PYCR - Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the Paycor Fourth Quarter and Full Year Earnings Call. At this time, all participants are in a listen-only mode. a question-and-answer will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Rachel White, Vice President of Investor Relations.

Rachel White

to year call June XXXX, welcome quarter the XX. and fiscal of which afternoon Paycor's for earnings fourth Good ended on

Paycor's On Raul Adam me with Paycor's Chief Jr., Ante, Officer. the and Executive Financial today Chief Officer; call Villar, are

of management's customer the found be today be following Investor today, recorded, and expectations not the operations, include our press to section and as call. business is available are being of not website as be our on the our may a can subject views future. which upon the results date. products, relied release conclusion updated to on should and available representing on will other is of on risks, made statements uncertainties financial our demand, our this and the Therefore, as current statements of These subsequent be in forward-looking Our assumptions call our these replay on Relations results, statements impact issued of Statements matters. financial website. Today's and in call COVID-XX based any are related

to measures information We investors. key business With I'll is provided additional refer release our measures Definitions press financial on and Raul. reconciliation over will to turn metrics website. provide that, of to to also metrics and business GAAP measures certain non-GAAP and the non-GAAP a non-GAAP key to of in call our

Raul Villar

in year. profitability have quarter, of thank like XXX%, the and over our investments and for exceeded quarter growth end with growth record, demonstrated our revenue our Rachel years client culminating their we our thank for dedication margins year-over-year continued I and consistently us X% year to would fourth Revenue the experience, for top to revenue XX% and and by QX. company, in of growth growth recent expanding you, respectively. Thank following results. In significant fiscal all two our highest contribution started for and the and a acceleration, XX% discuss first public year guidance We joining to you full as Paycor's our accelerating, and employees performance.

are results possible fantastic Our them. not without

value differentiated continues resonate by market. to the in and leaders industry built configured Our for proposition

quarter, nearly new that frontline for year. XX results organizations. to effective and over leaders tagline, a further we industry business This our enhanced XX so To introduced product specific commitment Leaders, be can this reinforces unique features industry Empowering we enhance to launched deliver integrations empower configuration, our they more industry their

coverage, continue expanding has make execution ADP from remained stems we excellent, demand dynamics referrals bureaus including have and and of competitive Over service progress Paychex. business go-to-market been of and year-over-year. legacy our XX% significant our broker growth to and new as XX% in resulting providers, PEPM. in-house, robust consistent bookings strong, Our sales regional winning legacy growing remains with The providers,

headcount XX%. rates industry. are at and the we competitive increased is strong In for a win leaders open a labor result sales Our our cloud configured on which modern demand platform focused by record market, levels, of

an continue marketing for the and in sellers rights X flywheel naming Tier coverage secured for years. our have Cincinnati we'll further exclusive brand these XX established unprecedented for on We today, strong and in Bengals future. and foreseeable Paycor's all promote markets sales the we next markets national leverage To scale, expanding stadium

assets. other Paycor in viewership the sponsorship the reach powerful community-giving initiative largest and America. NFL, and signage, will multimedia hospitality of Stadium events, a The Given includes the audiences

Cincinnati have XX headquartered We a partner Bengals. longstanding and been for of years over in the

employees our proud and fans, longtime our this is a As moment community. for

and XXX partner extensible integrations by FY endpoints paying we PEPM number HCM integration by Paycor's partner powerful client enables year, Moreover, modern in since powered into a XXXX. In in modern growing more This the this we released XXXX integrations. connectivity since The available investment greater XX% our have growing Leveraging delivering the and our developer customers commitment with with total in demonstrating its to system February $X been grew than the world-class XX% suite February. our APIs, highly X% development usage increased over our expand in last portal API year-over-year. $XX. platform by of features for has solution, utilized ideas XXX% API off to or year experience. our rapid is customer inclusion continue we of Finally, launch and total to

the intend our to expanding focus in SMB Looking maintain expansion. through focus do space, and markets on PEPM FY XX%-plus ahead continued winning penetration will growth in on sustainable a further Tier so execution, XXXX, delivering share revenue and X to we We margins. relentless

We to are that, pleased and to HCM our now competitive turn With call on over Adam suites positioning our innovation. the with focused are I'll financial guidance. results leapfrogging and discuss

