Paylocity Holding (PCTY) 5 Nov 212022 Q1 Earnings call transcript

Company Profile

Participants

Ryan Glenn	Senior Vice President of FP&A and Investor Relations
Steve Beauchamp	Chief Executive Officer
Toby Williams	Chief Financial Officer
Scott Berg	Needham & Company
Brad Reback	Stifel
Bryan Bergin	Cowen
Mark Marcon	Robert W. Baird & Co.
Samad Samana	Jefferies Group LLC
Matthew Pfau	William Blair & Company
Matt Diamond	Mizuho Securities Co., Ltd.
Allan Verkhovski	Wolfe Research, LLC
Robert Simmons	D. A. Davidson & Co.
Arvind Ramnani	Piper Sandler
Joey Marincek	JMP Securities LLC

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Paylocity Holding Corp.

First Quarter 2022 Fiscal Year Results Conference Call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. now for turn today, would to conference I speaker your Mr. Instructions] like the to over [Operator Ryan Glenn.

You may begin.

Ryan Glenn

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

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

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

Steve Beauchamp

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

our strong QX execution XX.X% resonate to of was continued as over million of product represents top-end QX, highest in $XXX.X the we grew result other year, clients all prospects growth recurring as across most guidance of our with exceeded proposition quarterly XXXX. comprehensive target areas since XX.X% our value and $X.X QX last the the providing And or modern suite Our and market. which growth fiscal Revenue revenue Total by and million. a industry in of of of

first hardest by $XX.X exceeded margin EBITDA off of top-end continues and XX.X% to also strong quarter end for selling Adjusted heading million the XXXX guidance was to momentum team they well the fiscal our build positioned had sales the And the are Our we into season. $X.X million. or

the to advantage ability with mandates. efficiencies our like to new also a vaccination our see within take row. machine-learning are XXXX, we drive employees. and business, plan strong Client We culture marketing, our time collect highlighted sales, prospective remote-friendly improve our to we resonating status, we continue comply as including COVID October, pleased and more our business, of FY Conference, award-winning across In for And Tracker, test held and enhancements looked within with regulatory the attendees to scheduling Annual the suite, claiming, to in our tightly-integrated hiring and labor with rules also While across We’ve new serve operations. also for enabling and clients’ manual schedule foundation digitize virtually year capabilities Elevate throughout expanded forecasting in areas a we a second including number features, we all R&D of clients results product where workflow number open of continue hosted shift that and Paylocity the staffing we for hours. as of capabilities, to record employees new processes through order momentum their our

generation candidate Lastly, culture diversity, a inclusion within to help can shows hiring equitable recruiting gender, our DE&I customers. which engagement, distributions equity functionality focus into retention data demographics provides from we We masking disability, data employee new that released early and higher productivity. our turnover the on drive clients within dashboard, DE&I and a and fair on race, our product visibility employee their can business believe outcomes and tools, help real-time focus And positive and including ensure process. base, a drive and for

employees the labor and in globe, completed world, pandemic The remote many with a in Blue leading around workforce market. the looking paying the tight and the quarter, talent more global for a increasingly their also such we payroll companies Marble, accelerated shift seeking U.S. to the a companies has acquisition provider the for convenience During control outside across of managing more particularly

X% processes, countries we world. expect pay Marble Marble a maintain towards suite, Blue to the solution we and automate less existing financial Paylocity than excited in points, September we’ve revenue, all unified into the to financial standpoint, basis we’re excited headwind employees, of slight I’m opportunity XXX Technology of Chief Lohani, which approximately and new Blue As incorporated offer welcome work a while XXXX updated From Officer, us the about fully XX fiscal joined represent our Atlassian integrating from into providing who guidance. on compliance our new of also Rachit to to total EBITDA a clients XX. to recently our around adjusted

roles had and forward to would his of for and momentum strong big dedication helped I us our our everything October addition to In they maintaining to growing Rachit and X,XXX achieve he would at than senior to The the being leadership been technology where recognized platforms. Toby more development. named to like was list by Paylocity as Netflix was Paylocity product Intuit, named the we XXXX. strategy to Fortune more holding and team part as Atlassian, thank our guidance well in Inc.’s Prior years for successful the impact detail Product XXX to Gaty for roles call product scale software like to on across and awards. the of build have momentum for also Paylocity companies, provide has inaugural also as in we fastest X, Ted clients third you parties, and help Ted recently as of thank business will A at XXXX. Technology. departure to X to for results now Companies a was and for review financial employees updated Best-Led than significant and fiscal these in his growth, look SVP pass I do our instrumental

Toby Williams

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

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

QX scaling Our we to in for profit QX fiscal, of adjusted versus operational last gross was our on XX.X% continue focus XX.X% as costs.

