Paylocity Holding (PCTY) 6 May 222022 Q3 Earnings call transcript

Company Profile

Participants

Ryan Glenn	Chief Financial Officer
Steve Beauchamp	Chief Executive Officer
Toby Williams	Co-Chief Financial Officer
Scott Berg	Needham
Brian Peterson	Raymond James
Bryan Bergin	Cowen
Robert Dee	Truist
Brad Reback	Stifel
Matt Pfau	William Blair
Ryan Krieger	Wolfe Research
Kevin McVeigh	Credit Suisse
Lucky Schreiner	D.A. Davidson
Mark Marcon	Baird

Call transcript

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Operator

Good afternoon, everyone. Thank you for standing by, and welcome to Paylocity Q3 FY 2022 Earnings Conference Call. I would now like to hand the conference over to Mr. Ryan Glenn, Chief Financial Officer.

Ryan Glenn

Good afternoon, and welcome to Paylocity's earnings results call for the third quarter of fiscal '22, which ended on March 31, 2022. Financial Chief Glenn, Ryan Officer. I'm on And Beauchamp today Steve call Toby joining Williams, me and Co-CEOs are the of Paylocity. Today, announced in the discussing the release be after market we issued closed. our will press results XX of replay the be the website call A days tab. webcast our this on Relations available will for next Investor under

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

GAAP the I paylocity.com any business, Exchange Boston disclosures. and the and the will at any Stifel how JPMorgan at call, XX. in statements. Commission unavailable unable the I unreasonable Global will forward-looking are Conference to in and on in our For the under Insight today's results a Stock us Tech measure June note Global contained Securities needed we of the press Sector and reconcile therein the refer Steve the Services X are will William New Chicago and Consumer comparable Software and Relations Jefferies measures. with on additional Conference which reconciliation Please the conference measure me information, in the Baird course Tech Growth non-GAAP Toby We to Steve. website is Conference Blair With Investor non-GAAP In these Boston attend let X. measures currently in that, Francisco turn attend Also, schedule, our June time And in please will to that release, on is located to without internally of other complete information with attend over reconciliation financial available X. also a Toby Exchange because know measure do any there on schedule detailing will effort. directly our more Conference which our filings schedule filed Conference that Securities we Commission. any is believe financial certain X. I attend we regard San risk on is financial to and of forward-looking to the tab this let factors June to Please the update non-GAAP We with representative May not time for you'd if during to refer call on these and duty upcoming to the events. at York Cross the June me like and undertake

Steve Beauchamp

with drive strong discussion use This third their introduces us increased the month workforces. providing the call. level the seen while digital announced will was to increase proposition momentum value help since world. the in this peer quarter our industry of client even users most monthly market. PEPY across modern demonstrates by more Thanks, with and Community sentiment, X target and edit our reflected share community, quarter culminating premium improve our in launch chat features improving workforce record-setting base active the of usage they and months. addition workforce continued and and We to end, how thanks recognition scores, sales clients for The you number been in increased in of Community earnings posts particular, as XX.X%, automated dispersed that functionality, navigate the modern To of have as products through readily continues connect an every usage growth collaborate which our QX of April, the and nearly clients is the marketplace. to and transformation join increasingly million straight employees we in across including index attach to over team growth $XXX. has differentiated utilization groups functionality, ability the employees Plus more Plus, significantly our increase addition new ago, to two the as revenue Company. of has new impression revenue with and employer XX% believe reactions including launch one-to-many in rates public increase of and with solutions, initial XX% In marking workforce focused software files than quarter third they of of shown last productivity The execution from which these January. fiscal and 'XX selling to will throughout the the communicate season companies best create, our on XX Moreover, modern our joining of increased have one-to-one greater The Ryan, by community's groups our its ability suite $XXX of momentum profitability. all employee release connect, years on engage Community announcements, to from third with our which are among the from their in resonating prospects our digital modern to and resonate

Products and recognized the to once Our continues Best GX be being the the year. List third commitment again market development product Software for to among ranked Paylocity with consecutive HR also in Best Products

in for further like GX across would named Report leader as XX well the on leader XXXX Grid target as Toby a categories call was the as to being to Paylocity market. recognized the an HRIS to I provide Spring color our pass quarter. all overall Additionally, now

