PAYC - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Paycom Software Second Quarter 2020 Quarterly Results Conference Call. At this time, all participants are in a listen-only mode. After today’s presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, James Samford, Head of Investor Relations for Paycom. Please go ahead.

James Samford

to quarter welcome call. earnings and you Paycom's XXXX second conference Thank and forward-looking statements that the to those objectives call on Private our performance not plans, Certain Act this including Securities are Litigation made of meaning within statements the historical Reform facts, future expected of are XXXX. related call. represent our statements of forward-looking only as the date These outlook of this conference

quarterly our results statements statements are on While XX-Q. on with this risks on actual any are Form most reasonable, report our the because forward-looking These made SEC, annual expectations the to may believe discussed Form subject materially XX-K report we are differ uncertainties. recent filings and risks on current based our call and recent including in and our uncertainties and most

call available issued Officer. I’ll at on and and Richison, these EBITDA, non-GAAP purposes. non-GAAP planning versus market use update to by to press included of certain and is financial that factors non-GAAP now of of do only events, and speaks as on non-GAAP net You when refer call, certain over is showing new statement the will our Any it consider as not except Chad? for as including information. to Paycom's or We measures, Chad and income, should disclaim investors.paycom.com. these we which relying made Executive during otherwise, forward-looking schedule the President adjusted close expenses. or measures information, required performance on gross and website refer the a any forward-looking result such profit, to we obligation expressly statements, our is law. Chief and made course undertake release in turn of future adjusted we gross Also A adjusted the date margin, the to the after today’s our results alter today adjusted GAAP financial applicable review reconciliation whether forward-looking and assess

Chad Richison

who thrive joining want thank this to environment. continue ever-changing call James and our today. everyone you I to in Thanks our employees to thank

For our trends. minutes on today's quarter and call, I'll spend XXXX a some results few notable second

Craig pleased questions. performance and second demand some our and provide in our very quarter take I'm then guidance, we're will that, we'll with and Following the perspective review seeing. financials the on

lead and As expected a we interest March. the our base were the and achievements, impact last rates in $XXX.X unemployment Despite respectively. namely quarter the future. these XXX strong volume pandemic headwinds, second our EBITDA cut came sales up point well and across new million $XX.X results very which and very impacted have business basis set in QX headwinds by in call, we outlined due current of at see us in the our continue to client to revenue adjusted for

we comparable revenue volumes, and While increase on unemployment began and these weekly client these times We've loss we making know be expected rate another investments Headcount clients a on reductions impact the unemployment revenue pleased our second as impact to on second at approximately recurring leads fluctuated quarter. lost stabilize in to seen even Interest the the and months, last quarter prior stabilize. recurring the QX seen shortly. I'm in by in through to in the numbers the impact strong the for similarities rates million of predictable. with current the our revenues. on cuts roughly year throughout rate the Craig we per $X provide which estimate lead the client three April at impact on position elevated quarter. the demo advertising. few base, were $XXX,XXX is guidance, we now between the client there the base our end in We deliberate week. on current more we've peaked of QX are trends you impact throughout and client has actual driven revenue the added Based quarter, thus demand will at our walk higher over began a than our

high As we than is single last and the outbound to proposition value and workforce our exposing see quarter, continue I efforts. solution more increasing both HCM the scenes disparate is Paycom the trend believe created mentioned the We solution. inbound database is ever stronger pandemic by and systems in autonomous success a towards for of creating demand sales

disruption, they operate a QX. model in in success strong Our virtual and to sales had teams without continue

patterns continue strong measured Exchange see or Data Direct our We by usage as to of products our DDX.

widely is increases that paved several patterns the sets usage that released on-the-Go and importance the our and product and With the to Throughout company enhancements. relationship wins by our This our existing manager just transforming companies client since almost critical a an it and launch. more With their autonomously, XX/X already future for months clients the enable enhanced the quarter, accessibility product of data Paycom, Manager accelerating direct way solution five moves One the with and functionality with first of was leaders employee system, working deploying wins in Paycom's and continue be innovation future invest Manager increasing empowers ROI that to XX% have continued in comprehensive solution. is thousand of to on-the-Go the of quarter side Manager real second the on-the-Go. managers up manager we from further workflows which is app speed continues with the it be base that our experience easier database. savings. adopted employees mobile the tool development essential during to into product product and throughout automation. built to the from across

new the of added will providing clients, world-class execution and believe three of clients rapidly activities; I to-date, our which all to strengthen technologies, we the remain number come. service platform. forward, focused will Going to new on continue controllable our delivered with to fronts developing our increasing to these pleased quarters and further the position very in I'm we market three on have years

We are overcoming pandemic. the created by revenue the headwind

As a assets second ever I'm TV the advertising online, our seen advertising for yielded more than with spent organization, single we've us in span in sure our spent have of quarter by QX we have This commercials on you significant world-class coupled and many great results quarter. sales in advertising our in a margin.

