PAYC - Earnings call transcript Q2 2021

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Operator

Thank you for standing by and welcome to the Paycom Software Second Quarter 2021 Quarterly Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Mr. James Samford. you. Thank ahead. go Please

James Samford

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

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

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

Chad Richison

everyone And we Thanks, second look the James. call. pursuing joining results opportunities ahead. the as highlights spend a our minutes thank we you Today on of and our are to quarter few XXXX I'll

client will Following million. our take our of quarter well range. strong the year questions. a we primarily Craig XX.X% review revenue period growth our that, and our result XXXX, clients. and That was of with end second since QX prior broad-based then top grew $XXX and to consistent from rate upside strength above demand delivered guidance from XXXX financials We of the results fastest will to guidance cross quarter The new the compared selling existing quarterly and very ads

year over prior second Our of million representing period. was EBITDA adjusted quarter XX% an the increase $XX

our again With clients The we which results, these our raising our guidance we driver strategy. make for strong will more detail. once Craig full year products investments are tremendous discuss employee value generate differentiated and in in

employees assistance. to do from have increased most and to it's anyone driven benefit we've accuracy, we to payroll officially gain payroll their their first innovation connection for the today. which and take experience an contact clients payroll. insight clients out pay the July. Beti a when I'm The one their calculated. action accuracy their wait to additional they of transaction home own items our pay require important for which to rolled allowing their combined Beti, With so errors of with gives well full in allows clarity direct employees advances their Employees their and automatic Beti, with employee newest payroll Our or pleased alerts do far. changes payday, is paycheck paycheck early very made employee industry's on which self-service employee to employees payroll the employees launch advanced payroll, represents so in interface, while how how is resolve market the better technology, stands including the calculated have and to knowledge before of on don't is confidence own

tremendous a said We VP who of most are the HR Beti receiving I've revolutionary ever feedback payroll product including is seen.

should payroll the and employees because better anyone that they giving Officer their know be. great Another noted from is comment HR which what to is Chief Beti managers ownership paycheck than of

sold the we earnings end to on continue and X, As in have call, through we to Paycom goal. pilot XXX existing Beti, deploy up On achieved QX payroll to the that Beti we're And planning clients. quarter expect only should new Beti eventually done. will all XXXX all Beti of we easily that I said the already during clients opened second July our over July, be clients to it's way we've clients. and

in Our continues to the coming large our further marketing quarters to share aggressively deliver and and growth revenue fuel expanding demo market in plan a intend to future and spend expand camp. we strong HCM leads

QX, again, the in usage Employees exchange data be as to software solution expect measured HCM we efficient HR messaging rates capabilities that direct had self-service with single than we their continues and and employee resonate to use. systems, shortcomings to of record as with once ever. database DDX. by easy disparate or Our Paycom's the of contrast prospects value And are proposition high stronger

enjoy traction companies. to with smaller larger continue both and increasing We

Self continued our have we've to we reminder, sales teams demand added building inside as further technological as be Service made continued Due range. pulled upmarket target well. advances, the multiple below initiatives, the to a our we've and to we've around success Employee As that's

pleased excited XX we segment. by this our This with outside had targeting proactive XX driven empowers targeting that efforts this organizations by we're to XXXX result, to demand. we opportunity. in larger announcing firms expanding are change sales And today representatives our selling our above we target company are historic from range incremental sales success proactively firms to expanded a to announce We've are employees. As employees XX,XXX to with

in We segment so have and clients our that already, solution we're compete confident will the effectively. serve these clients

rights XX-year with the Center happy City their of Center. to we naming the that home On XXXXs I'm that be signed Paycom home the our the Paycom into Oklahoma Paycom is transfer partnership branding home and employees Oklahoma will downtown will City Thunder. front, a the recently of Thunder

year record is have pandemic the this and over our it year We lapped tough client over now our QX, historical reflective pre additions growth new year past of growth. comparison driving more profile,

improvement our and client approximately the represent of the hard for long foundation of turn a commitment execution from to revenue employment the any guidance. not saw further have QX a throughout pandemic the the dedicated we TAM, While that, and growing market small and all resilience and our want very With our investments ahead only of review future reliant runway I'll a share to initiatives that our with and employees In [ph] quarter customer Craig? their the of summary, we we've financials is growth continue made winning. on working of reflects our a thank are strength in headcount and Innovation, our revenue over And guidance pre base, Craig pandemic for X% growth to strategy. call new long-term to I strong to growth competition. of service client very distance ourselves improvement. us.