Adam Ante

full first our and the then results for review share and year I'll year. Raul. next quarter Thanks and outlook fourth quarter fiscal our

new a $XXX XX% was quarter a record. increasing operating management. As bundled for top and investment Revenue our driven continued by outperformed through year-over-year, my acceleration to our significantly guidance income and of financial business, adjusted was by guidance million, strong our diligent Total partner the comments of of highest measures our reminder, on the revenue growth program. our basis. are end in related pricing recent We X% non-GAAP and strategy growth adoption revenue exceeded

$XXX increasing year-over-year. For year, was million, revenue the XX% total fiscal

business and organic us cross-sales, from the in for grew single digit setting expansion the low wins prior growth percentages labor the growth bookings majority reaching FY PEPM revenue nicely and year, digits. single high continued Our $XXX million versus into driving in market growth stems The XX% and revenue XXXX. up new of

experience of XX%. success a client reached our revenue of retention high With product investments, the and net historical

number increased to last background record employees business verification Additionally, The employment annually contributing automated is of grow. X.X will our focused our and expansion expect million. continue to year, platform such and increasingly income to the a as in services partner screening, on and our we XX%

growth to increase than increased from to size QX, in continue an with more customer accelerate and Micro among away clients average X% employees XX employees. as of segment year-over-year we Our the XXX shift

For profit gross a our XX.X% and million of nearly quarter, depreciation improved margin ago. driving XX% on approximately was of year. basis, points On teams year new revenue, we XX% to expansion our resources or excluding line XX.X% sales The Sales of with and we XX% business $XX Adjusted X Tier million and growth or for ago. sellers an pace through the a amortization, margin, this increase our markets. year-over-year. gross targets. to expense of $XX XX% in two headcount a the hinges ago year in quarter, XX.X% versus a marketing revenue year expect similar compared a revenue and was invested and next sustainability of lower marketing long-term than gross adjusted XX% increased primarily add sales to in at XXX year programs, slightly Sales R&D to

XX intend quarter development, down revenue team revenue, progressively this Our functionality $XX our down improvement of of tuck-ins basis continues to of the efficiently PEPM and XX% best-in-class of points. enhance million or partnerships a drive new as opportunity. value and client expand organic to add that XXXX. G&A to through product expense continue following XX% percentage was from G&A year's We in fourth

cash just the margin to or point flow. business. intend objective steadily X.X% to basis While million We than we year. scale our operating compared the profit income balance quarterly primary Shifting The growth, grown expand sustainable margins revenue $X.X increased as remains we XX% and thoughtful X.X% as an by to driven last management sheet expansion greater to we've XXX investment business. was the plus

$X generated and scale business. no in to year the free debt. million we of of $XX ended with $XXX year flow compared million the cash a consumption quarter This as cash last million we We

generated This $X on million quarter $X.X just interest income we client of funds average approximately billion. of under

was fed rates overall have basis quarter. increases, compared basis for overnight rate quarter XX this rate the to increased just last XX points As points our with effective

Turning outlook FY XXXX. to the for

continue strong in We quarter benefit increases. the about quarter in to in At market. XX continue we business, Paycor's the position macro will momentum labor for as And that environment while continued our be to current rates monitor leadership closely from rate guidance remained positive million than market income and interest strong about HCM rates, we in generated in has We more the the be low start and the expect overnight range fourth basis funds first interest The fed environment, assumes double demand income demand. year. tight. to the rate $XX full of to estimate the the the points

$X and the For our million or $XXX between between of $X.X XX% of and expect the revenue million total $XXX adjusted at million we operating income of high-end about and million. range, growth first quarter,

or In million we we million business. For $XX operating revenue we end expect range income the our XX% at end adjusted the scaling the $XXX summary, year, significant $XXX of top year, of and to million to growth between $XX and of this million. front reaccelerating progress anticipate the of made full

our We call for continue share press open the with is total we'll continued billion trajectory than Operator? expanding of questions. capture growth. and enthusiastic market, have to $XX We while clients. that, opportunities addressable industry into remain for and to less with the focus profitably. runway our resonating about share that of the leader X% significant business And we With market

Operator

of Instructions] question-and-answer will question Thank this Our time you. from be comes line JPMorgan. session. Ladies we Mark Murphy with [Operator and gentlemen, at proceed. Please a the first conducting

