Paylocity Holding (PCTY) 1 Nov 192020 Q1 Earnings call transcript

Company Profile

Participants

Ryan Glenn	Vice President of FP&A and Investor Relations
Steve Beauchamp	Chief Executive Officer
Toby Williams	Chief Financial Officer
Joey Marincek	JMP Securities
Brad Reback	Stifel Financial Corp
Alex Sklar	Raymond James
Samad Samana	Jefferies
Matt Pfau	William Blair and Company
Mark Marcon	Robert W. Baird and Co.
Siti Panigrahi	Mizuho
Drew Kootman	Cantor Fitzgerald
Daniel Jester	Citi
Scott Berg	Needham and Company
Robert Simmons	RBC Capital Markets
Arvind Ramnani	KeyBanc Capital Markets

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Paylocity first-quarter fiscal-year 2020 earnings conference call. [Operator instructions] Please be advised that today's conference is being recorded. [Operator instructions]

I would now like to hand the conference over to Ryan Glenn, Vice President of FP&A and Investor Relations.

Ryan Glenn

Good afternoon, and welcome to Paylocity's earnings results call for the first quarter of fiscal 2020, which ended on September 30, 2019. CFO President the and Beauchamp, call Paylocity; Toby Vice joining Relations, CEO Glenn, and on me today Williams, Ryan of Investor FP&A and of I'm Paylocity. of is Steve

issued will relations be our will website days webcast announced press closed. the Today, tab. for after this the we market call discussing the of on investor available in under results our the release be replay XX A next

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

to For Exchange contained disclosures. additional other information, please therein and risk our filings for the Commission the factors and Securities with refer

which unavailable measure reconciliation to Paylocity.com this directly under is reconcile any non-GAAP undertake we and needed GAAP to website representative to how we a certain investor are unreasonable currently located duty there and will schedule Securities that we these financial in measure financial reconciliation at Exchange to detailing update effort. complete is believe statements. the Also, measure any filed because not results comparable forward-looking more available at during on time today's note the the refer do non-GAAP their We press non-GAAP any We the without information, business, measures. call, measures forward-looking which are financial course that tab of Please to is internally our the release, of relations and is Commission. a with our unable

XX. XXXX Midwest the conference New for to to with on that, conference growth at in events. me one X turn will let over call in upcoming be if know time these either and a November With on Chicago would TIMT Stifel of like York schedule, the conference I Toby us RBC our Steve. November on one let Please regards you me In attending the and schedule

Steve Beauchamp

Ryan, you, call. joining earnings of to and on first-quarter thanks Thank of all us XXXX you our fiscal for

off in fiscal our are XXXX first-quarter nice We the revenue XX.X% an million, of revenue total straight quarter represented we marking of an XX.X% again momentum in with driven offerings. fiscal Channel than same by Recurring once a start of the mid-XXs. by average and to revenue brokers per quarter total increase with new and with year, growth referrals, client last other the to benefit $XXX.X versus quarter. XXth new positive financial additions client revenue advisors, our as for business newest continue in from and product increase primarily XX% first see more grew

investments attendees. a record while target number and XXXX to margin we toward revised adjusted as XX in marketing in sales last research initiatives software we the where channels Client and of broker conference recently We and Last with our of revenue. XX% was or a Compeat, advisor restaurant provider leading announced have represented company. while in a partnerships million broadly, our EvoShare, annual we technology investing basis week business of held exceeded quarter fiscal also and operational EBITDA work remain million in investing also of including first our continued Elevate improvement XX.X% and in partnerships development focused microsavings of year. XXX midpoint leverage more for continuing point which X.X drive and to same guidance a the Adjusted quarter from We the EBITDA incremental by our the on XX.X margin, financial hosted

communication, Clients needs and the including choose of collaboration were the modern to and HCM other XXX and workforce, trends on employee from over focused sessions learning workforce prospects breakout industry. the able in

