Q2 2020 Insperity Inc Earnings Call
Second quarter 2000, <unk> earnings conference call all lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be question and answer session.
If you would like to actually question during despite superstar number one point, they're trying to think Keith.
These final lots to do just to be speakers joining us art.
Oh, sorry body chairman of the Board Chief Executive Officer.
Douglas sharp.
And your Vice President Finance, Chief Financial Officer, and Treasurer at this time I'd like to starting to go over to Mr. Douglas sharp so sharp declines.
Thank you. We appreciate you joining us let me begin by outlining our plan for this evenings call.
First I'm going to discuss the details behind our second quarter 2020 financial results.
Which were strong considering the current economic environment brought upon by the pandemic.
Paul will then comment on the key drivers behind our Q2 results in our outlook for the remainder of the year.
I will return to provide our financial guidance for the third quarter and an update to the full year 2020 guidance.
We will then in the call with the question and answer session.
Now before we begin I would like to remind you that Mr. Sarvadi Alright may make forward looking statements during today's call, which are subject to risks uncertainties and assumptions.
In addition, some of our discussion may include non-GAAP financial measures.
For more detailed discussion not the risks and uncertainties that could cause actual results to differ materially from any forward looking statements.
And reconciliations of non-GAAP financial measures. Please see the Companys public filings, including the form 8-K filed today.
Which are available on our website.
Now, let's discuss our second quarter results in which we achieved $1.54 in adjusted EPS.
An 86% increase over Q2 2019.
And adjusted EBITDA of $92 million increase of 62%.
Average paid Worksite employees declined by just 1.8% from Q2 2019.
Paired our forecast of a 1% to 5% decline that took into account the impact of the cobot 19 pandemic on our clients and prospects.
All three drivers, including Worksite employees paid from new sales.
Client retention and net losses in our client base from layoffs in hiring were better than expected.
Worksite employees paid from new client sales were approximately 20% above forecasted levels.
Driven by 15% increase and trained business performance advisors and success and our mid market segment.
Client retention held up at our historical high level of just over 99% during Q2.
This points to financial stress and actions taken by our clients during the pandemic.
And our quick and effective response to assist our clients with our premium level of HR services.
Net losses in our client base in Q2 were lower than expected at the level of Worksite employees laid off returning to work from furlough and general hiring were all favorable.
This was particularly the case in the month of June.
In a few minutes Paul will share the details on the actions we've taken recently to assist our clients.
<unk> thoughts around more recent trends in our updated 2020 worksite employee outlook.
So let's move on to gross profit, we didnt, which increased by 27% over Q2 2019.
These results included lower than forecasted benefits and workers compensation costs.
Partially offset by our decision to provide comprehensive service fee credit to our clients.
Lower benefit costs were primarily due to lower utilization, especially lower levels of elective health care procedures.
Some of which is expected be offset in subsequent quarters with the resumption of deferred care.
And future Cobot 19 calls.
Lower workers compensation costs were primarily result of the effective management of claims incurred in prior periods and largely unrelated to the pandemic.
Due to the structure of our workers compensation program any reduction in the number and severity of workers compensation claims associated with the work from home status, but many of our clients and employees.
We'd likely impact our cost then later periods as these claims develop over time.
During the quarter, we proactively engaged with our vendors and successfully negotiating savings to support our clients through this difficult period.
As a result, we provided a comprehensive service fee credit to our clients based upon their worksite employee levels at June Thirtyth.
These credits totaled approximately $12 million and were accrued in the second quarter.
Also under the cares Act and family first addict X. clients Ray will take advantage of payroll tax deferrals and credits offered through government stimulus packages.
These deferrals in credits totaled approximately $45 million during Q2.
Ever reported as both a reduction to revenue and direct costs.
So in total these two items reduced Q2 reported revenues by approximately $57 million.
In gross profit by approximately $12 million.