Toby Williams

software Steve clients. environment. continues industry our traction value with to QX, and continued from modern providing our product see resulted highlighted, existing as in in increased proposition we robust differentiated and in the sales Also, Throughout gain Steve. rates attach a of both Thanks, to performance has strong the most new teams demand

purpose-built or markets. continue in to has for revenue process. our operational XX.X% R&D products Paylocity over of while QX sales performance workforce by providing $XXX to total $X our across our created investment beating the target Strong build of drive execution modern guidance sales helped distinguish million growth our the sustained we sales momentum Our during from end last top and ability million competitors year, as teams the to the

staffing talented next we fiscal pleased We very staffing and the season. head in hit heart to year we also be reps of confident are ability to targets with into start our as continue in to attracting and our go-to-market sales hiring success sales our

XX% than strong help new referrals, third business referrals. we us meetings benefit and channel primarily the the continue once in-person leverage both to for from maintain Additionally, quarter events and again represented financial as advisers, broker source virtual to brokers of more and of

will funnel to and year. have and We which in activity of productivity driven both top referrals this investing support continue fiscal efforts, sales channel increased digital marketing of

by $XX.X Our strong which drive top with the helped revenue or our of outperformance, of coupled end exceeded continued million. million $X.X guidance execution, adjusted margin, XX.X% operational EBITDA

to continues the positioned business to beyond. continue Our are and and the close we the we to prospective future fiscal resonate scale and to year out award-winning remote-friendly with drive growth business of culture well expect in areas across investing as all ensure 'XX and in headcount employees, we

in who culture values employees 'XX was recognized provide more I worked QX. to Best our guidance. to every day has fiscal clients Employers XXXX to Our pass would financial for Ryan so List. and live named detail in who to and our recently externally the to thanks strong results like now our single been to America's support X,XXX than the Employers review call represent also updated as big Diversity the Midsized Forbes and Best Paylocity A and hard

Ryan Glenn

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

As growth. million 'XX team midpoint at guidance resulting in million we XX% and another our above fiscal noted, in $X to revenue fiscal to midpoint, quarter, our of pleased 'XX raise Toby guidance XX% revenue the come guidance sales the and had of QX by $XX to were strong

drive understand continue investment workforce. also in on to of both a go-to-market to and Paylocity the we as dollar regards sales a QX, expense focused quarter in was combine year-over-year last third investment And of to making on in 'XX fiscal the on In forward. business the total XX.X% to serve basis, non-GAAP we of marketing in R&D the R&D G&A significant XX.X% quarter On to non-GAAP We we third capitalize. by and when were our compared overall build costs and the focused this investments we investments out make activities, a year. research platform to incremental making of expense the needs remain what to in in area XX.X% the basis, it in going remain On XX.X% important of revenue increased investments is versus continue development. modern period we same incremental what R&D, growth revenue and in basis, and our to our

exceeded to interest XX.X% net with the adjusted by at was for and invested EBITDA operating In average or regard $X.X and QX approximately Briefly funds progressing our average gross we of XX% and the fourth daily committed results. remain $XX.X our basis in are million, $X.X client our target Our billion QX, the $XX.X $XXX income, in end, cash realized adjusted to EBITDA yield million the $X.X time. was of be ended funds points guidance XX% cash, top quarter in XX In quarter. million, to balance quarter, balance we to client-held $XX.X our regards average daily million and towards we of was X GAAP an the of million. equivalents cash approximately estimating of balance sheet, corporate which $XX.X income will and QX with million. covering was over the to profit was billion revenue income