Craig Boelte

with the quarter the by of quarter million would existing our Before XXXX, for primarily quarter revenues, the XX.X% second We're year clients. measures and of revenues total representing our and representing client over was on quarter outlook XXXX of broad-based related profit period. gross I revenues basis. full revenue total the was to with period, growth recurring representing results comments for of to and XXXX, adjusted from adjusted new third million prior will my wins financial remind an the growing for results in consistent XX% like everyone second margin XX.X% selling $XXX.X of strength cross to the million, be $XXX.X Within Total quarter quarter gross for XX.X%. comparable year second I non-GAAP second our a certain driven year comparable $XXX.X very pleased review total that with prior

Adjusted we million marketing million quarter, as remain of XXXX. or XX.X% was the Adjusted in quarter be for $XXX for on the the million target of XXXX, revenues. the second XX% $XX.X of $XXX gross for expense administrative were margin to and sales compared to second to second total of For XXXX in XX%. adjusted range expenses quarter

portion continues invest the in to generate or XXXX compared the have to our Adjusted Our Chad R&D We million R&D marketing outside representatives to we within target XXXX XXXX. strategy And remainder the range Adjusted market quarter XX to cost plan to sales $XX to employees. to as $XX.X of outside strong prior of million leads throughout revenues. of XX.X% quarter second proactively XX,XXX, to our our the in and million expense demo empowering both were increased target of in XX larger continue marketing thus including capitalized year range $XX.X companies. mentioned, market period. of total XXXX the historical in was total target second

the second XX.X% to We the seeing to Adjusted second high-quality million or R&D revenues, XXXX, investments quarter very total future was the in be drive talent aggressively of EBITDA innovation million growth. of XXXX to XX.X% continue we're of or compared our to revenues. pleased total in our in and R&D $XX.X with in continue from recruit we'll of $XX quarter

quarter in year the the million cents both diluted diluted share, second quarter was period share, million shares prior or in per the periods. for versus second share or year approximately XX or income $X.XX or prior XXXX for Our diluted $XX.X Non-GAAP million in share net $X.XX was $XX.X per $X.XX GAAP income $XX.X of the on versus diluted per period. per million net $X.XX million based $XX.X

cash of $XX be expect XXXX stock million to third the $XX We non compensation quarter approximately million. to for based

will million $XXX For $XX we stock-based be the anticipate full compensation approximately million. cash year non to

tax tax XX% effective For basis. full to XX%. year XX% year anticipate GAAP our anticipate our to we effective to On XX% be income non-GAAP rate full rate be to a we basis, income a on XXXX,

cash of with $X.X $XXX.X quarter at of billion million revenue $XX of business our the corporate clients balance was We Cash model. second related our million total Turning the to in quarter cash the sheet. strong balance of to headquarters. $XX equivalents reflecting profitability of behalf and the million debt approximately and on average operations The of XXXX. our held ended of second construction funds was second XXXX for from performance quarter, daily and the

shares second $XX XXXX, of XX,XXX approximately a the we roughly of quarter total During repurchased for million.

For XXXX to for since our total while million repurchased has we guidance. Paycom buyback $XXX remaining XXXX, have million million, roughly currently June of a Shifting in shares $XXX over XX, X.X approximately program.

raising are strong the quarter we that outlook to the in half result. our third achieved year provide pleased XXXX guidance full XXXX. a we are of reflects We as performance robust first And

guidance and as QX full Our are year follows.