Second quarter operating expenses increased by 9% and included continued investments in our growth including costs associated with the increase in the number of business performance advisors.
Other corporate employee head count has remained level over the first half a this year, even though HR demands have increased with the pandemic and its impact on the economy in a number of HR issues, including diversity and inclusion.
Second quarter compensation costs included in an acceleration in the timing of a portion of our corporate employees annual incentive compensation to reward them in a period an increase service demand.
Additionally, Q2 operating costs included an increase of eight time off accrual associated with higher than normal unused vacation hours during the pandemic.
These expenditures were partially offset by cost savings in other areas, including travel training and business promotion costs.
Our effective tax rate in Q2 came in at 27% and we expect a similar rate over both the latter half of this year and for the full year 2020.
Our strong financial position that liquidity continued to improve over the first half of 2020 in the face the challenges and dynamics of the pandemic.
Adjusted cash totaled $269 million at June Thirtyth.
Up from $108 million at December 31, 2019.
While borrowings totaled $370 million at the end of Q2 up from $270 million at December 31st the 2019.
Over the first half of this year, we have repurchased 879000 shares of stock at a cost of $61 million.
Hey, $31 million in cash dividends.
And invested $39 million in capital expenditures.
Now at this time I'd like to turn the call over to Paul.
Thank you Doug.
Thank you all for joining us.
Today I'll begin with the discussion of our efforts over the recent quarter to support our small and medium sized business clients throughout the historic disruption arising from the pandemic.
Secondly, I'll cover our view of the dynamics driving our expectations over the balance of the year for growth and profitability.
And I'll finish my remarks, with some thoughts about the long term effect on demand for Insperity services.
Which represents a silver lining in the cloud of Cobot 19.
This quarter was an eye opener in many ways, including highlighting the absolute necessity and the tangible value of a sophisticated HR function for small to medium sized businesses.
The unexpected events that played out over the course of the quarter cast a spotlight on the HR Department, which of course is what insperity is to our clients.
The sequence of events, beginning with the health crisis evolved into economic disruption in the transformation to working from home followed by emotionally charged dynamic a prolonged stay at home orders and political and social unrest.
When you add in federal state and local legislative and regulatory responses with new obligations and opportunities for businesses you have a monumental challenge and opportunity for an HR services provider to demonstrate value to clients.
Insperity workforce optimization has long been the most comprehensive business service offered in the marketplace and our competitive distinction is the breadth and the depth of our services and the level of care of our service providers.
Our clients were relying on us to help them work through decisions that directly affected the livelihood of their businesses employees and families. Our service teams continue to serve our clients in worksite employees with genuine care and excellence in an unprecedented time of need and constant change.
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More than 30 years, I've never seen a quarter, where clients experienced more of what we are designed to offer in such a compressed time period.
The effort put forth was exceptional and could have only been delivered by the combination of an amazing team and an incredible culture like we have at Insperity.
The workload across the company escalated substantially with call volumes and length doubled service interactions tripled and a long list of others services spiking.
HR solutions, where required for the myriad of issues businesses were facing including layoffs and staffing strategies PPP loan application forgiveness and reporting work from home returned to work FICA deferral and diversity and inclusion just to name a few.
Allow me to say, we could not be prouder of our staff across the board for the way they stepped up and delivered on our mission to help businesses succeed so communities prosper do a very challenging period.
Now in addition to passing this service stress test with flying colors. We also were able to see our business model performed well under the pressure of these unprecedented events. We were pleased with the dynamics across the business from sales and retention to pricing direct cost and operating expenses.
On our last call we indicated our objective in new account sales operating in this virtual selling environment would be to fall within a range of 60% to 80% of our original 2020 pre cobot sales budget.
As you May recall the sales budget is the internal metric, we used to monitor and track performance in our sales organization.
Our entire sales organization, both core and Midmarket performed remarkably well.
Achieving total book sales above 70% of our original 2020 pre cobot sales budget and in the higher end of our revised targeted range.
