Paylocity Holding (PCTY) 4 Feb 222022 Q2 Earnings call transcript

Company Profile

Participants

Ryan Glenn	Senior Vice President-Finance
Steve Beauchamp	Chief Executive Officer
Toby Williams	Chief Financial Officer
Scott Berg	Needham & Co.
Joe Meares	Truist
Pat Walravens	JMP
Bryan Bergin	Cowen
Matt Pfau	William Blair
Samad Samana	Jefferies
Chase Donovan	Raymond James
Mark Marcon	Baird
Alex Zukin	Wolfe Research
Daniel Jester	BMO Capital Markets
Robert Simmons	D.A. Davidson
Siti Panigrahi	Mizuho
Arvind Ramnani	Piper Sandler

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and thank you for standing by. Welcome to the Paylocity’s Second Quarter Fiscal Year 2022 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference may be recorded. [Operator Instructions] I'd like to turn the conference over to your host today, Ryan Glenn, Senior Vice President of Finance. Please go ahead.

Ryan Glenn

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

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

information, forward-looking Florida course unable refer we non-GAAP and our Please currently comparable website Investor undertake measure Steve And factors conference regards unreasonable Conference in and reconciliation, with the that virtually complete there risk our refer GAAP will Securities this to Exchange is attending forward-looking and the filings the under Commission directly our and other us available the our Raymond Stifel the internally Exchange be unavailable release with let Summit me which a turn March during Steve. located business, know are schedule is to Technology to events. X. With time measures please detailing note Also, upcoming to any will measures. Conference update these JMP financial and more the schedule, Relations is measure like to how to without schedule Please with call, believe these of X. Commission. on filed of effort. paylocity.com to non-GAAP in the Securities we me Executive therein are to results any We call we financial because representative would which In a needed the information, I Securities financial at attending at duty reconciliation reconcile if at We the James tab Investors the do for any on their March and any over press disclosures. of not you that, today's non-GAAP statements. on measure the Institutional contained time let March X to certain be additional will For that is on

Steve Beauchamp

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

modern top our with the of million growth. XX% proposition $XXX beating guidance of year, QX Our the sales the last XX% second growth million. resulted in our industry, strong most revenue or $X.X providing over Total was of coupled end differentiated value execution in software by consecutive of quarter revenue

segments all million the $X.X end second of target top EBITDA Adjusted year. position record well and fiscal season the of which team selling our the results, into to by was across of very the XX.X% half our continued and sales headed momentum quarter back for market exceeded million. $XX.X margin Our build delivered us or guidance

R&D and perspective remote continue resonating business, areas discussed all culture and friendly award-winning and across with hire sales employees resonates and most to of product product marketing, operations. our is modern From in of investment perspective, including and prospects. our suite as clients As with sustained quarter, a the last proposition providing the we R&D continues to pay our marketplace in dividends the successfully value

modern and workforce, compelling, using including modern surveys, particularly video transformation and community to see products index examples. conversion our workforce rates. community products on products Our premium digital focused attach, the find Companies video, management, on continue like focused utilization increase premium and learning as

continue a high quarter. video the hitting utilization record We with increases creations in monthly to premium see

also users in active a saw our record number of community we While monthly product.

are seeing Modern action-oriented Lastly, Index, of higher engagement as provide clients we of which employee machine our result our learning clients. a from recommendations all powered the Workforce to

integrations. that and processes continuing other to unify systems. we deliver and to of and also modern Finance, the are We integrations integration acquisition completed strategy. automation efficiently through development critical our effectively, a automate data focused more deployment Cloudsnap’s In and technology of on while API differentiation to HR, Paylocity business across will platform and drive systems helping January, low-code enable enables seamless innovation sharing the and Cloudsnap, between integration Benefits,

providing financial investment for breadth of clients in solutions believe resonate proposition continued automating integration supports to EBITDA guidance. into with. exchange capability to will a Cloudsnap Our materially Cloudsnap can of perspective, XXXX, will of XX seamlessly the the we adjusted which our our channel but headwind will points clients From partners best-in-class contribute systems. basis strategy fiscal expand our a not revenue, approximately as our integrate updated our of in value also our critical represent this between will data factored with We have

resonating thousand modern than market in who prospects a most the target increasingly providing employees. of proposition with our the and is software throughout value so greater have Our industry

clients of employees. success today we're than a we the target market end employees, a to market raising are of at from the number fact thousand serve of the employees we seeing higher the with end our our X,XXX and more significant X,XXX high that Given up

filings on a also processing as closely of work XXXXs team, of The clients form they second state fiscal federal, W-Xs, year agencies. operations time and annual to payrolls, our local tax with is our would and end year our to time fiscal provide thank dedication and very busy and pass for like I the quarter all want year. XXXX review this financial very guidance. in detail results during Toby to to busy for updated the work of hard of their now employees I call to

