Paylocity Holding (PCTY) 6 Feb 192019 Q2 Earnings call transcript

Company Profile

Participants

Ryan Glenn	VP of FP&A, and IR
Steve Beauchamp	CEO
Toby Williams	CFO
Justin Furby	William Blair and Company
Joshua Reilly	Needham & Company
Brian Peterson	Raymond James
Brad Reback	Stifel Nicolaus
Mark Marcon	Robert W. Baird
Pat Walraven	JMP Securities
Shankar Subramanian	Bank of America Merrill Lynch
Nandan Amladi	Guggenheim Partners
Ross MacMillan	RBC Capital Markets

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to Paylocity's Second Quarter of Fiscal Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following management's prepared remarks, we will host a question-and-answer session, and our instructions will be given at that time. [Operator Instructions] As a reminder, this conference call may be recorded for replay purposes. It is now my pleasure to hand the conference over to Mr. of Investor President Vice Glenn, FP&A relations. and Ryan you may begin. Sir,

Ryan Glenn

the December earnings and discussing year for on, market CFO Investor am Relations. next welcome the of Web FP&A afternoon, Paylocity; A me available release today President results Paylocity. the Glenn, XXXX, be XXXX. Vice Ryan to ended And fiscal results Relations Good Investor of Williams, will press be announced under Toby site and of of and issued is XX Paylocity's replay we after closed. call Steve webcast will of CEO I our quarter this the which on our in joining XXst, call Today, second Beauchamp, the tab. days call on the for

implied caution actual to Before These forward-looking contain that these factors, projected risks, which on beginning, statements question-and-answer including and materially and to results important those forward-looking today's differ that the statements. are the during statements forward-looking and the can are statements. to numerous results uncertainties subject must uncertainties you to Also, by present information differ solely cause we from made cause the from results based actual session other in statements. statements subject these or risks are remarks could

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Steve Beauchamp

quarter business XX% positive drive continue we to second Recurring year. in of more so an by in research EBITDA margin released continuing newest leverage see invest From again, the work results to Thank for for investments the back-half non-GAAP sales driven remain of last an revenue the and over increase revenue in you, to last XXXX, to continue long-term which month revenue grew we've incremental us product the our into of pro while received last in our Broker fiscal per client adjusted QX on quarter our client you as business several client we forma the guidance with all extended XX.X%, earnings total of thanks as on with of we've marketing strong period XXXX the and of exceeded by million, as $XXX.X product also represented once towards we joining quarter, XX% second and XX% additions We $X.X in product, performance million, second solutions focused a standpoint, by same operational of channel. target fiscal also The Ryan. fiscal TPA to EBITDA momentum offerings. our versus average revenue. we for increase new million. consistent was development of the of $XX.X the seen feedback call. for and quarters midpoint And far. XXXX, than and new our Adjusted XX.X% initiatives referrals,

TPA number of health accounts, benefit Our unified savings administration. a spending and accounts, with includes technology-focused a for reimbursement users such accounts, single point providing products, as health offering payroll, and access HR, flexible

Our the of per ability through and and research product to modules. balances see time continued integrated when development. focus $XXX in The addition our March claims, in our employee total sustained from opportunity, at TPA to XX% from mobile offering solutions year includes our product to the also and year $XXX and while investments having web submit IPO, our expanding to increases our employee employee per users of a is per speaks allowing of up from suite the transaction $XXX on XXXX, our account access, client all available This to per portfolio buys all portal. details our

talent positive HCM across We in momentum management of continue clients performing to our product suite all sizes. well particularly with adoption see

marketplace, recognized Crowd development reports; that overall software its the provides quarter, on reports multiple users continues during expanded unique overall on decision-markers unbiased satisfaction addition category customer administration. GX six HR be payroll, Report reviews users site mid-market mid-market with suite, based HR, in calculates application assess a reviews and solutions. to mid-market Because coupled Grid from can to Crowd including one algorithm real and the high in through management to business benefit who are process placing real-time number In product Grid on commitment gathered suite, ranking ratings our core and objectively GX satisfaction. mid-market go verification the a with Paylocity review product to

