PCTY - Earnings call transcript Q4 2021 | Paylocity Holding Corporation

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Paylocity Earnings Results Call for the Fourth Quarter of Fiscal 2021. At this time all participants are in a listen-only mode. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ryan Glenn, Vice President of FP&A and Investor Relations. Please go ahead.

Ryan Glenn

Good afternoon, and welcome to Paylocity’s earnings results call for the fourth quarter of fiscal 2021 which ended on June 30, 2021. President and Vice Relations. Glenn, Ryan of Investor FP&A I’m is the CEO CFO And on today of Steve Williams, joining me Toby call Beauchamp, and of Paylocity. Paylocity; release results we in Today, discussing the the be our closed. will press issued after market announced call of under next website be available Investor Relations tab. A XX this for on days webcast will replay our the the

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

be you’d For therein of the time do know measure non-GAAP representative under the the unavailable available detailing additional in Investor at Relations Exchange their these the Conference we turn person more Steve. reconciliation we any and We upcoming on our are attending and conference September to over the we Global the and reconciliation paylocity.com time Conference measures. Commission. at Securities measure Las release, me with refer unable us to needed on course Exchange that Tech website duty Also, which for risk our forward-looking we reconcile our and schedule Conference to events. XX, of on refer to are which a to how and press these on will effort. there is Toby complete to in measures filings at will non-GAAP Jefferies this Citi any other in the call, regard XX Please financial business, that, information to currently internally schedule Securities believe results if is note filed is located and tab the HR update directly GAAP I comparable financial like statements. and September September forward-looking during our to without with information, call that of undertake In because to With financial any the please schedule, virtually the factors non-GAAP today’s is disclosures. contained be a let Commission certain XX not at unreasonable measures let me the will any and with Software Please Vegas. Technology We

Steve Beauchamp

thanks We fourth to our and fiscal you, the for guidance. joining Thank XXXX Ryan, and XXXX us in all finished earnings fiscal and ahead call. momentum strong as our with of came year you of QX results quarter on

year quarter, excellent top XX.X% the quarter in had an million revenue exited the the Our of was exceeded sales $X.X million. fiscal EBITDA for fourth guidance growth the team with or fourth we by margin our and and XX.X% quarter. end $XX.X Adjusted

years. very zero fiscal retention near adjusted again fiscal XXXX last increase of and and greater ended margin COVID-related The revenue also very once the we fiscal number as client by with of environment in rate Despite end challenging compared XX% $XXX sales was interest driven XXXX, XX%. XX.X% our fiscal or XXXX had at COVID-related was and highest the EBITDA clients level million at despite high For increase clients in year, strong team environment. XX,XXX a than XX,XXX remained XX% by in year, an a headwinds satisfaction its of a to aided restrictions,

product industry marketplace. the suite modern the providing continues Our to value and of in most comprehensive resonate the in proposition

for across expanded seen team we’ve our segments. levels adding and with marketing a the XX% force reps, drive into fiscal pleased new to sales have the training and highest revenue initiatives we’ve increased and appointments Sales our XXXX staffed programs the starts driving that the investing XXX time, in off channel year. to at fiscal first-time pleased gain we’re momentum, while very sales in strong sales to we’re and execution This guidance in XXXX market business new fiscal heading in sales execution reps productivity. momentum, all of and QX number strong is fiscal by and XXX from continue fully this to Building by New same XXXX, XXXX of years. I’m

strong and Paylocity’s value into normalized proposition a we employees. more resonating past pandemic also prospective As is environment, with the move

advantage a across staff candidates We’re and we in R&D. business, plan including marketing talented seeing of very up take We this to XXXX as fiscal beyond. strong the for pool momentum sales, and of

in continue channel, our referral our to continued initiatives, QX fiscal also full channel our with in in We which remain deliver we pleased business the invest and more XXXX. than and of consistency XX% new to

support increase in reps fiscal we in remain our to digital to XX% and an to sales motion. go-to-market lead addition In for our marketing generation committed investments continuing XXXX, digital