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

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

expected $X.XXX range from up For $X.XXX raising fiscal our approximately range. billion or billion XXXX, to revenue the midpoint we $X.XXX growth of year at billion, billion over are the year to XX.X% to $X.XXX

easily range revenue range. an To the the margin performance adjusted to XX.X% of are for full rule we the remainder the EBITDA expect increasing in gives year. the $XXX outlook pleased expect approximately growth $XXX our We million, of with representing midpoint confidence very of When adjusted now year. of margin to the combined, million the in us and at quarter, XX we EBITDA which EBITDA the exceed adjusted in year of conclude, this

deep for pipeline, growth Beti deliver that, of ahead of launch years come. open to the us and a a target With to for Operator? product long With to market questions. we have we and will continue expanded runway development line the rapid

Operator

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

Raimo Lenschow

hesitant XX go Historically, were And follow to amazing of had end sales the complex now. little more always seem bit growth. et because quarter and it you an you to one like all, cetera. That first like XX,XXX with process? then the longer, still sales return question high clients employee How to on quick cycles the congratulations. do a force, do Chad, manage towards same that up. amazing get decision can I to was you Hey

Chad Richison

it time was ago, remember, that Sure, Raimo was and if so you to three our years about XX employees. XXXX at range

We continue pulled to be up.

more that target at companies of happened up because range, our been market. that here official And point we so, to again, made we've in time, Same it up pulled employees allowing proactively target to XX,XXX. things

be criteria such employee. the a I changed. has We market, market companies that up all and type buying the We're a of employee that would market with continue size thing small same for working of employee, as no say to pulled there's further large

You can employee work employee next. XXX company XX,XXX one the and company for work a for a

so, with way with interact we're look standard displace multiple larger providing for use they And work a one. employees easy to finding data. disparate with And very to to their it as systems easier we're businesses to

Raimo Lenschow

rest the okay. some Yeah, And than and that there Were up, And XXXX then of you. maybe you been so sense. can XXXX, Thank the the base? you again. you've the there think if congrats Perfect. like those has clients? Beti, like, utilize what the far on greater client seen signed feedback clients that from Make already surprises, for about

Chad Richison

You bet.

everything saying like before payday. they time clock fly clock so, what find their I've get they out right the been pretty and before do benefits, it day in to else, every And blind blinding the pilots And meant. out, land. work, in, expenses, similar into manage off, much then They I they and it's employees employees, to pay they manage mean, put payroll. blindfolded then on get

You know.

it into because And anxiety is where a payroll there, day, perfect. off understand are be how they calculated, want employees help checks they payroll and so, not payrolls, have taken department because person that doesn't what we've to perfect blindfold there's the payroll have their done out that going can each to

checks And They Beti how the adjustments perfect. is and of is check checks, do after know after it accuracy. also it be so, right to eliminates oftentimes of have an And important a everybody incorrect. manual clients employees' the what help expect And to get employee's level lot does for fact, it. we is voids to that

expect success of it. And lot a with now having to we're that. So, continue would us

Raimo Lenschow

Perfect. Thank you.

Chad Richison

Thank you.

Operator

Please a of go Samana Samad Your Jeffries. with line next question from comes ahead.

Samad Samana

on Hi. XX% great and back. that congrats Good see evening, come was It growth. plus that to

want it call Chad, So just to think you more does historically, to for mentioned maybe was on adopt say often think a more selling this cross first customers and tend bit question much I about, a upfront.

us understand And a or So, the selling cross motion? can is help you why is Beti that is becoming primarily bigger it across portfolio?

Chad Richison

still it. again, more what of selling clients would believe revenue to the move cross new our quarters over new is is cross better of as in today percentage interface, a ACA, of good than basis, as four the biggest our here percent our had pretty been we're that going to on Also, cross that or which say as take do selling the revenue couldn't to a some I everybody transaction a onboarding we three is I that be say now, we're selling, Beti part Beti. having employee that. selling I Yeah, where it's year of everybody for past. percentage is during the

with every way sales of do. and And that. believe an included is side package additional as forward so, their with businesses it quote It investment fee new But for payroll reps the on businesses is it we our product the on - achieve now. to for return our relates Beti we as what is this payroll the moving win comes

