Automatic Data Processing Earnings Call Nuggets: New U.S. Sales Trends, Pays Per Control Numbers

On Tuesday, Automatic Data Processing (NASDAQ:ADP) reported its third quarter earnings and discussed the following topics in its earnings conference call. Here’s what the C-suite revealed.

New U.S. Sales Trends

David Togut – Evercore Partners: Could you provide a little bit more insight into new sales trends within national accounts in the U.S. and more specifically what were bookings like for you new Vantage HCM product?

Carlos Rodriguez – President and CEO: We have right now little under a dozen clients that we have on the book. We have less than half of that that are actually in implementation and we have a few that have actually started and when you think about the timing of when Vantage was rolled out at the HR Tech Conference in October and you think about sales cycles in this space, we are pretty pleased with the progress so far.

A Closer Look: ADP Earnings Cheat Sheet>>

David Togut – Evercore Partners: Could you provide some insight into January sales trends in particular which typically are critical for the sale season overall and the year ahead?

Carlos Rodriguez – President and CEO: I think as you saw from the sales results for the quarter, which obviously includes January, based on my remarks, we are pretty pleased with the outcomes. We had good results in all of our four businesses. In fact, I will (indiscernible) to quote the comments we made in the opening statement, they were strong results, the national accounts space was the only place excluding the sales that we got from The RightThing acquisition was the only place where we saw I think continued softness, but very, very pleased with the results in our core businesses as well as some of the ancillary products that we saw that are additions to the payroll solutions.

David Togut – Evercore Partners: Just final question from me, any competitive issue in national accounts in the U.S. that you’re focused on improving?

Carlos Rodriguez – President and CEO: I think I think Vantage is our response to what is obviously a changing landscape. So, Vantage not only has a new and better user interface to make it easier to do business with ADP, but it really is a single database solution that integrates all of the core products. So, I think our intention was to have Vantage really be our next generation solution in national account space, and we are very optimistic about where that positions us in the marketplace, especially when you think about the breadth of the offering that we will have now in comparison to our competition in that space. I think you user experience along with true unified integration or a true unification, if you will, of the database I think will really create a real competitive differentiation for us.

Pays Per Control Numbers

Nathan Rozof – Morgan Stanley: I wanted to dig in a little bit more to the pays per control numbers, since that was obviously a key positive this quarter. Specifically, given the increased guidance, I was wondering, if you could give us any differences in trend by customer segment or client size that may not be obvious from the top line number?

Christopher R. Reidy – CFO: They were all up, both industry-wide, all the industries continued to be positive with the exception of public administration, which is probably no big surprise, and geographically, all the geographies were up, some more than others. We saw Texas, Oklahoma, for example, growing particularly fast, that Eastern Seaboards, they were a little bit lower, particularly down in Philadelphia, South Jersey, but all very positive and as you say, the pays per control across the board were very strong for the quarter.

Nathan Rozof – Morgan Stanley: For a follow-up question, I believe you mentioned that, GlobalView sales would have been up excluding the impact of the large sale last year. Can you provide us anymore color there or what the growth rate would be ex that large sale last year?

Christopher R. Reidy – CFO: It would be strong. We don’t actually give the specific sales growth numbers, but we had a big sale in that prior quarter. I think we mentioned it, if you go back to the record for the third quarter of last year, it was a pretty good project and it’s still on track. So, we were very pleased with GlobalView sales results for the quarter.