As a reminder, once the sales booked our service teams work to onboard those clients and actually generate revenue as paid worksite employees.
In this environment client retention may also be a concern due to an increase in the business failure rate in the marketplace at large as Doug mentioned, our client retention has remained solid reflecting the strong client base, we have in demonstrating the benefit of our strategy and targeting the best small and midsize business.
This is onto our premium services platform.
Another stress test during a period like this was around pricing of our services on both new and renewing accounts. It is certainly another credit to our staff and further validation of the value of our services that are standard pricing on our book of business did not reflect unusual pricing pressure and temperature.
Yes.
We were also very responsive to the immediate financial needs of our clients in providing a cobot 19 related service speak credit.
During the quarter, we worked with vendors and negotiated $12 million in fee reductions to pass along to clients. We felt it was important to act quickly in this regard and get the funds to clients as soon as possible and clients will begin seeing this credit on invoices starting this week.
Another area to evaluate during this unusual time was the matching a price and cost on our primary direct cost items, including payroll taxes workers' compensation and employee benefits.
As I mentioned pricing has remained on track and although our quarterly direct cost pattern has changed we anticipate a strong year overall at the gross profit line.
So we have navigated the disruption in the immediate aftermath of the pandemic and related events of Q2 successfully.
And our business model demonstrated substantial resiliency.
Now in order to determine our expectation for the balance of the year, we need to zero in on the most recent behavior of our clients, particularly in layoffs and new or re hires in the base and consider the economic outlook for small business.
Now in the second quarter layoffs due to co bid drove a 6% reduction in paid worksite employees from March reaching a low point at the end of May. Since then we've recovered approximately 40% of this reduction primarily due to the returned to work of just over 50% of furloughed employees.
Please at the same time, approximately 17% of furloughed or temporary laid off employees have been reclassified to permanent lay offs. So the number of potential rehires had been has been reduced by two thirds.
At this point the rate of both layoffs and furloughed employees returning to work have moderated considerably.
So determining what happens in the near term and net change in employment in our client base.
Somewhat of a toss up on one hand.
It seems the small to medium sized business community is adapting and dealing well with the new realities their face.
We believe our client base has been particularly impressive in this regard.
However, the continuing spread the virus and the corresponding economic uncertainty may temper the rebound we've seen recently.
Also in our experienced there is sometimes a pause or hesitancy in decision making.
With the uncertainty of and then cup upcoming election, which may weigh in over the second half the year.
We do expect new account sales to ramp up over the last half of the year. However, most of the book sales in Q4, typically do not become paid worksite employees into Q1 of the following year.
These sales would contribute to growth in 2021, but not contribute significantly to this year's results.
With this backdrop our guidance for growth is somewhat conservative over the balance of the year.
Although the pandemic driven circumstances make us appropriately cautious about the near term.
Recent events that may this even more bullish about the long term prospects for its fair.
Our outlook for profitability over the last half of the year also has an appropriate measure of conservatism built in.
The wildcard here is in our direct cost in particularly our health plan were some portion of lower cost experienced in Q2 is expected to shift to Q3 in Q4.
This creates an unusual quarterly pattern to our profitability for 2020 shifting more of the profits to the first half than usual.
With this in mind I believe it's very important for investors to look at the range of expectations for the full year 2020 in context of the pandemic and focus on how we're positioned for 2021.
Our full year guidance for 2020 implies a range of minus 1% to minus 3% unit growth and paid Worksite employees, we expect a range of adjusted EBITDA growth that straddles the level, we achieved last year at minus 6% to plus 2%.
So the big picture for the full year 2020 is lay offs due to cobot in the economic shutdown are expected to be partially offset by higher gross profit per worksite employee and lower operating expenses in our original budget.
So while we're continuing to focus on meeting the intense need of our client base in the current environment. We're also looking to the longer term and the straightest path to regaining our growth momentum in 2021 as cobot 19 moves further into the rear view mirror.