period our research in R&D, quarter investments when investment basis, investment a by first On year-over-year what development. revenue in significant expenses to on were we to than as also and in-person business continue to we important compared in the for overall increased events, what understand to basis, And quarter we and in total of source make dollar us and to our both focused On XX.X%, continue we first virtual of sales same expenses both the On And quarter is and on year. in XX% combine expense R&D broker it capitalize. maintain making were the to of annual focused activities, modern fiscal this In brokers benefit represented incremental once business as of and platform making from regards help of marketing in advisors, remain to a non-GAAP referrals XX.X% new consistently financial Paylocity XX.X% channel remain leverage meetings and we QX. on go-to-market versus strong R&D referrals. non-GAAP our investments to fiscal And XXXX. drive in continue an we incremental again the our revenue the a of out fiscal growth. the G&A primarily XXXX first workforce. to investments remain We needs the on in the basis, basis. leveraging to build G&A XX.X% the more costs in XXXX, of focused throughout We area last serve

million. our the revenue adjusted target quarter, acquisition XX% to QX, In in Our ended quarter. which was XX% interest covering which of average profit quarter client progressing remain includes and $XX end. invested Marble time. cash Operating was funds top EBITDA our and the of or corporate million $X.X was funds for with for impact million XX.X% GAAP to was for Briefly $XX.X towards income, $XX.X sheet, the guidance million balance of income of $XX.X We client-held cash, million $XXX.X we to net $X.X daily balance the in the regard our exceeded of gross Blue cash at QX. the million. billion to adjusted was over EBITDA and In regards committed our the results, $XX.X income million, equivalents by

approximately second estimating yield daily balance we the basis average average the points billion are will And of QX. in be X in $X.X an XX to quarter. approximately assume We

in opportunities included while and and we’re to performance G&A with our sales the progress quarter start operational our team, costs, to scale demonstrate the year. we’ve identifying another which strong QX, happy in for made with pleased We’re also

As areas back QX. sales and Steve mentioned, marketing, R&D, start across driving such key of we into including and hiring in our as successfully the QX growth in business half of particularly are the

XX financial provide XXXX. market, a to while our service continue Marble, in target to fiscal leading our margin guidance this I’d EBITDA represent customers. for leverage to we fiscal like In that, across impact. we our approximately teams we business execution strong to With to the of adjusted it basis do operations operational driving industry remain full our within and XXXX, our to staff expect focused on in add to to headwind QX points given deliver Blue offset Additionally, regard

quarter are be expected XXXX, of total we $XXX for we for in is fiscal second to maintaining approximately the adjusted with million And results. are XX.X% be range $XXX to Marble. XXXX. fiscal range adjusted note $XXX XX% of million despite of implying conclusion, QX represents And margin of be XXXX. in dilutive is EBITDA fiscal the full total adjusted million, pleased million of the EBITDA million, revenue percentage $XXX of And million. this midpoint. be For to range impact you. XXXX over our $XXX.X we EBITDA approximately midpoint, second an And range And our is to are XX% the margin million, the to the adjusted at at growth In to $XX fiscal $XX Blue in expected margin growth is that million fiscal expected of to in EBITDA in expected the of to revenue the above Note, XX% over full-year growth to Rule fiscal our the Operator, fiscal guidance range which to XXXX, XX $XXX.X pleased an of questions. we’re ready combination Thank for guide, in XX XXXX in raise XXXX. or us to returns approximately with year to guide now represented the revenue the XX% million total revenue. increase to or initial quarter

Operator

you. with Berg Scott Instructions] Thank the of first comes line [Operator Our from question Needham.

open. is line Your

Scott Berg

Hi, a strong everyone. my Congrats just Thanks quarter. got for a I taking couple questions. on here.

the Thank attended seems innovations customer of you. First is But in HR, new collaboration, like sell is feel want piece that the there. now are specifically, tried to how of collaboration right forward? something which out coming XX product in a of going building maybe Steve, obviously it of you’re ago. functionality the some And today? work be functionality within a kind to we product the was didn’t I that love functionality as quite conference, is, you well well. of collaboration suited that years repeat And Why all,

Steve Beauchamp

it’s good question, Yeah, Scott. a

you parts how great that we’ve processes. I it, the and use that don’t getting platform. about we that years, the have it’s seeing a had really an imagined how ago, many if traction significantly back So video would the and video. opportunity changed then different to it then processes so And our of of kind an work really so have, and and video would take just X communicate same you within has we and think integral couple of think the it’s step I point we’re anyone to use long-term, embed would where years clients kind with But part reimagine think I of first of both have been that HR of long. last an for I connect over the think the in going become success HR

So, is and which lot it’s models attract remote of more and customers. as we a editing, description think things where example. to job going in to or sharing be both will And like there really great be work And that is require that time to hybrid the reinvented. be across our that connecting a useful about ultimately, to people the way be description, a become document HR We this need with as chat, organization. to the part going opportunity talent is including valuable video an capability job think communicating, same the that way, process a recruiting collaboration to popular,