Toby Williams

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

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

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

GAAP million. or XX.X% of Briefly million. and balance million by million, quarter profit XX% We EBITDA for $XX.X which equivalents of to gross our revenue EBITDA to exceeded we corporate over million, Our and ended at of cash, In the the the towards committed our to $X.X was was progressing quarter, top was end. net sheet, invested XX% income $XX.X results target adjusted $X.X regards $X.X our million was guidance with adjusted cash cash time. income covering for QX the remain operating $XXX.X

and million down in the revolving acquisition. balance from of credit we to drew funds billion daily client January, facility regard QX. was income, average in In Additionally, held interest funds our Cloudsnap to $X.X client $XX fund our

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

our Additionally, rate that interest while scale not operational revenue our any for please increases that QX, note strong with and by quarter our included in the costs. future does team which implemented opportunities performance or guidance in include to demonstrate Overall, G&A identifying profitability sales pleased also potential, we're from be federal reserve. another may benefit

marketing sales, across hiring in continue as see including we R&D, and such to in mentioned, key Steve operations. As our areas, business, success

in We of expect drive to headcount business. financial scale said, full the across fiscal I'd the growth to With to for fiscal year our the the areas half guidance positioned XXXX. investing provide continue of we QX that back ensure all year to and in like are and well business

that adjusted be revenue be growth And represented are approximately Blue to maintaining million approximately in million. fiscal basis EBITDA our you. to above to fiscal the total $XXX quarter, dilutive the margin Rule is third of impact Operator, And we note guidance XX% adjusted of of we XX% raise revenue adjusted in and results And pleased $XX to range adjusted or the million In expected we're in for million for an $XXX ready the Cloudsnap. range expected Marble roughly to EBITDA XX.X% Thank in million, fiscal implying XX fiscal is us the are the range XXXX, at midpoint. be to of to million revenue. is now XXXX. the margin with over of fiscal is guidance total XXXX, we XX% of $XXX at conclusion, expected expected For million growth range $XX points million in to the EBITDA be full are QX the combination And $XXX in XXXX. of total percentage EBITDA which midpoint, the approximately of to quarter year puts XXXX margin revenue questions. XX to also and $XXX over or with pleased the $XXX third growth despite

Operator

will [Operator question Berg first from go Instructions] Co. Please ahead. Needham come you. Scott & Our Thank with

Scott Berg

Steve, Several customers guess, you move good that and what ago, think down know, moving down six expect Steve I you. of we'll prepared two to up come, moved to now like to a the or market here. think us start Hey quarter to we Help are Toby to XX, congrats upmarket. on kind be, comments your about segment looks were should you're your from more four with of you your target top investments that we and years end on X,XXX. don't pace versus something today kind this now? of how of through guess is there? I for should How I maybe quarters

Steve Beauchamp

Yes.

the think our I time. move happened So, like much over market, move-up naturally has market down very

the sold year-after-year product that public, the and strength we’ve the those our as course, improved, they portfolio So different a in because more amount we’ve become start quarter-after-quarter, we’ve the really of market. lot products of of we added competitive double of modules. to And all product continue stronger of to and them has become become have X,XXX-plus and we since enhance

today, clients. employees if more market. reps number those competitive. last two, four so in we’ve really and frequently the And have the X,XXX being competing over that over sitting last, our you And terms become We’ve capped ourselves clients never years, of of over look to here more a there’s at significant more find able sell we and three, in

as So R&D, The continue And overtime. which a it’s naturally continue to we our to our market, really perspective, this we more our just go-to-market part motion. have that, in like time we success make of the from investments growth that we’ll that that felt right to strategy, important Street, was those make part to in is think of that just and was visible

Scott Berg

significant how customers But about engagement right some that follow-up early And modules customer that kind your a customers maybe not statistics don’t see thinking we those can there kind the some or the own in you’ve perspective, you given difference aren’t from or Do Steve, that versus engagement of and good with maybe Excellent. quantify a data have should using or prescript of those or on their way? maybe retention of think remarks. similar qualify about employees. you then

Steve Beauchamp

Yes.

little bit a modern a So, we’re I with of still cycle think in products. these the workforce early lot

transformation is free offer seen digital customers increasing the stay benefit is of uptick, definitely employees significantly. platforms, still a rates video. more would the from and over we’ve higher part involved since So, or that in with looking early seen which more community, are more maybe to learning additional theory rates that attach capabilities that the and of to such surveys we is and higher the can engagement, then it, our But last We’ve can Certainly, of so. utilization that are the come management attach I XX both are for get likely we’re we signs those our positive seeing those I year, call months to customers direction. and think are initiatives that in an us. say our

Scott Berg

Great. taking again. for my I Thanks That’s have. Congrats all questions.