XXXX the utilization per of interactions focused saw hundreds comments and monthly average we of visitors products and over modern an In with way. as user the workforce Our of led month on employees unique XX,XXX month, announcements our reactions growth. continue to thousands see doubled during from per Community, fiscal

the As groups and see as many are Community we created created see around centered in thousands a potential for groups We of collaboration. being that allow use to grow, case increasing team. discussion continues

already this to engagement and better and leveraging We team are looking a get to as collaboration internally. space have done enable work started

in the one significantly million and surpassed X.X than launched surveys to premium video usage XXXX across more played product growth over million of usage the average each increased with survey an month, addition videos suite. fiscal in In Community,

with with a believe content momentum the learning tool. this powerful per completed employees on XX% leveraging has over Our by suite further uploaded, seen our demonstrates video We content is product. growth XXX,XXX video recorded communication engagement courses product all continued across learning significant management month similarly nearly being video and how

Paylocity their instrumental to tool conversations, more is employees, Lastly, tracks analyzes, pleased in or driving very and been client the the Workforce Modern progress delivering the in seeing this MWI, engaging and with marketplace. Index, traction has company’s experience scores which a we’re a in

to challenging Work recognized strong were in certified also once as also as mid-market very the in worked Our leader commitment again Paylocity commitment continues a social to hand success our Fastest-Growing our Place segments. to in culture year. communities of pandemic XXX leader reaffirm in Paylocity’s and hand Paylocity we’ve possible the would high more employees recognized commitment environmental market employees, a be Fortune on The included Companies commitment. a ninth our clients business the have company on continues dedication being who had recognized without enterprise in Summer a that with to The be ranking be we clients and being corporate not development than to X,XXX Great while and responsibility at The list. place the and through with product and impact to in And to in during a Crowd categories ranking the XXXX, named fiscal reports product deliver listed across Grid as addition in be governance. had XX that GX on we programs

our created to also to is and training in an Council a program product. diversity, unconscious available for which management environment our Leadership our made bias employees, and create Diversity strives required on learning that focused Our we we’ve clients equity inclusion,

shape Additionally, resource culture the I to outlines I commitment and communities. guidance. our fiscal work voice Toby our to the develop launched to chance financial in would our detail are organized give now personally like XXXX very connections, Responsibility in review and to pass local our call employee you perspective, which and community to the and grow website, their groups topic. and a Social our and employees on at make review provide to difference encourage section build efforts ideas this important newly to Corporate the of results further and

Toby Williams

Thanks, Steve.

very on year. Before I Award, last other well to the with I Steve, Steve XX.X% Glassdoor Choice for like CEOs companies. receiving period from Congrats, $XXX.X fourth Total Employees’ deserved. quarter the revenues among results, in up another million, XX.X% honors of XXXX increase which our recurring top the was recently same an large revenue review congratulate would and

our quarter, $X were the we and to above come Steve guidance. pleased revenue team noted, million in strong sales our had a top As end of

revenues and and up were was total XX.X% For other XX.X%. recurring the revenue up year,

the quarter, for the For XX.X%, fourth XX.X%. our adjusted profit year, it gross was and was

revenue in were We to On research expense make the XX.X% significant fourth to our development. what of fiscal On it when to basis, combine non-GAAP total continue investment R&D ago year investment fiscal the of in in we and were R&D, capitalize. in XX.X% is important in quarter. overall by R&D we basis, to year-over-year XXXX total to development quarter what research a XXXX. And a year and to XX.X% investments in in fiscal combined XX.X% understand Full increased XXXX. and investments XX.X% dollar our revenue total compared both compared compared investments

with believe fourth on future fiscal revenue XX.X% On differentiation consistently last and in us quarter XX.X% XX.X% the R&D of in XX.X% as XXXX, fourth G&A costs were an were of year fiscal investments period to Full quarter revenue annual XX% in costs to revenue our non-GAAP of for valuable marketing sales leveraging we to G&A and growth. G&A provide year. basis, basis, remain ability On on basis. product XX.X% and same continue non-GAAP the the drive We the in our focused in versus a and were expenses XXXX. a expenses compared

which guidance by $XX.X was quarter, at Our XX.X% adjusted for EBITDA our midpoint. of the $X.X exceeded revenue million million or the

was for Briefly remain XX% adjusted a progressing EBITDA XX.X% We towards return to of or revenue to covering we Our once target our to normalized total adjusted XX% of our million EBITDA $XXX GAAP more of environment. results. year committed revenue. the