Samad Samana

take beats out this the as a Great, and maybe follow up one I'm biggest that, of was expectation. the carve to really to helpful supposed

recovery the help about how versus could install base, quarter? you in the strength much you I'm as Beti bookings of about it we So, this in think unpack uplifted think maybe curious and how versus the new maybe better if us terms maybe employment

Chad Richison

and We zero put would clients. think we actually that within weeks, on regards our that second other talked clients impact X, we I Sure. that. went that, first on achieved beat had very call it I all to to May And Beti, the looking quarter. of it Beti released held then little to on couple we then through July quarter. be we about Well bit in in on XXX

this that within So was quarter.

be have of do part zero forward. differentiated So, going We impact think a strategy to to our it relates played it's quarter. Beti as would last moving

by new current ads, to growth, is as So followed to what contributes upsells clients. logo usual, our

little this far having as an bit saw base been base, a million pandemic client about our pre quarter, we As macro, through improvement for improvement on pre that and for quarter, far million for this $X talking as our now some was this we've as it $X.X to bit. little with in the during been past this revenue from us the hiring quarter. impact pandemic going the client a had quarter. say I'd I've

that of talked worth improvement So $XXX,XXX that's about number prior. weekly had about that on we

Samad Samana

questions, Great the again congrats to say. Appreciate results. and strong on Great. the

Chad Richison

Thank you.

Operator

Your Brad with ahead. at line next Stifel. question Please comes Reback from go

Brad Reback

to sale do Great. that Thanks further sales if Chad, do think very up that? cycle you manage how your it market, And you the opportunity as people have much. the lengthen, does move changes length?

Chad Richison

No, a I mean, that, a company cycle as for going cycle. XXX-employee sale I the me same company XXXX, say little XXXX bit, the don't, is same you employee's is XX,XXX-employee hard cycle know, employee sale say sale be to will it's a I sales as cycle. a the to

long there's major sales their two We're still as that cycles as would requires with I to us between multiple to disparate those far don't up be. So, sales differences looking not what link cycle of engage the with systems. that know some

small strength we lead be that aggressively something continue business. we they has for I to up. So, our us to to somebody into as continue also those go achieve a say And go and the market, leads have continue volumes, fit else. to would to are oftentimes down

inside we was this from we've sales first year. up and year, six the of teams. one previous so, Throughout that added And another four sales had teams, this year,

the teams, sell business be inside And or would which we're the XX below now market. XX so, that emerging sales

So, the whether because employees ease easy Those employee or continue expect work we it's And access interface, their below be do for whether market to continue and same a XX. XXXemployee company. to you use a XX,XXX-employee up extremely we company, system. well, of again, you pulled work for to

And so, it it usage, based employee needs easier being much we're them. for created and off makes seeing a lot momentum of how of

Brad Reback

an adding That's on lift work? of up help can existing new quick I if on one you type missed net customer follow type then get that's us great. sorry What of on it. been the of, from monetization Beti, what And Beti and you

Chad Richison

in added is and XXX% we've of we product, DDX I'm even is products payroll pricing those past included quickly, believe the that We so got every Yeah, competitive. go. very on our single it products on an additional priced and it's where pricing And Beti, with were though usage thinking included our the in deal. just we Manager now

like put to don't I it out So, just there.

it's reasonably our You able all say would But like to other out may priced be there. modules. is, many it find I of

Brad Reback

That's great. much. Thanks very

Chad Richison

you. Thank

Operator

of comes next ahead. Marcon from Baird. line the The question with go Mark Please

Mark Marcon

accuracy good regards lift, first easy that on clients to on Beti, the over opened it with feedback that to And they let or like, XXXX A, really afternoon getting of was ended easy any the to Or sort Beti, you've how X, from our it payroll With were you got Hey, of up on, the that department clients in how ramp congratulations. many you them the was you Beti? they July now doesn't to rapid what came about people? as need me XXX are up using convert it and about Did that seeing? it little experiences experiencing? talk are a my ease terms and bit increase add can