Paylocity's year. be the We also recognized, to continue Best to be Glassdoor for as straight Place third proud of in December, we culture, and by were to Work, pleased

second of state, issues The review XXXXs, of in I the tax quarter for time annual for payrolls, is like detail pass and very with to results busy W-Xs, as to and fiscal to Toby of work employees hard employees local clients closely year very year-end work dedication year-end forms this call agencies. for and they updated filing federal, to and Operations on our quarter's I provide to would thank want year. our related time now all their busy guidance. our during the

Toby Williams

Thanks, Steve.

a market as-reported a financial same close QX results with fiscal forma today, revenue results, non-GAAP in discussion increase press basis fiscal table provided the forma our 'XX prior non-GAAP the period year. on from in Consistent is results into for following going the be $XXX.X QX please that for we XX.X% 'XX. fiscal pro on quarterly that pro revenue illustrates for the million, the 'XX. a and QX revenue which growth we note last was Total Before comparison to in release will quarter, after issued

invest seeing pleased was period XXs. in total QX to XX.X% quarter of with within during continue recurring the recurring up rates, to revenue average increased and and revenue continue interest also business, funds our mid client a we're our from in XX.X% we interest as year, quarter. income with fees straight the client the of because consistency up total securities QX be the of high funds result growth a available-for-sale last on primarily We XXX.X%, balance up in quality eighth marking increases, portion same

XX.X% QX on was gross consistent also as we profit profit our adjusted business growth driving was model. gross scale recurring revenue for focus continue and adjusted Our in while total XX.X%, to

and investment investment R&D investments our combined and XX.X% R&D development, this incremental R&D focused investments non-GAAP We in what we fiscal basis, it a to XX.X% 'XX. XX.X% On to of G&A consistently 'XX. expenses business revenue on we in remain of a fiscal total is And what in by and on G&A continue were our an revenue On we XX.X%. and in revenue and a make remained year-over-year On to expenses basis, we basis, our understand in in significant our costs capitalize. QX, on marketing were a non-GAAP both basis, in on of of were non-GAAP basis. QX QX, dollar sales annual focused overall in total in XX.X% investments increased of combine important expense research area QX as versus leveraging

profit was we invested was cash of we we Briefly QX, $X 'XX. $X.X which sheet, year, including results; confident expand adjusted ended fiscal In activities last remain covering the equivalents, million, or exceeded compared on as was to income allowance. of flow cash the cash a million same $X.X GAAP operating XX.X% Our $XX.X million. quarter to our net the million quarter, income our cash, EBITDA for million, the and balance gross for the at regard and the revenue midpoint. quarter, cash guidance with by $X.X was $XX generated free in million million. an which continue will cash $XX in annual $XXX.X corporate million period $XX.X We to that perspective, From from improvement operating margin in included of flow for basis, tenant million

fiscal for guidance to our 'XX. provide like updated guidance and for Finally, I'd financial QX,

revenue third of $XX million, 'XX, $XX in growth to expected to quarter million or fiscal adjusted quarter in XX% EBITDA approximately forma pro million the $XXX to 'XX third be is total the For of million. $XXX range non-GAAP expected is range And revenue to total million. the fiscal be of $XXX.X of over

or fiscal million which the we're our of Operator, generated of are revenue and million over financial to ability ready to 'XX growth be our represents eight adjusted in $XXX.X with for And forma expected business, approximately Thank represents our in progress In This to targets. fiscal scale quarters, growth continuously demonstrate range we now EBITDA total is revenue last of the our our total our to is the $X long-term fiscal pleased over to $XXX guidance. QX mid-XXs 'XX $XXX an $XXX million, the $X.X range be increase including million of of revenue 'XX making conclusion, guidance. $XXX 'XX, fiscal an million, in increase towards million we've million. to we're you. pro XX% to expected non-GAAP questions. results, For the

Operator

and Our will Furby the from Thank Blair come with William Justin line you, sir. of Instructions] [Operator question Company. first

Your line is now open.

