mean these multinational particularly global view deals, you can imagine that if you take out on a quarterly basis, it does have just put in perspective that outsized impact so that's just from a framing perspective, it is a pretty meaningful adjustment, if you have some of these deals that flow in from one quarter to the next, given that sensitivity.

Carlos Rodriguez - President & Chief Executive Officer

On the new business bookings.

Christian Greyenbuhl - Vice President of Investor Relations

On the new nusiness bookings.

Carlos Rodriguez - President & Chief Executive Officer

Right. Because on a revenue, as you just described, the irony of the situation is that as it doesn't have a big impact on revenue, like, we're having issues with FX and with client funds interest in particular that are hurting us. It's not to deny that the bookings eventually will have some impact. The types of bookings that we have fallen short on in the first half are not particularly revenue impactful.

Jeffrey Silber - BMO Capital Markets - Analyst

Okay, that's helpful. I do appreciate the color on that. And then I know you don't give quarterly guidance, but you called out, I guess, the comp on the, I guess, “acquisition of the Wells Fargo Payroll business” last year. Anything else to call out between 3Q and 4Q that might affect the cadence of those quarters? Thanks.

Carlos Rodriguez - President & Chief Executive Officer

In terms of new business bookings?

Jeffrey Silber - BMO Capital Markets - Analyst

No, no. In terms of the overall business, either revenues or margins.

Carlos Rodriguez - President & Chief Executive Officer

Well, I mean again back to revenues and margins. This client funds interest issue and again going back to kind of the three-year guidance that we gave a few years ago. Again, obviously not expecting a lot of sympathy from this crowd, but we're probably about $100 million less than what we expected to be in terms of client funds interest that we're obviously able to overcoming some of that as we go forward here. And the - so that in the second half is actually going to, according to what I'm seeing in terms of our forecast, that's going to start to have an impact on revenue growth as well. Not a huge impact, but where we were getting, call it, 1% lift in terms of revenue growth last year in the second quarter, I think this second quarter, it was a much smaller number. And in the second half, it goes to probably no help to actually hurting our revenue growth. So that's - that's a headwind for us, but when I really take out all these issues, FX, client funds interest and other kind of calendar noise issues, when you look at the net impact of New Business bookings starts, not New Business bookings sales but New Business bookings starts minus losses, so if you take retention and new business that has started, if you compare to last year's second quarter to this year's second quarter, and hopefully, the same thing continues into the second half, we have a slight acceleration. It's not a huge acceleration, but a slight acceleration.

So that - that's what makes me feel good about the strength in the underlying business, because there's a lot of noise happening in between with calendar and remember last year, we also had a one-time item that we mentioned that we called the SUI pull forward in the PEOs, an accounting change that we were obligated to make that help the second quarter revenue growth. So all those things you have to kind of separate all those and get down to the core of the business and how the core business is performing. And on that basis, I feel good about the quarter and I feel good about the second half.

Kathleen A. Winters - Chief Financial Officer

Yeah, the only other thing I would add to your question about kind of quarterly linearity in the balance of the year. Just as a reminder, in the second half of last year we had much, much more margin expansion in Q3 than in Q4. So therefore tougher comps for us this year. Q3 versus Q4 in terms of margin expansion. So while we don't give quarterly guidance, I would expect not a whole lot in Q3 and then potentially much more in Q4.

Carlos Rodriguez - President & Chief Executive Officer

But again back to like in terms of what I mentioned in terms of some of these comparisons that were difficult versus last year's second quarter, some of those things then get easier on a revenue standpoint, notwithstanding the issues from client funds interest as we pull forward actually helped last year's second quarter, but depressed our third quarter. That's going to make an easier comparison. So we do expect slight improvement in our revenue growth in the second - in the second half.

Christian Greyenbuhl - Vice President of Investor Relations

And just a brief reminder [Speech Overlap] of the fourth quarter. So, as a reminder, so we did the client-based acquisition. So that added some amortization expense, which will lap in the fourth quarter and obviously increased booking expense related to the client-based acquisition as well. So just keep that in mind, and then we obviously launched our brand campaign, I think in the third quarter, but most of that was really the expense that was kicking off in the fourth quarter as well. So that will be left as well.

Jeffrey Silber - BMO Capital Markets - Analyst

So I guess what you're saying is, you got some tailwinds in the fourth quarter.

Christian Greyenbuhl - Vice President of Investor Relations

Yeah.

Jeffrey Silber - BMO Capital Markets - Analyst

All right, thank you for clarifying that.

Carlos Rodriguez - President & Chief Executive Officer

Thanks so much.

Operator

Thank you. And we have time for one final question and our last question will come from Lisa Ellis from MoffettNathanson. Your line is open.