For was was million, million profit $XXX.X net $X.X and operating million. income $XX.X QX, gross was income

the $XX.X million, full the income invested million corporate balance was profit sheet, cash, equivalents income cash net operating $XXX.X was cash and with was and ended $XX regards million. gross of the In we to million. year, year $XXX.X For

of quarter included to daily client-held in also strong QX. pleased with team opportunities G&A end operational balance identifying QX, that We’re and another funds average was costs, happy and In billion income, funds in demonstrate the to we performance sales interest $X.X in QX. to our while progress client-held in our regard made and with for our scale we’re which

assume average be We’re estimating XX basis yield in five the and $X.X the quarter. first approximately in billion to will points of balance QX, daily approximately average we an

to guidance, reviewing context the like I’d Before provide current on operating environment. additional some

April, of continue ongoing saw year. with sales COVID-XX, within of In further and we in client As in team regard seeing be May to notable impact QX, this pleased improvement. performance last the with quarter the past workforce and increase levels mentioned, the each we over of also Steve June, fiscal July our to a

Finally, to our I’d QX fiscal financial for XXXX. like provide year guidance full and

For well million range to the quarter are to to we the million ensure quarter million $XXX.X to $XXX.X conclusion, committed $XXX.X of in range range the $XXX of approximately the the revenue. to results, future be we QX to fiscal be EBITDA XXXX, million expected are full approximately EBITDA or total is adjusted to growth. $XXX XX% to over of in be fiscal to adjusted to And $XX.X expected remain growth investing or be million. revenue fiscal drive first XX% business with XX% first fiscal year In And in we to total in to and total over of the our XXXX, expected growth And million. positioned XXXX. XXXX revenue pleased million expected million in is $XXX.X $XX.X of is range for is

XXXX since XX% fiscal growth midpoint, the at growth fiscal We’re also August to guide XXXX. to pleased revenue guidance year our revenue a highest to start

to Additionally, you. EBITDA guide and in our margin revenue of Operator, XX of in now year the us strong rule above the full growth ready fiscal questions. XXXX. for combination represented adjusted returns Thank we’re

Operator

[Operator first & of Instructions] Scott question Your Company. Needham comes Berg with line from the

line is open. now Your

Scott Berg

environment. with Congrats a on quarter for and taking let’s the thanks and demand I off Thank questions. overall you, Ryan. my guess great start Toby

of We payroll? demand customers, in I entire you kind down areas really core core your HR know, is product trying market replacing are though? to buy hear strong the across just upfront? of it continue now. How customer products really set, seeing you and the your don’t is say appetite Or maybe suite really to right for kind Is would customer buying

Steve Beauchamp

Yes.

both. seeing we’re think I

at buying, number then So new the demand look overall is pretty terms appointments from strong or looking of board. And popularity number we are of in that called out. we’re that more people sales that activity we’re just bringing we’re in the products having we definitely as that on places of at seeing

surveys, initiatives, product, as real modern differentiation. big all and think our getting conversation I of So of utilization great It’s part but LMS, But the we’re labor a that’s a there. communities, free the been everybody obviously, knows. a market, tight workforce

resonating. And able have products so really to to is being with employees engage

Scott Berg

And the along into the Got of of you heavily Any a then same it. back on the from perspective, line, base. last are all have more couple sell more kind know the going to over of I how in, those efforts follow-up kind color commentary invested quarter? in last years

Toby Williams

are our Toby. customer mean, We’ve investment more muscle and And right. most in a think of you’re definitely Steve resonating as back it’s our I with the they which base. that little just what sales. customer think the into of those base Hey, newer, bit I which – Yes, Scott, into are new bit little products, I with put same more ring all as team things said sells with much true a are terms

think And new the pretty there. pretty definitely part I able overall smaller a the seen of drive and to we’re revenue. those the mean sales so the part we’re customer with I the back overall smaller base pleased products. demand it’s penetration newer into we’re of we’ve with pleased But with

Operator

line Tillman with Your the next comes Terry of question from Truist.

is line now Your open.