the in our on providing to product appeals and suite our of commitment Zone use driving Connection features Additionally, to our was latest that of professionals site provide theme our to the innovative modern to technology Changing are engage demonstrations. to HR product the teams clients the and employees. and employee retain recruit, conference introduce software product workforce. to key needs they technology transform were way to A

employee Employees the mirror release platform clients I'm the employee-focused to meaningful, work timely It most the end, expects. modern to at day. way coworkers employees with communication engagement to the feedback productivity. that HR and enables of platforms and that announce has and Community, use expect an today's for technology to share increasingly pleased To social workforce outstanding. a they connection, increase content Early they use in been relevant professionals every designed

communication and provided a collaboration culture, help and company Clients attitudes. build have employee a and as companywide for leveraged they have to better engagement utilized community insights around platform

have employees a clients and to Community common who on employees with positive way Our collaborate their interests projects, broad-based participation drive also initiatives. from key use connect as strategic in feedback received with other

suite review pass continues Our versus to our in to detail now commitment would results the I and quarter's provide to guidance. in the to the call being Toby like pay marketplace a product key development with dividends updated competition. product to our differentiator

Toby Williams

revenue with XX.X% Thanks, other was from million, XX.X% period increase for year. recurring last QX revenues of Steve. Total up and XXX.X same the an

our quarter Steve continue mid-XXs. As to the revenue QX total straight consistency pleased in by growth we we're our in be noted, of seeing marking with the business XXth

XXX to model. for points gross as period focus in the an basis year continue consistent the XX.X% our scale while same in we of profit prior growth business was increase driving QX, from adjusted Our revenue on also

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

basis. a G&A On were our non-GAAP revenue QX in QX basis, on G&A costs and last in year, leverage an on XX.X% XX.X% consistent remain versus fiscal focused of in of annual expenses we

and net Our same Covering XXX adjusted guidance our by GAAP basis year. points EBITDA XX.X% prior XX.X increase an which for revenue the was quarter, profit in for or our the quarter, of X results, million. was Operating gross million million at million, the XX.X was income represented of midpoint the period the and million. from XX.X was exceeded X.X income

in In we sheet, XXX.X balance million generated of last to for X.X activities cash as million, same the from regard million in ended quarter we the with the corporate X.X QX compared year. and invested operating cash cash, and cash period equivalents to

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

quarter revenue. XX is second be to of to second expected of XXX.X 'XX, range quarter XX to or of to And growth in XX the million in be 'XX of the over expected the For total XXX.X fiscal range total EBITDA to XX% approximately adjusted million. revenue is fiscal

revenue. we're And quarters, growth the XX generated to XX% total approximately our of to adjusted ability we're XXX in expected ready we mid-XXs demonstrate the million growth range conclusion, over toward the making In of for continuously financial with our or now last XXX the fiscal our EBITDA long-term revenue pleased progress XXX.X are targets. 'XX, we've for QX the questions. scale XXX.X in our be in results, fiscal and total including revenue is to range to to Operator, be business 'XX And over is expected million.

you. Thank

Operator

And Walravens JMP instructions] line question from comes [Operator the of first our Securities. with Pat

Joey Marincek

Pat. you Hey, Joey This Steve, are for how is doing? on

does So like our later typically wondering look question usually Or they were products? was first add start and what one clients? on? more Do new buy we with multiple for adoption

Steve Beauchamp

Sure.

expanded think to as evolve time that So product continues portfolio. I over we've our

purchase also the that very all a HR And I popular typical continue terms of As to that of able labor, some adoption in good to across of new increase after of and be they more point that. traction time you being all but start customers. definitely see at the our we onboarding, of benefits, with then recruiting, our our for probably think as would clients of payroll, modules modules buy know, component

Joey Marincek

like? particular? on just what on-demand pay, then how's and look adoption then Awesome, the feedback that for does been the And in

Steve Beauchamp

Sure.

pay. early very of our in we're on-demand release So

So we advance. it pay using and and a that their have are have number they customers, that in are of requesting we actively employees available to

new that adopt to are also feature. little a a little bit of that slow have reserved We maybe more around a number and are customers bit