Lisa Ellis - MoffetNathanson - Analyst

Hi, good morning, guys and thanks for squeezing me in. Congrats to Christian and Danny from me as well. Carlos, you mentioned a couple of times, and I think in the presentation, the progress on both Lifion, as well as the Next-Gen Payroll in tax. Can you - can you give an update of where you are on the deployments of the Next-Gen Payroll and tax engines and how they're impacting your business perhaps on the retention side or some of the other impacts? Thank you.

Carlos Rodriguez - President & Chief Executive Officer

Sure. Thanks. Very excited about the Next-Gen payroll as well as the back office tax but the payroll engine, even though it's somewhat back office, I think, has some positive qualities in terms of potentially helping us both in terms of, in the future, both around bookings, but also around efficiency and cost. I think we have somewhere between 30 and 40 live clients in our next generation payroll platform suite. As you can imagine, in comparison to the size of ADP, it's a relatively small impact in terms of revenue retention or any of the other actual metrics. But enormous amount of enthusiasm around what we're doing there, both at the team level, I think the team is incredibly enthusiastic, and I think the rest of the organization is very enthusiastic as well in terms of what we're seeing in the early days especially around the flexibility of how quickly we can, for example, make changes and that's just related really to the investments in the platform itself. So we've already kind of experimented and I think we maybe talked about this in the past with kind of federation as you can call it, in trying to have others develop and build on that platform.

We've done the same thing on Lifion and so now we have a team, for example, in Australia that is actually built Australian, and we have one or two clients on that as well. And so we're incredibly happy with what we're seeing, we're really happy that we have live clients and this is the first year that again, even though it was, call it 30 to 40 clients,this was the first time we've gone through year-end. So we actually had to go through a year end and do all the year-end closing activities, W2s, etc. So it's still very early days, just because of the size of ADP, but if we were a start-up, this would be like really great news, like this was the - if this was a discussion about a start-up like we've got now a lot of technical risk behind us, if you will, and now we have scaling and execution risk that's still in front of us. But that's a hell of a lot better than where we would have been two to three years ago and I think it could really add to our competitiveness here in the long - in the long run, not to mention to help a lot in terms of our back office costs.

On the tax side, that's probably more focused on back-office cost and efficiency, but that also has an impact on our associates in terms of their ability to deliver service and also the experience that our clients have, when we do things like amendments and tax notices. And so again the news there is very positive. We have - I think it's close to 140,000 to 150,000?

Kathleen A. Winters - Chief Financial Officer

Yeah, about 140,000 clients.

Carlos Rodriguez - President & Chief Executive Officer

About 140,000 clients, obviously, those are smaller downmarket clients in a limited number of jurisdictions. But I think we've now - we're up to 20 more than 20 jurisdictions. Jurisdictions, by the way, refers to number of states in addition to federal, places where we can actually do the - do the taxes and so I'd say that that's progressing also very, very well, again, highly flexible platform that we're very optimistic in terms of what it can do to us down - down the road and see no scaling issues so far in either of those platforms.

Lisa Ellis - MoffetNathanson - Analyst

Excellent. Thank you. That seems like a good point and I will see you guys in a couple of weeks.

Carlos Rodriguez - President & Chief Executive Officer

Thank you very much.

Operator

Thank you. And this concludes our question and answer portion for today. I am pleased to hand the program over to Carlos Rodriguez for any closing remarks.

Carlos Rodriguez - President & Chief Executive Officer

Thank you. So as you can tell we're pretty - we're pleased with the progress we continue to make on both the financials, but also on our - on our strategy. Obviously as we keep saying over and over again, we're trying to build on our success in the past but also transform for the future here, so we can continue to deliver sustainable growth for many years to come. I also want to mention that this time of year, as somebody mentioned about this being a busy time of the year for us from a sales standpoint, it's also a very busy time for our associates to deliver service and also our year-end commitments to our clients. It's very long hours and very hard work and I really appreciate the commitment of our associates, and again, it's one of the great differentiators we have in terms of being able to deliver that level of service, especially at a very busy time of the year like we are right now.

Obviously, we wouldn't be able to be successful in the long run without strong products and so when we have our Investor Day, we're going to hopefully lay out a plan for you about how the sustainability of the strength of ADP will be, I think helped by the investments we've been making over the last five years in our next generation products. So we look forward to spending time with you on February 10 to discuss all of these innovations that we've been investing in, in addition to the Next-Gen platform and also discussing a little bit of our vision for the future about how we expect work to change in the HCM industry to change. And with that I want to thank you once again for your interest in ADP and for joining us today. Thank you.

Operator

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Q2 2020

Earnings Transcript

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