Chad Richison

And to normally need have are factor have transaction. lot we with we're It's But a to with irrelevant. We on you'd these that, you. those. on that you after what that do or the lot got convert once processes of do beginning work we've happen well factor. so and at to we to the it. those processes the already the during you the for We're after displace able a processes, turn your Yeah, payroll of Beti, something happened

of we in into processes. processing earlier so, eliminate phase. And a some the lot them processes of move then we And with the

Beti actually and to but XXX% anybody a with had your And employees, and turn hadn't so, employees payroll that's money an manual itself. wire because helps high for module, doing, the satisfaction on, a are answer because Once entire their ROI, very voids, employee's question, And itself what pays you wrong. we it you have pay rate the it and do amount have your SFBs, we for accounts adjustments, they was have there's of payroll not in very you're cover strong payroll an it turn off. ROI. to may when to into even incredible having checks,

employees mean, people so, to the be. XX% live be. difference exactly $XX their off, the also visibility is is if them. check of lot it gives And pay that's what need the check know let's a going employee over check. it's what of to into check, U.S. big to And XX% And A going check they for I the

and long visibility Beti you to it's their on It so, to easily business's that the date, exposure which people. pretty with time. achieved. ROI associated check your them some gives And correctly, business. with you interact gives making specific them accurate, sure the ability and the certain on and employees for lowers increases sure also pay with again, There's them check And make pay Beti, laws that's before paying risks

Mark Marcon

some That's have them does add set of those did great. Or all already attendance of And that? time up? have and to clients

Chad Richison

know, great most question of would our a You that's expect I that Raimo. first…

Mark Marcon

It's Mark.

Chad Richison

that are sorry, time would the Mark. our expect and attendance, and that we'd had because most quickly already Mark, I of go ones like to ready. get already through Mark, using clients there sorry, Oh,

clients certain move as be modules time for be say our there already to you Paycom would go implement. to and client of would a we But have attendance. Beti right, most required that are I at Now, will

Mark Marcon

from first range guys? approaching be talk being Great. XXXX inbound And limit inquiries. of a that's how kind and and XXXX been to employee of drawn But of like then as many being one XXXX kind from XX,XXX to you you companies you've pushed? upper like opposed that of last Imagine got expanded successful. how increasing very were campaign a is you target one, pulled great Obviously, the about, those in when marketing can that's would to XXXX, much just of number the of on

Chad Richison

to we mean, have I do targeted Yeah, XXXX. targeted XXXX. not companies years And experienced strategy we're then we that the ago, below is XXXX, for which were below been XX,XXX. marketing we've now we'll move start these. a our above into last strategies they proactively prospecting And three prospecting. that years. what means had companies three moving And And targeting do for We

continued the sizes again, that to range. of we've had, move continued have our in that people market. call to us we've And We up employee more have

to allows prospecting salespeople And they're do able as is make it to toward what now you do calls, so, And make targeted know, those us those. proactively calls.

toward efforts in companies as have prospecting those as small those out would reps sales now, below can that rep business more go company, type for call. were there care. or XX. companies, been proactive between and also employees, far XX,XXX now XX,XXX-employee that a have I to able then are our right and always until what But be Sales XX a are it emerging targeted make Now, don't our

Mark Marcon

congratulations. Great,

Chad Richison

Thank you.

Operator

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

Daniel Jester

labor is. question. market afternoon. every how like great for about Thanks It taking a day seems new tight Hey, my there's story

market wondering inbound may tight impacting seeing. I'm if be demand of about you talk be not could labor how or just may the that So, sort you're

Chad Richison

seeing? we're Inbound interest that

Daniel Jester

Yeah, that's right.

Chad Richison

Okay.