Scott Berg

And strong. helpful. headlines, a really at the from look Got perspective, when we it, then, in quarter, the look follow-up Toby, all results really, numbers

million the and should Marble year. than get of Blue $XX math we the for I or me X% about that’s tells my less So, the the how impact think quarter? less

the strong, any on quite the color obviously So guide in up but quarter? was the maybe impact

Toby Williams

an Yeah, you’re within Blue for timing the overall, is it of only describing that I I we’ve contribution from right mean, terms terms in I a of math Marble. described the and year think your how rough got quarter. in from the we mean, month of

that’s So it. how about you I think think

Scott Berg

again, on quarter. Congrats the guys. good Excellent. Thanks

Toby Williams

you. Thank

Steve Beauchamp

Thanks.

Operator

you. Thank

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

Your open. line is

Brad Reback

very story, a platform? usage has any a Thanks as of on daily Great. can you Steve, becoming about year give ago, us expanded? and think collaboration and the of employee versus This part sense that’s much. like the how bigger we active what engagement quarter bigger looked

Steve Beauchamp

Yeah, usage tell so we I that platform would expanded you it’s transactions. And the pretty on definitely overall the significantly. have expand traditional beyond seen

people yes, lot They off. mobile in doing request at So, that checks. in. a They’re punching environment. a They’re of time use look their to

are them of desktop. on doing Some

of It’s what self-service increased And and popular other in time, so those employees. terms become over activities that the expected as have has marketplace. places. in more environment for from really But seen the is just coming the really naturally increase we’ve

using that actually And creating groups They’re ones our where creators. is actually to necessarily the using. not is are community example, department clients with HR employees we’re are question-and-answer interacting the that are great and that content finding it So a just announcements. create

groups created different across the connections. sharing so, and being organization, employees’ And stories creating are

from a And your so, also increased increase you that to employees. last nice more just that the fashion. Surveys harder an active XX Learning collect can community driven daily user over has has do popular in feedback significantly. months, management been stat. And in has automated

our of much you’d clients. with than number So in employees been of see or pleased increase. what we’ve certainly It’s really the terms been platform on overall higher

Brad Reback

very much. Thanks Excellent.

Operator

you. Thank

comes Bryan Our from next question of line Bergin from the Cowen.

open. is line Your

Bryan Bergin

relative that’s you. can a us on the sense Question versus and Hi, give how you your expectations progressed sales-force level? on pre-pandemic good Thank to productivity, afternoon.

Steve Beauchamp

Sure, yeah.

improvement think, we seeing I you really pre-pandemic, productivity. recall, a So were as nice sales-force in

of had In fact, throughout that prior new actually. had dip took out kind in Obviously, of we pandemic, we gone we year, just the almost growth. the up had of a to kind called XX%, sales That the quarter prior pandemic. terms overall

earnings talked the we levels. pre-pandemic last about approaching think call we’re I this

And so, trend I that think continues.

make to improvement continuing we’re So that. on

we from to going much take see is out, sales-force of of pre-pandemic type one really reasons called very perspective, We’re that to a momentum you’re that but in advantage see do We the of of momentum the can hiring market hiring. many folks, we accelerate in early. had this starting which we for get we to still try most have us continue we as the the our sales as and spring on board to people

only there across because continue going to the seeing. board And not hire of to momentum so, the but we’re we’re

Bryan Bergin

as and on then, And there. margin question the puts of some a as far takes Okay. Toby,

margin, heard XQ one then, EBITDA tailwinds XQ the the I And we some XQ the versus kind on to of is margin. But the XX the to it first from that? in year-over-year gross outperformance year? Blue you at as outperformance. aside the just balance you drove and roll bps strong and for consider about on be can on forward implied down can of that that, of margin, Just XQ the drivers to talk look comment

Toby Williams

Yeah, ago, to you this we bit and quarter expect towards quarter. Steve – ticked said back what I last higher second up mean, seen a the And I momentum continue quarter of a that off half building into the second little think saw through through just we’ve quarter. stronger

there of the It’s something of think So don’t I some think to I is like was is the that the onetime of to and or that no biggest story. on QX timing. the timing hiring just think – probably it. in margin, takes, really talking just puts bringing in terms items there QX It’s that’s about. any about Steve

perspective. that as continue, Steve from that business invest And in the referenced. of area every across just continue to momentum we way, to great seen to that have expect We

put and quarter from think to perspective that’s quarter. I a really take So the story

Bryan Bergin

income remaining throughout does also pressure? that is the of a that little see to is Just gross statement, strong? clarify, bit margin Or

Toby Williams

think, the gross with on revenue mean, the up rest EBITDA I from what about a guided we’ve year-over-year. And, perspective, Well, think good set would margin I how a how from pleased adjusted we on think for we we’re I from of gross saw pretty we standpoint, I QX we’re think, we into and based – expect, coming margin. year I feel

Steve Beauchamp

both to at the the we’re XX% for at think we’ve and the make And about same hire bringing customers an theme great able be the here to rate. I us result that we momentum. we’re board on is, accelerated was got the to Yeah, sure a the excited across service time,

want actually seeing we and So investments the return were marketing. product and to those good because we’re make investments, sales making on in

the of so, guide, And that was the advantage got look different EBITDA of it us. front we’ve because it first to than want quarter, in when take at is you we in momentum

Bryan Bergin

for Okay. the all Thanks color.

