Paycom Software (PAYC) 6 Feb 182017 Q4 Earnings call transcript

Good afternoon, and welcome to the Paycom Software Fourth Quarter and Full Year 2017 Financial Results Conference Call. [Operator Instructions] Please note that today's event is being recorded. I would now like to turn the conference over to Craig Boelte, Chief Financial Officer. Please go ahead.

Thank you, and good afternoon.

future I this to not within conference including regarding started, statements that historical the get expected of those during and XXXX. Private made call our Reform meaning we of would forward-looking Securities note like certain facts, performance, the Before are objectives Litigation statements Act plans, that are These call. conference date of forward-looking statements this represent our outlook only as of the

the are materially risks based and ended made XX, believe our are we reasonable, and because including Annual any the year our could results uncertainties. are Exchange we and statements While expectations our Securities December in have Report differ on risks current with for are and forward-looking XXXX. actual to Form the on filings Commission, discussed statements subject uncertainties These XX-K

at market refer otherwise, which A and and disclaim certain You in required except law. new as speaks will statements applicable these during statements, is made information, do non-GAAP should Any today on course release our result alter that relying results and on it investors.paycom.com. future whether press factors to only information. forward-looking website forward-looking or as the on the of GAAP of we of which call, expressly to a is we financial consider any undertake refer after by the measures. versus obligation showing such close reconciliation today's included update forward-looking schedule Also non-GAAP as or to of is our issued we events date the when not available

on now Chad Chief Paycom's the XXX, website. standard, will call over which addressing and presentation a our We turn also issued accounting new President Officer. I ASC can Relations assessed Investor Executive to Richison, be the

to Craig, of executing great thank joining made XXXX XXXX full-year to goals. and results. and call year, our our progress in was our pursuit a you quarter review fourth we and everyone Thanks, substantial

over in on the comments of XXXX. of to key period. year, client efforts onboarding $XXX we results thank made goals. XXXX, of the patterns and year, service I enhancements our our want and to XXXX Paycom very million, of Before the excellent the support in provide all system, base to prior-year usage Thanks I efforts client the achieve improving up growth we quarter XX% quarter, our of model, to experience, to our in succeed This well review both other results employees comparable tireless of processes. set and and with at us whose allowed significant our our ourselves representing the We coming focused revenue our have fourth for had through growth employees

of continues year, drove with For the this XXXX. million, over resonate of the traction our the prior power to representing XX% The revenue and year. Paycom was $XXX solution the clients, prospective in full growth in marketplace

Paycom defensive football's second and sixth again a consecutive one to to review list XXXX. being companies, the technology received in Tech from magazine's athlete was sources, Paycom. honor a external revenue the that row, top see list by and finishing our year we on XX moment top value to for Thorpe partnering rate publicly-traded I’ll For some fourth of work Also, companies proud of Jim Paycom fastest-growing Award, Oklahoman year. highlights continue notable clients an XX%, a fifth the Fast award fastest-growing college with sponsoring in to on the take Jim legendary several Fortune America's Forbes back. named given places Thorpe publicly-traded quickly of underscoring to our recognition XXX Oklahoma's placing were retention of once

first our national has received it and very debuted positive feedback. television also We campaign, ad

X.X enhancements in many Apple to value the growth while we and mobile repurchased million quarter shares XXXX. to top-line and and XXXX, to our us form over less repurchase repurchased our robust were of program we achieve XXX,XXX XX alone, our and our months this producing In We Since in million the margin over accomplishments than of set initiated return in the app course impressive to fourth stockholders shares. also we Play have the offering. repurchased of launched current substantial the Finally, ago, shares. developed cash Google we able X.X allowing stores flow

daily be we the are achieve employees. to of in to clients every often intuitive cutting-edge particularly in integration. the digital trends the management companies team Managers makes we broad HR have by same how used driven growth systems the to the companies the time, we industry robust of our This Paycom functionality to achieved of we of workers are value of business. basis. more traction, them is believe is unlock even that it more prospects solution What While proud with front provides their along use, X,XXX functionality without our for of allowing the trend is our system best-positioned At user the with our is Paycom aware employee it believe cost insistence market we our a We company HR of third-party best-in-class are and providers their help continue. potential on of technology allowing help software in these us organizations we intuitive increasing with engagement industry. across future The increasingly about and poised excited becoming functionality even to marketplace so to significant their on of powerful these them are which continue the gain what far, by X,XXX HR these can of in are or produce experiences future with easy see capital vision why members. yet by to target as confident efficiencies human