Justin Furby

you you I step And to really you where Great, that Did early to quick guys. this out points mid-market, on proof enough And gas? the compete sub-XX you versus can what want I've SMB speak your there can key see Steve, get your guess, in thanks there's sort give coming guess, wanted sales a that you market competitively at I tell ADP is just follow-up. of then a the build-out, least I update and got there. selling that a is market, thoughts an season. tougher I think a on Thanks. seeing you're perception to of run

Steve Beauchamp

I at force. mean, the think year under-XX suite. for the demand of really were in fact success was seeing the broader I existing thesis sales that also more Sure. market HCM our off driven start And the we're seeing more the we our with

think thesis some true. make that I we to held space investments has continue as in that

as for think we don't for impact from an going probably and much next this fast-forward We year, year. to it's that it's interesting definitely three be still that able products. a in impact of still not to use, easy an now, But under-XX for space. two HCM the think huge or for years are suite I think you still customers buying buying they're it's us. pretty a to them got We've already more fact use very space interesting a be market, more we to think

Justin Furby

side And I market end of on it. just then larger the got of space. the towards guess XXX-plus your other the Okay, it,

carved there's up of improve I the as opportunity some derivative does mid-market? down or bit, market? in think or been help so, sales further in if there. impact update out little team on you of ago a that the year And areas the market that upper an sort a Thanks. you've Can you a enterprise called and to give

Steven Beauchamp

upper the Yes, wouldn't marketplace. of of sure. material call terms the I it any in change end

a think feel we've like we competitive product I got set. pretty

customers. adding the our off our Of that continually get product feedback enhancing based from and releases we're we of course,

So in improve that market. we think we to continue

in core able selling significantly. for think our definitely a -- go I you've to We're season. to were back our all as I'd quarter, we so where got be really able perform as to much well selling season. and to segments had After the market. be this to up-market We market where just do to year raise able did good pretty that,

Justin Furby

thanks much. Great, very

Operator

of with will Needham our from Thank & Scott line question next Company. come you. And Berg

now line Your open. is

Joshua Reilly

completed This guys. buybacks, going $XX acquisitions for Josh your with cash focused on your allocation recent Hey, Are you capital are Having already on million your or is Scott. flow? buyback, more things? other forward free thoughts what

Toby Williams

Toby. is this Yes,

we of closed a about And to quarter and we look So drive as means you on cash on as I about look million think mentioned, certainly look, we $XXX dilution. the sheet, a we'll to I continue should do annual at basis, think growth. the with we And buyback in take to for ways an think how capital managing allocation. balance

it at view this we on that annual We'll against things and growth. basis, I we of look cash look all continue growth the eyes at have way. we'll believe but think continue to on uses point, put that can we'll an to at

Joshua Reilly

And busiest for more me, productivity reps you December should your how how think And hiring then the about thinking your in selling is XXXX? about in of quarter then are great. versus expectations? the sales just season, we quarter one Okay, December

Steven Beauchamp

Sure.

we're part the look first. hiring year. headcount think stages sales at what looking the take second planning I'll in we a to next really So needs From for like perspective,

we've productivity of in we our set the February into of time before, the of think period. really then that targets out fact the I come looking end we hire and our kind all summer, spring to headcount about and through way and talked

ago. thick fully a about where feel perspective. now, point to so landed then we've that raise right front. quarter got the of And from We a to think in back $X.X season update selling the think a staffed from it went a million we good selling fact no season. year in just from headcount we're We that in I on perspective, So, I I the

today more And to good the year, we'll but so, raise, able you here give quarter we of feel wrap up we sitting it. as color the third being and about

Joshua Reilly

Thanks guys. Great.

