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  "documentTitle": "Automatic Data Processing (ADP) (ADP)",
  "authorId": "01_Pershing_Square",
  "authorName": "William Ackman",
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  "presentationDate": "2017-08-17 00:00:00",
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  "pageNumber": 66,
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  "notes": "Includes detailed footnotes explaining adjustments for PEO pass-through costs and float income.",
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      "kind": "callout",
      "text": "ADP's SMB should approximate Paychex's ~41% operational margins",
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      "text": "Comparable Paychex Operational Margins are ~41%",
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      "text": "Employer Services Trails Paychex's Net Operational Revenue Per Head",
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      "text": "SMB comprises a ~mid-20s% of Employer Service revenue, or ~$2bn+ of operational revenue; Paychex Service Revenue (Ex-PEO) = $2.8bn; ADP discloses 510k RUN clients, compared to 605k Paychex clients; We estimate ADP's SMB retention is slightly greater than Paychex's (at 81%); HR BPO mix: Paychex has a large ASO and PEO business, collectively ~22% of Paychex service revenue; Reported PAYX's margins are 38%, while estimated net SMB margins are ~41%(4)",
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      "text": "operational margin: 41%",
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      "kind": "source-note",
      "text": "(1) Employer Services revenue only. Assumes PEO has 2,500 dedicated employees... (2) $226k as reported... (3) Excludes float income... (4) Reported operational margins...",
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      "kind": "title",
      "text": "SMB: Structural Margin Potential ~41%",
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