Joe Meares

to that Meares you questions. with a Terry. the then the what I of portion this revenue? do over Any months, XX revenue, course for XX seeing side think, next And part to This the on broker Joe is network? to broker this taking the on the existing expand for brokers. you’re opportunities wonder regards the of could overall of Thanks expand as

Steve Beauchamp

broker consistent been channel. we’ve really Yes, the in

really throughout we’ve to were referrals, pandemic, lot prior broker been which were XX% because a even of pleased visits think So greater the we I with business of than new happening from face-to-face. those the pandemic our

happening but lot virtually it broker of are a still is We a back to face-to-face some perspective. activity, from

so that XX%, able to deliver with. And being really above pleased we’re

our send brokers with segment. good getting that going self-generated kind our And got a the number us us have, lot on target. existing providers of It’s allow of will of the mix initiatives forward, basis. think referrals. I continues pointing good feel referrals target the to we but at broker relationships an We of kind and relationships we’ve that about of that that market across expand deepen be to also in mix who terms annual a

Joe Meares

or now? like helpful. pockets wondering variant way That’s is just as I of then are is demand any the the demand And I’m appreciate of Delta just fast that you’re or playing different consistent right overall it. if but with country parts seeing the a follow-up, out, if – it the if sounds that slow strong, across is

Steve Beauchamp

places We little up, and certainly California. opened on see And down. certainly those we in which differences accelerated – activity. we then early in New look like at those when shut the markets as would last in of places markets you through We’d a bit demand year, being impacted saw see like some York

Like we terms moving feel some worry got point virtual, have everybody, adept in momentum. we’re people I and maybe think one impact a the it’s to could of pent-up do are We like doing And go in that segments in about good very the the selling. of serve for in across feel demand feel of across geographies. how like reasons that of not at industries we terms the be. certain pretty things pretty to much look what that of all we there’s Delta while. terms at across to this we well We in is improving size our time, all sales If back able teams we’ve bullish board.

of we’re hopeful the the Delta. so some in continue we that can And momentum increases despite

Operator

Your Baird. question line comes next Mark from of with Marcon the

Your line is open. now

Mark Marcon

in wondering, the of with little quarter can Good particularly for guide, number Ryan. revenue for circumstances. Hey. a both terms considering this regards client. a of the bit Congrats. to I’m performance, of about and couple and per afternoon, Toby Great employees the year, quarter, aspects great the you talk Steve,

how within in seeing with impact the really the last there quarter. suite have? certain secondly, full that of existing client? elements appeal the have, are this I’m did of And revenue increase per that you end seeing some the And larger did that you in in employees Just an clients. base, much of what client, sort up to terms then terms what particularly size you’re of wondering average of

Steve Beauchamp

Yes, question I’ll second the start first. with

of X,XXX been go platform. end targeting employees. top we don’t customers, organization. We’ve So sales well And the X,XXX on We times, we above have many our our our segment. limit market at employees got

And been We’re at even beyond capabilities market. we’ve looking for you’re seen target us adding correct, our the the some success. right competitive make fit. that more end top or we’ve interesting And good

go out really if you COVID. we even in were think enterprise-like a nice I driver being those of kind growth as last more clients larger to calling year,

think happened in of our the seeing I end and core market. low recently our more at what’s is acceleration we’re even mid-market

we pace firing to And a our bit growth. we now like – revenue on platform contributing Toby we’re talk on feel to I’ll all little so And cylinders. let the for view how then

Toby Williams

the the well. off all what we in is would think we momentum mean, seen think I I COVID, that to strength And most there last seen the QX, – that coming headwind. – cases, I for quarters, I basis being right coming through saw on that as last of we growth single-digit call we momentum year we sort magnitude would about building plus I saw think continued way call, we’ve impact most month-to-month the in have through the And the double-digit our in think and we’ve a year, said is July last as in on Mark, said I we of Hi through described described Yes. through that the a headwind. of a the mean, back what we would terms of revenue and on down. course low have have as to And QX think last

positive for progress, certainly sure. So, progress

Mark Marcon

Great. the about rates really client solutions little new video, talk just in you. engagement about surveys? potential talk and are that What’s like positioning attraction sounds the like bit monetization Thank it? are Community, levels can It then within the the opportunities? for of you doing terms with you high. that’s clients Can clients And what the a just retention using