from accelerating deliver fact, massive continue less margin levels QX QX to market. and our X% In our With QX to business have target share to throughout ever a market transformation perspective financials investment above sales market on way to it we value aggressively review working. the expanding our proposition large to by best and will a our the stop go. in and already advertising addressable than of over Craig total our digital business I'll there was hand new a captured, is QX The guidance. for quarter is we our as we and Craig? and spend long

Craig Boelte

Thanks Chad.

non-GAAP our some briefly results measures guidance. everyone on QX I related Before will second and results, XXXX our I'll high would quarter financial remind review I'll trends, a QX be I like certain provide comments that then comments basis. to my level cover about to

pandemic been near-term to possible, client transparent impact that provide is enough of on and the our now be revenue we on the what as there based predictability we to know as current approach has guidance. Our believe

to turning QX. environment results, briefly the to Before I in the we discuss want faced

of headcount low hit the our a effect and During then stabilized. progressively as a clients quarter, approximately loss at in existing revenue We our recurring lower current of weekly that the end estimate worse client $X April revenue employment our and became the was second on of declining the million of analysis today. is pandemic our of the point clients impact of that rates at

solidly of We also of in had was with roughly impact a amounts growth total million strong occurred new top adjusted by Despite experienced nicely into the weekly to second recurring was revenues, for of of XXXX, March, point quarter. current success solution total we representing for for Within In that revenue. revenues to million, sales of That new second has XX.X%. recurring our results. quarter, gross cuts recurring generated a levels. period, million, the base. the XX% wins. representing of backdrop, adjusted to $XXX.X on and XXX roughly representing the trends these basis X% our $XXX $XXX,XXX anticipated as demand revenue the interest clients that demand for of driven I'll year in quarter that turn in total quarter sales of which gross profit of revenue second and pre-COVID were strengthen ahead margin business layering Total with revenues $XXX.X we With are prior the headwinds, continued rate increasing continues QX accelerating client that loss sales comparable

second seeing We expense margins for and see of progressed, Adjusted our as advertising million or million expenses second gross results XXXX. decision to XXXX XX.X% spend. for increase customer of of quarter and and quarter deliberate very expect XX.X% made the quarter see in administrative $XXX quarter improving million the adjusted second was positive and quarter. revenues, further $XX.X the ad of year as efforts and Adjusted from remainder marketing We're for campaigns continue prior compared the were the total to efficiency the the we $XX.X to up from in second year. our the service similar to sales marketing

as long to to share in to we As intend investments, continue gains. this to we continue be drive from market positive aggressive results these area see

XXXX be than opportunity R&D $XX.X to spending a or both We quarter million period. on including year the in adjusted portion, of market the XXXX in higher marketing of in by expect approximately maximizing $XX QX $XX.X expense second share capitalized costs, QX million revenues. compared We're to million capture quarter expense Adjusted $XX.X and R&D GAAP was prior advertising. were to to $X the on total total sales more million and million of the our Adjusted XX.X% basis. second

but key team the and of our EBITDA we was second of the roadmap, to have able to partially lower high travel our which total Adjusted was a revenues offset million XX.X% ambitious XXXX of biggest quarter in decline We or the driver deliberate success of XXXX with quality from R&D high XX% product were margin year-over-year expand We revenues. costs million will expenses, continue very talent. reduced increase to driver loss of or the adjusted is the $XX.X in with $XX.X a innovation revenue compared of our margin EBITDA advertising. in total quarter of second

million Our on shares million XX income per in approximately GAAP $X.XX diluted XX or was diluted period. or $XX.X shares on prior million per the versus million for approximately second net $X.XX $XX.X quarter share based the based share year

our quarter and tax XX% expect QX, our to expect the was stock-based income approximately XX%. be stock-based to second QX For quarter to we approximately year XX% for and of and effective Non-cash the approximately in tax third full $XX be income effective million. compensation to we million XXXX rate be compensation non-cash $XX.X rate

XXX,XXX quarter, $XX full $X.XX per second market. the will fully the time per shares shares XXXX on for we of based the buyback diluted share income third and year year the based shares on From the stock-based quarter approximately of share approximately including shares open through over or $XX.X For the in anticipate compensation end be million. our XX million XX diluted anticipate versus second XXth, diluted million outstanding in the increased million XXXX. prior be purchased $XX.X $X.XX repurchased net Non-GAAP period. We million will on over shares was March XXX,XXX we or of non-cash approximately in XX we shares, approximately the XXXX million quarter

repurchased XX, remaining X since has of XXXX, buyback over million XXXX, $XXX our June As program. with Paycom million shares in

million. sheet, balance debt quarter we of and second XXXX. average for balance total the the the $XX.X second from was in $XXX equivalents second approximately million of $X.X the with $XX operations million quarter billion was daily clients The Cash to Turning funds cash held quarter. and of cash ended of for

see client our Now, to has clarity let in based today. QX become client pandemic, revenue headcount more and turn of the guidance, with predictable resulting current providing can about we from are guidance base now our believe we we me our trends on as more what