We one about a helps to we offering, differentiation being of the from benefit think certainly perspective. the that offering and employees. it's to with market excited great a first think that new We're

Joey Marincek

you. Thank

Operator

you. Thank

Our comes next Reback line of from question from Stifel. the Brad

Brad Reback

Great. as attributes Thanks the belt, continuing to economics you under with your to expected? market out down much. prove Steve, the it relates are another quarter very as

Steve Beauchamp

Yeah.

seeing were really market. this at we year, onboarding. They our XX And move continue I and that traction like as with unit I kind into think look last we're year fiscal excited think we fiscal of products employee XX%. recruiting growth topping in to under

smaller talent. of their seeing our adopt clients We're has a new communication and like of as management those differentiator many talent attract our Community products And a actually them. of for been retain portal to great also product some ability

fiscal there, continue that think building last we to segment. to gain year really progress we and I into that started make traction continue So we

Brad Reback

Great. And follow-up. quick one

the relates leads of making grow these sustained new those is these side, your new Or the channel? from have to over focuses, XX% the to that to channel, you're that north time investments does partnership the On XX%? that just that or ability of

Steve Beauchamp

anticipate health being biggest of changing. a today our revenue good we brokerage It's brokers question. Yeah. advisors And that, with comes insurance component. Most and partner necessarily wouldn't financial from the

co-marketing partners We're extend with to other those some of formalize starting some to relationships, some of potential starting we're concept as our you do partners. And partners. see, the of can to

being So product Compeat for marketplace, being advisors. EvoShare a financial the software, provider is add-on in an

for So help and that maintain we can as to be grow it potentially interesting XX% we new both plus be us. us to able think that channels continue could open that

Brad Reback

much. Great. Thanks very

Operator

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

Alex Sklar

being usage few just years? discussion of see Alex But in the lump the as broader you the the lot installed you user Or into the of retention? over been portal about thanks. do next base talk for into conference efforts fit There's I'll as kind the could Sklar about kind This is a maybe products here and in back Great, of Community improving just toolkit adoption Brian. to if sell well. valuable these to thus they and on

Steve Beauchamp

Yeah.

the to of back So base course, I sell at installed think it effort fits the into our usage purchase. point broader and definitely of to get

introduce roll I So have, of times, of if a and the journal know capability be the out, really HR Management, you going interacting challenge some it, and departments doesn't managers think employees many to how is that And to Learning impressions employees. do do it's products the what our journals. with that performance I'm teach management, to Community are surveys, HR of department the I other able great survey, how lot to things of how how write types like

is And up so, the this into one incorporating product our best into wrapping toolkit. really that of we're adoption idea practices

into to traction if be a you, you employees, can the out product Community or gaining I on turn adoption able using email and a other customer were will this are go going I'm wanted surveys, So like clients it. toolkit send with to that and your to give here's to actually an I

Here's use cases can use. that you

get to to a able after meeting survey could immediate You be feedback.

You use make to announcements. can Community

new You all hires can organization. the announce entire your to

in this concept Learning same we're Management. in practices. best doing We're So building thing the of

can ideas doing more they then basis. much usage. customers clients we're them that And powerful kinds of And take getting that these on really finding and giving it's an seeing are are everyday what capabilities we're that use on employee the how is

excited from we're think the our the about so, right definitely clients. strategy utilization, And we early drive this to and reports is

Alex Sklar

here All then target for Great. Toby. quarter, Last of sales maybe about right. count one being year. -- at rep talked already of the And your you start

if you we Or about more move scale hiring talk regular could line that you expect cadence? a year? over if wondering the course the see to item should to back should of we to I'm

Toby Williams

but was come we a what with Well, think I fully little was into we think And pretty that we weeks, think days to was that year earlier. the staffed, come we think were and I good prior quarter, staffed that And little said that what year. and said a where think pleased fully we reflects the came fully than we as happy were ability And we've be had to I think feel results quarters, the the would for before see bit about I our bit the I you it not year, ability we sales prior into into we year have. was staffed well. the can the earlier I months by say I that as think momentum and

feel And so I kicking off year. pretty think as we good the we're

Alex Sklar

right, great. All

Operator

Thank Samana our with the next from you. line And Samad question comes Jefferies. of