We believe we're very well positioned for growth as we look ahead to next year. The front of our growth engine is the number of trained business performance advisors, which is currently at the highest level learner history. We have deliberately continue to invest in this team throughout this economic disruption due to the likelihood of a quicker and strong.
Longer growth surge once once the uncertainty diminishes.
We also believe we have an opportunity to hone our marketing message utilizing the recent positive client experiences and we intend to increase our marketing spend in the fall to drive leads and test this new messaging.
In many ways the unexpected an unusual developments of the last quarter validated the need for our services and the distinct advantage, we provide to improve the success equation for small and medium sized companies, even though the pandemic has been quite a challenge over the long term. We believe this experience will serve to increase demand within.
Small to medium sized business community for Insperity services in the years ahead at this time I'd like to past call back to Doug.
Thanks, Paul.
Now, let me provide our guidance for the third quarter and an update to the full year 2020.
With the first half of the year behind US we have more visibility as to the impact of the pandemic on our business.
And have seen signs of gradual improvement as businesses have started to reopen and employees have gradually return to work.
However, a high level uncertainty associated with the pandemic its impact on the economy and any further government stimulus packages continues to exist.
The current political environment and upcoming election adds another element of uncertainty.
Our guidance intends to take us into account and continues to reflect a wider range of possibilities and that provided in the past.
Based upon the details that Paul just shared on our expected Worksite employee levels. We're now forecasting a 1% to 3% decrease in the average number of paid worksite employees for the full year 2020.
This is a substantial improvement over our previous guidance of a 1% to 6% decrease and reflects the more favorable starting point for the second half of the year.
The low end of this guidance assumes a persistent level pandemic cases continued economic disruption and ultimately a recurrence of layoffs in our client base exceeding both new hires and furloughed employees returning to work.
The high end of our paid Worksite employee guidance assumes a gradual improvement in conditions associated with the pandemic and its impact on the economy, and therefore, a nominal level of growth in our client base through both furloughed employees returning to work in general hiring.
For the full year 2020, we're raising our earnings guidance now forecasting adjusted EBITDA of 235 million to $255 million ranging from a decrease of 6% to an increase of 2% when compared to 2019.
This compares to our previous guidance, which ranged from a decrease of 14% the flat for 2019.
A component of this revised guidance the further shift in the expected timing of healthcare utilization during the pandemic.
As I mentioned, a moment ago, the level of Q2 benefit cost savings largely tied to lower utilization and fewer non essential procedures came in significantly better than our previous expectations.
We expect that a portion of these non essential procedures were deferred and some will shift into the latter half of the year, including costs associated with participants with chronic conditions that miss treatments.
We also continue to expect ongoing cobot related testing and treatment costs.
As for our operating costs, we can we expect continued cost savings in various areas while operating in the current pandemic environment.
As we are ahead of plan on the growth in business performance advisors, we intend to grow BPH modestly over the remainder of 2020, while we intend to continue to hold our other corporate headcount flat.
We are forecasting for an increase in marketing costs associated with the upcoming 2020 fall sales campaign as we promote our premier HR services in this period of increasing demand.
Finally, our updated earnings guidance assumes a reduction of approximately $3 million than net interest income from our previous guidance due to the recent decline in interest rates.
As for the full year 2020, adjusted EPS, we're now forecasting a range of $3.67 to $4.04 up from our previous guidance $3, a 19 cents at $3.86.
Now lets for the as for Q3 are forecasting average paid worksite employees in a range of 227500 to 230000, which is which is a small sequential increase over Q2.
We are forecasting adjusted EBITDA on a range of 29 million to $38 million and adjusted EPS in a range of 37 cents to 54 cents.
Now at this time I'd like to open up the call for questions.
Simon will like to remind everyone in order to us. So please press bar and the number 1.1 keypad.