Steve Beauchamp

Yes.

prior think path to we I modern an features really that So might traditionally extended HCM of were COVID, of down this view we product. marching how really creating kind

integrating acquisition our into the that really And acceleration in in to of for for had at were the of investments. product premium while right the had the suite, VidGrid so perspective, a called Impressions And trends. video a the continuing and make from what we saw an market those while. our pandemic good We’ve and product. Obviously, recognition, we’ve start Community from a is peer-to-peer now market an of timing pandemic

and a second time And or all and finding many employees it’s So Zoom asynchronous a for comfortable the imagining sending were there Zoom. recording a much we’re individuals, And in talent and war hard communicating what hours out way. actually is labor themselves, pre-pandemic, now, customers they’ve with market video able a our part employees having is be right are calls is your with because recording to in tight spent that there. more that to versus so fashion themselves, communicate to using phone out an imagine on

importance with develop and so and their connecting, base. risen within you’re employees really sure engaging And them gathering has our client training your communicating, feedback, making in that

had that the they asking the the the we A in better so seeing Community we’re just that product place move starts releases company advantage And once several to their are out employee for touching and makes of connecting add we less population. like that, more get in we’re have products, years, so perspective, to are we’re over it continued that better for, difficult product turn our who market from Community making like based off competitor. a every constantly broader clients our maybe where features it feedback we’ve seeing and momentum. a the and absolutely to with clients than taking much Because

Operator

question Cowen. with next line comes Instructions] Bergin Bryan from [Operator Your the of

Your now line is open.

Bryan Bergin

to question any in Hey, pace noticed decision-making afternoon. when of switching. demand whether the you’ve ask on it a guys. comes Good Want Thank you. improvement client to and

Steve Beauchamp

if it the I say trying normal personal new put And something and would during terms with Yes, shelf. way lives restrictions the administrators we’re had then our of solution. things in to in on the would that state a happen it delay HR may more would them. back. feels project now. take in lots know don’t of I pandemic, the But were have implement that would happen issues We of actually their that some they all had

And of kind friendly quite decisions. we working always those were making been so in through that and

would they live, sometimes that dates. went impact when delay start other it And times might

now. It decision We’re time it to was that in not way first market a final the right very from really pre-pandemic cycles. much appointment to back and the feels implementation to seeing

Bryan Bergin

premium Curious any around if early, the you typically same video, in expect it would is around on-demand past above for can And then way pay? those on-demand that? Okay. you’re offering? product stand it’s for comment – rates, for seeing and interest pay but it? greater penetration premium I trending video know then modules you just where attach, characterize you And How would the

Steve Beauchamp

Yes.

push would and bit with is earlier, be plus grow. premium went products, trying management to just interesting. other very which many I for video uptake really slower more modern to to probably connect thought a ago So our in continues little employees. of I similar we’re people premium a we seeing pay pandemic video through Because a because of year to would have the track On-demand communicate that way a on are and what talent really

request time can see throughout exactly payment. of payroll kind they They frequently real They throughout can log and period. growth what the with the that. probably that been do I employee at it mean were and not of some happy seeing quite grow. of they constant our in, pace that period the we’re can can It’s We’re an a the us that other and labor their heavy really that that’s feedback future the see employees we’re I the there that tighter, employer. But the hourly it you customers still something have products. market their good that optimistic that opportunity becomes used demand being from opportunity. workers love given about think have as see for because feature we And

Operator

Your with next line Alex question the comes from of Zukin Wolfe Research.

line open. Your now is

Alex Zukin

still Hey, guys I Maybe taking want And just strongest because a you of for zero want the the environment? guys. just zero kind back? opportunity Is want on it question. levels clearly, to that Delta, just year a – I the that Is ever numbers. a it employment the of is one. zero guidance coming cross-sell, ago. in guidance I from kind fiscal confidence. exemplary in since long what in Is or to Thanks you this quite up-sell? to the that gives given on because there given have demand it time is for significant larger is first the the uncertainty