Operator

you. Thank

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

open is line Your

Unidentified Analyst

Terry. of Hey, everyone, G] this behalf [ph] is [Robert on

Just you identifiable a what curious couple really, recognition increased following-up about of traction And video, earlier of a on engagement seeing can we’re returns or that solutions. that, community, with report and document? any type customers questions, premium are

Steve Beauchamp

great a question. It’s

we’re of is, couple product. happy would we’re with I is things, a really So seeing rates so say a the free penetration that community

really utilization So I driven earlier. more comments that’s made by the

than people I groups, that to clients in trying where or some trying remote. groups, where their really even to kind create use they’re to to hybrid stories. just culture workgroups, an environment they work mean, We’re them where work environments, done, more them seeing we’re would of have of are seeing connect they’re share employees, difficult driving people are some get it be completely of

perspective, that attach we’re got terms From sales. And so, rate a really video been that’s new in powerful. the we’ve with of pleased really

the instead to going or in by with record see believe been the has that increased me video interaction. a we or going subset employees, we and that just sending faster where of biggest to case groups certainly even post video video ton for e-mail would have been comfort than the of level actually that’s we for a better is out overall And helped an use announcements then a I’m So has capabilities. get employees, of all or that probably much expected, community,

So our react, with platform and effectively. that people we share in content much than videos more see post greater views to we get just comment, they text, they’re if able

probably the And case so see use common most with that’s video. we that

Unidentified Analyst

Thank great. on great you. That’s quarter. the Congrats

Operator

Thank you.

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

open. line Your is

Mark Marcon

afternoon. good Hey,

if of me you’re in the what you Let talk terms bit the about your congratulations, both little my add really, a ends to terms can base. client of Wondering of seeing spectrum quarter. in

also you’ve market, You’ve had clients. the of a would larger certainly move added, features to to appeal a go down number that

what Blue And impact perspective various the terms across from So pipeline just most then, does a perspective the bookings a adding what’s with that perspective? seeing And of impact in you getting? those the end a clients to follow-up. capabilities? from are had you you the regards range could a and spectrum up I of Where that Marble

Steve Beauchamp

Okay.

So, market really segments. I all across think, I’m about momentum is excited what seeing we’re

our buying so, and And also XX customers actually employees, we’re seeing that them are traction, unit good more both below product.

part your Blue second XXX segment. little vendor over And has to competitive we of some the XX see penetration a market definitely think our core kind tools, that stronger that a some space. to one, And that to of added in us, the the some little adoption bit as of point in question, good market I some Many is of of of products fair Our We’ve modern of us a your terms as think adopt couple made that up part we in definitely a time same think from thing we’ve as the space, some plays differentiation driving times for also more really perspective. of a more choice. strong customers of over newer the Marble X,XXX and to then, appeal the always XXX new which for of to employees lastly, a us. there business is being us of that about I larger out the customers called in newer the of employee really times bit more the things momentum

number it terms are sophisticated believe some of create move enough U.S., pandemic there’s employees. have clients talent they employees And there’s simplify we where might small will more are a ability also where of over parts continue the our the more abroad. And we to So certainly global that different around of managing does in world. state get here past differentiation shortage think also that obviously the I more and time, and in and more trend the mobility as world, companies looking in

do be And that a solution relevant across our interest so, we natural that more segment our market. will think in with end a bit of little upper the

Mark Marcon

bit That’s scheduling that And can new sounds like introduced great. little some and and you conference? that the then, the and those incorporate, a It that modules the time and talk to about things you improvements the news of rules obviously and at attendance end you are going certainly in How COVID ML what they a today. beneficial be tracking adding? is could about thinking are AI up

Steve Beauchamp

a there’s few in there. I you, tell so concepts would Yeah,

sure can to about behind to the is maybe customer employees’ you’re people put and ways, a which out really extra shifts. control that scheduling be to more at transparency when how in a do. in the they that many trying take, give shifts back capabilities, to that to a of want you So intelligence to and the much gig that able the really make you lot about be so to can one pick shifts employee, want And that back up they figure right and they putting don’t are It’s they customers to our post right experience, them time. comfortable trying then the to in hands of like have right control want the giving think the more the very

a theme delivers with we to example being certainly of insights that scheduling back that. a platform the interesting across key are also them. It that’s So driving good

reports. your spending not time you’re So running

And continue across so, do that to the to we’re going platform.

a example. survey vaccine in yes, would just of basis, get use employee, many But it frequency capability their call results. can your test tracker theme, status, the if great the the It’ll of and ability automate subset workflows a types COVID is And, can And experience. automatically to the send I solution employee of collect The is like that of to front think, is, you different test a want. you completely second prompt unique really I you need vaccination that the upload them parts do so our you cards. on of out to a automated, you it automatically on have collect weekly workforce have is to one each the

opportunities many of that And so, able do had a be like forms so the customers automate see lot that fillable workflows with and our to to things we have of to manually.