Your first question comes from the line of.
It will be summer from Suntrust. Your line is open.
Thank you.
Well im interested in your perspective on the.
How this sort of recession and endemic have [noise].
Played out with respect to you being able to kind of pull the playbook that you thought you would implement.
In the next recession.
And.
Sort of what you what you've done to deal with the situation currently it looks like the bps or up substantially that's something you hinted that but how about.
Cost structure and other things like that.
Yeah. Thanks, Toby we have kept an eye and on that as we've gone through this this was more.
An abrupt change in reduction.
Layoffs that you would typically find from a normal recession.
But this also came with a more significant need for immediate.
HR support so we have kept our corporate staff of.
Even with where we were at the time, even though there was the 6% reduction in the Worksite employee base because of the workload the volume has been.
Really incredible we've really been able to help our customers and amazing ways.
But our our people obviously have been.
[noise] really putting out a tremendous amount of extra effort.
We also think.
That is we see.
We bounced back about 40% from that bottom already and have the.
Organization in place to grow in the very near near future, even though there is some.
Gives and takes about this next quarter or too.
We think we're positioned very well.
For a substantial rebound in regaining our growth momentum.
Earlier than you normally would if we did have this ongoing investment in.
Our BP a team and.
We're also going to.
Look at really invigorating, our marketing effort in the fall to kind of double down on that strategy. So we have followed our game plan I think pretty much.
The thing that was a little bit different was.
Such an increase in demand for the services because of the nature of the events that occurred.
That makes sense, if I could pull back the aperture and look a little longer churn with my follow up.
What does this is due to thinking you're thinking about this year's fall campaign, and and whether you can try to slingshot the growth.
As early as next year.
And thinking of how you in the industry provided a lot of value to sort of your your how do your customers as a category.
Does this change the way you think about the addressable market or the rate of growth over some sort of maybe five year period for the company.
Yes, it really does it makes me really excited about the opportunity to use real world tangible examples.
Came out of this situation.
In in conversations and in advertising and marketing and telling the story two prospects in the marketplace.
And.
I also think that businesses in general [laughter], the ones that didnt have us or we're not using service like like us They felt a dip a deep need and it hurt it was painful and so I think as we become effective at.
Telling the story and translating what occurred into the marketing message into the.
Sales motion if you will end the dialogue.
And even getting.
Current clients speaking with prospective clients and whether that happens by video or referrals or whatever I really think this is we'll turn it and we'll look back and say Wow, we had a nice surge of demand and hopefully a better ability to.
Conveyed to the message in the value, which in our world is very important supports not only the rate of growth, but our pricing in our service model.
All tied together and that value equation, so very excited about that.
As we see this.
Immediate situation how to get into the rear view mirror.
Thank you.
Your next question comes from July kept marketing from Roth Conference call your lifestyle.
Can you hear me okay.
Yes, we can.
Okay great.
Wondering if you could kind of walk us through the cadence throughout the quarter in terms of monthly change. Obviously April was the bottom, but you alluded to briefly.
Make somewhat but in terms of June and July what have you experienced in terms of sales efficiency.
As well and it's a head count within the classes.
Yes, so what I tried to lay out in my remarks, there Jeff was that we.
From where we weren't March.
Had a 6%.
Reduction.
And paid Worksite employees by the end of May.
And about 40% of that number has recovered in paid worksite employees since that time.
So we're not quite halfway back from that low point.
So the March number, but we're well on our way and.
It will be had met that direction now as far as new sales.
You know in the virtual selling environment, we took a look at our.
At our original budget.
And based on what we thought we could do in the early stages of.
Virtual selling.
We decided that over the last three quarters of the year to if we could end up somewhere between 60 and 80%.
And frankly, I was thinking closer to 60% in the second quarter and closer to the high end in the.
Latter part of the year, but we ended up at.
Over 70% for the second quarter, and we feel confident we can continue to do that.