Mark Murphy

how are the you wondering focus wanted at the I'm which you batch said if rates that in and running engine a very Paycor's real-time a your think by making When year. coming Thank been fantastic I on you congratulations finish in more differentiation of I'm asking have those a conversations to much look competitors to current specific might environment elements industry the often still difference you Yeah. which leaders? biggest of versus to mode. some it's the up start Raul, be and difference? is the also you, more do the making of maybe processing focus, on payroll wondering win increasing, in

Raul Villar

Mark. Thanks

over that in out. three. our focused we're I of on. key bookings it's a XX% combination think four all We're industries the clearly of Industry stands generating

Our highest those key levels industries. four rates win at are in the

definitely So, I would out. say of one, industry stands

also markets. People are labor to market. really However, leader our our this are end to in people in messaging interested talent retain and attract the appealing of how elements

we've a for as significant be then advantage engine real-time tends So a long lastly, well. a time. to And had that processing

XX before payroll have years. employees pay been able their to hours Our see stub for

we've service stake. of competition consider for So, -- table that employee market don't the and like some our of the leveraging the and some we years. had -- some really of in driving tools we And are

our us eliminated kind customers. flexible payroll for really really a to helped So, has of that I for think, those the from tools engine in have need The ability it's market perspective. the

Mark Murphy

say you Thank other landed that. And Wonderful. other size in up then was, the to help reliant largest materially the aren't targets you sensitive if at just market? QX? that the organizations customers are slows I given XX backdrop during where then on end the that with this Okay. be had segment it the have able just months, the the that for at us the macro way more you And point your maybe, bookings is can of employee economically spectrum, mixed Adam, the question safe been next of to sub-XX you've might

Adam Ante

Yeah. Hey, Mark.

and revenue. represent a of lot our of of questions, overall over are the them of clients X,XXX both top to even our none end employees X.X% we But signed that range. So, at

we across individually we say, from on there's a targets not perspective talking bookings of as of none think segment, I that in strategy. -- overall a the where would through. go-to-market our that and closed mean, not material of of Micro overall go-to-market bookings an So, in material reliant that there diversification definitely segment. our of overly necessarily a quite space that clients sub-XX about it's bookings. bit worth we're definitely that all and business composition our in and Micro I our sub But -- part space we in

Mark Murphy

you much. Thank very

Raul Villar

Thanks Mark.

Operator

Sachs. of Please the Goldman from line proceed. comes question Borges Gabriela with next Our

Unidentified Analyst

Kelly is This on for Gabriela. Hi.

developer and products on helping just products up? newer seeing are management new as question, drive trends you First what much such there? are portal, NRR And how across adoption expense

Adam Ante

What bundle. seeing go-to-market our with Yeah. really we're to strategy, HCM is build like it our core management, expense into

And the overall lift and so, attach in for helps product as included PEPM overall it it's bundle. to that

adoption XX% core time see than more to really HCM We of continue strong sell to bundle. our business. that of new the we So,

of number of terms In lift our are buying. continue we clients adoption, broader the to modules that

number of And that of terms It's new on somewhere that two closer three business. and so, buying in of range between entire the they're two we're midpoint across a attaching. average selling to portfolio. and modules new three, They're our that

to good our that we're addition in bundled So, these the attach see we products the new pricing bringing continue strategy. to lift overall from of of

Unidentified Analyst

And much. forward? NRR years, see number, for think -- follow-up two a so mean, you higher? do do see impressive you kind of And main you Super next that going do Thank you that but Okay. even on just drive then that. what the to you the you can levers as where I Do that what do of maybe?

Adam Ante

I One is key Yeah. of the levers. gross couple there's a mean, underlying retention.

far. hasn't continue we to And primary so, and our create as over then drivers bundles we continue has see to more bigger see is which lift to been continue that to thus And new the we gross as additional compelling release to from the focus time, continue lift and retention products number one cross-sell, strategies, improve. you'll of pricing room

for to we from to today. so, as continue we there's additional to continue cross-sell, are improve And room it drive where

Unidentified Analyst

on quarter. Congrats the great. Sounds

Raul Villar

you. Thank

Adam Ante

Thanks Kelly.