G&A performance costs. note another be strong quarter and to while operational please for results in we guidance of for increases the have pleased we're With do full financial expect guidance which I'd although periods, given that include QX scale the our 'XX. included our like impact QX Fed QX, on a material demonstrate rate. impact more and to in material and sales to with our to movement the our expect And we Additionally, interest opportunities of identifying future said, funds also that provide recent the fiscal this not the in in does recency Overall, team, rates. impact

approximately to total of And million fiscal for 'XX, total revenue. 'XX an the $XXX.X 'XX, total our to adjusted pleased EBITDA quarter 'XX of 'XX. for And Operator, And our be XX% In million. scale the across to to Cloudsnap last are of of in adjusted conclusion, XX% for million at $XXX.X growth million more over be the represents 'XX. combination is with of revenue million leverage the million, million the expected margin range fourth $XX.X XX are the acquisitions. the as growth expected in to expected fiscal offset $XXX.X year or guidance fiscal QX be million margin end, EBITDA questions. quarter which points $XXX XX% in revenue we're year is adjusted fiscal the in our $XXX.X the of to versus top the revenue expected and and EBITDA fiscal raise pleased basis to be range of driven to Marble of of range approximately $XX.X implying XX to fiscal dilutive than For XX.X%, in fiscal in range business guide, we achieves basis year growth fourth EBITDA approximately impact ready represented is points of to to adjusted now Rule over roughly $XXX XX we which to is Blue with we've XX% or full results

Operator

line Our [Operator will from question come Instructions] Scott Berg the of first from Needham.

Scott Berg

I to on Sorry myself about mute. hate it talking I'm when that.

about to last wanted talked on Ryan of know I couple quarter, mid-quarter. Congrats guess of target guys. and talk upmarket their above X,XXX here you a expanding traction. I market your your things the is, I to of kind Toby about just employees. top Sorry, end promotions

is sales it after was in was this formal a there? Historically, Or you Did announcement?" anything your operations that "formal You've of in I guess, the as of, maybe there. announcement. kind see quarter normal efforts kind beneficial been this just

Ryan Glenn

Yes.

as business sales it really I think had force. entire would performance I strong call the usual. We across

market customers momentum as really above So XXX bringing focused good the quarter. in look the in some of on team continued the in seeing X,XXX was overall, -- that them boost the the larger getting having some productivity sales that's basis. out pleased that called on momentum year-over-year we're to with past at in the -- But as -- of that really force clients employees it terms on you even with in X,XXX already, when we've that and in a

Scott Berg

more think your one, with how look modules suite from then at And several is is customers your know maybe And viewpoint know kind if last Steve wants this, XX% more modules buying time employee last almost XX% Helpful. then your it. a that's over is product difficult years, -- several the and Are follow-up a average The to is, I do Got or we helpful. two, about that what talked question, reasons two-part Engagement would or take the at last historically, over today? Today, and are the over your three of environment engagement we've before? the difficult Any how a I if trended Toby it's customer question maybe don't years? is today hire. years. penetrated and deal. it's you today, more to be been certainly many. But four over on big than we

Ryan Glenn

Sure. Yes.

obviously, So give of year. every and in at of added per size since that time number of public. the terms the we've product per We $XXX now double product, employee customer clients a the roughly and now went year. we We're more public average you than lot going

you the take kind revenue. recurring you when So calculate realized actual PEPY the of can

of And available you product XX%, to XX% we've been in the above potential that sell. below on we've historically do so days but to been XX% more maybe in recent the when math, years, early that XX% total that realized

over And rate that and are add driving prior that then, even which products so we the in attach stayed products. as years, three means products increase similar we that those new the we've attach we're And we're kind range the market. last we product, of to on attaching rates, at course, the prior in had rates adding of incremental also

something So like is for as nicely, up pretty old, is recruiting market the a a two time on which we've that had even just up percentage is video, year-over-year like something long only basis. in more years

we've higher nice period And so but attach a products we've products rate, rhythm attaching at had natural for of still longer from that of had rates a the the new driving that time. in market

Operator

come will Our from of next James. line Peterson from Raymond Brian the question

Brian Peterson

guys adoption. So that of traditionally great things potential kind Community. the in a of I wanted map product, you of And lane. Steve, to are start seen kind product on see that that parts product-driven It's curious, swim the given offering I the know change over I'm other that wouldn't to hear HCM on I as into you've company. adoption maybe areas does the that long road term? the within are