Steve Beauchamp

Sure.

to give is usually, perspective. we a So largely that time think any number do that that And guidance a is looking or of performance. really that consistent sales the the on ability sales for in guidance, our you at starts with it do to and exceed momentum something us which first is pretty I predictable. COVID tell we platform, new fairly what due hit would from variables employees We generally some terms have with

have a significant We last months. the pretty over seen return few

comfortable bit a you to is have because way the gap We’re the years. guidance But the levels. forth, be of not the that strongest the we momentum had able to all some several put pre-pandemic in sales fairly last we smaller, mentioned, in we’ve force feel that little back with to as

Alex Zukin

there vendors selling And they’re think any loosens and make about win improvements how now any in versus a if seen environment? you seeing when Understood. post-pandemic we a that is in productivity you’re in maybe rates And as from and you’ve up, that stronger think months? a year, kind there XX remote the competitive people of then the the think pandemic that to hesitancy should in environment, hopefully having about of big I moves last over kind are of COVID against past – particularly standpoint,

Steve Beauchamp

unique products different premium in when some like around of future the position and a we’ve engagement-oriented the we of introduced, that a work you proposition the the I in can of how video think think a products give talked we’re Community, of really we about. of really a things value think lot bit that. role A play us we

unit end of of on And More per And so we terms on. across vendor. kind anything, top higher got a with think in our resonating the some we’re we’re that that the the value that, our of marketplace. board. feeling than end or in of good bringing sale board, good large call-outs getting traction real We’ve volume the terms market, small we’re products. average revenue No midsize, of these against across particular better worse proposition is just doing of of pretty sales momentum

So perspective. call-out us to environment, competitive it’s probably from a no an execution up from

Operator

Your JMP. from Pat question comes next Walravens of the with line

open. now is line Your

Pat Walravens

Great. you. Congratulations. to Thank great see. It’s

for look So work if to next that you the three the what step back at are at want say months big two or XX and picture, on Paylocity? you would top the Steve, things you

Steve Beauchamp

large Well, pretty still have that relatively TAM. of terms a underpenetrated Sure. TAM and we in are

the investments future, And about for start you to long-term. so think

tight is labor one market. it’s a So

the just key, the year kind staffing really but in is beyond. of and for staffing So not quarter,

great engineers, in on And so great we we salespeople, want bring to people our great make sure software that implementation. can

hiring a going of right on happy from now bringing so And environment. how I’ve competitive on terms been highly talent. really of there’s lot in done a we’ve activity in perspective a about And

So that’s number that – certainly, one.

to of extending and capabilities our goes I perspective. product workforce a from number the some have wider we that two think really strategy

employees We’re really our customers platform. can engage great help and seeing benefit And to cases and additional we higher with themselves we great activity and be of to translate retention. get the think employers on use really our that activity, really

really value savings. the proposition really saving combination we than we’re of just much more map, of our on that road time so that’s beyond value talent board able time. about, And well offering the little goes excited bringing extend a our a that great what clients I’m bit offering think and being to And

Pat Walravens

And us you do to hint don’t do additional of away, much want do you could sure I’m you you give but things give that sort too to don’t today? on want a

Steve Beauchamp

prepared little talked bit I a think the about script. it in we

One Community of customers groups they’re asking interacting like what team. interacting with our of the teams. that themselves the platform they’re they using capability as the things to us, way that’s for additional would have become And is pretty do terms are the they’re in we obvious to capability,

have about people, the data the We teams, the supervisors. positions, the the all

And with to the be same page we’re our pretty to get so space done. into bleed enable able capabilities incremental them that acquisition, certainly bringing interested collaboration their work to

Operator

from the of Your Samana next line Samad question Jefferies. comes with

Your is line now open.