Operator

you. Thank

Please next will Truist. Our question with go Tillman ahead. Terry come from

Joe Meares

and released recently I tracker just a scheduling that Meares for just drive Or more Joe Terry. customers tools. wondering is was early these do how the This guys, Hey tools, higher differentiating for ASPs? feedback the get actually factor taking COVID diversity for is the question. is customer free? And on new with this Thanks

Steve Beauchamp

Sure.

the built So available, all track drive COVID we on of had But that I usage And still obviously great our would track included tracker and be platform. legislation capabilities of mandating some free that have we’ve the what that’s have that, receptivity those We those. necessarily customers to of so think and already differentiation are a they say law forecasted some differentiation. workflow the there but launched who still that customers all to was idea the good the from are and I in that. in of lot platform would had choosing highlight not I and we nearly get provide would of definitely passed.

cases other at those able to can be use so So, definitely that you differentiator. look something a use COVID find like and tracking is to capabilities

Joe Meares

And That’s a super then as just helpful. follow-up.

you what XX% targets it time? about that the is frame remind investors XX% like thing? revenue You Could time should on a in it the puts you size P&L thing? gets and to EBITDA margins, XX%. biggest timing range us the over just are posted to and that? takes think that is Or How And we a

Toby Williams

Yes.

making I from ceiling. margin XX% the below remain go think over pre-COVID to think So, to the consistent time I mark. to XX% that’s time. don’t I and achievable we if a we we pretty year-over-year I that back target, leverage think committed But you think that progress a XX% just is were frame, standpoint, were

But that. essentially we context headwind in good that and margin pretty like bunch noise of roughly I of acquisitions to call over as believe XX I flat, two against it think XX%, in points it, XX just XX think the context I path last, feel this on over year, are we to also this certainly months basis think calling that XX% doing under a that, a XX% especially we’re to maintaining it providing you’ve performing the that guidance And of to seen the time, months I introduced range. post-COVID that get by still year, relates COVID. to

time. same over So business scale. margin where think, a the I this Certainly, still get is with leverage you target

there’s question And time, the you there’s larger revenue the of other – is so part scale also your benefit of size. get but with

I the margin think does described it profile So, as growth remains target to. we’ve and

Joe Meares

Appreciate all the Thanks colors.

Operator

Thank you.

to go with Please will Brad. Brad Reback ahead. ahead. believe question come I go we’ve Pat next We’ll lost Our JMP. with Stifel. Please from go Walravens

Pat Walravens

to you guys. Great. Thank you and congratulations

XX% always it XX, of Is comps something guided easy comps? plus Steve, I changing of sort So know XX, or mean, this but is the was to just easy, us suggest grower. are I XX, sort consistently you’ve a

Steve Beauchamp

Yes.

to to you kind from probably pre-COVID, kind go So, accelerated XX% of above XX%. XX% we of I if just had think

kind focused the low mid-XXs. you for a now teens. reason long-term target. that we definitely mentioned. you as COVID, the that model in And perspective. on our from comp, XX%-plus And be We of So, were still have to the on to the down are That less saw employees is we seems main platform, go easier during then

did you And XX% But pre-COVID. good. feels feels normal I two quarters of what would to the it so pretty certainly business tell

business, that we’ve momentum the business. in got way just growing we’re So the the the

model so a gotten the feel ride our that we think We’ll don’t guidance long-term see certainly And acceleration. because of going momentum, forward. some of good changed an necessarily has I fundamentally, bit if we we’ve little and about can

So easier it’s comps. it’s a bit momentum It’s of business, kind we little back before. in of and getting the doing what were to

Pat Walravens

and growth you as the And terms of that? your on up do building sales about quota what think capacity, you the what side do target staff of you staffing in

Steve Beauchamp

do do part think the up can from the so Well, we equation perspective. ends a what being we productivity of

love always productivity. drive to we so of And able being idea the

are we’re then the pre-COVID. to earnings in It’s that again, a and bounced levels couple as COVID is very the out sales actually us. seeing on that And around of calls I good close We increases the force productivity of productivity on in would you last called encouraging. tell that pace we’re which we sales very hit, – pre-COVID force. performance

take for that. it to reps and we of And get year. think productivity to we’ll way done we’ve able into us kind a to us is that to So, increases, same targets about I financial to add next back see. of We’ll number would our kind that historically, get which of the similar is be great which factor

Pat Walravens

Okay, great. Thank you.

Steve Beauchamp

think we in having a Do just difficulty we’re do have another Seems somebody just question? to we waiting like should the here, Operator, into someone be I technical the queue. get some have another question? queue second. getting

having else? We definitely technical we’re difficulty. somebody Well, have

We’re to back All have dial right. anything? going to

line with operator. the on We’re

going to trying what’s We’re figure out on.

can seems old the we’re with get but next Zoom question somehow days, with we can patience the your appreciate queue. We in It great calls struggling the I do So like here. get the [Technical me, but Difficulty] can’t so hear you somebody call. you still into a we you hear on queue. fashion and we message that’s can’t Did good, get conference

So, trying operator with we’re to messaging and figure back the forth on line out. it

want next So, do stories share we any to for while you question. the we’re have waiting

Toby Williams

couple days. and in has sitting we’re a snowy been of Well, it here cold and chamber,

bearing out So the here.