Steve Beauchamp

a it's question. Yes, good

be labor to terms in a got is you've Gen trends increasing are is time very a challenging Not as tight enter it an So market, it workforce. I different dynamics different is but demands we in see the leading the Z work-from-home organization. workforce they way only the think that this of from rapidly, HR

talent ultimately, retention to business. HR so with being because employees stretched communicate, departments are their in And and help way and drive different of being really to a attraction collaborate trying connect and they're grow asked they're to

are more to important ways all are leverage so things, for And traditional connect new compliance-oriented, demand increased things and to we very we with still the modern ROI-driven those but of platform have seeing a employees. them, to innovative

brand-new anybody with the You our on example you notification "Come through of a profiles get now team. platform thing recent your go team, that is first Community on to if more going you're you're team." people know can all and the on so don't the employee the Plus, says, meet a is And the your

some can icebreaking answer You questions.

remote particularly environment. some modern You can in scenario, get a individuals. more much a those And backgrounds of that's

seeing said, think beyond significant our growing we of that talent into you compliance business. their retaining So it's be go and comes really then to examples modern drive as that the and ultimately experience traction can kind traditional ROI, more when to like it much getting successful message benefits a automation-driven that, we're gain that, extend customers

Brian Peterson

great go-to-market That's the Right. hear. on maybe just side. then And to

just maybe go the in person. as to back strategy does I'd virtual about maybe here. think source dynamic, in-person leads we an of of the be As or guess, that kind curious the kind maybe do returning more I world could productivity? more to think you you of the net normal new how change to got a we've engagement that influence of

Toby Williams

of helps that as the back the and same momentum opened as we that I up think, clients into that works think get we productivity live clients -- across to teams. certainly more think more relative for with be with XX% being motions the is think one I that's as our north is are with Brian, the force sales field into to I continuing things from we and pandemic. mean there's and quarter. last of -- referrals that. other get getting have for out when back continue live that, it's our you way example, continue if the And for this, the about get which thing brokers have an to, sales productivity different brokers started certainly Teams couple then over They work of the on that discussions sort force, of Toby. think two into us the to preferred, events clients. advantages into back that broker we started motion Certainly, and to of and to and quarters, with

Operator

from Bergin Cowen. question from line will Bryan the of next come Our

Bryan Cowen

on Congrats promotions, the guys.

on got I've is Community. question First

the using mix can curious thinking clients that give So if Plus. of about and how the Community clients those to sense of were just potential for us you're you Community upgrading a

guess, as any just experience around version out attach So you I versus adoption given have or product different, there this product pace a freemium already? assumptions around effectively

Ryan Glenn

Right, right. Yes.

So version time, we've free we've been really capabilities customers, I clarification, we've which available some of client clients think drive think successful We it then investment. and and to driving And our attach free customers feature seen of would to felt version, all the listened And higher across just Community had to like them. added sets. worth the that so over I the has at we've point for the enough benefit were we adding an successful. have helped us such the at these utilization the to that rate premium make base where features making utilizations was of that

product. so we're the early launched just in And that. We

features We to those have add you selling video to And We'll with on and always really early and have back other We'll a capabilities. the from and fairly is every as it started some have strong listen early that we new the base. -- attached product, we client look well. we've our video success do product. go then rate success But live and at customers, thing adopters at trending with back same feedback most we we if do, have the the customers. adopters, really you done with recently, had client as we'll quickly to

results hoping we're with so product. similar this for brand-new And

Bryan Cowen

that? a methodology of then you inflation? internally these of of the considered how guess, on approach then kind a your it, about I pricing you levels increases the follow-up you're And standpoint, pricing have just managing, other on just Can just about wage and inflation pricing. Can and outsized Okay. talk around you base? from into talk And side

Toby Williams

Yes.