Operator

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

Samad Samana

strong a Adam. first to for the year. fiscal on one end Maybe Congrats you,

I you Just heard of I say for think the revenue. float millions teens low

somewhere get that to need in that maybe two, growth the there year was stone's as guys as far I Just beyond growth the of assumption. call basis think a goes. from to XXXX? that into getting like of trying looking a And type around, for if went it, the that just of level rest and fiscal XX%-plus kind full teens what I'm is you I happen what company a right the XX%-ish the wanted on high sales just housing above understand bookings of check are at. growth implies curious would throw would business One, perspective. it or seems the to to you let's

Adam Ante

almost QX. guide, of the Yeah. mean, we of I we're at the of sort longest the We the end now. full to the point did right as for top XX% think right, about year year guide range

of going good -- of talked the strategies to additional like and that. about flow-through demand additional opportunity pricing it's bookings revenue. and the to along those And feel bookings cross-sell that with course, then, we that environment and So, about the be to that. And go drive continued we the continued

year to the So, a strategies QX. we good and continued comfortable lot where balance quarters with of saying, that of upside contributed the things this looking at we in saw about Again, out execution XX% to the guide four that really It's in through the and just here those growth of point, about in advance the guide. do we the really here feel feel revenue QX. the

Samad Samana

then a Great. for you, Raul. And just maybe follow-up

might grow result of of for think that? type bookings of you're Just the if salesforce -- need we driving peers. larger assuming as larger accelerate your when It's it's you the I or that? at even base hire the seller And some you do about able think think sellers, now level, about productivity -- the actually just to that significant. growth total your to the your same I'm or what's than is you're year, either curious should maybe this in a

Raul Villar

Yeah.

sellers. overall, of next as we I we've add this year year. And them And say, XX%. the think, continued we contribute this more to significantly added majority will year, than

hired And of we we'll we the believe and bookings new from that so, associates growth obviously, sales year. have ramping this the bookings lift

of XX% shifted solution. the the cloud really on approximately to We to a modern cloud, market are large with market a big end focused has

of of cover we're way unlimited we have To in So, had perspective, the XX%-plus headcount. it about a put to we we covered country if the on future. runway believe plenty believe that the headcount. we that we foreseeable headcount we have third would sales sales for it add still of focused adding And kind

we And continue adds over with have the incremental years. cover of to five-plus next market so, sales to two-thirds for the

we to and X%, So, to is grow to we're there's hard tons to take This invest of which for of Obviously, growth. think we and were headcount opportunity look do. we year it. ASP advantage market able the in XX% continue ASP going add and will

focus So, to we're execution those in the that. continue And able the on future. to great going to drive to team to being kudos sales for do results

Samad Samana

Don't office signing that Has I'm Burrow kidding. Joe Congrats visited that. answer Great. your yet? on partnership.

Raul Villar

Yeah. Thank you.

Samad Samana

done, Well guys.

Adam Ante

Samad. Thanks

Operator

comes from Bhavin the question proceed. Deutsche of Shah Bank. line next with Our Please

Bhavin Shah

taking question impressive Great. the for on yet congrats and my again. Thanks results

up Samad's following Just on question.

looks coverage you're we Just that I XXXX think forward. XXXX? how think years we sales this from bit last the on expect we going of year the FY talked next year. X type this, a this at to and It Should sales but versus that you like to going rates like a XX% should Tier coverage about know ending FY about as forward you year little beyond? and see similar saw you continue maybe about

Adam Ante

to growth the terms of we're press mean, that add. I rate that we similar a Yeah. continue so of going sellers number in to into

are is want in we XX% you're market still, that growth, those Tier to XX% going range is in most And going that see of to that to of what so, to And going out new into X the growth in are headcount. sellers of which coverage Tier that X go terms continue XX% up. be press to to again

add Raul team. years to rates continue And at opportunity talking client today. that for about X, small that, other we're to Tier markets our X handful as of really in as and the XX% So, expand sellers like had to markets a into grow. mentioned, We there's well Tier do continuing marketing

it's are continue to big X. those we into It's coverage. to in expand just them to only portion not markets go Tier that that sellers going a So, add of

Bhavin Shah

industry prepared which remarks industries your the which with That you seen you far? on product And over about how do seeing topic, XX a just think well the And resonate are separate about you've customers? makes mean, and just like most vertical adoption of kind features, thus in specific talked sense. products I

Raul Villar

and Yeah. We the And of services. we functionality really I delivered strong say the different specific industries: areas; process, in three for specific on hiring beverage the four recruiting and growth would the industries. into manufacturing, lot food platform time process, a year professional and had this labor all focused that the those Healthcare innovation and product of

Bhavin Shah

questions. Thanks taking for my Great.