Operator

And Bryan question our next from comes with Cowen. Bergin

Bryan Bergin

do you me? guys, hear Hey,

Steve Beauchamp

somebody. We your got patience. for Thanks

Bryan Bergin

All right.

for demand. one First

do it of any Omnicron. decision-making really the XQ, due any So change thus or XQ was meetings in client change to it you But in later in in or strong clearly, number in XQ. like just sounds far see

Steve Beauchamp

Yes.

impact January the employees didn't So I the such sales we and a of were or us, of really sales for January base say pleased our number then guide see motion, and with and in that the month big had on was for would we're sales and platform the in client we in half our that Omicron a from whether into really even strong going year. to starts our ability with January back strong our

definitely So conversations like feels I activity market. the or of changed in number we're that anything of and levels the activity wouldn't kind with number It getting terms having meetings clients. back to the very meetings say of from in normal and pre-COVID of

like I a And do is I think attract think it's hot capital talent. trying out how people to tight they retain topic. market forefront human with management figure in and a this labor, at of the

but of the more and that certainly And so activities. has has level I part important, think elevated conversation of definitely pre-COVID become

Bryan Bergin

in market? the just size to good and the the your to target around that of And talk target prior bit X,XXX X,XXX That's level a X,XXX. of clients time just market, Okay. frames sales Can client cycles in of you formal kind the implementation raise that then hear. average versus on about the

Steve Beauchamp

Sure.

been definitely while. that our experienced opportunities. those So tackle prior mentioned We as in the we've market really most question, a see for reps earlier, I

cycle. it a have so And sales does larger

days. is sales cycle typical of that employee XX XXX more like Our

get going to can months It to that in almost three cycle of in of live. on upper so And be then six kind that from the we're perspective, weeks number somebody XXX-employee some three could And and months. to a running X,XXX be sales six to and customer, plus. implementation typically up that an it's in and measured really be tier

needs weeks, typically but are larger And we And our depending to like weeks find what in already going the customer. experienced to the what so it's people with clients do most more we complexity, XX six have be we the on and dedicated. could eight that customers'

us different for those We that of has significant level to number have And larger a have customers handholding customers. get into processes established already those of space. customers goes that we that in allowed

So good market. there's something in This changes customers is And referenceable like a X,XXX-plus activity internally. level of the number great not been lot doing. we've of feel and a we a newer already got we've

Operator

Thank you.

question will with Matt from next Blair. Pfau come William Our

Matt Pfau

relative Blue XXX important of seemed would deliberate for to my customers questions. taking X,XXX-plus that Marble your do a guys client more employees? functionality platform I typically acquisitions follow acquisitions that question end just end your be Hi, recent then and continue Cloudsnap more plan the much on providing of wanted average to one thanks Is probably customers of making functionality be take on like like sort those of the How with of up to say, even for motion? your some would customers. And And that more to around provide you market? to, market? the do your upper larger on it

Steve Beauchamp

Sure.

we've those more continue clients. our is launched a – to sometimes the the larger newer product, newer for So what the features say that add I that need then to platform would we

released like that's latest And on years we've recruiting market Learning now in management, competitive so our space. naturally becomes probably been for HCM something several that in product. more something X,XXX-plus the that

continue will even over become time to We add features competitive. that more

rest of you do a going one customers sometimes platform, see those X,XXX-plus I for components. already the your solution these of rest to like the platform. I'm say, of And use I've your so got

integration of correct data important an are that say part element. to you becomes So

you size also adoption average So bit little less get more customer, a product employees. lot a maybe than the but

question that mean customers little the target increase as It like then I more So last we've got get attach XXX acquisition you did as was you your rates the you've Blue we've seen those have volume. frequently of But time. countries. lot more products the a yes, over And think them, improved it's applicable I employees an with larger. seen different part have clients. And happens customers bit it does. in larger Marble a we've

that upper can to benefit the the client And bit of to so market. think entire little end this we have acquisitions can skew base, like sometimes the a

Matt Pfau

Appreciate guys. great it. Okay,

Operator

Thank you.

Our will Brad next open, Stifel. Reback go question come your from question. Please with is can you line ahead your Reback Mr. go with ahead.

Steve Beauchamp

Brad, know not to if hear your I don't kind we question to you're get of somehow able want through.

So we're riding the wave of technical difficulties here.

Operator

We'll Samana move with Please go on Jefferies. Samad to ahead.

