Paylocity Holding (PCTY) 6 Aug 222022 Q4 Earnings call transcript

Company Profile

Participants

Ryan Glenn	Chief Financial Officer
Steve Beauchamp	Co-Chief Executive Officer
Toby Williams	President and Co-Chief Executive Officer
Scott Berg	Needham & Company
Brad Reback	Stifel
Terry Tillman	Truist
Bryan Bergin	Cowen
Mark Marcon	Baird
Samad Samana	Jefferies
Alex Zukin	Wolfe Research
Chase Donovan	Raymond James
Robert Simmons	D.A. Davidson
Jason Celino	KeyBanc
Daniel Jester	BMO
Arvind Ramnani	Piper Sandler

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to Paylocity Q4 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator instructions] I would now like to hand the conference over to your speaker Ryan Glenn, Chief Financial Officer.

You may begin.

Ryan Glenn

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

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

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

Steve Beauchamp

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

as its quarter marking continued XX.X%, execution to the differentiated growth of with more our marketplace. in providing revenue than growth our with XX% team strong sales resonate revenue fourth in proposition in total value of modern most the continues software quarter industry straight Our fourth the the

For $XXX.X annual revenue fiscal growth largest our XX.X% growth, since or XXXX, million fiscal XXXX. total was revenue

XXXX base. across of per a XX% XX% a attach rising greater over of than $XX,XXX number our just recurring years. an remained with was increase revenue clients product as very as fiscal year, increase result fiscal retention in last to was fiscal XXXX platform client end clients compared of to again clients of $XX,XXX client. by XX,XXX in also increasing its and Our in in new driven was and aided in employees our strong client on at the under XX% We increased fiscal The XXXX, the revenue average execution satisfaction revenue and sales once Average highest client by increase compared per at XX%. both XX,XXX XXXX, rate ended an of adding fiscal high level

increased realized more base. attach to products client resonate have into existing entire selling focus our success on sale time and workforce most as continue across the We modern back products clients our at of

increase of our driving are tangible increasing with business with engagement the engagement and creation higher showing Workforce period. of clients growing over continues number levels increased XX% usage XX% community the monthly has Additionally, total same in Index, Modern our growth. scores with for to by These XXXX, fiscal impacts correlate lower turnover XX% during users more that headcount while proprietary video than faster

GX Our Crowd to fiscal Culture Building while category social Employee in of hub, XXXX the the collaboration Reports Paylocity during Solution” high on be commitment continues recognized market, product XXXX, HR Community, Summer the recently development within to our with ranking Experience the “Best Grid was Awards. named the Tech

and software would our the sales operational of dedication industry-leading employees. and be culture, strong without commitment and not execution Our exceptional possible

we to Toby to As provide year. fiscal a would thank our strong I’d all for to quarter the XXXX. very call to XXXX, fiscal like employees I like out close of a color pass now fantastic the and on further

Toby Williams

QX attract of retain and executed management, teams premium industry proposition in particularly as top are comprehensive of in increasing teams and differentiated clients attach surveys. and entire fiscal increased tight strong and the that on-site XXX well force our strong execution productivity dynamics Solutions, in remains to our in our year Building the mind ahead sales combination XXXX. into time, hybrid us of now a investing the while by for our The and training year. the the of environment market up the activity saw and the the pre-pandemic same driving are platform, we programs for reflected fiscal market, and the across setting of increased sales and to initiatives and fiscal demand modern recruiting, momentum, with new These off new labor marketing and saw Thanks, very fiscal for sales steady XXX sits suite in resonate in have XXXX. at Modern video channel from sales Steve. to heading technology. remote, talent we our XXXX within and our managing I’m expanded adding XXXX, and this including course to healthy of a XXXX sales productivity, strong which Workforce by providing reps, driving our we’ve remains XX% strong, fiscal XXXX, reps rates fully ability most are challenges fiscal that in marketplace. staffed across suite demand Sales Overall, fiscal continues In entire drive The throughout pleased product come value improvement levels. HR for learning

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

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

We across target headed into and fiscal continue built our XXXX. pleased to strong demand very the with market, has team we’re momentum sales see our

commitment Diversity not strong, Forbes employees Employers, over I July. to dedication Life continued of macro Forbes thank than points data fantastic to Ryan results workforce Best Forbes The our possible guidance. fiscal were remain list, Companies at which externally to a more would for the strong like and and to our Employers all like Echoing would Fastest-Growing fiscal Fortune key our comments, Inc. be review which culture to provide X,XXX at without named a to the from detail fiscal and now Steve’s their Additionally, clients, the pass to we Best year month Employers be for Companies, perspective, Midsize recognized Best XXX Paylocity would and clients. for each I this Women. Best XXXX, including increased levels financial QX XXXX into in as call in