Samad Samana

the Hi. the uncertainties. questions. and great for all to see It’s given outlook Good taking evening thanks the strong

you’re now willing a that the region physical they’re home, still so if physically? you’re may is you’re or a it Maybe doesn’t Are in to I be of going of be working hiring curious, that. which either congrats type hire it in the even that not going be to they’re people that all used office, that So to guys ever back you’re opportunity targeting first, we’re never that salesperson? know changing – to to geography matter you to just the hire there on said willing seeing. kind salespeople I’m behind from

Steve Beauchamp

that’s we the say market, under employee opportunity. would a end Yes, of XX real think it’s our I segment; a when good of think question. smaller the you

have focused that, the pandemic sales admittedly prior on but inside small. teams relatively that to We were

throughout to inside close every you virtually expand efficient. an started would idea we people essentially hired be you’re segment, ends and of But long the in As that hiring term that business stay inside we the period being to up pandemic, and effective absolutely with more time. some person can person that being for sales able

set still common market, about can equation. you back in we as events, of the broker to becomes talk important a them is you I a potentially the that having up-market, part customers think network move really think Being critical. and of face-to-face having to

focused we end. low very in hiring of market outside So remain on the

Samad Samana

curious know as And but change proven road a map? to only has handful the forward successful. done I’m tuck-ins, M&A. maybe question accelerating and about the product maybe be there’s Great. if maybe company the I they’ve think in M&A then look appetite any of on a you

Steve Beauchamp

Yes, we’ve it. big and front in sheet balance we’re a opportunity a strong certainly of got we’ve open got to us. Obviously,

right is highly just the answer. We’re probably selective

day, product, If like we it actually you ground the premium up. feels from end at look the it at of our built the video

took recording we we did really it’s time didn’t Now video we we capability. and able like just got team to it We’ve built the acquire would But that. to the that have already the build a experience, great that were user ourselves. integrate

we built going And feel to perspective, the to exact Samepage keeping that so a that experience like absolutely user at something as integrate like philosophy. it. it’s user forefront is continue we same From

sure have that sometimes rebuild with make and to that. we And something, when components we’re we to acquire very comfortable happens, that,

do where year product look actually to into opportunity and times be we’re able to effectively. talented road a and map. integrate do the going really Hard continue of get can deliver a to we be people, do to to that that then that them that So teams advances ton for able our to a

of think think those indication that how possible prior purely future. we there. forward type certainly history some That’s would it’s to in acceleration not we our It’s necessarily about opportunities see at of goal. look So and look the good as opportunistic. But the a we I a

Operator

question next the Brad with Reback from of Stifel. line comes Your

now line Your open. is

Brad Reback

feel Hi. XXXX? over of you the course very rep how productivity did fiscal overall, Steve, about Great. Thanks much.

Steve Beauchamp

think I certainly think productivity fairly the have reps. But very the had that and were the able that’s word I seeing resilient, more I pandemic, sell use throughout didn’t We year. pre-pandemic. than we the we prior We were same to true. more

hit headcount. reminder, in next and we see rebound Sitting forecast really can a obviously, you pandemic. took year, and a to were for sales. our today, hitting as good And recover that’s here XX% pre-pandemic, more So and year-over-year we feel which with started XX% the about, throughout that growth then

certainly, growth terms productivity to now the driving formula. our part the equation of about get And So trajectory feel of to and of pre-pandemic. we back is kind right productivity we had in that opportunity of good momentum absolutely the really our

Brad Reback

follow-up. quick one maybe then And

As have up, to as way. need rate market growth them the we people challenges and post a whenever you pandemic, is look in structural that wraps address the that different seen on brought the do forward better think of sort of pandemic the the has

Steve Beauchamp

that parts probably that of structurally different. certain aren’t suite are our There Yes.

end at to everybody of So day, payroll form. way, or in shape the had some do the

lot I because sure end pent-up got that have day, move But needed core didn’t a products to of So frees people the that I’m kind demand at a you’ve something maybe up. of bit and of before. those you little not there’s of think the

time to think newer or me that and incremental And ago. that has have, customer to attract demanding well being much think prior demand savings. video a wow, just tight accelerate of years I and never need able seeing cycle Some as those things five opportunity platform over be will in need. premium market. are HR stuff will hard about been of is we really products think imagined conversations more continue add we go and modern I to a time we’re have It’s would my for early probably from to And saying, four create that the beyond this in definitely generations. never like Gen compliance Z I we saw that us I now. to the we probably more talent labor