Samad Samana

Hi, great, thank results. Brad see to the will channel and you. been the you strong nice as thinking ask have my inner Reback And guys, I about might well.

think larger I philosophy how to change first, of the you revenue about may just are retention should Or those or Toby, you maybe customers up-market take about we operational think implement your perspective dynamic, longer guidance about customers. the And the CFO, side do But we've as from to any – progress into bookings think just the given change just from anyway? So going revenue? guidance think it's moving to as how I to ramps? when philosophy different the dug obviously,

Toby Williams

I forward. Yes. you in having the we things business described I it year-to-year. perspective if and to to and we think pretty description TAM think a the there, or we over in of traction think I I with the same market we of don't move-up back guidance downmarket and just on external were think philosophy here has time happen this is is it's seen. of been think we've lot that guide particular, the just consistent how our seen We've I think I'd case and that go was move. mean guidance what traction I really reflection And of move, terms provide philosophy what mean And the we up-market how initiatives a our an is seeing of we see been one had we've we very impact adjusted about quarter-to-quarter successfully. I an externally this Steve's about to as quarter-to-quarter, the add we how how we've much the year-to-year and two, seeing mean, the three traction years the said from been describe seeing. ago,

have don't I about significant Steve some longer of change that, cycle of the cycle there's business the probably time. slightly and philosophy think how slightly of terms that about the – in aside we traction terms how seeing times the the guidance been descriptions So think we've or sales and we operation on and gave been any think on times longer over But implementation. seeing in that's we've of seeing from

Samad Samana

think that we up-sell. And larger kind have could maybe pockets Any base? SMB right? in Or if anything you level, customers from can about customers, larger cohorts opportunities then and retention kind net early least I your data of if answer a model maybe your some for or that higher higher Just NRR cross-sell you Great. versus at revenue of have just more longer-term? impact can are – of they the generate core a as

Steve Beauchamp

Yes.

model, X,XXX the have me a that going Like last the of more let part. percentage the start we're years to higher with employees. over clients or three two I'm So now, not of sure from meaningfully impact

fair the hadn't already think of to of our I So X,XXX number is have a higher – much This target point space. called that This we to enough. we're not employees. is customers growth not push is over market percentage We market. meaningful that as a a going out

call out because of have clients naturally there. business. been attention years. is of should lot it three great it We part last now to a the paying got We've our We

clients way less in the business of But definitely out-of-business do that And rate. question to so I don't have of your They the operates. see think general. sort this to economics any answer directly, you changes are larger the

products. have And the they both kind more buy smaller sometimes net propensity so retention you see therefore, higher, do because of a and rate, out-of-business dollar of to

you've to likely great got they're you're selling the bit a larger, complex, get back to more gets products buy So then introducing, more needs it. you're base, if that their client the little client as

and them, we those love we lot great time. serve that to you customers. think So opportunity of over them a there's We've a of more got

Samad Samana

Great, questions. on thanks strong taking my congrats for results. And again

Steve Beauchamp

Thanks.

Operator

Thank you.

from Our Please next will come James. ahead. question Brian with go Raymond Peterson

Chase Donovan

Hey guys, the Chase quarter. Congrats Brian. this for Donovan great on is on

from us. one Just

Just form benefiting from benefit we – about on think should the the from the filing Thanks. fiscal W-Xs. recognition great XQ, in transactional potential like how

Toby Williams

the just from with trend from set. Yes. last a revenue the the across of I year a on was all perspective so down competitive was context which lower W-X year-over-year was industry observable was last there because mean employees year. platform,

little I revenue, prior described had platform past employees back. quarter. in of quarters, think what out the might coming than don't But have really you last platform client in bit leveling the W-X we've base is that observed But over so this the think had observed level far rehiring seen years. a I the hiring and employees prior we you back have to across you and same coming the on

so sure think historical what W-X have year-over-year. in not I quite versus levels back of you coming terms revenue year, And it seen last where was back to would

Brian Peterson

Thanks guys.

Operator

you. Thank

Please Mark will come from Marcon with next go ahead. Our Baird. question

Mark Marcon

Hey good afternoon.

regionals that just terms my of terms add Is of source in-house? the in any in you're of me seeing congratulations. color? legacy there Let Any change new clients

Steve Beauchamp

a type where opportunity traditional I get bigger years players kind often the would to big some you the Tier having last We definitely into X have Yes, place regional we the tell had see presence. the markets you of of customers is most Mark, the expand players from. still over couple

expanded little and years. the the story if But a come think growth of over they've big So last regional look players, at several kind of we've naturally you probably consistent I some us in-house geographies. players like as players, the just bit up pretty a

Mark Marcon

to big players some most the players, this more it winning modern comes – the frequently And what Steve, is relative reason the of when the point? up what's either at you're or

Steve Beauchamp

Yes.