about we from did before. standpoint, I and a we So price think increase talked this

increase year. relative certainly environment, is we look thing internal came an would price of I what we and think go what the during external environment. observant early the success with is, at outsized years, inflationary in piece our a I we've degree And I we in back would an asked say that sort the we say I staffing other this say we inflationary would While have as there what of this what that's business. think, price despite through. the about. you we part pandemic, high I consistent of And cycle would aware not did I And to From say a perspective, done hadn't say on would basis, lean recognize in while a are of through increase it we did of -- was as year any the to one still have, efforts the this I across continued done

the the across really in into and about momentum We season. so We sales we've equally we absolutely that our that continued the think, far. recognize about we, are had good labor coming in And feel we've pretty heart momentum what I a staffing good business staffing just of success market. that had tough feel as

some from pressure there wage far. I think think success I so pretty we've definitely feel about we a perspective. seen our good But

Operator

Our come from next will from line Samana Jefferies. the question Samad of

Unidentified Analyst

[indiscernible] This Samad. strong Steve, for is Toby, on Ryan, results. the congrats

often So many are are and companies before the apprehensive slowdown smaller potential enterprises economic about impacted are.

in down or on decision-making? there, changes either time delays takes close in to seeing the are deal any a you demand, market maybe guys it So

Ryan Glenn

The driving Not terms as terms products, seeing strong rates strong the us also of this by great demand evidenced activity only we're around in momentum the we of for seeing attach in environment in results and demand sales been has are really but the levels. sales. probably commentary just year,

appointment, whether we're that really number it's has deals onboarding, positive. all of first-time So been that of

definitely happy that, we back actually driving when question environment, prepandemic to so look productivity basis, things demand about on and at the, increases And We're the strong a with growth. we're year-over-year. like, year-over-year no we're

at change a we've dynamics seen all. those in And no so from recency perspective,

Unidentified Analyst

on Awesome. That's quick then hear. great to And a follow-up Community.

to Plus sense. Community long seems make of lot usage topic the call of been So a has and the

January. either impact so business have post the right, you by or usage the up to of world of as You as hold out opened any seen MAUs January, has size? Kind the called post-Omicron,

Ryan Glenn

Yes.

And value would that from client we're peak maybe to some that we utilization So We utilization. I several provided strong be more months. over January a question tell I time. really that reacting is continues think activity the adding number embedded feedback. to in there last features. driving that thesis We're we're to add is you continuing pandemic the think

of the mobile-first a that even the you're kind we're this finding environment. one in is So office, if things is of

of right off So activity a that lot their mobile driven is phone.

so they're fact the to home the commuting drawing work see that and at don't working And value back a fact we're bit not they're that as maybe more, little from we that away the offering. that necessarily

fact, of we around, the kind In more value the sometimes the in more offer you making by moving can palm you're hands. the information to available your of

And so over improvement seen in utilization continued time. we've

Operator

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

Robert Dee

Robert is for Terry. on This

a Just ones quick couple me. of super for

First private strategy on the terms seeing changed what M&A. or of Any update you're in in on anything markets? M&A

Ryan Glenn

the wouldn't I over done few of years, things of sort that map we've there's from us Community a some I product update ultimately we've video with strategy you've any a road or and in from any seen I the think think brought direction Plus. very and to or a mean, been the and activity last standpoint. there I like No, technology add there. and the features particular call standpoint don't change ground what focused advancement given But either

Robert Dee

on it. one just quick Great. macro. then And follow-up Appreciate

terms of potential customers? So thinking broadly no in ball, how a crystal stickiness downturn about speaking, front-running has course, potentially with a are of maintaining one but you

Ryan Glenn

going is like. we've Well, in cycles been the past, cycle many to we right? this look what Yes. don't through So know

like. always to -- little growing growth then It's see is is in is that environment, or declining But roughly. We number in X% what So similar that pace X%. get half we think GDP going environment, GDP looks a I grows it about you're get dynamics. doesn't And or benefit say a X% the grow And bit. a per what X%.

if is even primary this lower declines, So COVID, employees on with of we accelerated, but impact. That the the saw we platform. GDP number obviously, had COVID

secondary because we impact if interest is is obviously, benefit rates. The This interest rise. rates typically different

if and interest So some that it. there's of rates slowdown offsets kind rise,

historically demand. that affect not have seen We

are bit of going the a automation that's times resources some value for we're HR them. to offering what become to get They're that deliver to looking those looking little less market. you when that fact, they for in them. look where ultimately for solutions more there's at departments, likely connection and They're In available

we through we at slightly been environment, that but And success sell potentially the future. interest historical in anticipate what the would been having with happens largely, the there in able so and it's platform, downturns, employees we've is when fewer past, on look the to rate