Operator

line with next Thank of the Brian Raymond our And you. question from come will James. Peterson

Your line is open. now

Brian Peterson

thanks the question, Hi and guys, quarter. taking on the congrats for

full investments, the So, versus logos? the all trying to to to invest $XXX just way acquire for thinking portfolio, suite, we're up into and balance installed do trying base still the product drive new about really how to the now adoption you looking

Steven Beauchamp

Sure.

time, come at of are So as number at really of priority we we've It's material into our clients be time. for as focus would on-board, still more clients client purchase effort making point that not seeing couple and it's they're purchase. mentioned definitely is to we've able the but over the one as be buy landing more point top Over last more the to base. many as our over penetration much sure increased new that gradually our become of get clients us, years, necessarily as possible and buying

look us forward. that think really still we good I for opportunity remains a as

per to gradually of buying the product got we've growing about our client what are that up and are over look think at, that we'll year, time. capturing $XXX team a know and time to we've you If people back opportunity continue over new going into at that we base, clients per expanded employee

Brian Peterson

the next just position influence that Thanks thoughts, several And to in been might the your obviously, some think guys. Great. over high wanted profile Anything you your space. competitive there's M&A years? get

Steven Beauchamp

end and bottom announcement going certainly the the Sure. a of marketplace. obviously Yes, a that of our we private at frequently. in ULTI and but making not one some They're overlap to still segment they're obviously going maybe ours, competitor There's end segment, competitor them that with I see the of mean be they're going our the that top private.

has don't So, run head-to-head, ability any percentage I of of we that business any implication terms not implication continue that think our or in grow our that into time. to is just a to which when big of them even

Brian Peterson

Understood. Thanks, Steve.

Operator

line of will question from come Reback our Stifel. And with next you. the Thank Brad

line is Your open. now

Brad Reback

there Journal Wall talking small article are back how recently so spending. businesses was on in Steve, the broadly an Hey, Street you? pulling about

maybe deeper signs Thanks. who than client much you they seeing of your to, from spoke are probably base? clientele you those that in have any Given a

Steven Beauchamp

that clients mean, it's of our must-have Sure. HCM think you of a our then fact have I product. all some payroll Well, series modules; about really and the

are sure paid. So their they've got to employees make being that

bit You reality so get argue on little the a growing is growing could whether that differences and to some return investment the it's that maybe necessarily that really the products is not maybe lot the don't look efficiency that could much spend of items lot, doing, but a they at as or able sense as might economy much. not makes of a see they consider they that we

would employees is whether would purchasing. and secondly, pretty that's us the And it's customers, So, you that consistent there. No as then growing, per we be what tell time. difficult look call it they're see I at out over what to for been of our number

Brad Reback

very much. Thanks Great.

Operator

you. our line Thank with will come with the question Samana Samad Jefferies. next from And

Your open. line is now

Unidentified Analyst

you. in This questions, the out from and come Samad. some for taking usage -- thank on quarter. the significantly on place. I we their on questions [ph] improved, Hi, programs congrats -- our Thanks from the here of guess, is Paycom for platform here, yesterday Couple churn that first, and saw they saw put of Anupam

talk trending? in it the So, you bringing -- of I -- has Thanks. how little specific your some And maybe that generally, could programs like first see churn a maybe opportunities down you about been or it bit?