Ryan Glenn

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

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

was XX.X%, Steve our the the recurring our XXXX. since or respectively. and XX.X% as growth For total top EBITDA quarter XXXX XX.X% Adjusted by growth And guidance largest fourth $XX.X for represents was million. fiscal exceeded and of million and revenue the fiscal $X.X margin end annual mentioned, year,

For dilutive the basis roughly $XXX.X adjusted resulting or XXX XX.X% versus from basis leverage Cloudsnap points million Blue XXXX, of Marble and fiscal XX margin, fiscal of the despite acquisitions. EBITDA points impact was in XXXX,

growth, plus XX.X% growth to ability our drive by We for pleased revenue profitability. above to puts EBITDA strong XXXX. revenue with On XX.X% margin be combined exceptional adjusted us fiscal continue basis, of our combined XX Rule a the

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

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

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

no income For In ended $XX.X the operating and the with and was outstanding. of net regards million full equivalents to debt $XXX.X year million, year, we was sheet, balance cash cash with $XXX.X profit million, $XX.X the was gross income million.

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

basis daily QX. the million of daily average annual approximately fiscal are be to balance the balance million to average QX, $X.X interest $X $X we in basis to an We with approximately million XXX basis $XX be an points approximately average a yield in will income with will or are basis, points billion income in approximately average approximately billion of On million $X.X points XXX full of to basis interest XX of points estimating XXXX. yield XXX estimating $XX year or

rate will rates XXXX. be that interest Additionally, impact approximately point guidance please week’s interest as of increase assumption calendar basis with our XX that X.X% further year-end the includes last note of a

XXXX. calendar in guidance Our rates include currently to does any changes not interest

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

people total to the XXXX, adjusted revenue as software of EBITDA billion service across on basis million, billion continue and grow $XXX.X enter XXXX. journey the to the for total now attractive over billion are leverage to key our growth scale the $X fiscal very to And quarter million. quarter or expected fiscal revenue, XXXX. revenue of a first approximately of focused XXXX, ability while of in $X.XX the that over XXXX million Operator, our which of clients great confidence points high represents remaining ready expected total a level fiscal of our to be in in the and cross fiscal expected all addressable employees. be to with XX% building our fiscal in to market. In approximately we would also culture to is $XXX.X first world-class $XXX.X revenue. fiscal for of And for teams fiscal our is XXX million $XXX.X industry-leading be against fiscal million thank we is growth also made We over XXXX business guiding to with XXXX, of business million $X.XX providing For range to $XX in large questions. XXXX of backdrop range successful. XX% I in be our of over to adjusted range to $XX XX% the And are EBITDA a and a while is milestone range we to like and or expected

Operator

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

Your line open. is

Scott Berg

driven, start By your funds and great say, There’s quarter. field incremental questions. the in my in be Hi, everyone. should who much client but maybe from that income what it for from of beat see, a let’s interest like will at sales, Not strong customers? wants least we implementations, from in five for quarter, on the your sure I think years. new quarter? about taking outperformance best to Congrats impact How revenue quarter? with thanks some it was this, off looks How the strong

Steve Beauchamp

Yes.

say would had that like season, a to probably I drove we really which out. So, call execution one it’s kind big into no of There’s great builds – really We the selling quarter. year-end that. items business had

that So selling really a January through strong retention quarter. is important perspective, from also

And the quarter, performance revenue quarter, the getting plus from so driver momentum third fourth us terms as you kind really take in biggest in that of mentioned. the of was the beat you strong

Scott Berg

well think And the Helpful. fiscal talking about the the Are year out investments we here, other going into Or historical now were number and year. segments about starting kind growth you Toby, new for aggressively? this think of it. between is larger those core of you pretty sprinkled sales should then, to more your strategic, it I more Got reps? How than new segments the targeting segments reps target you’re areas? your of maybe

Toby Williams

Yes, Scott.

reps, grew it’s roughly XX%, I your we with mean, spread mean I the we well what business. of into year. pretty So, done across overall, historically coming fiscal different would areas to and which last And in the have line point, the is

we say wouldn’t historically. evenly I rate with growth that’s concentration, consistent any spread So, would a there what specific was roughly year-to-year done have pretty in