year $XXX we the quarter growth representing of third XX% approximately $XXX the of in over midpoint total million, prior of to For comparable a at range range. the XXXX, revenues the of rate million periods the expect

in at representing quarter $XX third million, the for an EBITDA adjusted expect We EBITDA range million of the adjusted the of of margin the approximately $XX midpoint range. to XX%

our our on number mitigating our added the to service pandemic focus rapidly Our clients, providing the to to world-class new the continues impact be platform. and increasing business developing of by technologies, on clients of new

is sheet, what a value strong we a recurring our and proposition business industry. model, strongest have believe in highly profitable balance We the

financial long-term We for the are our to With of open committed will gains. drive to taking we position advantage market questions. that, line share Operator?

Operator

first Your comes question go from Please Raimo Instructions] ahead. Lenschow [Operator with Barclays.

Raimo Lenschow

taking be a like increase -- lot the like what higher obviously, you on or we returns a for there if I the think spending you've or in Are I the than good why Hey, you seen results, is now you in my good the before? like question. Is you you to Can marketing. listened seem thank get more. advertisement Can that lot to on are going thinking will like it -- biggest bit ADP little kind hurting of a -- level seeing around one? -- like your come sales is to sales talk about question

a is this good So, opportunity.

about measure tell here and you success? how thinking me then your Just

Chad Richison

Sure.

So, discussed new call these revenue were quarter. numbers to call, April, -- we our pre-COVID that out and on that achieve and new our on sales just actually back quarter go said Raimo, our that since the end second sales sales. completed how of last best this I've from I client we book numbers are numbers

best Second July that, sales we've that a sales been had new perspective. new ever on had perspective. business the -- the Friday up we've just To from has finished business on quarter follow-up was month July's a we quarter best from been this ever

so for paying a I and or demo these up that genuinely always leads turn a people request download had hit where Xx where a and These want white of those webinar. or into our about product someone interested to demo demonstration that a they XX% But those that. website we're paper leads appointments. people mentioned are brochure Obviously, come are a so leads and might are are leads And download leads. we've

have we we're a and than And we've achieving past so lot in the appointments greater sales. had more

spending course Of that. do to we're

was more long saying Our And continue is much quarter and working, been spent working. than it's this, it. to advertising spin in we've as second the do as we'll past the advertising in I've

or We three made haven't purchases, a any two out. month months or

our success it's week so having And with it. commitments but type great week of commitment on we're a great having to advertising, --

HR to technology. this and Raimo, -- moved And to Paycom online. is seeing have the this businesses data. I'm not workforce. we're the autonomous use as a on make type just we've ads a technology and of we're is more everybody It an makes no type new As toward advertising deployed that toward brand, advertising sure else you, inputs TV another point sense All of moved way

the sense in rise would we're both And the somewhat only they in technology have that of think autonomous makes win the which they and I worker. it client.

yielding And results it so is it, aggressive we've but from been with us.

On the will client current and in to which revenue. fold sell-side, become continue

Raimo Lenschow

Good.

Okay, perfect.

that unemployment about the And of you Are like or kind on then And way in we you're about situation. any since it thinking down? have because in think losing there like or the $X peak helpful. with rates new the in the that to number as Thank QX math -- its -- talked laid are a there Is per out what and talked of unemployment do million you're stabilization of do about you. week coming about April. $X still think unemployment that? really how terms we -- kind that's like of about Okay, you per week to now million help to

Chad Richison

last I maxed on and but mean, impacted out exact our in clients between stayed reported and of now is up, it it did the accurate, a that said the because directionally, commonly call, impact maybe what the what to million we have directionally unreasonable -- We that somewhat do that talking and $X.XX make for hit But and via unemployment the mean, point numbers did million know the we unemployment, that believe to that. know is an size saying, to our in two -- believe in number fluctuated, would accurate should I the so toward directionally be understand now the on stayed April mentioned bring I be we between. government, basically are claims took number unemployment end we're we're I that wouldn't consistent, unemployment was consistent. that we I while sampling and by think that it's you, want it just the numbers $X were beginning. that and I it was I -- ways. you're about it Yes, the follow calculated media,

The compilation unemployment receives agencies. the from insurance unemployment first of directly weekly this -- is comes source DLL a data the from that and

Last both initial is claims second peaked A and quarter, quarter X claims a X week, XXX,XXX claims week. to point million. important initial X.X make claims at claims were were An couple about though million and were have initial July. of were before there stabilized You -- claims. and We initial million is at to started a weeks X.X million, stabilize average make continuing level they to pre-COVID. that they and that were They that million initial the point had early X X over in claims second week were million. about the

unemployment. households from derived May, calculation unemployment the unemployment get and how and about get XX.X% the they that's April XX,XXX June, for this Labor the one reliable how used A as calculation the U.S. for XXX,XXX you for -- actual number people. interviews XX.X% is Current where second number in of and and of data unemployment that that's the by Population Department And is Survey number for XX.X% that's not so U.S. the

stabilized the that stabilization. it having client Paycom. to the accurate while were situation and had revenue, took improvement of hits toward so, so is similar can't we while on client like the hadn't numbers, we peaked worse the the it the to know while on we of I current April; our We clients think we and Paycom's I in call state And revenues impact impact impact directionally now in unemployment been early. increase Like had current exact end said the we can seen gotten out we've unemployment

point. the didn’t this relates want But to have to I it to economist, as drugstore I see be to lastly, we'll unemployment. So, try make going not from mean to I'm there.