Raul Villar

you. Thank

Operator

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

Terry Tillman

first Raul, Adam question me full the Tier to Yeah. on quarter well relates from Rachel, Maybe Thanks. congrats Hey, the as just fourth strong and markets. X the and year.

You balanced coverage. Tier X they're momentum and to then across all kind add you're those still And top some are and to have that of newer follow-up those markets a of to seem a get But opportunity you make question. Tier have kind more kind for seeing I in like of lot capacity kind yourself, there rising a areas leading starting actually Xs? are of the more had of Or charge? that the really name

Raul Villar

Tier the growth Yeah. strong markets. California and our Terry, all We've large that would growth, in came I a had X significant large across the of portion cities say cities. Texas

-- And momentum strong fiscal strong multiple year. the momentum particularly been for seen markets the Florida, we've strong But really in in so, year Northeast. in two markets have well, those of this the end

And to TV solutions, X teams advertisements. of whether awareness markets really bifurcate are in we where a significant able variety YouTube, So, starting about it marketing really up be power areas. drive been we've the Pandora, into through Tier the and of big really connected we in segments these to to our feel campaigns different those good each

us helped in those really awareness it's so, markets. large drive And

Terry Tillman

how in question Got or full flow cash either share guess, there's cash on -- anything if quarter my just year? free think you we should can any for for it. the think free follow-up operating it to And income way how to know Adam, maybe I look I relationship Thanks non-GAAP can And just about a Rahul. flow. the or on help we to don't at relates about

Adam Ante

to Hey, time. over operating but flow. Terry. want specific see free you'll expand adjusted I Yeah. thanks, cash it and guidance, to haven't on income capital mean, we operating We mean with move continue given I

margin And adjusted free so, behind XX XX XX cash income. flow been terms it's to operating of points, running in about points

is that disconnect really the so into And the into of cost spend product and that or additional acquisition.

pressure or those you'll of see down flow. so, will investments that product resources for through continue XX% and sort play And free to of that like to both acquisition investments income the the from cash adjusted implementation XX% and sales to operating cost adjusted put

Terry Tillman

Okay. Thanks.

Raul Villar

Terry. Thanks

Operator

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

Jared Levine

Have And Hi. Jared is for your actually on are client within seen tonight. assumptions then, you employment levels Bryan impacts what existing employment XXXX? growth your for date? This fiscal in to base

Adam Ante

Jared. Hey, Yeah. Yeah.

So, say, macro in we And seen the within really the that growth market portfolio. at level seen base, that we've I'd low of labor haven't our continued mean, I a the within single ton in change, digits.

comeback considered we of a that's seen X,XXX perspective, more specific the and we we saw in or the the digit segment, broadly, market bit verticals specific any where bit where little market of pretty think XX But and faster our case, pretty Enterprise like But really really just healthcare demand or overall track Manufacturing the of it's haven't restaurant single all the a of also played little This plan, than sort sort we segments. target haven't that the think something faster to a in And single about from future. lot hourly this an well. different but from strong. through remained that overall the really of in in squeezes focused that a necessarily through in the segment. with labor tracked I'd bounce considered our industry guidance segment, the in environment, market I little in along course, segment only reacting exception squeezes Micro and Micro say, it's as right shift lot low anything what of we We sort overall. foodservices shifts. generating again, we've the Again, And -- organic digits overall so into resulted growth. our Of in low areas industries back played maybe well. lot differently. a of year A with

Jared Levine

revenue terms and heard the Got -- of did NRR retention land for then, FY it. strong gross where we retention in XX%, XXXX? client And of

Adam Ante

Yeah.

client gross net that The we've historically been we the increase retention manage is seen net business haven't line and in retention say or broadly. with of the I'd really retention the really to it's one But more We retention. was bigger specifically. not how that in shared gross where specifically contributors retention is

meaning Just honestly last we've gross the to the we a retention years. in couple that be continue improve and to business client that will of continue as invested the experience over tailwind

to average that really competitor smaller the you're of to where retention broadly where would discussion that benefit. So put a is been employees and in going continue portfolio bit of they see terms of the retention little And per you client. in it's been has our just gross terms line of knowing -- some in expect with just our given gross right size

sort Our you with gross of would expect. potential trend would what

Jared Levine

Gotcha. Thank you.