I finished the I happy we’re points, well into for well I how came adding really some think team set the to of what the year pretty really quarter, XXXX. Steve’s think executed they – on and up mean they with and sales

Scott Berg

Congrats again. Great. quarter. great on Thanks a

Toby Williams

you. Thank

Operator

Our Instructions] question Reback [Operator Brad you. from line of next Thank Stifel. comes the with

Your open. line is

Brad Reback

as the million, sort bottom income, gets more, you about sort interest what guys float around invested what’s Thanks gets don’t of but allowed Great. do who what not you very know line? $XX I if to incremental this, much. of follow think to be wants going take versus how of strategize an to

Steve Beauchamp

good question. Sure. Yes, a it’s

I think of environment, kind how our business in sizing environment. consistent on a the try first, interest investments, run the past, about with the it’s that’s what overall, absent normal we we said and to

but we’ve excited in we’ve actually performance, We’re differentiated rate, nice about at great great the some We’ve and sales we’ve part of talked because a the R&D. products that a launched that pretty investments they’re success. solution, having made got new attaching of about and is are

that investments we’ve year same of continuing been And so and think about aggressive going about based there. think the of At R&D do into off model and and interest sales next pretty And the drive grow able to that from the business the time, reality, we’ve of to marketing. the does to ROI increase in kind the actually we’ll in A terms trying leverage that what stay nice come in the in lot forecasted. from I revenue. got you’ve

hiring the and that and to. thought And we’re when ahead in And the so need, sure sales we think will line. see about put investments areas. R&D, opportunities need investments to for fund revenue really together, that’s people of the you that look But make flowing got ends we’ve in most our way we interest make let’s the bottom marketing, it, we when selectively down we up I those you all to

Brad Reback

And great. a That’s just follow-up. quick

leads quality early just is How in think talked into selling in larger that the they’re business versus Thanks. coming from about increasing because more product of to better script, guys force. ARPU I much customers? higher you sales productivity more the close

Steve Beauchamp

Yes.

is So probably multiple productivity. the levers driving

the our seen I success higher that market. the target end on last have we think we call, definitely of earnings called at

called and we’ve higher just the and the from another driver out ARPU what growth. So than an nice attach perspective. the That’s last time we expected. this products that same to is newer time, rates also ARPU time, At a contributor

for And keep of we’ve pre-pandemic you we with so unit where year really, – on line growth the been posted able saw to we’ve kind a were right that level. in the

drive in think there. higher more And for products. And a and that’s for similar attach so a maintain been units just to right fashion, bit upmarket formula able the little end success we’ve I the

Brad Reback

That’s great. very much. Thanks

Operator

the question of Terry from next [Operator with Tillman Truist. line comes you. Instructions] Thank Our

Your line open. is

Terry Tillman

Yes, and thanks question from going to as follow-up, me This well. and my product-centric. for congrats is taking be

are that often you, there if and you’re But kind for are collaboration, – And kind they without how and how help like do part Plus sales tipping think be this know or have is who don’t What’s things Community some I it. the PEPY hat, $XXX. we of you from when second in competition of or decision jump I Community winning it the helping the wants remote on then is of technologies going product. your Steve about of it’s meaningful like community So, factor in is, now? some a actually cycles, to market, the is or actually with really where these kind see workforce video that newer – to business?

Just Thank of how ideas at high go you. enable and you any these where next workforces? can we modern might a level

Steve Beauchamp

Sure.

So CEOs, businesses I in have first think one things that focused list on you with a look America, they’re your of at And think low with I challenges at just their of retaining and that’s of environment the talent. top greatest conversations attracting today’s the across if point, you rate if unemployment on. really is

management which feel with so making it’s connect and people digitally, like The employee employees that, today’s products like more environment. in to organization. and features really that all attached can is that along And community they’re of that They communication engagement on really learning required video is focused and sure and go with the transparent. those

do all save We them make in we do equation. part and right, that too, – easy an and yes, do so simple And we everybody. that time other things, way payroll to for the to sure the I believe absolutely right, that’s of have

And Modern the momentum you driver terms so revenue the in ROI in our of solutions increased when terms that believe a that’s you Workforce overlay modules, core in embedded big growth. combine got really we we’ve and why of

opportunity The product we that some launch very modules we’ve second to have capabilities, question, monetize an successful. done think of I of extensions of those. And of potentially maybe many the as your line and part in historically think additional those

as core and think in now a PEPY. Plus And we’ve so think things right Community does of new like potentially modern good monetize. of the we And are think products. and we’re then of We for add these capped – can more our capabilities that launch where got arena that a don’t product we whole that pipeline we we open

So, we feel pipeline. good about the

Terry Tillman

Thank you.