guidance is initial we're actual guidance, goal still Our to elevated us to it's or I give directional necessary for that tie unemployment, now the the and which are claims, of different on whether sampling households. of be survey it feel based giving don't methods to calculating like XX,XXX the pre-COVID,

So number not be number April. move worse of that we've seen end we and given have since better that the to or

Raimo Lenschow

you. Okay, clear. helpful. Thank that's Very very Chad.

Chad Richison

Raimo. you, Thank right. All

Operator

Your comes Please from next go Samana Samad question Jefferies. ahead. with

Samad Samana

Hi, taking good for questions. my afternoon, and thanks

understand comparison? think a most as what levels as of all And color just could then appreciate trying the less, of like the growth have If just of just up you versus pre-COVID dollar booking side. XX% follow-ups. magnitude spent new about year-over-year, Maybe always, I'm I because, to about in I think a the sales XQ point looks have As to either about a you gave. as growth couple it's bookings think that the ever I new terms maybe ask dollars, marketing or and on a you in year-over-year how about should framing follow-up just bookings we if maybe how

Chad Richison

of been then quarter QX typically to booking bookings the significantly I booking to not was and month and largest Well, will we've that year. largest had. is that year up QX QX has ever say and mean, on July bookings from the this the add ever last largest quarter meaningfully I were our

week in we face we're $X and So, $XXX,XXX the approximately floor then to for while a the impacting that's a unemployment, headwind, client unemployment, you a growth. we in revenue continue base to hopeful new establish current through million. that's the layer And us mentioned,

as that sell past, it focused just we we've so do to we of spend to margins as into being and able And achieve expect we on our next I side, in the hopefully, the to that. which folds I improve this a we year, rule feel would been it, as fully expect improve, continue you about actually sell, very at XX revenue on as it us year. continue to focus still least good

so in wasteful penny and going don't a and wise comes us opportunity want be not And working. We're of to with front is we when be and it's it XX%-ish. take are pound of the the spend if quarter to have to foolish we there's margins the high And -- an for income, both our well out revenue, but a at as quite million you working. as $XX for it, interest that

or out million so in $XX also got we've as you've so lost potentially there margin And well. that

And working. the subsequent work, seen believe to we going better. not ourselves set we we're numbers to continues so impact the the the long I -- yet -- it quarters our for negative worse know have -- because or And as up is like we to get as impact advertising continue our the to said,

mean, could business client like stop sales took our I it said, to focus even on impact not because our a they're so new we're but slow sales revenue, a pandemic new going business and and to current to continue accelerating. pandemic And I

do So, to has in -- the part. spend, with that and advertising

do part other The proposition. value with to the has

Craig Boelte

Samad And three the XX $XX this million the would quarter, million that's be a year. quarters for

Chad Richison

the for million sorry. three $XX quarters, Right,

Samad Samana

expected, might customers we if the versus what trended you pace the the unit on if the reading client on maybe given -- or severe release, base, And sounds number or pandemic through putting have control maybe quarter how a just us around very the it a maybe I and number could better client just of comment unit clients, maybe that Great, maybe for just what then the different could of retention as press was churn helpful. than expected, increasing the commentary like how was better change? in still than retention

Chad Richison

those not end units the because of follow-up we're last really mean the we're not I retention numbers time, said same give will on give obviously, I year, going away. but we that to go the thing Yes, I at exact seeing

them. clients have have may smaller going few be but a seeing for that employees have have taxes to clients clients be not we're returns we're filing to losses. not had for file are We some can that that they pause, are unit and XXX We XX. seeing do may on may now But we're zero not have your file Those zero to payrolls so run, still and returns them. we do

So, they're still active.

So, is all we're seeing a that's not say to unit attrition.

Samad Samana

helpful. Got appreciate my you. you That's questions new strong bookings very the congrats taking and I performance. on

Samad Samana

Thank you.