Operator

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

is open. line now Your

Daniel Jester

late, Steve, a that my customer. joined that of more reflective to ask But modules? of next sales? of initial we has. lands, for question. apologies anything the of year, see already sort of cross-sell, better higher bigger something go fiscal you you do I And Can mix kind Great. apart? changing that pull Thanks you in mentioned little as if Is sort so someone revenue per taking that I

Steve Beauchamp

on a four to been years, you we’ve do grown So path that for, client more the would sales that. let’s call base. last tell the we’ve I back it, incrementally to

from incrementally. a starting base. grown very say that I small but actually relatively quickly, Now We’ve

year. is sales a total higher every that so incrementally our of And percentage

base Toby it to seeing client we But products. total good still it’s units traction a new small able sales. I we’re and bring earlier, the that percentage are them with our fact sell that we’re on new The more. within mentioned and still the those our think that of biggest some is of improving, driver is

the we’re a the land of leaning perspective, heavily land-and-expand still side definitely And from equation on so

Daniel Jester

kind And you obviously Ted leaving. big, to you. And he’s product sort a level perspective? what Thank going maybe that from it’s Can take to you much. Gate the think Got yours. then is about just the of strong mean to like I been leader of talk you of partner take philosophically next very

Steve Beauchamp

been and time has Yes, us certainly to think, with for and is years he’s to take some us. in job do and Ted eight well phenomenal done off, been able everything an of has terms has which for decided I absolutely leave earned,

and who product And the a very created his he’s thing. as you involved with perspective, while, me very all most That’s a I’m my team. in worked great from team. personally important of involved think know, I for for

big platform. that’s and we’re my think want in in can we more he strong good goal somebody, so the from us a and to he’s deliver focus be somebody will pretty hired. and but fill. on continue most missed really the we with to bit may developed that time left he based going have strategy product find I of a forward a to in that to And And But that we team shoes perspective meantime shape driving be who that until off require little culturally definitely our that’s fits modern

Operator

the Mizuho. question of Siti from [Operator Panigrahi line Instructions] next comes Your with

now is line Your open.

Siti Panigrahi

for Thanks my question. taking Hey.

housekeeping item. First one,

sales when you sales say emerging breakdown market give the me could reps, of reps? So XXX you that

Steve Beauchamp

don’t by of We number. that the kind customers about end you core and sales segment-based group those and larger provide are both of sales mid reps. a the customers our smaller Yes. in and the of larger could think kind on in end being end some smaller smaller market, our focusing largest major-sized headcount reps But the being

fits sales group inside well. have smaller an as well into that bucket also We end that as

Siti Panigrahi

Okay.

of you margin it EBITDA think And like Okay. your of investment, kind then flat when year-over-year. looks is

you do side? it that the focus we where plan on So on think more about Is R&D investment? How should this? to

Steve Beauchamp

conferences, paused because interesting have – thing just we first an we say the the there’s for I COVID So is anniversary where while. a would this year on and is travel hiring didn’t year any

a that through was to to things manage we bunch there of certainly, COVID. did So try expenses

challenge we’ve But create investments in a on a of while comparable through It’s up about to really we’ve does a So perspective. been side, those flip us we’ve taken investments happy there. bit COVID, a anniversarying some the making momentum and got and sales we’ve product, little in making really our been ramp marketing. from been those good

we to And the felt EBITDA, we’re And the And an from will on marketplace. momentum X number that so that the for progress basis. to got like like focused momentum, on XX% a great of that this to think great we’ve was target because just year we’ve It’s this this momentum certainly feel a we we us year XX% make still achieve in we’ve is focus in on perspective. typically wasn’t got but a marketplace, will make adjusted is we priority longer-term sure the advantage got to year; where we investment. ongoing we sales take that

Siti Panigrahi

you. Thank great. is That

Operator

time. We have no the over turn the back will I this remarks. to further question for now at closing call management

Steve Beauchamp

everyone in very year. employees us helping thank night. and X,XXX-plus Great. a want of for and a has for Well, our of challenging your interest all Paylocity course, great customers Hope thank our I to you through

Operator

call. participating. Ladies and this gentlemen Thank you today’s for concludes conference

You may now disconnect.

Paylocity Holding (PCTY) 7 Aug 212021 Q4 Earnings call transcript