So with perspective, obviously I we've be we've everybody view you from how help have else pitching attract think and that your tools really is you of more our got a retain interacting a actually we're lot a of talent. will same the to modules has, modern and but of customers much should we lot got employees,

and And equation clearly with it talent. easier time saving important, culture really your but attract retain employees, that, That's and it's you it's and part environment. and great the idea not to automating. creating do about So about this a and engaging if of becomes communicating of just

of to obviously not that mean seems data automating, collaboration-oriented newer a enough And launching. video and message anymore. we're really their is to some be which or be of community the capabilities going simply important, I so but getting employees about examples still is that things message versus that or resonating

Mark Marcon

in and across changes then, from with community clients of in and an widespread you what seeing mean, of And are employee rates? I Great. perspective, the retention terms terms your the use

Steve Beauchamp

Yes.

in back terms probably we've year was feel not this a and which of stay that more fiscal COVID of moving that to really update retention in great rates I clients some been about. able normalized called very we on give high year obviously and rates, XX% So saw really over an mean, annual fiscal history. last out our we an forth. we And But we high you been retention basis. environment, We've for record

Mark Marcon

then to is there, what particularly And question. That's continues the you to last are just Obviously, rates you grow? balance up. the float and move float and to continue potential as about thinking investing the are grow balance How average starting the great.

Toby Williams

Yes.

portion environment that a the revenue had outside the and we've to us for at be the thing a hold is increases to thing just obviously looks rate come client a see we portion of continue Obviously, And historically little increase small that then funds receiving. up And takes rates, perspective, depending first actually a always the I rate – come magnitude of that bank. just rate bit of we through will the both time is perspective mean, of think a extent And to like. changes. of I tailwind. a from then second we do to discussions of look that the from profitability to a what what see from of that how magnitude tailwind very we much But Fed, the from around those on as invested So us. there's end overnight

see we a extent tailwind just magnitude rate the the to coming then us, and will the at and think a timing. question I that for So hikes of it's be us

Mark Marcon

color. the Appreciate Thanks.

Operator

you. Thank

Research. from will ahead. Alex question Wolfe Please with Zukin next go come Our

Alex Zukin

for thanks Hey question. the taking guys

to a So this a on ways, been has try different going of I'm asked it. but couple spin

whether you resignation, potential tailwinds the leaving of If a hire normalization the right employees think business different talent, movements headwinds a in tailwind. it's harder also to in about more vendors and now, for marketplace kind jobs all between the but or of being the your

kind thought hopefully demand am would versus the look that, but dynamic, environment how tailwind for curious? I be, what classify headwind you I'm at post saying post-COVID, what's COVID of it would post-COVID – you the If sense the you

Steve Beauchamp

always good when you're out a as well. hard It's to moment in question. figure the It's

net conversations that look there, the and environment. market. out, more of very like in see we channel the that, the that to we're get of referral feels sales if that we overall number pre-COVID the activity to level activities. in the things So while seeing it That happening activity, to what's a taken at of presentations, feels similar level a but all it It's you normalized back broker is we're

tell sure to and your they're top question those challenges, single attracting was there three, think not I of ask you XX our if talent. ago. of certainly with really retaining answer positive, people it's years four it's tailwind, is, importance I would conversations every a X don't I the you level and think but way these – of same if going one of that CEOs customers the know customers from raise I of I'm

the Gen got an the part all to to become tools important think that workforce That to challenges. than we modern the and our talent. initiatives few those that's make you've workforce, you to because things of retain be to aligns And on and going And trends work environment the a these a so resignation Z that movement more one entering of all really HR sure strategy great it's the attract drive a ago. challenging the saw of that and remote well years and has professional and of allow and the we conversation

Alex Zukin

Perfect. Steve.

Toby, larger for in beaten guidance it you've you've your most a it than look raise think question the the basis for I to a I by different asked So Samad at be, if guidance try you I'm way. Look, would a the this, going I guess, and beaten two year and quarters last also the in it ever percentage the by XQ. the from seen I've – ever XQ a is

Did the is have So is variance dynamic, to I'm what's change to not this great in methodology? what conservative something – why kind curious just that's Just which is it you it, should you you? – sure you larger more leading way, that? by be of changed the surprising but driving

Toby Williams

still I ground had that think we've moving the just in to business. the a you that Well, providing got pieces are impact some of

not. we sort I the think, tailwind we're depth you I phrase in recency maybe easy of we're are, of last post used from, these maybe So the being of the think quarters. COVID, seeing comps But two over that

And so our you've you've that's changed in also coming the guidance – platform think I And philosophy. seen seen nothing back. employees there's about

of of question method think philosophy that asked, same you've of you Steve, the best and estimating can we've estimating. that that you sort a just you've headwinds consistent taken to guess, the we've consistent got philosophy I got, I with been sort

are of and a in you I you last I environment. think you the get estimate. hope XX fiscal that your those, have to fiscal you months, And over have an think living environment of get would next still normalized some to where perfect one the year year. in into start this But COVID think a we through takes crystal ability puts more I ball and don't

to seeing sales I level. some pre-COVID employees the the We're the questions, of We're productivity platform seeing the pre-COVID the to a think return are pre-COVID level. to are earlier force seeing things we though of to demand in environment returning levels. a that return levels

think had said return And came to into overall, And we'd out see the the that and pandemic, to we was of what same we were we think when the of seeing I we such that when drive come things coming going that into so to momentum were level I through. starting we're we came pandemic, it. try