Operator

Our next question come Brad from of Stifel. will line from Reback

Brad Reback

Great. I wondering, at commentary other your versus meaningfully around remarks marketing the efforts. across is Toby, look mentioned are the you better funnel, prepared in all rates similar Or think those leads during those your you some your leads as it I'm digital and close leads? higher?

Toby Williams

you've back if I how mean -- leads. go buckets so Yes, think rep-generated got I sure. you think gen of we you if I think to the would about lead overall, mean, I

more the Again, leads. probably more so us we I us in quarters invest That's with quarter. think we're And that both north we're progress seen the broker-generated the certainly we've for as And of few maturity I really get think, invest seen ability leaning, pleased forward. that and last there. an we've then look area over continue productivity think that of progress there, seeing to I and our And those pretty that productivity. from think as think you goes pleased we channel- the overall, XX% terms heavily standpoint, we'll rates I have that with And last more the the in. a we're, again it I there or certainly was and to close have rep little You to helping digital. the into with year a

Ryan Glenn

I'd that, add just color to Brad.

because that's love we channel leads the leads, channel think I recommendation. a

great in there. And rates so success close we terms typically have of

sources posting. leads replacing of we've sources lead other definitely as out, some of no any by consistent part pointed been Toby That's plan focus we from lead do means we've that a the at on and been digital some opportunity those away results in our of But look with and So an other performance. channels. we taking that has improved seen productivity, for

Operator

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

Matt Pfau

to wanted right that up offers acquisition services, just pretty maybe then that that market Because but seems area I you? robust Marble, think how is an that any I of results. on it now. record progressing. update employer is interest on to is Blue Nice Blue like Marble And an follow is of of don't

Ryan Glenn

Sure.

so layer with So of all services. record not providing employees data, services you Marble provide are a in-country They employee in to pay providers. in they multiple if software really Blue between countries, does that offer your aggregate connect of then want aggregation and that

that hasn't That's value and really the much go-to-market connecting changed. some for traction And generation lead stronger We've their team. that just teams looking at always seen proposition. really so been by nice

So that's successful. been

are the technology relatively in earlier around the We still integration. stages

We having progressing that still more future as suite. trends grow. obviously, much integrated So that opportunity around a And deliver clients the international continues is potentially a well. to see to employees

as a are and of the in as it's the market but still the so achieved excited us, technology kind we're integration. the front So we've mentioned, in we you had throes growth a about, whole, of that market, that of we objectives

platform such we As user an that we a from have it's singular to is a you want acquisition, the experience when completely and unified. know, build perspective, it

bit little doing that's we And in we're think a an doing takes our Blue client with that today. better deliver the been approach. of always even takes process but which time, we're than longer. so will experience And It that Marble,

Operator

Research. of come Zukin, Our will Wolfe the from next line Alex question

Ryan Krieger

Alex. for on Ryan is This

Just one on the a quick guide.

tough impressive. year, XX% from incredibly is last you a So really which for XQ comp called XQ, for on

bookings about just the how wondering forward. tougher So should going from we comps here momentum think given

Ryan Glenn

Sure.

guiding growth driven and the really of think So plus the XX% heard quarter. that's here high having now good think of and to for point, guide about remarks. revenue momentum XX% of all to straight to about I feel XXs fourth prepared your the in And we three I had the quarters off really the you've

selling really rates record of the in a season, QX, some good increasing. So parts attach product momentum early

fourth certainly away employees guide of quarter the as good momentum the COVID. bit to of still good into So and I well. you a will I to like fiscal 'XX. large Obviously, on the that then feel platform But raise go tailwind That feel there's the a about year a fiscal there's feel guide. the start about to lot get and as related from