Operator

Mark comes question Please next Your from ahead. Baird. Marcon with go

Mark Marcon

terms Hey the many advertising? they you driven any the bit being Chad a base? clients taking? little by can seeing modules are they How compare that and of Craig. in established Are typically smaller, they your Wondering about you're of talk differences to that sort client How types larger? if of are do

Chad Richison

usage now people's approach that been that I we accounts sell Same, are our more same. would commitment this that they quarter, to they've we the full strategy. a all we anecdotally, to the clients two largest to employees so are now them effort where but same. they during say getting in to usage upfront at getting will the be XXX% usage. did employee We of out take more just the as in start, compare as conversion were on seeing We are

usual far seeing we're us. of for that, types suspects clients the as but that So, as we're saying

Mark Marcon

national composition? typically you of seeing in you that change more from been in would regional the being Are terms that? of areas basically advertising? by haven't Or are brought in sort how Any you characterize that

Chad Richison

we and we going mean, best where That's doesn't matter where have leads We in. that the don't -- or them where handling continued specific be best places been it would they're sell have come over. of do we're we've coverage, did. to the out what the we is way most where territory, come have to to reps really do have No, from and our those from all and going but always city location I our so our we're leads

out office that today, had employees fly still home sales -- and would from so as approaching Dakota, it in we're our chair XXX the we before, someone Now, see doing well. and we're North in out-of-territory over but

Mark Marcon

keeps -- hasn't season off. Okay, think it heard we year potentially and one time. marketing say then should even is, we kicked about advertising the smart mean, really fall room the it And guy spend I we working spend still following is a going the Should way next advertising The given wimps. great. the think selling how increase? I really for share for that leaves go into even your further, is spend about year, of lots up market as that the if

Chad Richison

don't of you Well, double-digit mean, advertising can necessarily you buy on point double. I and get to returns a diminishing spend, get

then weekly that to it mean, makes managing in you a the do either initial where to where or And so efforts, can client take gives week-by-week down different you us and have advertising for areas up and -- an sense basis turn we're opportunity so, a on still that. waste But to this advertising that manage that, as we've at retargeting that. spend identified touchpoints for a strategy dials you of we we incrementally and opportunities dollars a I look we and on through

our So, say hard would for that but we have are go markets spending dollars, advertising spend average elevated having where success, are now. markets, are exactly than other to we say that we an me advertising the it's to

like do more that the ad we achieving aren't are and wasting areas result future, in again without of in that dollars results. would for a commensurate going We that to to produce

Mark Marcon

to percentage of the like, typical July be? it -- rank Historically, what typically months July, best would how relative does seasonal

Chad Richison

different have others. can you think I than are months that better

tell As will I not almost that said from December have believe said selling come you. know, may competitors as every of and September through Mark, vacations one we our our you back industry you even typically I know have people seasons, -- though this, what their and

back some been So, may getting the -- I of and think type with you potentially that and compare get difficult had little getting to where that last on have people into a to thing. kids year more it's school ready vacation

much have right those as You now. don't distractions

our And we've ever ever, of not was July so I'm for best I'm was saying saying sales had ever. July regardless best the July month a in year. month

And so question. the -- answers hopefully anyway, but that

Mark Marcon

Craig? it. if on I'm best should and selling December. effective saying are sort what not appreciate balance, ever, key even that average -- the season through getting of that it's was the for well now, yield the I portend you What why July that That's float September month

Craig Boelte

mentioned, haven't cut disclosed had as impact on that $X.X on million in quarter us. about We point the basis XXX yield million March balance, we our but had half float per

probably some We the -- we're have But layer are extremely layered low investing as We that's are, renewing, not as that may funds. we way we're the on a on of competitors obviously conservative much those some our rates funds. -- on as out pretty out. those

Mark Marcon

Okay, great. Congrats. Thank you.

Chad Richison

you. Thank you. Thank

Operator

question Steven [ph] comes next from with Please Stifel. Chang go Your ahead.

Unidentified Analyst

on that will versus less this have Brad. is you I a quarter than an that just the Chang extra assume Hi, one coming in quick September year ago? first [ph] has for Wednesday one this mentioned Am calendar-wise. that Steven believe correct normal. have Wednesday year I that question I quarter quarter

Chad Richison

will -- September in have beginning Wednesday. That the quarter extra correct. quarter is The one ending

is happened now XX And we that think week's of billing. made It's first half processing revenue in happened and it this point Wednesday about has in so a that we Wednesdays when XXXX where XXXX, a QX roughly XX the talked time. QX quarter last has I and had in

Unidentified Analyst

so for that up. you great. clearing Okay, Thank much

Operator

with Your Please Credit next question from Zelnick Suisse. go comes Brad ahead.

Brad Zelnick

been starters. the sales you Thank of having maturing impressed opening but see thinking in with go-to-market, a for geographies guys. your couple I got questions. and to Maybe disciplined given your very Chad, your you success always so does about offices by approach you're where the Excellent. much, very now, it change I've opportunity, go-to-market? just virtual long-term

Chad Richison

maybe it a yet. it's them, we're go week prospects week to weeks where distractions and Not mean, prospects this online, meeting weeks buy If to you'd good think two a that buy. have which, how I now watching and a I worse. two a normally pretty we're all and mean, from know continue I model, meeting and you are removes had going buying from meeting they deals,

on a Monday. have And Tuesday, a meeting a and on you following the some days meeting meeting Thursday