Operator

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

Your is line open.

Bryan Bergin

afternoon. outlook. wanted Good XXXX I you. just Thank about Hi. ask to fiscal the

you So, can half into that forecast, that, the how levels? takes as employment calendar course about go are of about in puts new and client of year things the year, of some as the the And XXXX? the growth like attribution, build thinking you went through particularly the assumed you sales talk you second

Toby Williams

start. our a and with we’ve our this Toby. I building of looked how I it guidance standpoint, mean philosophy I’ll I philosophy think from mean, is historically. philosophy Yes, is for XXXX I consistent think the pretty at planned

lot we think I momentum. – have our of a

maintained The demand couple sales environment, is of team – points. think I the really a well. strength. think, is executing I One has

that carries coming look into into QX, we so think the if momentum we QX. And momentum had I at think you

with the have that just items all seen talked we think the in product strength in Steve through. differentiation the market I our

I in XXXX strength that pretty with maintained same from viewed year year team and philosophy demand as a differentiation historically. we’ve the and out guidance and perspective sales execution a So, from the assuming perspective much think brought continued we

Ryan Glenn

changes. each about about we’ve guess perspective, talked a in as the talked I’d guidance in into just employment continued from we’ve an I But and quarter prepared well. in as remarks, seen planned we and Bryan, no as perspective, add fourth month Yes. assumption the improvement around July historically from

to. seen So, we’ve what is what guided we’ve

us said improvement somewhere the to as changes assumed would further we’ve top We of the past, that within take degradation the have in any sort that of not is range. levels. or in end employment guidance or that Obviously, discrete

year, thought consistent guidance we how about very said, that’s So this philosophy. Toby as

think sure incremental you perspective. implying and details a a from to I all some make average of what we’ve good this balance year, interest provided recurring that pretty we’re revenue daily and around idea yields income had

interest we for So being, it, at about look that really for even very year. if XX% we QX just, year. good rates, you in for the at and so call high the XX% XXs feel take of as put we out midpoint guide, XX% it, recurring looking recurring all to or the And QX together impact at the call the you’re and and XX%

start perspective. Steve momentum about really where a to Toby as and we lot good So, the year. we said, feel And of a are sales has from

Bryan Bergin

And way. sense. the sense whether trying Makes appreciate change year? relative of Okay. client think versus size that count. as client you I exited follow-up, I give this Just in that – Can to detail, heard last reconcile XX% a you total just My is client I revenue material to the growth. by average any us there year

Steve Beauchamp

Yes.

So, a had if I expanded back market. about you the the pre-pandemic, just the recently efforts we end history, going where of of low in bit think little were we think

under XX So employees. of kind

up. environment. that were years for couple of saw And some and And to kind pick really in in range under-XX pandemic, expand Then that into folks you market. client the selling prior a that so growth was dedicated we growth. client mid-teens of had the we We to

now in And across point, then mentioned, all up. a adding at tick fashion. people we’re fairly that uniform saw we’re Toby the as markets really You the

back go client of we to returned right the So back where years were four levels three or ago. kind

expanded upmarket we’ve the downmarket real time. no change client out terms and so in same of size And call at because

up on expanded same have spot it call factor more time, out And you did and bit roughly little end we numbers from in an before. earlier, that same that average-sized back also unit idea right customer. us a in see the had mentioned we’ve downmarket, upmarket. when you I so last we success the seen you But the We

Bryan Bergin

Great. you. Thank Okay.

Operator

the you. line question from Our with Mark comes next [Operator Marcon of Thank Baird. Instructions]

Your line is open.

Mark Marcon

afternoon. Hey, good

a Let me competitive regards were really add and rates set just about, a like quarter. congratulations can talk talking your which you win you’re seeing And – how like they are distinguishing much attributes like nature? value of when the of RFPs? say, going strong final do community scores, what engagement Steve, to you’re what With about strong up service other you in relative little and your bit to, the my in to the like really look things that the the some upmarket, who

Steve Beauchamp

Yes, Mark.