Alex Zukin

how longer employment we're given in any Perfect. you're term, out is I employment to final data employment about the you had trends think your what of even thoughts one. revenue general, just trends you I about talked about to reports, there for year, what of respect a but the updated current With the this year. both and the to for seeing maybe in sneak own in terms of system, market? trends, If out about trends thought employment to growth And tailwind seeing how maybe one general guess in being I think before think even

Steve Beauchamp

Yes.

prior predictable. this obviously reasonably it was that say to and huge So cycles actually through, would I pandemic gone we've

environment what So GDP got a lot in were of if lower you've and years. kind you is a see of environment, we growth obviously would growth a for

I've the it think today, harder over of before, has employees that's platform mean, the on to more predicting get the of plan we which GDP, increases terms don't now, a but is on time, that less similar this the never a that. a which probably would would in see the business those in you at conservative returns be numbers. X tank GDP bit. lived for to But And them stay then So X challenging. on in to the plan when would a is if anyway. decline. on predict there's Much you then provide kind – grow lot equation. seeing have other that what grow We I employees not said it. I see of I bit growing we than do but what would right GDP way, of that's percentage or thing in think try – start little a a think to And variability It tailwind. But been would that's employees less bit the we're it. recessions of platform right the It myself would then the something or of same points on platform typically you and as way little part couple little into dynamic than would well, try see be left the through percentage couple of points, would of less I future. it both be it to reality to to a And Toby sides

certainly quarters. last probably, over a we gotten feel of lot So we've four that like benefit the

Alex Zukin

Well guys. Perfect. congratulations

quarter. Just another awesome

Steve Beauchamp

Thank you.

Operator

you. Thank

Our Jester Capital question next with will from Markets. come Daniel BMO

Daniel Jester

of to broadly back to have kind expand joined I is go other of products for driving And we the Or in question. – are that into released? Is the last I push Thanks modern relative about workforce the that year apps it back couple to doing that a the and across to on that engagement? guess want talked different that I you who's taking my to clients far. that, Great. so you those you're anything maybe seeing base platform. more change? guess seeing whole times

Steve Beauchamp

seeing Yes, being driven now, it's both. by it we're Right good a question.

announcements, things the with set up more and launching tools, just earlier in cycle. types And they're active and newer feeling using of going of definitely implementation process like want they're and on pressure marketplace and they're so the through in sales they the video community, in terms getting at engaged the these their this employees solution, they're with getting to clients, leverage because our then looking

see definitely we in which we a of if actually didn't ago, much as starts using occurring. you of go January, see years couple back January community So that

there's a there. Now lot in features more

the of equation. part certainly that's So

with in customers them, other can then this employees engine back terms are do allows And and move off, ideas some the you of growing the kind of retaining their best we how lot we that them recommendation think industry your listen, doing in learning said technology a is approach customers The us that Modern the to the that is employees have that, engage this based We actually faster needle. and tell than same we employees score got our surfacing versus behind them. Workforce who how we've And machine recommendations practice thing we've customers a which definitely they're through to taken are. to Index, how engaged to with differently.

that we've a that new relatively feature is so added. And

use one like the our activity been and and months, probably or levels been higher clients existing over into things community that's driving six use activity And levels last I seeing bigger more MWI so of surveys learning. the think we've features in even contributors

Daniel Jester

the Thank helpful. in if you. this. Toby, how you Blue will revenue much But sorry That's call then out quarter? did I I'm its Okay. missed add And Marble

Toby Williams

didn't. We

that I year. characterized less as the we initially X% of overall had for think than revenue

And we characterization so was the provided. that

Daniel Jester

Okay. And performance consistent the quarter in was with that.

Toby Williams

Yes.

Daniel Jester

very Great, much. thanks Okay.

Toby Williams

Thank you.

Operator

you. Thank

from Robert Our Simmons with go D.A. ahead. will question Please come Davidson. next

Robert Simmons

of Hi, thanks on customers also then about the for wage inflation, taking the terms questions. hires feature boosting Can in you of talk balances or and slot seeing terms both you're in actually revenue in what your potentially impacting the float margins.