Steven Beauchamp

Sure.

growing that's much our suite, broader to growth. employee we our platform. of of manager we in increases adoption as faster are significant seeing and absolutely And get client HCM think I our continue usage than

had more you're a penetrating employee you And applications. those management, lot a talent these spaces interaction getting of think like lot of in success so, where we've if products,

some interactions those pay and I platform really that's driving our at online And punching be think to a interactions, to or higher both across interact organization. the in opportunities or looking mobile of transactional where move our portal. of And approving, to what's part you're from utilization able rates, big

Unidentified Analyst

we you going your how And TPA how how was this, the just you impact just would launched said us you're Okay. this about insight give solutions. have I should you monetizing and some forward? wondering could that -- think

Steven Beauchamp

per the Sure. TPA could employee maximum us, increased from solutions customer that buy year. of our employee the per The product launch to from of per $XXX amount $XXX a per year

Xst you cyclical nature business, are And anything to that where a for enrollment. there's to know What would was impact so going their a product that this a January. until lot think on, of be be it, doing didn't early going fall about have of in a called so, because I out and kind people it to January often ready say is if the wasn't purchases we big year,

in So able good volume we're absolutely have build and a to this platform the next be to to going market on January. hit hopefully from in a sales do customers position year that throughout perspective We be live fall.

So point it I very portal it phone positively. get real been to my user makes we're feedback is here mobile positive. and to customers able transparent get balances, can or The submit been them. very those of received my the to more claims, feedback has and everything just much The can that's from I on happy my get from the being ease-of-use

Unidentified Analyst

it that's you, thank me. Okay, from

Steve Beauchamp

Thank you.

Operator

from the line with Tillman will SunTrust. question our Terry next come of And

is now line Your open.

Unidentified Analyst

our thanks Terry, Hi, questions. is on taking [ph] for Courtney there, this for

you about sale quarter? initial getting is did you talked out more that see has how this what and a customer, modules playing been new and recently Something the to

Steve Beauchamp

launch philosophy we it, get the years out we those last say would better, and R&D we've that after we customer higher improve it I over penetration to rates and remember we've improvements our sales. new feedback, react make market, continues I rate think really those added yield take those we investments really increase on in to it to is success consistent the modules Yes, a had several as and

was launched a of kind recruiting, really go trajectory, to we where if expected. on highlighted expense of I you expense. back recruiting nice was So quarter we years we ago couple last launched a

better seeing success our year last I with compensation think that continues. newer like and from surveys. modules We're

definitely client And part we sales, higher to drive model continue the that's new and the so back is of we'll basis products. then on these of new to levels launch penetration

Unidentified Analyst

Thank you.

quarter you can the another question Second mid-XX% mid going revenue growth, this see XX% forward? how is talk of of sustainability is growth recurring about you

Steve Beauchamp

of came we had long-term that start year, new the with we at public. all At fiscal out time model, we had the achieved Sure. key a the because of that went this we metrics outlined

I our to growth model the about in revenue long-term long-term kind target. XX% being we think of XX% talked

pretty one Growth so that range last that of the XX% seeing we number our we we for in we're our as of we're think of is And focused it's continue of quarters how about capital a top on this Toby of grow. said. eight can we market, at range feel long-term It's use level the talk plus in consistency priority being terms stages about, when end growth. good to Even opportunity. early big the

rate in total we long on very a think have opportunity as in penetration of that the execute that low us. and we growth front TAM, we so focused and terms of as is We stay our

Unidentified Analyst

thank very Great, much. you

Operator

Robert Mark Thank Baird. the of question come W. you. And next from will Marcon our line with

line open. now Your is

Mark Marcon

me seeing let qualitatively to -- in and a that's acceptance impacting the obviously regards I'm cetera which congrats. sell reputation a scores, With GX are to your wondering be terms you you how what perspective? my if add impressive, Paylocity, it's cycles just afternoon, positive, et but talk Good of wondering ability sales about of are can from

Steve Beauchamp

research reports. wouldn't enterprise you on we some necessarily of buy necessarily studies, oriented and as our the segments know of be part Yes, focused being don't it, those customer mid-market,

love they participate is the a look paying really in reviews, or like and reviews put to of really a report in because from us the to anything And those validity of being valuable, So think, our the at transparency that. of customers. lot them, research able it's we idea know customers I not

review Glassdoor like an perspective. a much very from it's so And employee

it it R&D paying really able talk think the up I comments. as reviews to combination lot with in and then you'll time read to dividends those in think product come you service been great products take of in those and point the investments service. resonated if we So out customers see to our proof back I the well the we've of that And a marketplace and is the in gives GX it's terms of

Mark Marcon

I a did. And I was up retention, they think do negative longer wondering, you're impact, the which but then bit little it that a good. think so -- been consistent, thinking how the were little economy going down-market more do improvement you you bit so ends term, can has is better, some retention a and impacting we get as on very you're has side?