Samad Samana

yields? customers And for differences my any maybe have in to retention first either questions. come partner on channel economics taking I or the Hi. follow-up. guess channel noticeable that there Good afternoon partner a I side. then and the unit direct rates for thanks versus Are

Steve Beauchamp

Sure.

force partners these sales brokers. individual creating our the it's that's the reminder, a and with as channel relationships So

the are level. the at that broker often So level, relationships less individual firm but at

of relationships bring have so brokers a ratio department makers the the that in get HR partner, higher as one at us trusted therefore, benefits individual we decision a much and and And biggest those those. for the is when close the they we with client have

the basis, a to a from from kind need that questions do on consistent talking I keep or something then they're and anything very ongoing pretty perspective. we loop. they're aware And that in retention. be or of, it's channel necessarily into retention there's We've say sales customer across they broker, board. the running translates to to they're got marketing us efficient if measurable that an that wouldn't finding the So of that

the the on is definitely though front say I'd the benefit primary close rate end.

Samad Samana

then the out gotten you guys And think thinking XXX. great. conference I PEPY, have about coming Oh of the and to

HR or set is think what I'm getting get to maybe You've new XXX on and that above you XXX kind that per the of curious cap spend a on can time? what's represents where you employee total target -- the technology whether range over XXX. the cap of is to XXX

Steve Beauchamp

Yeah.

has that think I evolved time. over

product our more people look And if they think at products. expanded. industry have are think portfolios you a buying I in whole, as I

we years completely not prior. And in able have some of these products, been imagine to might

a in anticipated. So product, wouldn't survey the ago. is that fact we're sell way years we've very we as a fact that's able product The creating Community today several than to that collaboration a different something have launched

a have view initiatives our think I So is are working target we next for point on we us, is getting and that $XXX great toward there.

products. where means there's customers cap if to no don't exactly by plenty for have But we really do continue we we think is, that for, new is a listen we that what that if are innovate, and that to that's stop. we're to our of convinced there know where opportunity We but asking

Samad Samana

can Great. cut had just And announced. then We if rate not Toby, I be ask I'd one, you. XX remiss bip to. a

thoughts or that's into updated both just assuming I'm year and for any would full be helpful. the -- Any that factored around next for guidance quarter that

Toby Williams

is. yes, fully through I the guide. mean the that I think come short incorporated that and is anticipated we mean, I would that's that into it had Samad, answer, Yeah.

Samad Samana

Okay, great.

quarter. Just on and wanted clarification. guys, congrats Thanks again the

Operator

Thank of you. our William comes Pfau line the And Blair. Matt question from next with

Matt Pfau

XX different Hey, guys, Because market. Thanks market more in competition? than market. set the of probably are competitors the in question. to versus Is above taking my ask above employee sub-XX that you the competitive Wanted XX there What certainly for there's you terms that on seeing there employee run a market? of

Steve Beauchamp

Yes. Sure.

up the the players. They're biggest drags I sometimes as the below run in more most, in toward the you market, employee even ones certainly focused creep would space that are the enterprise-oriented we so which the X,XXX then some think more ADP maybe XX of Paychex that space. into and

But you providers. bunch hundreds also There's see independent of a of country. those payroll smaller, the across

a it's then and we primarily think XX the I independents employees. ADP, so of smaller that some Paychex And see combination below of

Matt Pfau

most that referencing to out of seeing would the ones traction I was TPA, Got you're some new it. products the assume out? of anything in the anything you and LMS with, And call there? but terms you're call

Steve Beauchamp

Yeah.

summer, it's relatively LMS launched I think so still just new. we this

we're think the force. back good I season our really sales terms during in selling reports from the traction getting of

learning think into. the challenge organization they're sharing idea people of I as definitely into across a buying running are being the

use as product. new really So conference. user happy Community, launched adopters our prior definitely we've just number early at been a seeing cases that formally with had a And growing product. that we that. to We of bunch a we're with of

a think we ideas of terms go-forward on to in basis. have of then that I And being lot a able enhance