So to I note it’s a segments. think that important across it’s all competitive environment

got don’t is competitors like ADP of somebody see low And see so segments evaluating we two the And that are obviously, size that it’s end, at all regularly that be play And that at you’ve we three options. end want to options. in but pretty high that some you people or marketplace. the there see different typical the in we one those

they’re segments. not The the rates, but say win disclose across we thing varied would that don’t I specifically is other

in So And we’ve all they consistent able deeper the success segments. get on those pretty then had larger, sell functionality. in being to get you as

each your off company It happening. is the at modules. that be to cases market you’re their is whatever might or that specific going going or They’re be demoing product to they have. vertical So be more expansion use based in looking where of

them I different. will some them I of we practices get or prospects, having departments a to at finding behind sales bit opportunity employees. in them. so the And the hard host and time looking you, demo corporate all to index these able platform in the same and do like their headquarters, really new It and And They’re because I time built to Workforce always some be all they’re some for. easy to that, of in of am having tell the these get really algorithm in more Modern going little talent, spend just bit the for time of each save you with idea our data more are them a ideas. that engage Community front of things and at give And a stretched perspective. they’re There’s thin. a front from to and that’s and little time, want best is company so resonates process. they an a different use And really HR looking

a combination of of So it’s really all that.

Mark Marcon

That’s great. to and mentioned What is And monthly more that XX% in up – regards the XX%. video by rate users Community new sort clients strong of you being of the then than you’re for in then up take-up with being are success? now? there? getting just on should such as sort of pricing you that how signing what those are they’re seeing And terms about you how solutions Like – thinking penetration

Steve Beauchamp

Yes.

So base Community, available is Community of free version all and to of customers. our our

communications it right do – We’ve to but of broad-based employees. that like our their of And use all and for to so use pretty rate announcements got all customers I think away? things a good take of starting them

You usage get we drive then different and features into the ideas, over give them new we and time time, – product. building over by

probably product time, giving a no has clients to great and new formula roughly we think for And really we nice really drive higher driving that’s client them over do us, Video, new just utilization. so of great video to it’s and And feedback upfront video. the utilization combination a to and gone couple been a use – as years years only then that’s four, at things a video – a think would of third reacting old. about gate, clip is the out have see it monetize really, product And we of a five imagined one using for that customers which right maybe of probably ago. our for

Mark Marcon

you. Thank terrific. That’s

Operator

Jefferies. with line you. question Instructions] Samad Our Thank of Samana from [Operator next comes the

Your line is open.

Jordan Boretz

congrats question. for a Hey, guys. This quarter, Steve, for Toby and my strong thanks is on taking on Jordan Ryan, Samad. and Boretz

workforce headcount. in your the So on the quarter prepared no touch of clients wanted throughout your and that monthly forward. you guidance change assumes I said increased to going In remarks, that

there So the quarter are now of you into rearview mirror, or or any job seeing headcount that we have headcount changes per touching slowdown growth in to openings line growth on there any this se? client change on the specifically, side

Ryan Glenn

Sure.

I think base the would degradation from from think that a we no far, and standpoint, perspective, continue a we’re at, I macro and that metrics client of look all strength. goes a so we across sales seeing to see lot key

the talked we quarter, well. saw held remarks, in in month about that’s – each for as increases and prepared of we July As fourth the

we’ve about a So from perspective. momentum feel the talked the start sales of year. a of Obviously, good lot about

And those seeing not point. any of far, this at so are we headwinds

Jordan Boretz

a sales for quick the then follow-up. to on great. levels horse, looks Thanks upgrowth but the And color back to Great. there. dead Not pre-pandemic the beat

In terms is pandemic looking to ramp early increased line productivity, that maybe of now? time hit the full to since that XXXX pre-pandemic? reps maybe versus when these line has the versus And time how

Steve Beauchamp

Yeah.

lots into sales go productivity. So rep variables of

a I think would of things just out. I call couple that

to hires. certainly, quarter, first what had hires folks. sales And we – gain most we’ve the a get productive, is quarter we that so experience, sales all they – try year. produce hiring good not well-positioned more try be So become do year, go to into They really right? to first we in we longer-term you’re your but going you on definitely they higher are at then with really try retention salespeople this quickly as to level. board do your the of into into our love able your that go as So And of we to

earlier, kind onboard So that can be that if can a a bit months little get you driver. of

number one. that’s So

and number is. I differentiated it how the platform think is two

board a and got training differentiated job you’ve into be them do on story them. this a great can year. you going They and So bringing

little kind be driver. that earlier, if a can So get of you onboard that can bit a months

one. that’s number So

differentiated platform the I is is. think how it two and number

So can ramp and them you great a They board got story. on with story, and differentiated differentiated training job do you’ve a them. bringing faster that

that. And more year, so and of factors highest more. have and that to both able for new the I – things sold the five we’ve has think the they’re are over those even any amount the Each year shown that for rep last every bring on hires years board, we time probably folks experienced some us sell the than sales just broken

Jordan Boretz

results, strong the on congrats again, guys. Well, Great.