I product remove as well So, you you focus on even you as more replacement. way, think able of the know, and, out the buyers I are know, to functionality distractions think

within So than obviously looking process a we're it, definitely to be some on were gaining with because management, them physically yet, but salespeople, at person. able efficiencies more what calls we're we in throughout not we're we're, leadership, better with our development lot sales

as So, to as go sales continue achievements up. well

the our sales with to without environment could that I So like we recurring client type impact whole going revenue. done to right in this of now. back office the be this current clients have But the the of type fact like to technology, through environment people But return to office is, in buy them. we're we're their in, we're having if then going

Brad Zelnick

expired. That makes on could if follow-up one the maybe PPP now I And with sense. program just government's that's you've got perfect pricing,

about you a basis. think asking for How when concessions like-for-like trending? we that know them Our pat customers is on

Chad Richison

Yeah, model. so fair a we have pricing

only for you the pay. You employees pay that

not them, have system if employees paying for you you're not charging active and them. we're within So you our

employees So, may you XXX that employees we're had XX for that know, those employees, you have that them. pay only charging XX as company you now

So mean But a fair our there I'm haven't it's pay that? may have. pay. sure in we you models fair a here had asked we model, model for who that you that client that for or a does have

Brad Zelnick

new congrats Excellent. on and business you generating much, the Thanks, all so in guys. Thanks and environment. to success this

Chad Richison

Thank you.

Operator

Your next ahead. go Jester Citi. Please with question comes from Daniel

Daniel Jester

question. Great, thanks for taking my

you're about side, I come update. any the product, maybe sort the of last about more as conversations client looking across Just adoption generally, first, you in product talk can sort couple of big Manager now, been are on-the-Go sort about out you briefly you six think rolling mentioned It's and think themes and of just there months the that, the have of in out features new months? evolving terms your on

Chad Richison

do you And, got a first. roadmap things while to had We've first Yeah. a now. product for

didn't them, HR it's should job And I us, better. it someone that on there employees because We've getting employee mind. does own, an think duplicative. departments a interact so one else good for their with be the for make change can done ever reading do and we was that, the No And, I but it don't to first anytime employee's database. again, on

things do And to person privy employee so an obviously are HR be said, themselves. has do is to some an there that to that not able

data within with have So approvals keeps very we it's approvals, out to the and came same you Manager that have flow we've good you. into Manager similar performance moving and technology on-the-Go on-the-Go. app about timecard the the application, the time off reviews, moved now it's And thing is what the

automation so it move we to us allows get And along. further as to

our is products a all set that buy because automation. the take to are have we And to now the set, more sure to solution going solution people cases companies these, right it's for making full use we be goal so full more that have. have using full The the

group assign We yes, rolled We're aggressive thousands producing takes that R&D updates project quarter. many our as of well. hours we this a we're we of environment producing, hours also be more throughout out actually to they so to from And so finding hours hours in this our with R&D continue development efficiency hours, are a efforts. project, a number

even clients continue move and And we've these especially areas and as we products, use gets and employees continue to so of that ambitious. the roadmap, automation And to us laid their it be innovation closer as other in. to we

Daniel Jester

term a question a longer And a just bit here. little lot. Thanks of Great. then maybe

physical Oklahoma right? given year invested guess, I year, facility over You in Texas. purchase of lot over know, and how more the Last built How sort you need a business the physical for campus in made to City. pivot help You work right space, need a years, the the to big in you've grow a next new land think space able to you been Thanks. a of year you've physical to you the two? do about environment. invest or remote next

Chad Richison

in feet XX right I people Well, or think, got million I've about, we've square got, occupying X now. so

that the overbuilt in, now. know, you we're we're environment right for So,

it's relationships to think I think environment. building too said early to and to be do there say, about face face something I I is mean,

see and built are do not I been relationships, But, Not we're right think we model those face a we difficult. those now, where the virtual? have really, from had bit to where way had a interactions now little So working sitting we're I -- be objectives could right I'm going to a face strong, if continuity, strong what supports have provided we’re we I that to don't a those think be that happens. the to efficient, see today. to But that more an business looking going obviously, there's we'd is that's today. we achieve need make something decisions to not opportunity

Daniel Jester

very Great. Thank you much.

Chad Richison

you. Thank

Operator

Schwartz next ahead. Your question comes go Oppenheimer. with Brian from Please

Brian Schwartz

into market. there anything you've wanted been the Chad, Hi. the drivers bookings for one I the this the really a COVID-XX Yeah. drill Thanks pushing be out ask you've evangelizing is see sales that's to you home that the momentum? couple questions if for down I and now and and of years to from wonder, been the the work if try that. wanted just to just of Self-Service, in taking messaging really accelerating hold, somehow I is And around now trend could if record messaging my taken that afternoon. What Self-Service know changing that

Chad Richison

ads been it. for Yes. mean, having people a these lot getting of we've I are believe usage. I while people are do a Also, success Absolutely, with running

go HR, leave whether one administration, it go leads we're way the as procurement, payroll, easier Solution and another, company client they're even Paycom to they're people another, employees an in as leave performance, whatever in bringing wins. to administrator, So company getting whereby one use the that solution they're use in, or of benefits to they that

our absolutely is results, but differentiation advertising getting those So product what's us at-bats. driving a differentiated is sales the

And so we've been focused on that.