So…

Mark Marcon

these do modules PEPY? impact the customer, the How

Steve Beauchamp

great Yeah, it’s a question.

out see differentiation potentially say would term, I in that, do be We that longer incremental. point all some workflows So to there right now, solution this they’re further at time. are opportunities around as build we

that. really with that we term, added. going which use enhance of we value to at their could But point done the include this in customers. for to continue COVID tracker to thing necessarily our the We We time, same kind the introduce where have opportunities scheduling say longer And yet. are for I’d capabilities, some not there’s enhancements free

Mark Marcon

thank Great, you.

Operator

you. Thank

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

you’re Your line open. see, mute. is I’m a there? Check to on Pat, not getting if you response. are

question the Peterson Brian from Raymond with James. line next Our of comes

open. Your line is

Unidentified Analyst

Brian. on Thanks for taking Hey, the Chase this question. for dialing is

environment? you pre-pandemic Just we product, core how back switching are seeing more the to seeing curious then Are for demand suite, and how yet? the you whereas kind of broadly, guys Thanks. whole levels just guys the are

Steve Beauchamp

best handful going little from a the activity pre-pandemic, market. during market to to Yeah, the been choose an go customer going I a bit overall, did a providers to post, a were evaluate. we’ve the normal pandemic. obviously one. think, like They’re more we to have That it to starting pretty going where feel definitely revenue there’s happy needs They’re of certainly Typically, a perspective. the is lower growth, HCM able to was certain with course, and little bit where the

very much activity, kind saw akin a And years level couple ago. of of so seeing to we’re what we pretty normal

Unidentified Analyst

Okay. Thanks.

Operator

Thank you.

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

is open. Your line

Samad Samana

seems makes for it’s Hi, good interesting investors. I I in about we daily think our a questions. to our think whether the today employers. kind either you Paylocity, of us maybe have or lives, Thanks an a Paylocity, broadly, that we’ve you maybe your or and from starting versus gaining it communities of it’s taking to like Bloomberg base? evening. traction? content But, when video way as offering inside Is that getting one, point work, Terminal. And that it? been Steve, a Office maybe when more getting Is had start this Outlook for customers think to come install on their that for in workers we starting for productivity or core is about the increasingly in about from and me question Microsoft lot either the think your seeing which of Are own good are

Steve Beauchamp

community of where think, from Slack mentioned, started a departments, on a challenge their employees what from channel, they to were, product e-mailing I employees. largely Well, you employees. subset it their or all be HR as we we the imagine were from I might heard would that start when perspective, a their And as Bloomberg terminal if wasn’t in had a of they is that

so single didn’t one either have they of every that reach actually e-mail their employees. an And a tool, would

of employees time posts reacting actually HR or and are it got that you’ve sending to kind that’s a engagement where team so And for of videos and out and doing is starts, of with they real monthly instead getting kind which us, newsletter, from employees. an comments weekly

I there, see would on at yet click spending notification nice you the say on starting more with can have team where definitely capability, all kind it’s in of know, really you many That announcement and it, analytics of share follow HR their how CEO. where we’re They’re I interacted if don’t and people you it can message lot from and people people. kind can get started. is day a you point you or that the phone, the a behind your a that, it so And there. get can of terms the are from time all then you

to just HR The would I we’re use team second thing to you not the is, see now that. say starting

a be the that a results to could that or use use group it they that sales folks, make of post they and announcements. sales to team So has

for inclusion And e-mail alternative clients communication, idea we’re for type Q&A groups, all today. being more company groups, a so culture equity diversity, where and this most the traction engaging to of of seeing that’s it our groups,

Samad Samana

of you maybe module interacting see and terms the that making to more me you a question, modules as add-on getting bring leads maybe ROI in people additional kind which the is, of them it and in fold? of usage it That follow of showing the up easier, more as is system Great. into

Steve Beauchamp

Yeah, I point. great think that’s a

pretty first So secondly, of has you all, get up of embed an where the it’s surveys one harder to been into you think, can feedback. way really But significantly, I the it’s environment use reasons, this community.

to to communicate what the you’re then like you’re to look whether then launching back ability in might survey. that the quickly, organization be doing out able that of surveys, polls, and the whether from So results and terms data analyze actually