Operator

comes Zukin Wolfe Instructions] Research. you. next Thank line with Our [Operator from the of question Alex

open. is line Your

Ryan Krieger

for Hey is question. Alex. on Ryan Thanks guys, this taking the for

get how X% know integration this is a with expected first, traction standpoint, a is Blue that progressing or the How are of Just next then you maybe on customers. update be. revenue and year to then revenue internal wanted about And Marble, about to quick I the year? from thinking contribution

Steve Beauchamp

Yes.

in So ago was a year September. Blue Marble acquired

of the kind anniversary. we’re very the we’re coming integration. So with happy up And on

subset obviously integrating that Blue have but an our probably found employees. can all I And differentiator, international it be only customers clients sales incremental think it’s of not way customers a that those into opportunity the that we a a think our need it’s product Marble us. the have becomes and to have the about It’s process need. of a product that employees, not international for for is revenue

These And take a so we’re from pretty integration. happy the with go-to-market perspective. of kind longer things product

And further in that we’ve that team in time acquire So we have integrate different to over more we’ve the a employees lot going definitely got on we’ve grows globalization talent and bring able opportunity happy forward. the increases see with made space a and think been really progress, and people of board countries. just we’re that that naturally to we but as

Ryan Krieger

we not we there just You how guide. potentially question, should built of moving Great. on issued And about back a that degradation, still. But think be follow-up, guys forward? into could the that uncertainty about is circling level any there given a think kind strong obviously of that out the then macro seeing really how but just should conservatism some obviously,

Steve Beauchamp

would you people that across look the how what of do is that historically of did at you we people see year every one we can to and ago see it nature in now? paying do guide we I client you we And front thing. the tell have were and base, how us. many week kind as every we what many of right day, that at And Yes. we look have you

add like and has time I they were terms of slow. We’ve Ryan’s this This where real never has continue employees out in that at last been point, relative year. us an a also to been recovery. very it’s our accelerated looking to that. gradual clients think called And to So

percentages see, that we are these So but it is small positive.

that’s a no kind And consistent environment It’s taken conservative, if before. that or the aggressive just of to approach flat of honest be with idea Ryan mentioned, assumed year. I so balance we as for we’ve with have completely the you. the

our You’d have like see, feel we the right to have that a there. opinion But view an it’s on the approach macro economy to guidance. have all for data from we the

Ryan Krieger

congrats you, Thank Great. and again.

Operator

from Raymond of comes Our Instructions] the line Peterson [Operator question Brian with you. James. next Thank

is line open. Your

Chase Donovan

Donovan both Blue Brian. on taking to in guys, for we’ve I market for a Hey Chase seen just is the Obviously, the on pullback this and question. dovetail private valuations. question. market Marble want public Thanks

M&A your update road ability Thanks. product to map. Just accelerate and curious, the any appetite the on

Toby Williams

Yes.

– been that we’ve continue – platform on we think from that I pretty perspective grow new from the has of we’ve launched, we solutions perspective we’ve it of the user got that the consistent built think platform I I perspective. we to we solutions the flow And approached want we’ve approach a in as any we and it look seamlessly that be taken the have strategic, that and mean of we’ve integrate a that to be It’s can And we’ve result anything an that’s acquired. our able the at with has M&A anything we’ve think the that organically. to belief done I think many terms have experience think view been is got over launched. that’s that how M&A we both produced data I time. we’ve to And from and I to onto view anything. integrate a to we’ve

of is talking and think into view solutions. – true to our workforce that going would the think I approach differentiation drive hold Steve anything taken. so modern been that I that we’ve might we forward. the And as the about was we And able do XXXX that forward look through we’ve some That’s approach been

Chase Donovan

Great. Thanks.

Operator

the Davidson. next Instructions] from [Operator you. question Our comes Thank line D.A. of Robert Simmons with

open. is line Your

Robert Simmons

Hey, thanks question. for taking the

until changes? really the up lot days. a was back than and going when this guidance pricing quarter, of live today? and there opening to over up, the a rates Was kind just versus years, to larger last eight changed in the closing base? Like reported it lot what surprise Was was going the weeks your pipe of last there Other ACA and was So going you for from what of sales of seat you back guys?