Okay, got it.

role. to an like part shouldn't I have I a definitely, at last I've We've off? of there a work, cut said easy-to-use Your technology mean, done plays employee that think lot work employees to it work. Well, surveys

employee definitely frustrated for And talent have that have there. of out pieces base, a it's difficult technology if you Also, are hunt a you use. so, multiple to

good that's technology want You must. that. do you helps employees, a Good your retain to

technology also it's talent. the talent market. pretty tight You a dogfight in now, need labor a very everybody's good on Right deploy acquisition because side, to for

only of their that in the there's this some with that be So, everything I digital employees and believe something, there. to makes that But transformation do engaging to right ones would do sense it shifted the way and data.

so, I kind But the happens while we'll we're no, labor what might that. think see be tight of for with having here, that. success a after And market

business, our what our we because within had as really the some that far stability And we As of year, last the needed needed we've labor business just since summer we've new stability. market. we've ad, of

so, there's think, different still situations believe through of if pandemic, dealing we even I somewhat And the I labor this year, with a the market. as don't with go tight remainder of we're

don't is forward us an it we like provided a go here. perspective. going the impact on I So, it like macro looks feel we from And to like had, stability some employment that have will

Daniel Jester

follow like up, That's And just been virtually as great. selling a you've then for, XX months.

do normal your of sales new adding you this offices? talk once philosophy Now about you if the to environment, can change just about reflect actually back adding on inside get I'm wondering you sales team. kind does

Chad Richison

we selling. timing, back our No, year, And to our the office back throughout just the to office. back no people I this mean, we're into go filtering our do as the to offices managers are now going be are into its of getting rest

to As going attention how buy. type to why paying hybrid as what far paying be to model we've and using, we've of attention we're prospects prospects also model been buying, been

as the for understanding case, them. So, display prospect clear what a is help ROI their supporting be well be both what in methods best the to, as case, in the that our product us we're of and does, have our going to able

Daniel Jester

you very thank much. Great,

Chad Richison

you. Thank

Operator

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

Brian Schwartz

on if just activity Yeah. bookings start Hi, Just or in there Can quarter. trended the light a thanks on have for taking Chad, linearity you shed start we'll my any was, I maybe questions. on And could there. the great how a business the from congratulations quarter. the quarter? just

Chad Richison

weeks strong since ever July, took of we and last the that's weeks off, mean, really here Yeah, that anyway. in up of two fact, well, were we mean, just April bookings very these kind doing strong things year, in had these two we've put I I had number we've bookings. in had last last largest bookings, But we've

have to marketplace. strong And lot in here been a differentiated strategy we've a that's the so, as momentum continued getting push bookings of

Brian Schwartz

I Thank here. expansion target. would to to then right Beti there's for on organizational about verticals therefore I'm target likely you. to complexities and fewer more Chad, had think and And just one have, them, the you self-service would any that I just when would question be move switch wondering industry just if

Chad Richison

is, need Yeah, more more you important even like the I product employees' check, it would the to to it is The as really on say deploy mean, at from Beti. everybody, I something a it's you data I a more perspective, the Beti. complex that more deploy it look points have for the

So, I'm company that either for. be easy any that to going of say or Beti not would best vertical type complex or specific

it's significantly everybody. engage with for best this themselves work for their worker can their and the American going financial it's product to impact think have XXX% a data, best And like to I to plan. to they that's something where their ability

Brian Schwartz

question on And just then and marketing for the advertising campaigns. last Craig,

support to in in momentum the the if business? year of of bookings second half momentum in the the in spend Thanks. the you product commentary, have wonder cycle and your advertising increase the plans I current the business, year, the Beti Given in any here

Craig Boelte

marketing. going continue spend and sales to to on aggressively We're

where that up sales seen year the past, and ramped the half You've back marketing. in of the of kind we've

marketing for see third plans guidance. year Obviously, of So, year. full currently we've our rest the in same of quarter baked I the expect would and the through to into us kind

Craig Boelte

Thank you.

Operator

ahead. from Ryan the McDonald question Your Please go line next with of is Needham.