I So there’s employees? but training that’s utilization driven think higher videos, driven say then I how up would to to thinking send videos, type PowerPoint, so in got I’m them announcements it’s coming at experience in where utilization can’t start end about, with a you higher multimedia of train community much of because I you example of I’ve higher that. have LMS, even for is well, am do of going my utilization videos. we absolutely that content driven surveys, the And it’s an

increases And all we so, have products. in utilization those in definitely seen

Samad Samana

Correct. That a Yeah. solid really for feedback. was that quarter. Thanks

Steve Beauchamp

you. Thank

Operator

Thank you.

question next line Matt Blair. comes with from Our William of Pfau the

open. Your is line

Matthew Pfau

for for for wanted customer I well, and and market about ask your base, taking it’s questions, impacting labor my within parts of just if the challenging Thanks. both congrats as that’s me. thanks of any levels as to impacting guys, well employment your suite? terms as Hey, in demand how

Steve Beauchamp

Sure.

hiring employee terms So heard environment tell that challenges. they’ve and I retention environment most of been challenging you lot that a clear and loud this think customers of of in customer our kind seen, we’ve would the has

of being of that that for you’ve HR I organization, themselves and What that to believe tools very anybody, employees? talent are becomes raise your And, can become being strategic, that rest today. surprise got actually team is find HR a so, to be is think, that are very important the be it they’re strategic organization. are team customers I the of think from the what do boardroom to of they recruit doing what more part a HR able with to don’t of it the And the lot And, importance translate using those directly be your the engage I certainly how And for people? think objectives. to drive then conversations, would using to does to tools the differentiating able kind that is I an business

pandemic tell I collaborate way which be and employees, to of and that. retention you the voice. And engage you customers employees are changing, on side, And second trends. work also more to these with The is would is of to their able and connect more me find think prioritizing when is got trend hear to a you’ve this a future about into accelerated into with like tools lot the really just

the of so And but customers. these that’s really all proposition HCM And, capabilities revenue to we’re the reasons only all that having I modern you, of growth. also with automate, engage modern just acceleration these our and value of with seeing big the not tell workforce most success our platform of seeing we’re one tools

Matthew Pfau

yeah, it. of quarter? improvements And out in I Or those did it. terms think continue That’s employment did the you level had called that the you seen Got quarter, last that improvement first kind levels, off? of in Got helpful. throughout quarter,

Steve Beauchamp

into Yeah, first then we’ve through month-to-month a improvement quarter, this continued month to and of see basis the quarter. on

perspective, on from I a each in magnitude So of in QX. has of terms say what continued a seeing quarter has decreased month you’re but would magnitude last since improvement directional the basis, month-over-month

So…

Matthew Pfau

guys. Thanks, I appreciate Great. it.

Operator

you. Thank

Siti question Our Mizuho. of the from next Panigrahi comes with line

is line open. Your

Matt Diamond

Matt curious impact print. very that you solid congratulations for take I’m what Hey, that trajectory on the the behalf. integration Siti’s year X% away about could fiscal and can far XXXX. of we as the than Blue less there’s that do guys, we How I’ll Marble, in so feel this echo on is expect Diamond actually about unfolds? the for plans

Steve Beauchamp

Sure.

fully like prior So, to around really to I that the any M&A think, philosophy integrate we’ve our really take that We done. solution. time

so video we the when perspective, from seamless a you that use would video overall when and user thing the look kind collaboration experience just is that And like team we’re it. usage in we a platform of built the contributes on our it to the be platform, same same our at taking And across the user. with time doing to page. way capabilities And

but with take We approach we’re Marble. so some there’s do integration And Blue a same mutual the platform, already got that. to be able big to plans level customers today, with to have the going of fully we’ve integrate

all experience. then obviously better will we’re do user much U.S. to much very time We would do for that as And that. in from for solution any be be needs, HCM believe, the and seamless to our where some a to and going the but able it So even important a customers, will happen that that, handle also provide better do global be we able to become though, and and it’s And perspective, them steps, a experience. create differentiation that us takes do right? to stages in differentiated marketplace, of that,

where to use patience, platform. a be happening little bit we’re in able to seamlessly So navigate they a in think and And entire with user across perspective, our functionality of about stages. that will a from going situation be

Matt Diamond

half-baked. crossed expect sounds a not half making of it matter that like to are in the for all really year. they’re put dotted going the that and Ts first lack next So anything of something there really shouldn’t are a sure better phrase, of It’s out Is we

Steve Beauchamp

often Yeah, range. the will think, it XX something XX take to in us of historically, month kind I

made here be do haven’t a longer. it integration. all that the We that bit in assessment We be could could range, existing have little an

to going that’s be So automatically clients. available to

integrate us So market. you’ll to to I that And, solution add able for the already already think, we level improvements I we historically. really customers. have windows because it’s try But And for into fit wait of see probably time don’t us to is to here, we’ve more integration. type to continue at that going incrementally in solution, have a to had to think macro be the

Matt Diamond

plans. Thanks Super so All helpful. much, sensible guys.