Steve Beauchamp

greater retention, that. than We've been giving the you at the consistent exact on decimals really not rounding Mark, and we're XX%

that now, much above be the were it's XX% And nature it's we starting stayed years If just that would of investment, very great I the impact, off to many range. because it's obviously think got really problem. would our being from we've which to fantastic. impact. really but in think same think small so that businesses is of that because a be take I really possible emerging some has market That's

too about that I much. So don't worry

able position I rates in and feel think like maintain we level of a good to our performance. near-term for the are retention that to be feel consistent about we we

Mark Marcon

the implementation on the on then interest the split of the given particularly, ones, client the just funds terms of a transition? other quick and revenue two bit bones And regards just between to can with Great. versus in you guidance recurring meat provide versus little

Steve Beauchamp

We've increases the you to increases, Yes, partners has able accelerating I get we not just do our revenue would with into interest and look for past our to that history the a work obviously of been quarter. last bake rate and of future based any been couple are then off seeing lot this over at realized in. of rate quarters most what that so,

compare when So, on the a going look revenue what you terms it's an in would of interest be to like less it impact year-over-year. go-forward of basis,

Mark Marcon

then, a it. about the longer as growth Got bit cadence the you margin talk XX%, you you And can term to XX% profitability? balance reiterated just little versus the

Steve Beauchamp

Sure.

in front to get or us, think huge for opportunity focused prioritize and whether market, important we've there on in clients with marketing we they clients of will think us stay it's good on XX,XXX our a been that. are ROI with they're whether we and a I continue R&D, over sales is in in growth XXX,XXX able to and investments, to

I four also got little of from more forward and so think we've able a history about gradually reach target to a were able we IPO four years, -- long-term being do in EBITDA, to years. our march than

we we range. we've of XX%. hesitate that getting so, invest, we And fairly opportunities got that, great are target to do will If a that gradual towards a to we will in it, XXT but and march committed to We to see think fashion. we won't to do

Mark Marcon

Great, thank you.

Operator

And from Pat Walraven JMP line Thank come Securities. the with will question our next you. of

is open. line now Your

Pat Walraven

and thank Oh, great, you congratulations.

-- on going what's that? you Steve that so, think but do consolidation, that marching So, focused see is more and if get forward, driving your your total mission I sector of the to

Steve Beauchamp

having a getting and sure of real-time, to employee of absolutely a early generation are attention, the are trying you're modern, they become And kind like the fact to that of of think example I expense lot are companies have who number I my and make as is perspective the think think I whole, And that think is are there clients success. that of as the gave components that the easy-to-use the sector because I that innings really fact you that automated really trying I we're also possible, shift. to themselves think share a important expect a hiring think HCM in ability seeing of and to data the tools become have can things the that become you talked managers you employees asking just more more for then and interesting that there customers, creates add is the recruiting this the serve I is companies bunch have that performance whole secular there with employee efficiency. about where and management, fact the much when and as I and XX the trend businesses. so the workplace. next that in they they're in to helps we management, XX, sector as And

Pat Walraven

a which how Great. done? just follow-up, ask And can learning is I is quick

Steve Beauchamp

components our to courses, segment. on So, some is We compliance we learning mostly those which in applicable application. focus most have our

So harassment think is stuff mandated sizes. training, in in certain about certain sexual which states

potentially a a building that for So module we've had yet. learning our available We about not talked launched learning We've while. customers for a module.

typically involves say of that usage, are ready launch market. obviously probably I when our that, we are know, now, but that we early in announcement up we to able program adopters, much product add to we that Our next be on TPI and will to feedback, opportunity, you stage right that's make list will and initiative would very client tip

Pat Walraven

you. thank great, right, All

Operator

Thank you.