Operator

question Our next McVeigh of Suisse. Kevin from line from the will Credit come

Kevin McVeigh

my revenue acquisitions from add potential as what existing client base? Is so as you of them base, that necessarily across So on your the you to how on about me any client and across so well. let kind two Blue kind And existing there Great. implemented the allocate what of but not contribute as based the and congratulations impact and think are forth. scale acquired, can way Marble you

Toby Williams

Sure.

with the broader But integrating you working we'll guide, product we not product as earlier, provided about Steve's that continue the those standpoint. a come color. portfolio. particularly date, from from added point is think we Obviously, think efforts, more the yet the less I To this commentary mentioned X% on profitability. Blue we that through I suite into still as impact as have the and back integration overall to in year revenue a So Marble, to headwind fiscal to think than there's

Steve Beauchamp

I but really going that with that's it's a is do do bunch then via already environment a if technology low-code allow was the something no-code on configuration that think technical on rather to today, work integrate where of kind about can ability acquisition which streamline back end. you really Cloudsnap, third-party that whole a And you applications, than that, us the we think to to of

integration of an And more a data revenue opportunity accelerator strategy. so overall and of that's certainly our less around

Kevin McVeigh

kind about just then you in from said this, proceeds how the just float? Or remind should That's the we step-up reinvestment super like helpful. particularly not of us, that, quarters apologize, think that incremental you if seems in I know we it as float thinking you I to And may of the are can necessarily business? use about come? is how and in quarter, but scale next will the

Ryan Glenn

Sure.

high the is as profit revenue. way there benefit that's to very well as we too. So And I that likely about and think is over that there time, revenue profitability, think you're upside certainly, aware, to

level likely look I those making and we'll profit. a R&D and time as reinvest marketing. about hard we'll think of But that of portion is growth-driving rates upside, I a I sure. over reinvesting initiatives can some but of a flow that we think continue would you about those think And the think way in. think, reasonable that at sales question, investments of that portion But we certainly, those, no there's rise, portion see is incremental would to for in we're to

Operator

Our Davidson. D.A. next question Simmons will come from the from line of Robert

Lucky Schreiner

form last fees, trend. and this that This Robert. how guys year longer the filing was if versus maybe is looked you Lucky year wondering I for on quantify can

Ryan Glenn

Sure.

of to it but from a mid-single was year, last what levels, basis certainly nearing growth. absolutely fully So not experienced I'd kind up characterize as we back percentage levels, which pre-COVID digits on normal the

levels certainly would of but seen. to So pre-COVID growth fully we typically better, that have not back

Lucky Schreiner

-- you that? good it conversation grumblings to Has mentioned strong then Obviously, that maybe ahead previously, still get guys? some a was almost Has in too, terms you're And the that could though Has of shifted? in demand. almost macro been for the been seeing trying catalyst environment. of Helpful. you good people

Ryan Glenn

Yes.

our say, market, average I news the their that employees. business think on environment macro terms not basis. on about you I think XXX a so operate sure they how street" customer the when should of size I'm drives "feet in the

any focused basics, bigger to HR, terms their so of helpful with seen less broader typically that's we at the really tight that become on made platforms I demands a trend really need to work think which And drive are and the things, say, in of but think that a certainly part doesn't something the us I do challenge." and that their really conversation, the micro really what's big connection customers macro have in has the appointments more look workforce, those business. is engagement, impact but and of They're haven't macro is just prospects part on really part think, environment. and focused retention, I the people the remote much Those market. been me and the "I of allows labor happening

Operator

Baird. from next question come Our will Instructions] [Operator the line from of Mark Marcon

Mark Marcon

out labor made. take a some add the on if I And pressures. cost inflation, the to last and of the to are the me let your other the important those your -- of are to you you From the just modules. look a certainly, relative to applicant like those like Modern and value congratulations. focused clients market, tools, you -- most alternatives a little added really we at helping follow small that clients engagement some little talk providing Steve, that differentiated Community, can of my wage Can tracking Clearly, businesses talk bit about Workforce tightness there? on are how your becoming Index, comment tools wanted more

Steve Beauchamp

Sure.