Raul Villar

you. Thank

Operator

of next Needham. proceed. question Our comes from the Scott Please line Berg with

Michael Rackers

for Scott on am on Congrats I Michael This today. quarter. Berg is everyone. Rackers. Hi, the

new coming the larger we the of You've about talked about the And that that XXX bookings today? to size new bit customers employees. same average extent with customer dynamic kind moving forward? think of continuing trend Is than from a with majority how should more

Adam Ante

Yeah.

coming off the mean, company XX, you're I average about the seeing that from XX year portfolio grow. continues at year. what is to our overall, we And employees of about last in ended So, per

we we in so towards we sell range than at that some seeing that you're rate the segment But new in grow in outsized more shift size. And you're it XXX adding mid-market. flatten seeing segment. XXX not One, than coming And of of higher as the and of improvement. sort continue add to the good things. from are additional business, we're the the terms seeing really the Micro we're sort client and that's clients then XXX seeing on XXX-plus average sort business So, the in of lower of It's the and really -- to benefit with that that average, that. is combination then XX-plus as we two

dynamics really the those of both of So helping the to size portfolio. lift are overall

Michael Rackers

looking but pretty there Great. mean you've adoption markets? maybe established at And talent bit module smaller Tier trends Thank on some are then, management versus of you. that which similar Tier mean, markets? the established to a specifically, your any I of disconnect maybe adoption, earlier, does know I the in little cities in kind market is X smaller look how X Or the in more mentioned I there? is

Raul Villar

Michael, Raul. markets, we're attached X, X we more Yeah. in do X sizes bigger Tier X is the Tier slightly this In seeing slightly than markets. pay and or

really positive in us expanding our desire markets. to So, it's it's continue and those reinforcing for

Michael Rackers

Thank you. Great.

Raul Villar

you. Thank

Operator

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

Unidentified Analysts

months Hey, guys. for how This two the the we're for September is far? Chase on the Have through just curious seen question. I'm taking as Adam, thus already in quarter Brian. quarter? Thanks linearity is you any changes

Adam Ante

the portfolio? overall the demand of or In terms environment

Unidentified Analysts

Yeah.

Adam Ante

of the different than and environment demand the the has through we to capture labor that is would market that our And portfolio. I'd nothing strong. we I wouldn't No. just in that playing broader significantly what guidance otherwise shared. we say, market Yeah. say tightness labor see in no, remained the

right seeing that nothing now. there's we're So,

-- we're it. stay Although, on top continue to of we

make to of for lot discussion watch the continue course, it. months. on around out over haven't of would changes. of six especially demand macro be We us the there's that sort three, change of And, seen a We different, the expect or of environment the sort any next anything anything portfolio just in inside

changes our So, today. portfolio through no playing

Unidentified Analysts

line? firstly, think kind growth incremental initiatives, of bottom the kind Thanks. through flow then reinvestment fiscal to revenue as XXXX, of coming kind you think the you that interest on income, And it. of about of to into through of how do Got that margin high

Adam Ante

about product. and our opportunity to and Yeah. Absolutely. I in us expanding as into growth making investments sales invest those initiatives, back marketing mean, an our continuing it's engine think for we definitely

marketing looking those for demand accelerate opportunities So, to of business. and investments we're the to into the gen in product back to and end front make continue the

the targeting income sort the as those looking the that's say value strategic half other to business. in through add we're to there's fall manage to of If I'd we're and as continue long-term we that specifically make we're that of sort invest to investments. how much XX% maybe find to of giving we're of guidance that to and for we the seeing and think So, not opportunities going we're interest business that's are it. what additional tentatively the of opportunities

Unidentified Analysts

quarter. good Perfect. Thanks and congrats on a

Raul Villar

Yeah. Thanks a lot, Chase.