Steve Beauchamp

I one surprise. big don’t think there’s

a had from execution really think I we perspective. sales great

the had to remained throughout time. we workforce about we guide So guided think it when The of quarter, the right? to what – believed at relatively incremental we positive that again, was And kind be flat.

certainly that So is helpful.

not getting job didn’t getting did great We great that, also last. of talk started. Our positive but we a really clients submitted running And up in and them had get but that was everything implementation about the team over terms and retention the only started.

whole a there’s went like really into that these So of results. of delivering factors kind bunch

Robert Simmons

looking Got curious coming it. talk given on having is both the But impact negative what seeing too not at of expansion And for the then to you’re this can overall sides the things. business? there inflation you Clearly year. that you’re on marketing

Steve Beauchamp

of There’s a different about think ways Yes. to that. couple

Certainly, an impact wage is become in our you across industries inflation, clients ways. different absolutely one, having challenging. all see which on So it

trying manage employer an obviously over that. are with so being X,XXX to clients We that And employees. manage ourselves

dimension. And to the HR to trying out engaged. now manage So different to ways figure comp trying goes kind back we are the more for way, That of puts to create value pressure are tell maybe HR create that variable in proposition people. trying certainly a keep that’s one them teams really that and to on the incentives differentiation employees, teams. And other

I an employees. we’ve you that’s We’re the of little for about historically engaging the really as board of we’re help think labor tight able and to can talked been a talked each sales. you add market. your retain environment differentiation across have you going employer. and with talent. to an ability employee tougher to also not on Paylocity piece helps able R&D story. that perspective, only perspective think We’ve about in your been attract I that And but pick has challenging. pretty really heads save And being hire environment an up ahead pleased time, hopefully been going being retention We’ve to to our But just be some really from you to the The attractiveness create a part areas from inflation

impact but the So seen it client. much sales of we the the so on haven’t see side, we certainly

Operator

question KeyBanc. Our with Jason the Instructions] comes [Operator Celino you. Thank of from next line

is Your open. line

Jason Celino

more high the And fitting was all businesses field for priority question. me Thanks just year Maybe Perfect. really view how shortages. for engagement a engagement, it the Employee year? And driver you with upcoming Thanks. a might a last in. labor among one and that focus normal priority do this parity then levels? how demand if, as conversely, say, change as fiscal employee reaches

Steve Beauchamp

Yes.

question. good a it’s So

today. I accelerated pandemic see shortage that market think the that some in the labor the of we

of you you less is up there the the and people a of year shortage entering with of of force creates end labor people Gen the year, this people back However, entering if tightening. level take Z kind naturally versus versus of you number force each number think exiting, and that with step exiting each the labor some

long is less that you’ve be last last might that test that just It customers. be a and And theme think to necessarily will more is people engagement going a I exiting as next create tight now. the talent employee that time. message decade, us. so we a for got workforce, you to And around that the to entering the time and over an the that as differentiation pool is will managing do for going and going I it But think be because last have have this think employees over and the not the that economy just right that increasingly people in really knowledge-oriented challenge we’re that

Jason Celino

Thank you. Perfect.

Operator

Instructions] next from Thank BMO. with the Daniel question you. Jester comes Our [Operator of line

open. Your line is

Daniel Jester

go to now past chosen have of the types you taking to the wondering Maybe a of they bit customers or left permanently at companies differentiation for of have relative you retention seeing that sort in on I’m between hybrid? remote who have my But little the policy Thanks Paylocity a of Great. one those how platform hard any businesses? maybe question. over Are retain field. looked retention, back year, your to office retention for from

Steve Beauchamp

are question same platform answer with it our clients Community if those that compare So digital retention. the that you be that’s have tools get in digital some that I more What but to of to in that that. is a higher XX% leveraging tell impressions at when companies There work, recognition would because we something don’t I more that our like doing like indicators do back and they a could not directly know to are necessarily difficult industries, can track. are be I the companies companies communication are from video, we the that using might

I So know that, back if if that or are where I those mix companies don’t don’t it’s right? remote are the answer office. to more they’re know a to ones the

them those we that using but do most absolutely So that customers, better can their directly, impact peers. question I the that can’t have I than you tools meaning actually the answer tell retention the are the have

Daniel Jester

Ryan. of ones Great. And a for couple maybe quick just then

be dilutive you guidance X% go for higher sort neutral, the or by a of of And have us then interest that Thanks. why maybe on talk rate can yield of flow and Marble, the – they guess the potentially increase year-end, baked couldn’t or are Cloudsnap First, quicker? the through just the sort on Blue mechanics why ahead? year you balances? to I if going in

Ryan Glenn

Sure.