Operator

Thank you.

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

Your line is open.

Allan Verkhovski

accelerating but there. Alex on just a and last perspective, you you’re are got guys Zukin. and quarter? versus on Hey for larger Verkhovski What the the outperformance the growth it’s seeing follow-up. over for I’ve quick there, this taking Thanks is quarters question changed results few Allan strong congrats the seeing And demand given a from

Steve Beauchamp

more question so call think asked Sure. I the your platform. mean, few last employees out quarters. on Well, the get the I over obviously tailwind we about you from

But that look if So the than has less tailwind. last over been few has a quarter. this certainly it past at nice you that’s quarters

to demand to pre-COVID part has levels. is I environment second think return the started the

in we the business the salesforce. our revenue when new salesforce, momentum at generated happy at really we’re look So the by

So, when huge more then, the we’re I our coming a clients on is obviously thing adding are that’s driver. products pre-pandemic third back customers, level, they’re And salesforce getting buying think, to that productivities board.

market. of have combination And we’re the the products terms think, the lot in increase. more of revenue I contributed those of modern in uptick, And resonating really really accelerated to new those so attach And, features that rate in a are X the seeing growth. things

Allan Verkhovski

TAM given That’s think about acquisition? incremental helpful. Understood. Marble incremental how we lastly, And should and the environment really Blue competitive the opportunity

Steve Beauchamp

Sure, a in amount say, obviously, I would pretty of penetration. huge got a we’ve already TAM small

the to and product customer And offering. that some them that time along deliver we’ve in size national over has So you gave, would going for solution. now, our we make drive our definitely there. There’s incremental can if to get because to But I’d got It’s just which us TAM, some is a further this going a differentiation felt in the for that’s try an want But was of to actually I fair I integrated solution. like answer integrate right to roadmap a we Blue people product a market until probably go time, question. handle we point actually that the trend international more it be employees, where be in to more back really fashion. Marble, take look integrated we won’t interim to a we don’t TAM to think, employees did we have would really sure

Allan Verkhovski

Got it. the Well, strong thanks, again, and congrats on results.

Steve Beauchamp

you. Thank

Operator

you. Thank

with line Our next Robert Simmons from Davidson. of D.A. comes the question

is line open. Your

Robert Simmons

Great. questions. Thanks for taking my

growth very level? that sequential for but items revenue the low. So one-time guidance quarter large beyond quarter strong, Where some was relatively the is in in there’s XQ sequential

Toby Williams

how a to largest items. there that think think, the are so would come was I with from guided execution, strong of quarter, in in philosophy And I sure. No, the one-time no this others. in described, mean, outperformance quarter, employees there the dynamics the a I the saw terms and think, I And, that, back how has environment. other standpoint, next by line – items. weren’t terms those no have there in you’ve sort see for one-time we then was think the of demand continue terms I and to, it guide initially than of sales performance magnitude in But quarter. other contributors did Steve prior of But still that in fits we strong for just quarter And we to tailwind. were in the compared for platform, I mean,

So…

Robert Simmons

your where And your, new from is anything industry, Okay. client on then, can or Great. by as geographies, else? you a any color give coming business

Steve Beauchamp

thing Well, I truly is our think businesses horizontal. the about interesting

versus don’t vertical, next. or geography necessarily in market by differently one we So the

And really so, on a we’re now level. seeing traction, it national

closing we different the in obviously, of activity we across faster still it. the at which rate coming obviously, pipeline as of that some state, geographies element sales board, don’t pandemic anymore. was appointments, having driving back see the in teams of that a think, being strong than demand that a where more I business our and exists consistent It’s others, see much would more recovery today, really there’s terms

out no by us the really call we’re for geography there’s board strength. vertical market So across seeing or

Robert Simmons

you. Thank Great.

Operator

you. Thank

next Our comes Sandler. the from question Arvind Piper with Ramnani line of

Arvind, Your if you’re on Check is… see your open. line mute. to is line

Arvind Ramnani

current not much but mute. on product quarter. roadmap new that roadmap, next you kind then Hey, and enhance I in more essentially congrats if bucket ask you of term, of was X good do the to can wanted or going perspective, also your I from that to have completely a development offerings? capability that’s functionality, months, and the the on medium about sorry, so X on kind what Yes, the years. And X next into