Operator

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

Brad Reback

profile have Great. about you as deal? the going Raul, Stadium high do this forward? think incremental you efforts, you Thanks it's Or marketing at additional sufficiently deals profile very raised your much. need like where the Pac-XX and point the

Raul Villar

Yeah.

think a our I whether of Most type evaluate golf NBA teams lot raised Pac-XX be those significantly things. opportunities. are profile. in NBA our marketing, stadiums, of peers or investing [ph] sports or We or those of on we it

wanted do essentially Pac-XX The So, West that like NFL we was we to XX is it something rights Bengals sport was an The naming actually felt stadiums, the the profile. unique scarcity U.S. asset. naming to raise really most popular and have of Coast the that rights, overall expansion. There's to to XX unique our it's the in

brand invest and it opportunity nationally. both in felt a community our was expand we to us So, our for unique

for definitely the brand. that so, perspective. next have need XX from And raised don't I invest We brand the to more to into we XX think months

it I the think, demand advantage take to that the incremental impressions and for runway a create it of gives will channel. little us

Brad Reback

the Adam, your follow-up. your environment, the forward? historical the of level that appear then forward of commentary same with has given over respect Thanks. this a to And quick it would great. conservatism course just going call That's guidance

Adam Ante

of any we've we're We to think -- not philosophy to continue to -- about and Brad. how we're our methodology. going sort We we Hey, And to guidance look for overall to changing Yeah. be to how to want opportunities our well. be with execute want prudent. guided about consistent continue continue

can. So, that's We to best with guide. want how we we performance I continue consistent be would say to the historical

Brad Reback

Perfect. much. Thanks very

Raul Villar

Thank you, Brad.

Operator

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

Mark Marcon

at wondering what point? markets of from Let are me add the my congratulations. I coming Tier the sales X percentage was this new

Adam Ante

markets. from sales mid-market coming just Yeah. We're about X -- seeing close to of or half over are our Tier

markets and success. good we've had a Raul of lot that lot performance. growth to the improvement contributed West Southwest of in like a from seen seen have and And the Coast, mentioned, we've which So, overall those

Mark Marcon

you've I productivity that, I have imagine as that to continue headcount people to more increase And that would accelerate new. Is because relatively that correct? And particularly in the great. put opportunity could that assume would they're an ramp even you other place there. That's your levels

Raul Villar

Yeah. Correct.

Adam Ante

right. That's your some expect would you're on that the had improvement Raul sellers, as Like many level would ASP so marginal saw, whole. And is at declining. we say, Yeah. mentioned, ASP you adding I

flat that now an their ramp hold lot into of significantly these with to productive. year, a XXXX so, newer more leverage productivity opportunity the into to And they're sellers second or

the to continue, then country. across the West that So, Southwest you're and hopefully in but going see entire the really

XXXX productivity sure. to opportunity for of lots So into drive

Mark Marcon

How you are talk bookings That's a expect from great. in deals And relative the can you referrals broker here? broker point? at How your of other through much got the broker You've little plus about this to the would about deals coming channel? expansion bit referred XX% channel. the

Raul Villar

Yeah. I close remain brokers high significantly rate. mean,

on channel. in mid-market that's the XX%s. XX% so over And slightly focused specifically, the why So we're We're in the mid our overall over it's reason the bookings.

And year-over-year of sales with in we're continue go-to-market significant motion. dealing of I referring component number in of a XX% scratching XX% surface. brokers, about the see our that nearly literally the XX% between mean, addressable somewhere opportunity segment. we're So to and the and increases we increase just

Adam Ante

Thanks Mark.

Operator

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

Patrick Walravens

Raul, Great. core complete the look $XX. per increasing is month? $X we we below and you on is employees, XX per for for the I can employee website, Hey, the Thank if can see you. the price strategy mean, us through walk

for tiers So, that fit greater maybe it employees. the how and how works into explain pricing XX than

Adam Ante

Hey, Yeah. and we've to a a identified then the month couple more that gets that that you're there's fee strategies. of subscription PEPM and consume. Pat, fee at under as of have $XXX, And we a market which XX, then services fee we a And that per a have fee. based on employee, in has small based model how much base you picking sort And $XXX all $XX looking versions as plus base fee take you starts per segment. a then and go above services. PEPM. They'll a start up up there's management you a clients base management. to XX suite up more tend of the talent those time labor XX, the $XX over couple broader to pick that look for under different deeply. really benefits They of there can to for That's and different And

an benefits, core labor and $XX that's And we bundle HCM and and time that to four then offer management. now bundles so talent the expand where that's with we

Patrick Walravens

would add related How time? Great. But like And that guys that. expense could is about over to add last the solution. management of what introducing if And quarter you sort talked going? then feature-wise to that I to you

Adam Ante

Yeah.

to business. it HCM selling put time the into $XX, our bundle, over of new at we're we core and $XX So, lifted it which from XX%-plus to that

don't time now So, it functionality. in continue and drive seeing of invest stand-alone as we're to product in fashion We adoption we'll really to sell right over a good there. that

Patrick Walravens

right. All Great. Thank you.