I'd the those call out. two be So would

Operator

with line you. Baird. next the of Marcon comes Thank from Mark our And question

Mark Marcon

question. afternoon my and taking Good thanks for

wondering Just of And approaches to with the channel? give you course to regards us over should the to be employee market, the can any thoughts year? with updated this sub-XX regards expectation that the what

Steve Beauchamp

in if the had under you year even at we employees. we look where indicate, as I Mark, some definitely think contribution under that XX and you of last units XX, grew that, a range, bigger of XX%

market. we're going on sub-XX more than those that accounts. sales sells also team being accounts, this a XX the the force sells market the in I build XX while At think maybe little probably TPA employees. to point time, sometimes channel to we indicated primary sometimes, range it's it they So does the our newer be channels, focused those emerging a take bit employee that -- in to And core that

marketplace. to really early What We've we in resonates of think to like majors. So it build with channels. I success. product well done in the more kind We how that build well continuing really we're is out understand

progress. continued think And quarter, kind look first past I as we of it's so, this

Mark Marcon

bit size and to Evo? regards a can the channels, about of little with Compeat then And Great. talk you

Steve Beauchamp

Yeah.

brokers, really here we we is sure what We see us looking financial products other insurance the is be to from potential things on focused might expand and we're advisor. financial brokers, they was interact concept the make channels you'll I at past. that advisors very wanted think called partners. one that of in example the is the that EvoShare a could probably reason out were That's health squarely that and the with

They've that in potential at we're relationship. brought providers different looking And into then space. software also us

restaurant-focused and software be looking a fit. that was thought got was to going we So a great for a vertical that partner you've market, provider

And go-forward so we'll that basis. options like a on entertain

material. them. of being able see any would little to I to behind expand out you'll beyond financial We're I think But We to bit as have us individually don't continue a think happy I go relationships. great think call idea they're the brokers. to those and be advisors channels

And the reasons that of out. was called we one it

Mark Marcon

one. then last And Great.

of look in little Just interest obviously, float, at we've seeing. of a on that embedded the terms income cut we the we a to bit been If rate change what's the pace a take guidance, in today. saw the the relative

that out on course about here changes? think the over to the should out there's How year, we playing anticipating from going that limited of be

Toby Williams

Mark, a that's and rate minutes today I and it's like into few looked saw said a Yeah. incorporated true. guidance we that I that mean there's ago it definitely mean the that we quotes, cut pause. the maybe we saw think had Toby. Fed I I

but course said two that good I out We'll rate the of we guided baked initially, saw. if obviously have for the over which fiscal to year see we we we how think how plays ability, back about cuts, we in feel go the you year, the

we've guidance, on the both year, and EBITDA raised updated which third revenue with We the baked in for cut. have the rate now

set the up year thought but ability good guide not the for third. I feel cuts, to pretty the baking after about the rate nice we was take quarter in generally pretty think just a the but that initially incorporated we what to

consistency we're feel And the the seeing, think good that so about again, momentum I so. I and

Mark Marcon

That's great. you. Thank

Operator

Siti And Mizuho. of Thank comes next you. from our Panigrahi question the line with

Your line now is open.

Siti Panigrahi

a to QX in and Thanks and for just demand user confidence Hi. a you most your downmarket customer or do would sweet landscape. versus sense growth product competitive taking is or in now your of level conference, product segment spot? post in the think question. any behind there see year And particular get in also, wanted customer my last where opportunity opportunity? since drive of whether positioning Steve, And incremental any terms or terms that this year your a I of is now of you your

Steve Beauchamp

Yeah.

growing to of happy organization. time year the a been long the we've now, really strong sales were obviously, revenue performance That a our ability the quarter, so mid-XXs beat sales drove in increase of really and from guidance for So kind terms first the that and performance drove we really quarter in team. with from rate in our for our

that's great get to So start. in always a great revenue a to recurring business off