Steve Beauchamp

think about generation wanted think Yeah, of much of first all pre-pandemic, in part things we that I we so Sure. re-imagine think to digitally and started the And the where HR is, the you fashion. to the processes being not Gen if even modern really journey, workforce, this native in Z going the a workforce. more way. same really just entering They’re

we we things so then with started to modernize several just And felt ago like a had years that. video journey like we community, and adding that

there onboarding And the ahead very I’m who are I teammates to clients to need if a where many quicker we’re opportunities of get a maybe to world, time, to early you my bit innings to “Hey, already be want help to great think, where, that. a Workflows company, from are background on.” of learn terms another I imagine maybe example so in is in of brand them, of working start meet able myself I I to new workflows they’re in speed up what little automate. still maybe

learn tell you would So we of see platform. front I clients And our a how us. in really from the great use we opportunity what is

and look to be we We to able trying to solve, solution. the to problems innovate great doing. what they’re that add at we And and see so ideas continue get they’re to

It’s problem make matter not the So great being innovate, to of those of and we’ve continue a deliver to in we a a great sure record against of able which had can necessarily us doing. track finding opportunities. terms is there that

Arvind Ramnani

status that something to when be of you that an to point a of to was going of monetize? like has started ability just to Is And charge changed know, in is kind more Terrific. currently clarification. Or as for. add-on I feature, it able that quo? opposed terms community,

Steve Beauchamp

monetization that of strategy. some We to the communicate is differentiation. But of. every teams Paylocity. monetize say never just ability In would the ways part employee with for has our do connect get proposition single kind think been I core we Well, you to discreetly with by that you HR get really and value the

advanced yet. time, we’ve We over but features on that for still the that’s will necessarily we at have look maybe nothing immediately monetization, plan, the is that indicated more horizon announced

Arvind Ramnani

Okay, one then, on this. last terrific. And just follow-up

competitors your kind on-demand talked of pay. essentially about of Some

those client-base are much yet? of kind about Are so sort where areas your all interest self-service. talk not from Let’s of kind you seeing of or this

Steve Beauchamp

market Well, we pay one with actually of the on-demand first to solution. an were

and whose their into employee to service can phone, any from can request It’s time. net put part that employee on pay nicely client period, client on to or into be time had any they can subscribes payroll simply there out that bank look that we’ve their they platform been mobile account. our So at our in And for something long pay the real their to gross growing of throughout that’s automatically go a for us.

great in the because competitive expectations tried we’ve more great has market. And feedback employees think it we differentiator that, are nice feedback really service. a But than who the that the it around I from gradual to got has from been been clients, using our temper exponential.

Arvind Ramnani

great. Yeah,

or the you of Sorry, gradual of you terms for revenue just one gradual, you one mean man. last engagement in When say gradual in terms all.

Steve Beauchamp

therefore and And that then And make of there comfortable comment. to of gradual on. a nice their number hours employee we’re the for hours in pay, it process are have usage, it. gradual in terms tied they seeing revenues have that uptick turn the that and requesting to sure with getting in the the are terms those advance are of to in correct. in people then in be more have that clients same they terms application, Gradual of, comfortable a that employees But because to that

So in fee associated time we it’s that with paying the a the many at is cases, dollars. small usually And the that. transfer revenue have definitely that employee they

other can the that employer On hand, cover the for them.

Arvind Ramnani

much. very you thank Great,

Operator

Thank you.

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

Your open. line is

Joey Marincek

Marincek This Pat. for much. on Joey so is Thanks

what about the But acquisition. to second, we’ve from most and getting a this would out monitoring And you. the investors, between differentiators stood lot question you Marble but say Thank the been you? cloud on you the one last the other what solutions? Blue sorry, are then key So,

Steve Beauchamp

that the those see look for be to it have employees Yeah, of starts and so able employees thing, employees more international first I clients with to on to of get we started think and in terms those ways paid. our the trend manage help

to time. like this as So over existing with. over the already see we then, we that shortages, back It look gradually And an started that and talent felt think about opportunity. we to and future was a going continue was state, time, great was grow as world increasing like to had the as and partner we opens up, integration

So And also had thought of assets that is unique And we space. there. familiarity it we that there scarcity capabilities. in was

earlier. really invest time and discussed able And And excited over to the solutions, so, I be board. we’re that that as bring we’ll to in on integrate

comes that need. proposition differentiation, drive communicate, and what of is we collaborate the offering unique, point biggest but the beyond the with features value also that continue to automating culture the really And are that talent that the in to that functions, simply solutions the just and it we the HR And it their we’ve and that ultimately of in our terms retain employees market. make allows marketplace. we’re got to In connect most payroll and go down say, modern clients able have to their sure and they’re attract they

Joey Marincek

Thank guys. helpful. you, Super Congrats.

Operator

in back management turn the for remarks. to I will call further Thank you. questions I’m no queue. the showing now over like to closing

Steve Beauchamp

to as questions appreciate your our more I I’d the got. interest to all X,XXX Paylocity. take you’ve course, that in And thank of to challenging for, able of all of able work have people love today. to the that be years, than able Well, that couple been a Great. you And share usual, in of really we obviously, be with lot but produce put a results for are the to hard opportunity to

So has great everyone evening. a hope

Operator

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

wonderful disconnect. You have may a Everyone day. now

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