Michael Rackers

This for my is I'm for Thanks McDonald. Rackers. Michael taking question. Ryan on

a experience to your the within churn driven churn that ticked have in year may change competitors couldn't pandemic similar quarter, And opportunities as So, we've last of priorities. base? to any make on up Did see other the because you so wanted multiple did the any given quarter heard from you during that do uptick vendors more the of some slightly dynamic? this customer replace customers

Chad Richison

do would to to when a is having it as idea say a are deploying lot staying. clients in use I current report I are to what well product, but to new would customers, or relation to as until that relates and to we bad buying proxy though, Yeah, customers say What product year. competitors no first each of end that a gains is of the success, it's us, as those not as both differentiated gains we're either retention churn our

a lot And through impressions DDX rate strong strategy. an And the of continue and company, we as on we within more to an ones increased our intermediary have clients. would have employees are continue expectation we It's the a with the another and not that differentiated department so, making retention have would the having a we're success. to where database usage, more

Michael Rackers

thank you. Right,

Chad Richison

you. Thank

Operator

Siti Your next Panigrahi is from the of question Mizuho. with line ahead. Please go

Matt Diamond

to normal cross for guys, think solid Hey, is alluded to we've I was going for Matt three this bit, are One of the results. It to to And question continued Siti. I line congrats there Diamond around be pretty four my selling. the it Beti. little come add a mentioned want above on that's up. that quarters is

modules to client Paycom like existing sounds the has modules be the opportunity of what of base the for all magnitude it's those you necessitates of Beti an of so that size handicap us widespread, eligible like the Beti. pretty that in know clients to also that idea next four help can over for three really to quarters? [ph] of CNA order cross-sell Can get looks all we what We

Chad Richison

Sure.

do does modules so, modules. Beti There's say to thing, require you utilize our want Beti. one need to all a to lot of don't not have of you And I

modules, able take someone would your you that to attendance, to Beti. implement sense off so your that know, But administration, modules, like can them, have have A good management, Now, paid use that within and far don't that lot benefits time, clients to have a without of talent you use are would popular to you're one be of some it want we our things it like be because of lot idea there us. them. are to necessarily you Beti. definitely them, use a that that Cobra, business products them to expense run required wouldn't those employees to going have fairly Beti you as as time, several are use But don't But make it's but acquisition, recruiting system. modules would there the

of there of of a a processes now, client ready our characteristics, few required would are so, like the right shift out and to who're most we clients our click that probably all and all sales to group your eliminate a are lot to But group that continuing we go or have the reach I'm thank probably sure sales our currently beginning. whether products already I And they who those out partial. just our just to will reps have of relations clients to CRRs where with go working button, internal

So, there opportunity there us. is for an

of sports our handicapping do consider are logo. by logo that competitive wins the primarily I it say opportunities because want As exist revenue logo in this business our the out there. going But of driven though new what the upsell nature. far as saying gains a new be in because to of and again, there are to just pricing I'm of new compared end size same wins to we potential

Matt Diamond

be segue commented perfect a in anything XXk employees, base the and to or anything my being helpful? differently been above these That's and that that's seem spend, on But to that's on R&D side doesn't the to to question, prioritized customer the adjusted above. customers there XXK done the be would employees being for what's case. is that regards It be and can product next address

Chad Richison

X,XXX for anything doing that not doing we're different employee We're debt. employee no a XX,XXX for there's No, company. a company

Matt Diamond

Thanks so Excellent. much, guys.

Chad Richison

you. Thank

Operator

the from of Bergin is question Bryan Cowen. next Please ahead. line Your with go

Bryan Bergin

I near end being what level are deal well sales. on client by XXX% Can the Hey, of good you on you XXXX? here clarification But you're A adoption And the last sitting several the comment on you on it's anticipating each afternoon. weeks? in understand included as bid. new Thank of the Beti. it question here you. attach

Chad Richison

July now. we business conversion some have training and It smaller through into would not training would I system. definitely and have clients, mean, said, on of them a way and smaller We're we're you that. now then training you because you model we employees' do the X, yeah, training they're data of it's side, X, selling could the not employees Yes, we're setting payroll. started they then how training, new on on them mean, put going in the business unless and a your we're started be as I had mean, conversion. up. We're sell just old to our you again, I then, like we'd lot it own their client July relates by would it Well, on be that rare

it's And so, the yeah, conversion. part of

of it Beti. an so, included be the system, it'll old use to ROI it's And activity. it Beti way. can ROI. entire also, many the low would pay I that And and cases it's tried help issues me having Payroll even mean, it's part a our anybody include for mean, now ROI. I do the payroll. And been in it actually risk, you've you for the true think depending upon high is, logical pay, to can a reward how important in