That's really positive.

product I side, offerings. some the excited equally newer think about of the on

I our And differentiation, strength helping the think they is size across segment. coming are business. is force which creating our some also sales win

at well in on under of end doing but we're core doing XX marketplace, upper really our we're So well the and market. the market target our

that's is so the strength the positive thing board. quarter probably out to first the of And we're across take most seeing

Siti Panigrahi

cross-sell opportunities product to And think right have now? about getting when percentage go that logos you cross installed and enough new versus your sell back do you And to installed you what's base? base, sets your the to now now think

Steve Beauchamp

XXX,XXX primary more think with customers opportunity certainly will those -- Sure. more land businesses, market, move we I we think that helpful. land be than of still this to our selling in forward. a so of there's market we we as size that's I At product, same a XX,XXX-plus huge XXX,XXX mean the new as new the and And customers, time, them customers. goal are still

will the gradually we selling expand base. client our to efforts continue to on back secondly, products then And

over at times a these had an us years. base that products user have sales several that A with the lot have team. So back They we been while the don't selling are client last clients to know conference, our currently. products of inside we've

unit to would selling you're opportunity, think see back what great and growth on I to we'll continue But and focus you a focus We tell so going the to still base. us it's is client then the maybe of and growth platform, base the bringing about client new revenue being our and growth first sales primary driver. to the being than back a not foremost, but to think faster clients

Siti Panigrahi

Thank color. you. the Appreciate

Operator

Thank you.

line of Kootman question next with Drew comes from Fitzgerald. Cantor Our the

Drew Kootman

Thanks for my taking question.

Just tagging that. curious, on

mentioned that seeing a can group. dive you more end of your in the strength little market. you're You upper Maybe into

Steve Beauchamp

Yeah.

employees, as there's bring we to So we a customers X,XXX on employees, where they feel we to fit times know, even on that feel and you focus same and going above XX be they're employees X,XXX obviously if the way. like

will And most we get a reps lot those in front our experienced to with of of our those retention folks. so of often got most try customers. so We've we great had reps, confidence experienced

I some years, look think I you certainly that, we've at we've management, products that over management, three the filled the learning Community, added upmarket, four us our of when look initiatives, you really like portfolio. think having having product if product last out has management. Obviously, expense having we've recruiting, compensation it or added helped added

stronger end upper a we our the market, years for like portfolio even strong or two really got we've So of than ago. feel three

the combination think I of broader driven experienced just a and upmarket. is having And really in our so portfolio what's the breadth sales success product reps

Drew Kootman

moving Great. engagement can expect touch do now focus, pipeline forward. the as to the of maybe you that's then as much new that Community you're releases you say, on that And driving in some of you and the have willing more

Steve Beauchamp

Yeah.

what add. learn We use, to a features learn they I We really believe think is get releases client what talk we them to need as customers. in adopter -- changes cocreator. strongly they'd product the we like our we we to with about what and the in So like have to the early way

launch then see kind And once kind that us announce you of it. of we

as of is don't I so think we've a we preannounce. we kind of that you more to example, that think that though I product robust. long for tell Community to would got And What make add even list features typically we an can

think also monetized there a possibility version premium at sets is some be there asked. with time feature in of that that are point a being some that We might

continue adding from right focused a road We're off features be example a something it's we'll we're to would and at map that feedback. that But based look driving of perspective. an utilization, free client So on now, offering.

Drew Kootman

Perfect.