Toby Williams

The question clearly. had come through

driving, around I heard part think the I was first float what's think, I balances.

terms average so saw – about of the I we have other we in line QX. balance I perspective. And see in seasonality years different $X.X billion daily quarter. seen think nothing is the had And what what pretty being $X.X in had typically, we for higher. in with think guidance of – would balance float And sequential quarter-to-quarter much billion quarter is around from the QX a in We you and provided change

question. the best on Sorry, we what come was attempt that through to heard

Robert Simmons

inflation, actually and on both also asking then about on margins. impacted was own the that's Sorry, I wage float your

Steve Beauchamp

Yes.

are the the on you There's us meaningful float a then So – to float. float have now, business obviously, allow that impact a where hold it The can very smaller big more it to I to deposit, direct some think business. our with percentage they more wage of translates inflation inflation taxes doesn't doesn't of have right but wage a impact our ultimately a then have side. for a that realistically to because time. rates period in little bit happens then And tax

small. increase, things, more of material, big as in Now but that scheme rates still to relatively starts the be it's

Robert Simmons

end it. And competitive field lower you your you upmarket Got versus then lower above characterize X,XXX and range? the the range how of would

Toby Williams

other may competitive set the from as competitive go, I in you X,XXX-employee of have sort perspective, suspects see I on high described usual Well, we deals. dynamics you market different set. how But you would might slightly a think think competitive a that see depending in

You see formerly or might see UKG there. ultimate ADP you might

higher. little a up go You

our be a You – the frequently like think I I think I would Paycom of that most might and there. would are sort see those somebody to previously that names competitive at end it mean – are we those you of see around have X,XXX that would think just described upper And I employees. the X,XXX market in dynamics speaking, segment. I same generally as described X,XXX

Robert Simmons

you great. much. very Yes, Thank

Operator

you. Thank

go with come from Please Mizuho. will question next Our Panigrahi ahead. Siti

Siti Panigrahi

of comment data for to acquisition. department. just understand ask the question. Cloudsnap Thanks be owned rationale behind want the side. what's were integration data questions for to But my the I helpful. be this need wondering, my taking I by about would Any asked. integration that HR Most

Steve Beauchamp

Yes.

we this perspective. So category I data really of integration from already have this our put that a could strategy into would a if accelerate

So today our they and wide us ask clients variety us with of a systems. come to to integrate

Some Other of so GL they those benefit like systems, data into systems so on actually systems. ledger and referral financial channel, back forth. so can it's systems power our XXX(k) broker be be getting the general their They can systems. times,

a integrate approach more So with we of does we have really these today. take is hundreds and integrations. partners of What Cloudsnap low-code automated towards integration really hundreds that

customers. you're that much time using can to to shrink transparency modern And time. and their dramatically more API-driven a experience, the real clearly can that their we give the capabilities imagine then so when provide configuration And can tools we leveraging whole

So of business offering we're existing impact but we're partners. our both the about can integration have power our of that an value that like think I and technology different to wouldn't that it segment go and to kind type our a strategy as after, going customers

Siti Panigrahi

color. Thanks that for

Operator

you. Thank

ahead. Our from will next come go question Sandler. Piper with Arvind Please Ramnani

Arvind Ramnani

Hi, thanks for taking my question.

ask you ones. business wanted some from from providers? taking the the takeaway business sort mostly competitive a deal of you dynamic providers? a legacy of Are to quick away from couple do of Just perspective, the run into legacy I

Steve Beauchamp

Yes.

one compete a with It market lot. does So the happen. PEO that we isn't

small I think that would very percentage. be a

smaller use the but than that's that that are they're employees, that, larger least kind PEOs see and most stage popular so of see at we clients clearly commonly. where most You XX, in as that typically it being XX customers PEO are and the growth XX,

and exiting sometimes, somebody PEO coming platform. might be on our a so And to

You us a of might new somebody move sales. have the PEO, small might who from go small way, percentage number and but our that of would other a it's to that's a amount

see frequently. that competitor necessarily them we very wouldn't a we So run as into

Arvind Ramnani

then provided math like should interest know kind And think as more can how when all me revenue previously Great. you rates your on I the we rates remind you But up? increase were of margins? rates bps go meaningful. float every have of impacting XX in

Toby Williams

Yes.

this So is think out in a from basis and seen point and too, and a just now quarter called expectation X% between guidance backdrop I yield. XX% the we've perspective we've

$X.X I Fed, think on on, can think, might for just see basis I you example, say, the I what to XX don't the do raise from point know but we million. math

it get we in of that don't think that immediately. the we I all get basis get points, only we of element is practical of and sort don't always – fact, don't XX

But – them I conversation of have that points XX-plus that on we So banking that's basis with that depends practically we work it very amount closely works. timing get. the the it's would each a that mean, partners around XX how with, we and and of

does much what that you how and So you're do talking about get, then over flow in. time

think I bank of that, it typically, varies the at as get but half timing and does well. by least you

Arvind Ramnani

much. very you Thank Terrific. Great.

Operator

and closing today's remarks. any for to turn Ladies management session. I would participating over you question-and-answer thank gentlemen, the for in back now you. like to Thank call

Steve Beauchamp

Appreciate team or technical wrap get a just really everyone's legislation much, changes the worked that as managing all hit we've glad working to just year-end some with it's Thank Omicron you through our difficulties. everybody. home we dealt to patience of from thanking been that to I our questions. very team. we job us, up your hard I'm way through who's Paylocity whether were all working really our a have of with able great busy the everybody obviously, and by and want

everyone So you. night. a has Thank I great hope

Operator

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

disconnect. now may You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.