Operator

the Markets. Our Capital with Please of Jester next Daniel proceed. question comes from line BMO

Daniel Jester

taking for what us events little are the getting Thanks trigger wondering about to to a you was question. Great. the engage. talk if bit are really could that customers I

at just extraordinarily your last and As it have six into. results an peers, sell I environment months the like to to been nine good your seems look

time? if amongst you getting confident parts there's the that other new sustain of able your relative ones terms And so, to forward? that Thanks. are I'm engage wondering in to especially now be commonalities in going And to going how to what's customers, you're them

Raul Villar

Raul. It's Dan. Thanks, Yeah.

talking drivers HCM pandemic, CHROs, one started markets for by served work that cetera, to And of cloud methods of a step are biggest they think far the and or of CFOs well. was overall. the communication all been for use as to the and processing. coming think end et have a of during remotely I the thought the cloud new they lot has grandchildren, too may their I CEOs cloud children and adoption our out And pandemic

the up you're really do think share three modern over I window the from think that's a seeing And opened for I legacy so, that cloud quarters. take providers. HCM last And the to providers

in opened workforce, ability I it and are to that talent whether the And it companies to and cope our tools, cloud and the modern the all have our helping our ability recognition Paycor's surveys, deliver that think with with modern of markets be cloud. do solutions those bookings revenues poll the accelerated communicate virtually, the around tools are real-time helping As and adoption. solution one-on-ones accelerated new are combination drive up, built into modern

Daniel Jester

you much. Great. very Thank

Raul Villar

Dan. Yeah. Thank you,

Operator

from the our D.A. of Simmons And Robert Davidson. Please proceed. question with comes line next

Robert Simmons

of What taking guys. Hey, Great were to thanks the -- the you quarter and wondering, the surprised I biggest in question. for I'm relative most? guidance the the upside? drivers mean what quarter

Adam Ante

Yeah.

executing those just think we're we seeing through of really initiatives a ended that I come well. quite up that few on

business the But over-performance contributor pricing been through. all into hitting to from came new course, course, as all that of cylinders new programs really exited of the of -- running, the quarter. we've initiatives some is, convert were of biggest the went we ended really some on all The income -- as we our of So, initiatives or growth. It business we're well. seeing continues strategic those then, partner to overall and interest that

the of the forward saw we a of for a quite So, performance few come initiatives. through lot

Robert Simmons

talk can on business about the of cost on you on both Got impact revenue then, side side the the it. your and And pricing of equation? inflation the

Adam Ante

Yeah.

course, like we material cost labor way. But overly of has it of think not in new lot in I some the actually We bit. wage the calmed mean, see the a the a down on of across that business, market but side, see an So, hires. I inflation,

quite that inflation into period, it it of just As harder. the sort December soften bit. a sort bit And running we've time was was of seen wage a little

the impacts impact companies more quite perspective, HCM and companies business, a payroll of bit its of course, revenue a from terms on In directly. it

interest we'll So, rates those get double XX positive interest the to closer the we they closer into about seeing we're rate. the increase fed QX. or probably overnight increase rate rate And And in that's And income really generated increases. to of in sign to from funds we see and continue see as the basis and the close quarter. that -- inflation points than more

Robert Simmons

guys. Thanks it. Got

Operator

I'd for any you. concludes session. turn Thank closing our like This call remarks. question-and-answer the to Raul to Villar back

Raul Villar

Thank us you again your tonight. We continued for support. joining appreciate

quarter. We at the a everyone. next great Tech in are to Have into business We and and in the head Deutsche evening about this as Bank of look we forward accelerated touch Stifel, seeing the number you staying fiscal year. momentum enthusiastic HR a Events

Operator

your concludes you Thank for you. participation. This today's Thank conference.

disconnect. may You now

Paycor HCM (PYCR) 24 Aug 222022 Q4 Earnings call transcript