Operator

Thank you.

of comes with question Daniel the Citi. next Our Jester from line

Daniel Jester

everyone afternoon question. Good my thanks taking for

the to last tie off just So one. maybe

had the year thematic You focused time are clients. just your two things for or they're of ahead? a most one conference, user What on the lot with spent next

Steve Beauchamp

Yeah.

really retain I type step the if of and think take environment. be talent I able is they challenges to you to in attract this think of thematically, that have a one back,

a of economy and the one generations, workforce or gig that's lot younger next, the new generations getting nature of workforce, the entering state lot or moving the positions there's whether remote changing. to So facing departments, legislation things the HR decision-making the in the of it's millennials from job people the a

HR. So there's I would change in say on the lot one of is theme a going

they treat so much able And terms out how trying become employees. are and then more users marketing-oriented in HR really figure to of how to be to manage that

second looking to help a is really for them. they're the thing think I partner

questions. than partnership, this things for transactional kits and idea service looking of out. are so And we're a just adoption rolling of great more They're and example really advice

for best looking They're practices.

best And the world more advice, we're of practice, is some key trying toward. getting to to they lot so a really more therefore, complicated, that need drive I aligns initiatives their think

Daniel Jester

the catch say then, could your as you you in that of sales That's second, really in progresses? Toby, heard you're of margins I incremental script, helpful. share thought that I first can color impact did I that how kind a little and and are, in And And marketing. I investments tie right? you year any guess making bit maybe if

Toby Williams

would targets level to sales financial We've in it's sales think the invest bigger marketing Yeah. I line. laid way. invested growth in intention our and over sales the mean term, I I consistency and I of in in that be, has that with one been talked consistent our certainly we time. were a business, mean Dan, and pretty near continuing relative have marketing about what to in been out we of and in consistent our has consistently the marketing relatively the range and drivers the fact investment think remain in

Daniel Jester

you. Thank

Operator

our you. Scott line And from Berg next Thank with the of Needham. question comes

Scott Berg

a on five how taking kind have the Thanks three, I did space, immediate term over you in for maybe question. four, work quarter. some of do in think question thinking one there through years. I as of is overall the is, business guess Congrats there the and we my good about growth your customer

You're strategic. moved mid-market, the core you into

one and were XX, numbers if XX at bit little are? like, to about what maybe, looking we and does You're think of that five bookings a If employees mix the years three four out, lower. or to look whatever

Steve Beauchamp

Yeah.

subtle of think shift more initiative. a it's big than and probably probably different I a

you go that employees years ago, employees. less our the XX% XX% If now back disclosed we than had of think XX I three clients -- our of fact

always And so segment. kind we've that in of been

think a I anything, we've that XX, than before. had more traction XX, employee space little in we're if XX seeing

some And there's so ways to market. think that cases, in approach different we

had to always We've presence So that strong in XXX me more been darn subtle shift. is the X,XXX. of to pretty actually a really XX and a to that good XXX in

that's I think So don't changed.

a off anything, time, product. competitor space product at at based module the lower portfolio. And that we've that more the we'd in end, think, they're I added additional a bit demanding our little if stronger to same become the

than anything, today positioned we than years just we feel several I more So ago. think, have better

Scott Berg

an Got interest I I'd asking not it. guess question. remiss be And rate

You your some funds. made interesting guys invest changes you how interesting some took -- or around

summer, slightly duration securities some think was into longer yields. year went better now ago a slightly I last with it

maybe yield tell you're than are different you different you doing bit me composition others to funds those that holding in there. probably you're maybe again ago? anything And clients you'll drive to higher are space? opportunities the did little maybe a year know I any some But looking -- with there today perpetually you a As at change opportunities from

Toby Williams

we might I Scott, started it's Toby. what I a I going you years is referring think to back just be little client bit mean in investing I now. think funds think two

sort We that over duration the that think major period of over I investment doesn't the changes any change sort other in any of And course time of time. course profile a that of or of haven't lot element whole probably of made strategy. of

we're I think consistent there. pretty

Scott Berg

questions. Got for it. my Thanks taking

Operator

Simmons RBC with Robert from Capital question our comes the Markets. And you. Thank line of next

Robert Simmons

questions. taking for Thanks the

what for So you gig bit, this you and economy but touched you on-demand on offering of terms have? could in pay your versus the what's on what is go the a topic Ceridian take little

Steve Beauchamp

Yeah.