that business, only mind be coming prospects business clients I their have the of think making their the not to able need really handle the conversations sure sometimes they able talent into customers. that to just be they and grow that volume have we really for with but top is that's to

the from lower that for with then not transparent turnover. you from And so turnover, really ability the ultimately, them a looking their engage communication, people. company, in employees the gets really lower organization And in market that of them many their you're that as feel have benefits employees when to keeps benefit if to part help we makes them Company, with way attached their

waiting whole and You new don't speed. board have to to up productivity bringing for from lag them people on come the

getting our our the think with definitely has their results really that reduce try to resonates probably a willing is the as And to resignation, of customers with the the in turnover seeing. who is the similar line And solutions show gotten to industry find and industry really the leveraging and Modern you and them really who is we're top strong for in as we look invest kind message in board, might that to sometimes I great make we've are Workforce able know, And that of towards bigger push Index tools. employers, to the we're marketplace. in top concept modern drivers like that you one that And whole be spiked resonating most so Because, of same they're in the different size with mind. delivering the turnover. processes changes sales results to productivity actually across way

Mark Marcon

sales the resonating up appreciate really you I the comments November in that the productivity. core as those terms on retention came February through about through tools And time? you ended impacting talk -- Can of how

Steve Beauchamp

Sure. Yes.

really to year continues from This we we you, would from you Retention's year I is. update basis, year. Last retention retention kind an typically necessarily a being be to strong retention exact where really strong. about been good you feel perspective. annual tell give of we on prepared number, was without So client strong a give and a typically retention number. retention the

retaining producing think our to And customers that we're both results, the so drive, we the we're is the offering clients from revenue we've and value to a able but that that also right attach got. finally,

Mark Marcon

think you about of should that prices? permission pricing the going pricing where a there? That's as the great. strategy And level And we an to we're and retention user how then How Community strong that talk can bit -- you then this have -- just through strong ratings, environment inflationary influencing is with about with how strategy increased Plus? raise regards is little to and the

Steve Beauchamp

Sure.

Okay.

about tell not would changed have that I So earlier. talked you we this -- Toby

look for to the increase at look we And Not same We some strategy. adjustment those. that the got an at We've not for on do every subset year. we've annual customers We at customer look a fair what's at a price the gets we've the look customers. We price We it way. every changed it features that. added discounts. market. then are So at nominal reasonable in our at of a basis. pricing our some We to that price look price

inflationary manage able is, environment. our yes, the increases there forecast see been do. is everything we've to an margin that able to Our and been environment you as We've view that to

as outside some not history anything the got is the got know, you've goal to year, you do a you've grow perspective, and over during next to clients pricing because upset to that our potential So transition. from the

normal we're kind more pricing deliver back of a so And to value. environment,

ordinary. You out get a but it's to out little of nothing and us, helpful of more bit the

Mark Marcon

terms the that in your impacting just comfort your the with the of to business, team? user of as with does quality in people folks and end trying and to the the work-from-home, apply what Great. to How to question, team? of reviewing Paylocity would join And momentum you're extent you up ratings, then currently that characterize types candidates that your join with the last are to

Toby Williams

there. build few it's a really I success staffing attract just just into get into mean it. in pleased aggressively sales we our think including good season Company. the to pleased business labor tight been having We market. off think talent that with comments to feel last seeing been with out But my needing right of And more be the that actively earnings probably we across earlier. Toby. we've the the the -- almost I'd been think to ability continue in called business this and every market. hiring of attract we've I all from as calls ability talent our it's are I And we I the we're now the as Yes, we're Mark, we've role across really heart we've about level

our think value about but resonating is -- we certainly been the market, pretty it. good prop really I in candidates think happy tough a we've so feel with employment we're market, I that labor recognize So it's

Operator

of to interest closing remarks. not you great I'm for any your any Steve the in thank queue. the I Paylocity. a like evening. big X,XXX I'd the back And to you Well, for to people over to Beauchamp that results. able just questions Have thank further in course, showing produce all turn of want management Excellent. great call were And such a to

Operator

This you Thank concludes participating. today's for conference.

disconnect. Everyone, great now day. You may a have

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