Merrill question Our the from Shankar Bank Lynch. come next line Subramanian of America will of with

is now open. line Your

Shankar Subramanian

about where some thanks I that get question. acquisition been do of efficiency your worse acquisition Hi, do When market talk cost the comparing place on that -- about couple for ask programs because six years, you of if for so along. like will little few question, for customers? in and and now have the going cost we transition to maturing do in ACA of And there see market that's the high-level taking you questions been the just next go you my built the congrats what as you a more lot a the and A results. how have case, think on lot market of start in gets cloud years has the the years potential into acquiring has or worse? new a I'm get And past is better asking of customers asked, back,

Steve Beauchamp

Yes, couple I the think at and five first then those the the look you've marketplace. got years in where of of last after coming is couple activity public of to have there we years years more in certainly context the ACA

terms And more about would how I tweaked our talked the it in made our lot than when it so, we of years, we're initiatives And different and investments certainly efficiency some ACA be absolutely cost past sales say in would we today we but marketing look driving would are always and looking in. acquisition a higher that first programs. for went of We've like those did public.

able and and level think us, business, very marketing and the the of day is huge end TAM ROI. this the feel I right sales our at comfortable of be take in smart get and front of a to profitable of being advantage in we the and both R&D, investments about

see closely, able tweak, shift think get we at try we in to improvements to monitor, to do we time, don't that big the I win but all to something So the look have be market. any what we we we in

Shankar Subramanian

Got it.

same Just one competing that the pressure the for people any pricing you do in follow-up sense more to market, in -- the how a see see early kind becoming customers that, of of signs pricing do if problem? seeing you

Steve Beauchamp

have product I I think and no at, perspective isn't from the Sure. so time the that price be got No, mover, looking has it's are I been there really been from biggest really here on the to would been ever technology big this the competitive factor, it of combination in I've average, a biggest, I people is competitive the very market. for to still most-deciding market. don't competitive. it's would overall I difference for say years, than that a it's been price enough always tell think more XX really comes pricing spend here, and you

Shankar Subramanian

Thank you, Okay. guys.

Operator

with question And from Partners. Guggenheim come Amladi our the you. Nandan Thank next will of line

is now Your open. line

Nandan Amladi

afternoon. Good you. Thanks for Thank my question. taking

a So, fold? your into features, the but you how broker much how bring brokers TPA is talked -- result your gone about the it is helping or new side, how as on this of the helping up targets Steve, your

Steve Beauchamp

would once early We just Yes, I the again that pretty we Sure. are in say product TPA in January. initiative. launched

product So, our went the January. in first clients on

their And unified for so, early some selling that experience hit was when And us we kind of build the to knew knew the take time employees. we that made season. we fall really to didn't we it acquisition, going

think brokers. is, as are had So technology from We planned. good far working from reliable so and good. think as I a for I And partner the a real the as I of strong reception feedbacks brokers lot what that had We've service the that well balance between a tell looking off would it's component. had that they so

we next bit from TPA and brokers. think go We in I to year, as would terms our a perspective going with a resonating thing same into fiscal meaningful opportunity more become that the be great little starts of the think it's forward.

Nandan Amladi

OpEx year-on-year, Okay. of much is obviously ahead you mobile your the think tracks R&D R&D how other right of lines. script, there said up What apps? focused and this I the front, in on are And quick follow-up, adoption investment on focus the on now, XX% you was

Steve Beauchamp

Sure.

range, I R&D got to average a we've record over increase then and revenue similar continue is to over it's in track on important products that very launching great in as I think invest of to to well. be customer our we really able time a products, think think time for view seeing overall stay

are ROI good using mobile it I and the And manager so it's as that as We that we we is an naturally point adoption. employee investments. seeing than of perspective. certainly adoption are industry whole, think more well. much portal from are more faster definitely drive So in grow that the HCM think on are getting a one trend I goes we significantly those the to that online a driving are and which products, realizing of people It's the perspective

Nandan Amladi

Thank you.