So I'm doing. familiar not what perfectly our all are necessarily competitors

think Ceridian developing I understanding offering about think in the I is talked I is an new year a available. And think this having space. my

tell would to can Ceridian, I what different to So but you, take I a not believe actually that approaches take be able specific people might and couple there's both. of

to available, you we for how want way it leverage into see approaches or give you we if a of so say mobile you've clients real-time you you to. And app, the they all And tells that deposit ask you've manage to to you that to gross have. to of that then you've pay of it later account they give to go into earned, in who they administrative request absolutely the want whole tools one net for you got that the is kind from And want which our who the next any either able and put you earned, the kind not of your be that application, will to what morning and you the day. us, go much in day might this so direct bunch can so of

a card are could you type A employee's some direct put the deposit, those as -- use digital deposit. those direct with could of So purchases. actually then We're to think card to a wallet it card from are And network a that I either and or or speaking made as generally two to on approaches. different that's alternative that where be account and bank starting are card, one the a approach. card funds or approach wallet second are basically disbursements make

that mean are at time. do I'm can't over aware of. think Doesn't we least those that discussed being alternative second are that that approaches the two I But

Robert Simmons

Got it. Great. Thanks.

Operator

instructions] the And Ramnani next Thank you. our KeyBanc. comes question with of from Arvind [Operator line

Your line is now open.

Arvind Ramnani

for Hi, hi. my question. taking Thanks

PEPY of was met kind we last out week a up customers focus to new closer the versus really to are much they're of mark about customers? our the One that paying customers things of is there sort up a the basically going level. take and number when more at talked those you signing $XXX of How $XXX where of

Steve Beauchamp

Yeah.

employee years period. available at doubled than five so so and year, per time that per ago, I So half $XXX little think more ago, a we you a think product if the we five were in years

that And well with have so before five a last lot been obviously, we have years. us customers that time in and added we've frame of customers the

has need, solve able So you we're sure, it. a we to a what to make I want is tell would customer if

customers could we've last rest over of newer some sales sales our than the job inside an years, the that force from is offerings. We have grown identify faster to that of benefit our their and two team

that. doing actively we're So

would is from think I coming our you a tell I that to look growth. growth revenue if is lot were still mid-XXs unit rate, at what you of

it's us, to that an an initiative for it's although we can grow. opportunity important think So continue we

growth benefit and I still sales then customers base. back selling continued would new and the client come landing tell of get going from our of those you more, is customers the to that most we to

teams. continue those So we'll to grow

Arvind Ramnani

areas of And to of side major of not sort areas then about does investment equal the but from are do and of I'm just the product sort need you anything couple you sort of come? any feel how that either investments there business? are of they looking make XXXX, Where all just And portion of of next where the at sales you for Or are major asking across Great. for or look business? at to sort a need now years, side? of the kind guidance, really you

Steve Beauchamp

Yeah.

market that going very great large. I we're need the things one is back after about of it's So go the to to

you X,XXX And and XX there's when plus it between so employees. under larger employees, gets businesses. of then think XXX,XXX even XX And

XX,XXX got clients. only we've And

basically strategy we're very where customers. So expand we land think innings and the early new focused in a of landing on really we're

the We we've also over able to last innovation been good five-plus product years. drive that feel the really about

matter organization our to R&D able invest sales we of to innovate And can marketing a our that, on differentiate. in so and to be groups if that think capitalize such you of it's and continuing that opportunity, combined with

retention over we then had And years. the obviously, great

And -- We magic formula. in want invest the so those that's R&D. to

marketing. We and in will sales invest

drive great that we think where natural we scale long-term And retention to can our that, there. in we with a business doing put targets continue hit customers. out it's We'll those

Arvind Ramnani

you very Thank right. much. All

Operator

at you. call remarks. I'm this Thank now back the questions turn no over time. to I for further And showing will CEO, Beauchamp, closing Steve

Steve Beauchamp

all quarter. to just quick want last second thank for this I all take Well, over of employees to the efforts our a

year-end. of up very a time of We in then course coming season middle a selling your thank of to you Have night. interest with busy the all questions are in And your and for great Paylocity. and

Operator

Ladies may and and gentlemen, you this concludes for today's now conference call. participating disconnect. you Thank

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