Marble your into Blue the on So factored that all Cloudsnap, of first and question around guidance. is

of we what XXX of in start in leverage to is with and the you headwind, see but basis look challenge, guiding points that any factored winter, be as we a points And as is acquisitions guidance. leverage, really fall that into you pleased that think go XXXX, incorporating have on guide of So able that at that to you basis over I the early but same full look those when headwind although referenced, back don’t already. year, you sort at anniversary here both remaining we’re XXX are to

Second funds rates income, see obviously income interest think, on to client we’re interest as on go improvements starting point, I in up.

So $X million income. as interest of QX sequentially you look at

at $X that $X or look to QX, you you million million $XX top at fiscal year, prepared And will remarks, we’re double If versus at end in so detail in $X million the this sequentially. sort the so full then look of when million expecting the year. the

look continue a So But for as think I we’ll And there said, our to as higher rates. And we banking to beat tailwind. certainly, push seeing there. I we’re that partners obviously will to like over tailwind XXX with to that talked we’ve seeing is time, XXX work as is feel basis points in we’re rate there about last a is increases, you factor those guide. for As that’s historically, see the before there period us. timing Probably in of element element time a here, right?

yet winter. that So that and of to those last take in. XX right? before weeks the X%, that period in basis going the increases remaining saw in the part then accounts, we have week, the don’t So are fall early of of our get some to factors us rate sort that points we into that’s And the

are a of those So but again, smaller, time there. period

XXX points good in where a But spot to start year. to to So XXX on it basis, just be blended is everything think point basis a look when the we a probably able can love you at be to we like we’d else, overperform.

Daniel Jester

Great. Thank you much. very

Operator

Piper of Sandler. Arvind line Instructions] question [Operator the Our next you. from Thank comes Ramnani with

line Your open. is

Arvind Ramnani

have aggregate for you the taking but at question. clients? you can provide expand that thanks workforce did existing if sure that Hey, I’m or this, contract? Did provided already not my

Steve Beauchamp

Sure.

and things clients more workforce And is little customers one got a levels the of employees. over than XXX out slightly. called we sized up the that So XX,XXX average we’ve are

or increase that July, we do been the and was of they that smaller improving increased. steadily that how take they the so had is we ago, And since – more look out year have, continued employees in has even means in numbers, that it gotten positive. pandemic, has And same The call we’ve through less is has but we clients to a small do many what percentages, employees. quarter the month and here the have

Arvind Ramnani

to to to go for levers were additional just number if And adds Terrific. the aggregate. bigger I growth at want logo like is to number the that as Those biggest opposed clients, selling even the point new confirm shrink, products of in driver and does for two right? growth revenue are employees existing we a

Steve Beauchamp

by Yes. you percentage, of think small, of aren’t actually. Like small, relatively very material when number employees It’s platform the a on very, growing right?

perspective revenue for when us that’s help slight a a growth it’s growing. So from

is points normalized other we you’re of environment. GDP usually at of – like get employees But couple than a to and a growing people percentage little environment in a a kind GDP if this added. give don’t It’s The less is you’re weird I’d a is of percentage if points, GDP. of couple context

kind small. you It very, And very of so that gives context. a kind is of

Arvind Ramnani

that And separate Or greater typically I a you that for not plan question. creation, charge explicitly and adoption, know now Terrific. then for have is But on the in somewhat all you’re just Community video seeing or… charging it? it. you are

Steve Beauchamp

Yeah.

time. plan to So believe going a engagement that is we our strongly has long employee – be been important for always really

that see time of over has in thematically, which And fashion. kind in space. as Community engage Plus, automatically to capabilities bunch added engagement charge then so And employees video your a we in community. other of we there’s to that base with We product a added we more for. do a the within recently, different get premium And tools product, you opportunities expand engagement

time, features, so monetization opportunities. continue for you’ll to And drive over see look capabilities, utilization us add and

Arvind Ramnani

you. Thank Terrific.

Operator

Thank management to you. now like our the turn back Q&A to this for over Ladies I closing and session. call gentlemen, concludes would remarks.

Steve Beauchamp

take for second just Yes, to in Paylocity. you all thank a I’d of quick your interest

that to in continued Have proud looking pretty success XXXX in we and of the evening. year fiscal forward We’re fiscal XXXX. a great had

Operator

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

may disconnect. You now

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