So we're in a good place to.
To perform really really well.
Well I think in this in the current environment for for what we're facing.
Okay. Thank you and then in terms the middle market is that an increasingly attractive.
Area of focus given.
Recessionary environment, we're in and if so what strategically are you doing the shift more to the middle market.
Yes, we actually had even in the core market shifting to the larger customers was part of the strategy.
Throughout the since the pandemic, yet, but our Midmarket has performed very steady through this whole period, keeping in mind that those discussions take a longer period anyway. So we had good pipeline for that but that pipeline has continued.
And.
Where we feel really good about where we are this year.
And it we didnt have the same kind of.
Negative interruption in that space, just because the sales cycles longer anyway.
And you normally do have some interruptions in that process as you go through mid market sales. So.
In any event, it's been more even for us through this period and pipelines to looks good everybody's doing the right thing. So we feel good about our mid market segment going forward.
Great. Thanks for your time.
Your next question comes from the line up Mark Martin from Baird. Your line open.
Afternoon, Poland Doug.
Mark.
All right.
With regards to just what you're seeing from a geographic perspective or are any of the slows that you're seeing in terms of worksite employees or engagement in terms of new business tied with.
The various geographic surges.
Chris in other words would you see stronger performances in June and July out of the northeast relative to say, Texas, and California, or any sort of correlation from that perspective.
Yeah, I mean, I think we look at a particularly if you look those layoffs and return to works as it relates to the furloughed employees by region. It would be what you would expect.
The layoffs.
We're more concentrated in the west I would say, that's probably the highest in a little bit less than that in the northeast.
The other regions or would probably the layoffs or is it as a percentage of total layoffs less than their proportionate.
Share of Worksite total worksite employees, but so again what are you would expect on layoffs side, but that again. The same is holding true on the return to work side and so more of the returned to works are coming from those particular region also regions also.
So I think overall market it would be what you would expect.
Our region.
Okay.
Great and then with regards to the health care costs.
So much of the year.
Year over year improvements in terms of GP for WSE came from from health care costs or how much were for the health care benefits down on a year over year basis.
I think you could say if you look the gross profit as I mentioned in my prepared remarks.
Sort of the outperformance in that area was due to both the benefit costs and the workers comp.
And the proportion of more and more of the share that did come from the health care cost in the workers comp.
Hi, how are you thinking about that.
We to the balance of this year and thinking about.
Our next year in terms of pricing do you do you think that.
Jordi of what was deferred.
During the second quarter is going to come through in the back half of this year is that part of the plan or are you assuming that.
80% or 60% of what was deferred some stock.
Yes, I think the best way to look at that is if you. If you look where we were a quarter ago, we had appropriately forecasted lower cost in the second quarter and having that the bulk of that cost come through in Q3 and four.
And what actually occurred was the lower cost was low even lower than originally expected, but we still expect that same pattern, where where a lot of those costs.
Combat through over the back half of the year. So that's that's how the model's working.
To this year differently than other years, but I think if you back away from the Big picture.
Maybe the best way to look at it is is that instead of a.
3% total trend of all benefit costs that we were looking at for the full year.
They are due to the fact that there were.
Services that that we're not rendered in the second quarter people didn't go in for you know the things that were deferred.
Elective surgeries and other types of care, probably took a couple of percent out a trend for the year.
But what's important for us is to be managing price and cost.
In the bigger picture over the longer term and.
We are very very good shape that we've continued to manage pricing well and as I mentioned in my dialogue.
Not experiencing pressure in that area. So we feel very strongly we have a very nice matching price and cost.
Please direct costs times and Thats why we are going to have a better year than originally expected in the gross profit area and are in good shape or the longer term.
Great and Paul I really appreciate those comments, how does that make you think about.
Our next year, it's let's say that you know instead of having the 3% increase over the course of the year, we're looking at 1% increase.