Brian Schwartz

to share possible it’s is if in the since company's in last would I or that? the that Thanks. know then the your us of know giving Craig in color for can what help best it's history that above quarter you year this either maybe anything Is without July then bookings terms necessarily growth you And bookings? what trying anymore on was you. Thank the exact growth one we rate? was Or that month the what had since above be maybe there we follow-up get, was maybe just

Chad Richison

we QX, quarters July, the haven't we would which quarter. than we've month kind great we mean, that's you of was right it's ever ever in booking rabbit business better a down our QX continue booking in had, had. the that we month the we've and our This we month just quarter to was was we're July that, once ever is It of highest is highest Yes, had. and before. bookings hole year We've I the this month we've do. a down go And fact now then that also fact disclose was go any our that, QX new that a had highest tell largest had

our just month largest we largest having our So, finished finished quarter. after just

about where as XX% of on got the here what of for we for of two we've now, for as and revenues right weeks of sit with So client from that returned cost had kept then rest heard shut impact during And ever of -- guidance I we've My making QX. we toward XX% the we'll March. we've bookings. our new to month. QX, April. this, down largest to end stabilized, the see sales at what of We business for quarter, We our can the up largest of And that pace and throughout we happens us right I now of least that has got accelerated then about our revenue the to weeks. And end shut see, since, back us but book you've we've those followed back first were where quarter were rest the the current it two just April. that's mistake, believe momentum we ever the we today, week why

Brian Schwartz

color. additional that for you Thank

Chad Richison

Brian. Thanks,

Operator

Zukin RBC with from Your Alex ahead. comes next Please Markets. question go Capital

Robert Simmons

Alex. for on Simmons Robert is this Hi,

you've believe time a last office sales time sizes? a for usual new ramp team with good given office, are in this open two new So the opportunistic opened to you the I one now years, new expanding alternatively, few ones? Or your be plus

Chad Richison

Yes, we haven't necessarily expanded team sizes.

our this together isn't to rep team. great sales group, really anyone with those. and inside, just talk teams through now that inside outside inside teams. a to by we're adding just which it that we sales success year It's continuing performance, an And had increase. did Now a I about everybody's again amount inside rep inside an is continued Right put on XX We add companies employee last has now. think having happened sales above working and one mean, that added right on XX employees. the sales But been, that is focuses then I phenomenon additional We we've we that. sales just on our started definition, sales to how below focuses

continued to can top one have that increase the rep amount reps sell. Our

that we've hired having amongst increases so our not we're a fill very them inside out. teams group, moderate reps. in It's extra that sales it's of rep performance bunch as And strong with some sales we

Robert Simmons

XX? Or then And is $X Got on simple? it. lower million of multiply impact Can you levels can that XQ that unemployment the it by think Great. we size revenue? and too

Chad Richison

multiplied the yes, it be, will by for million XX Roughly quarter. $X it be will

Craig Boelte

plus but Yes, the the on interest. impact

Chad Richison

The think we quarter, I interest was out called would million last per $X.X which quarter what be

Craig Boelte

Close million. $XX to

Chad Richison

quarter. million total $XX Yes, for the

Robert Simmons

you. Thank Great. it. Got

Operator

question from Needham. go with MacDonald Please Ryan ahead. next comes Your

Unidentified Analyst

and is Ryan. guidance this of per assumptions? assumptions you with the $X for into in QX million of new is What on trends half guys, improvement recurring a an week the benefit Hey, customer Wednesday; growth? benefit versus that quarter roughly baking your steady remain revenues? to then that million expect to extra And Do are employment Josh for you week $X the

Craig Boelte

that first levels. Wednesday, Yes, extra kind the of off pre-COVID on have the been would

million a Now, on the you're that quarter. $X looking range $X.X at more million to on of impact

It happened we've guidance, not much an of current million client base ending stayed much. April going level that of where, kind in to up we're it our it $X what us as improvement. improvements, and is relates of in any QX of so far there obviously employment terms level and impact minimal the hit so In on unlike have seen what kind would

we haven't in So, improvements. any baked really

We for haven't quarter. far seen the any so

Unidentified Analyst

than this had to time at about then plans originally is your year? hiring year think back plans year? earlier this And want of you of ramp How Do versus great. we follow-up. I half the a also to should the pre-COVID the maybe you expected in like hiring the just up beginning Okay, more feel

Chad Richison

think the depends department. on I it

you're that every come see to think business more going I efficient. this out

that. all to who's from all to you we've I home work And people start which groups the groups opportunities working identifying doing sent we across any through of more of as taken of from ways and there's go home. advantage you what, people Board, and had different think we business become efficient

all think I I going that. did that think you. honest businesses So And to with be than we've come of out it, they this seen leaner into what some of

bit on a just said, staff pulled but what side so the there We weeks. and -- that kicked up, those like at on of others back at we that sales, people for little and we'll those selling some getting Now need. back did opportunities, and R&D hiring and similar couple to we have out continue look our of very especially with recruiting

mean, I have again started sure. rehire we to for yeah, So

Unidentified Analyst

Got Thanks, it. guys.