Operator

Thank you.

Capital come question MacMillan of RBC Ross from the next line Our will Markets. with

open. line now Your is

Ross MacMillan

out for either -- call and lot a time I up much. your strong I of terms it's know month just track for Steve, gone site, one but in timing? number to anything wondered on really you, so seasonal, Well, you just a historically, than and that open hiring has there now, we regs magnitude seen career or we've thank this more

Steve Beauchamp

No.

about I'd ramping end that the sales We earlier think of towards start I kind on hiring. talked February. up really of

opened into headcounts. takes to a we get from summer looking spring of regs for lot way the sales, those at all us So it we've comes it ramping before and to up when obviously

generally think you is see I year-end pretty bit I enter -- enter And this a for cyclically, tell that kind So of little busy time timeframe larger also our we open you that finish and would regs spring us. as a winter timeframe. be

of -- the heads January, and December are kind operational January year-end client-related teams lot all of in a our I with should So, down issues. say, dealing

they're coming to out of this kind and fill those to So, of in looking them. they February had in cases, some available positions that

me surprise Does doesn't that sense? that at So make all.

Ross MacMillan

another year, more staffing next -- meaningfully maybe any emerging for going magnitude? just sense that that is in is, point And you of market, fiscal that group Yes. are order and up into the down on

Steve Beauchamp

Yes.

We it's deciding haven't terms in given it. because in order of flight magnitude, frankly us still of

the customers, from bundles are we've the product some We hirers together. and that had obviously We've seen of with the in we happy the what in put marketplace. terms reception working

some that We that investment. building, to we of happy but safe we emerging market with will we are say I that channel are are early relationships referral in space. to would say the hire very continue in it's

We haven't the exact number. finalized

going go you I'm So year. fiscal to into color give try to as next we

it I helpful multiple revenue look cost take year, growth before and could it's that this at what as probably little to structure a it's next be for think becomes year, not is but look say years really driver think our at I you as a us. meaningful bit I we going that

Ross MacMillan

one is one, given actually but Thanks. -- strength the per Toby, maybe I is more just we've meaningful impact the And retention question, retention sense of in the metric? customer, last that it employment for and maybe had, just a backhoe Great. to there the it's growth that headcount broader does

Toby Williams

extent sure, mean, to our existing think and we for that's about tailwind is think translates cycle, a the when as the a guess of that -- the customer higher I some view would increase at that the employees to in number employment think terms I I way economic that we I of think base. one I see of I clients, tailwind stronger for levels

it's it's so, directional small -- it's of from if there, think as yes, mean a And think about headwind, relatively the I revenue the not but the that a a you is you see And terms true but and when in it's I it if the the thing you base, contribution know, I we becomes tailwind actual a tailwind, same in perspective. cycle revenue big. you think cycle the all it see turn view when

Steve Beauchamp

say revenue Yes. I XX%. other this on a employees zero, and greater Ross, very in our still if that be in low basis, growth small would that would talk percentage about single-digit we is, being was way, than growth

Ross MacMillan

That's helpful. Thanks, guys, congrats.

Operator

further I hand Officer, for Steve conference Chief no now would Executive over remarks. showing Beauchamp, closing Thank you. And the or back comments to any questions. I'm

Steve Beauchamp

want all Paylocity, you year-end of interest you to busy X,XXX to over all Well, in much thank very their great a moment Everyone just I have for a efforts very nearly your for this for day. our season. take employees and thank

Operator

and Everybody, for you and may This a on Ladies have gentlemen, today's disconnect. thank conference. program, conclude all participation your does our you day. wonderful

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