NSF penalties. wrong, cares then employees right, They expected. tax you get get upset who If pay and you you have fees, get employees. you to it it if And

because our And just client make use important, that payroll extremely is that to any wouldn't it. me use bought it any any product they to any Beti. perfect since sense wouldn't sense it they it would, their make without buy wouldn't that make sense it, and would so, they want it, employees having And wouldn't

Bryan Bergin

as services correction then automate and might away? with that? then another of Okay, revenue, your a getting and versus business the to like help on existing Beti can service we're and of Beti, kind as accretion work you revenue that of potential error begin of question of that things offsets clarify frame around the And far view thought, magnitude common the your within those just types

Chad Richison

a You know, some they to I'm visibility. going have a client. be didn't to to quarter definitely deal that. to it replace void created, the different to for do so bad Beti's then, client I to mean, visibility, than have to tax revenue they a didn't have period, a tax with a got to they send call the because and what wire. going manual, there's event extends there's different going The have check, extent The you've employee And a have

there - be higher client so, the some in our definitely we're tell we perspective, out out maybe margin work or there's it can to a clients our side both doing lower, I a a themselves side, that. are operating what to higher expense say, or associated your and is, not the end, clients Beti carry That as it do. on can a on of should but and labor And which of client. our anything with doing regards to not hey, you the From your read that fees I you. Thank there's get payroll. having us got to and doing payroll, And competitors both

Operator

Your of next ahead. line Alex Research. with question go comes Please Wolf the Zukin from

Unidentified Analyst

customer how half. put that for top of a range you're Zukin. you if end lower Alan the are you're your in I on end seeing second wanted and of what about the I just lot like Thanks. to wondering obviously, drill new the for business you guys kind the going is help this context employee kind of Hey, can was seeing on the sounds at forward, of Alex strength and thinking there.

Chad Richison

size I mean, say this more our I get in really would We of same. volume. Yeah, to from coming companies what don't lead dictate

larger As we're been the move are a selling deals. that seeing after right there, be to it. we're than than our to we that I use sizes our a mean, those so, company. XX,XXX you market, deals it leads; it a we're all advertising and and what I announced expect company And, different and we we're going be just employee that. see there. dramatically the clicking now. employee would could have assets, company using got getting up already already we have we're of XX,XXX going already have We're three We've Again, on how store, wouldn't our you clicking could pet already has on

to clients XX,XXX for up that So, prospecting we're those more we're and be as targeted just flag kind flying there it going out well. and open the of we're to right official, making business now

Unidentified Analyst

Thank you.

Operator

are this turn now questions. at the Richison. Mr. And over will further to I back there Chad time, call no

Chad Richison

to thank All for on right, thank everyone call. the us want today you. I joining

back life pandemic. lose process. XXX,XXX their Please every to their permit. through in that As it let's offices less fully are get the believe as are the our I to your employees the soon staff to and perseverance than the the we're saves vaccinated that we that one our for safely as this hope vaccinations thank way vaccinated Over getting reiterate of end for will I Paycom COVID-XX internally, XX% from like communicated conditions fully to gradually through back lives of people making be case. pandemic. and want I all either vaccinated break made

your presenting outreach XX. September the the on this Conference Citi investor On be Conference on the also side, XX, quarter we'll at followed September on and X, be Paycom Wolfe Conference by Oppenheimer will appreciate many August the hosting Paycom. in you meetings and Sandler one of on with one to look conferences. Thank at you, We and August support operator. very Piper with forward September soon speaking KeyBanc and continued

You may disconnect.

Operator

you. conclude Thank conference today's this call. does And

You disconnect, may now

Paycom Software (PAYC) 4 Aug 212021 Q2 Earnings call transcript