Operator

next ahead. comes Arvind Instruction] Piper with question Ramnani Sandler. Your go [Operator from Please

Arvind Ramnani

good Hi, quarter. congrats a on

sales how question, your declined. the product, changing hit overall how will Just when an certainly you you went all sell your pandemic into

changes surprised sort put place? permanent to dust settled, in perspective? Now were that what questions of upside two most from has here, downside you areas you're looking are of the about And secondly, there any and kind

Chad Richison

sales perspective exposed upside the the I that Yeah. I created pandemics opportunities. mean, also this the think and like And say, has, would I weaknesses do piece. said, I is obviously

much database, I and and clients time I have in over would And expected consistently want the fluctuation -- gotten then to guess that continue would getting to see better time. surprise every number have But seemed got have at like see that. I'm to maybe a maybe to I their think to the surprised didn't to hopefully stabilization the if It case, early conversation. to think direct will was and where that to there beginning we a number. -- in From over downside, with hits their now it's took the there. worse bad also relationship it our have impact week-to-week, really I some they do our stayed the just probably stayed easier number and getting business employee it that's the it

And has survey We you in But unemployment to the seen XX,XXX I three of from number a now have I just for as households that seen have down. months. mean, guys we'll derived unemployment, accurate and have back people. thus say XXX,XXX up stabilization the moved data far. what almost we've is random most go

to that we're to tie most difficult to the trying that's it's accurate So and tie to. number all

numbers over it million between week it's the I'm X.XX to -- weekly number initial our pre-COVID. last, six times unemployment we're million is get that the mean, stabilized. was of and number still take And claims filed. X.X it the I We're around second not seeing initial what and was January also claims the to million, week week And of I almost number X.X Cry week week the these initial March, impact. claims to are the week XXX,XXX. XXX,XXX, of continuing we be You can the next [ph] for then week, specifically, pre-COVID next it's XXX,XXX, unemployment million, said, that next X.X next call the first jumps it and then XXX,XXX in XXX,XXX, in you've then going third X.X filed goes Far you February million, in get first bang. to weeks, Xx XXX,XXX, until been XXX,XXX week and

weren't an going direct the numbers. needed did guidance, comment we so, now ourselves comment. separate giving from to that. It And and we impact on so have know our to to directional But going that and a important we we're that we give it's was

And continue and we'll we're see. we're we then it it's on numbers get so year, lifting growth. new in to come business sales, a if we clients, of with with from great fashion But better Hopefully, client from forward get numbers that's here. some and to which then not If like we now. to building we're into our built I a head revenue. next right focused -- unemployment clients, a growth experience going our building organic we're said, unemployment we're experience launchpad as going what bringing also will better achieve baseline survey heavy new the and of current not It's

Arvind Ramnani

That's Yeah. super helpful.

On been headcount. the there, have reducing existing clients clients

seeing level employees about furloughed or that go you return able for are back of that all talked where some help You through what existing to off? clients you're think they're and rehire us either triggers civilization, laid

Chad Richison

I mean, we Yeah, that experienced be us. relative get shutdown? we and significant current number before. areas clubs, by and since? a haven't of groups I had I that have I in our going we we one numbers? impacted yet ones went that some we Yes, negatively been the I've know of health had most to to believe we more could. movement were mean, did I mentioned When the believe hotels, could. But But what analysis different Could We did we absolutely maybe. some don't the had through an Could that some impacted that. were wait just And to the revenue? were on know, see. impacts thing they client we're I that's those what's What we was start uplift?

impact happens the what why I so then continues. And in we've unemployment good the That's on stabilization. been We feel guidance gone for months, we'll returned ahead our three here thus see and that. far subsequent our negative seen trends. to current And as third we've last that third about that numbers the stabilized have stabilization clients But to quarter. far am hopeful quarter. as

Operator

for further to I'll no time. this questions remarks. back are the There call turn closing Richison at Chad

Chad Richison

the the the I send a special I'd doing. they're to spend like call All -- thank a And want for you right. joining us Well, today. on thank all everyone all for valuable to employees work to

in your you appreciate virtually of the conferences. August meeting virtual at conference Citi soon. Paycom many couple and forward operator, you, be the look Oppenheimer and months, Over with continued we'll we the participate to in on XX. disconnect. may of in And next connecting you Thank interest September, with investors to We plan Jefferies

Operator

for This conference Thank concludes today's you joining. call.

disconnect. now may You

Paycom Software (PAYC) 4 Aug 202020 Q2 Earnings call transcript