But then next year, there's probably still some more that was deferred that still going to be in mode. How does that influence your perspective as it relates to pricing for next year.
Yes, that's exactly what we always have to keep an eye on and be working we member we really look at this on a rolling 12 month type basis internally. So we're constantly monitoring where both sides of the equation are going to pricing.
Which of course and includes.
Plans selection and plan design and so many factors that go into what our ultimate pricing is client selection employ selection new accounts coming on.
Which businesses you renewed theres a lot of factors going on there to where we are that we manage to make sure our pricing is continuing to match.
You know maybe not as short term trend that's been impacted by.
The pandemic, but the longer term picture and where things are going for longer term. So we'll be watching that as we go month to month, and making sure that we have price and cost.
Matched as we go.
Okay, and then can you talk a little bit about some of the internal dynamics that you see within your client base, specifically you can see what their.
Sales commissions are alike.
How they're performing relative to plan.
How would you say.
It is today relative to I know you.
Obviously the trends bottoms.
You know in March and April and May have been coming back, but do you see.
Are there any concerns with regards to hey, there's a few companies that have been hanging on that.
Hold back.
So it's been interesting to watch we.
We have factored in a little bit higher.
You know client terminations coming from maybe some.
Financial struggles and business fails, we haven't seen a lot of that just a hair.
So I think it's that's been a I'd say a surprise to the upside.
The other metrics that we follow that had been interesting to watch.
If you look at the average pay.
For.
The same employees one year ago to to this quarter.
That number which had been going up in the 3% range in a normal corridor was down.
About 1% so that you could actually see reflected in our numbers.
At some of our customers had to make.
You know pay rate changes and operating plan type changes that affect pay rates.
So that was reflective although it was pretty nominal when you look at the overall picture.
Obviously, the smaller group of clients that wasn't across the board that was the across the board number but smaller group of clients had deeper cuts.
I'm also what was interesting.
Was that the commissions.
Did go down the commissions were really running at a hot level for quite a long time.
And came down but still came down only to a level of about 6% average increase in commissions over last year, which I thought was a particularly strong number in this environment.
Not sure what to think about that other than.
It was it was good to see it will be watching that closely the other number that was interesting was overtime as a percent of based pay which had been running.
Well over 10% has the economy was booming along dropped down to about 7.5% or so and so that does reflect.
Capacity.
The need dropping the demand dropping and.
The need for overtime.
Dropping substantially so we can see the effects going on but I have to say.
That are small and midsize business customers and their resilient their innovative and they are fighters and it's part of what makes it really fund to help them because of you know there's going to find a way and most of the time they do.
Okay. That's great to hear can you talk a little bit more about the marketing message.
Because I mean, it's clear that you really came through for clients.
During this during this period and there was a lot of utilization. So how much more are we going to spend and what sort of return do you think we're going to see how quickly do you think that's going to.
Take shape.
Yes, it was going to spend enough to two to do a good thorough tested the messaging, we're not we're not going crazy spend and like.
A ton of money.
Until you tested we just are going to put more money there and tested some messaging and there were some willie emotional things that happened through this period.
Where we could see how much our clients care about the people.
Trying to keep them employed and keep them paid and keep it was just really interesting to watch and so.
I would love to talk to you about the marketing message more but my marketing costs would really be upset if I did that and so it's kind of in that category. If I could tell you, but then I'd have to have to kill you afterwards so.
Yeah.
I appreciate your not king you're not going.
Right.
[laughter].
Right got enough.
Thank you.
There are no further questions of the spine, although like concerned to call I'll turn it back Theres, they're voting. Please continue.
All right well once again, thank you all for participating in a cause for your interest and we look forward to.
And how things Pan out over the next quarter and.
And look forward to either haven't calls with Paypal zoom calls whatever the new mode of interaction is with with investors over this period. So thanks again for your participation.
This concludes todays conference call you may now disconnect. Thank you.
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