the were grow pleased and Richmond are of Island. market XX. in to brings This our sales Milwaukee, Turning the teams three to new opening They after to we sales number announce in Salt office Long XXXX, continuing we opened closed, Today our to City. of total mature. an efforts, offices Lake sales and

and Our XXXX date some reps to stride maturity doing offices will full but they have capability. in initial staffed of with who will sales hit be the XXXX, their become the offices majority continue the senior as are hitting soon, offices production opened their best of the well

worked sales our deep for the has her in several has helping For relationships his representatives, Paycom their is clients developed operations or deploying solution. and for A a that field company years improve time important. extremely through the rep territory in reputation

to about senior this to and market we sales that excellent that result, was and excited have our believe organization is a and drives allow remains As will over to Craig? the through for outperform for building that that, a opportunity of sales see the we Craig review our we guidance. continue financials up, for belief sum that call XXXX. us are and are sales to our a substantial very an to year this the improve continue I'll reps We With capture us XXXX Paycom momentum leverage opportunity. share continuing to To turn productivity.

Thanks Chad.

We I for full non-GAAP Before non-GAAP our will XXXX remind and our the supplemental for financial measures XXXX, everyone adjustments would that issued assess results also press EBITDA and expenses my adjusted and year as full and like measures not net and afternoon. we used year related to the are be to fourth this measures purposes. certain for earnings on first earlier basis. to other to income our Non-GAAP the non-GAAP that outlook release a for comments EBITDA that taxes. Adjusted review quarter our performance and to GAAP are stock-based compensation in planning quarter income review certain discussed income transaction today included non-GAAP net operations. Reconciliations non-GAAP and also measures expense effective net reflects are financial excludes income noncash the of cored and

XXX to filed we along is outlines X-K Investor provided I with press release, our to exhibit an financial fourth Form statements afternoon. on revenue available was download presentation furnished and new our that This recognition Additionally, XXX. ASC to our discuss and as presentation call this based Relations a the also guidance of impact the standard I'll standard the our the ASC bit more most quarter revenue will website Paycom’s earnings areas year about the and will the standard where recognition little on impact based it new results XXX. forward-looking ASC talk provide will a new on this financials. the later full on standard adoption have the that on revenue historical of significant

of the quarter, prior-year fourth Chad had revenue of total growth million, with the strong comparable XX% As representing $XXX from period. year-over-year results we in mentioned,

Our comparable prior-year full-year were of the $XXX growth XX% XXXX period. representing million, revenues over

quarter revenue recurring we and driven our Our the total fourth new with period. quarter revenue representing comparable an revenues, primarily Within and for growing the XX% from quarter wins, XXXX, $XX.X $XXX.X XX.X%. million, of Total to the of growth representing gross of total margin by fourth continued was continues be the XX% pleased revenues million for performance. profit adjusted adjusted are for gross business was prior-year

as the in revenues adjusted total XX.X% we million X.X% fourth adjusted a XX%. of costs, revenue. the quarter the $XX.X compared million million year costs revenues XXXX full Total XXXX quarter was in for quarter portion, quarter or the million. XXXX. total $XX.X fourth of or million R&D $X.X XXXX the compared of prior-year of in of million quarter Total R&D in XXXX, $XX.X $X Adjusted the fourth XX% capitalized quarter XX.X% marketing compared million the adjusted full of of will the the was anticipate expense XXXX. million EBITDA adjusted $XX.X including our X.X% range the or including to to was the XXXX, of sales expense fourth to that fourth capitalized was fourth For of for was $XX.X total margin total within portion, and gross year or period. for revenues. the Adjusted be were of $XX.X in in quarter administrative to XXXX Total $XX.X of of expenses R&D million Adjusted

$XX.X full EBITDA of adjusted in XXXX. total compared million was or $XXX XX.X% revenues For or year XX.X% XXXX the revenues of total of to million

per period. income approximately in the for approximately GAAP fourth XX diluted million million on year or Our share based shares $X.XX was based shares on per quarter share diluted prior $XX.X $X.XX million $X.X the versus million net XX

was XXXX the Our of XX.X%. for quarter fourth effective tax income rate

was XXXX full GAAP million $X.XX income share $X.XX net versus year or based Non-GAAP share was $XX.X diluted in For the income on net fourth per quarter share. $XX.X XXXX, the or for year period. diluted or $X.XX per $XX.X diluted prior XX million per the million approximately our million of shares

$XX.X full share. net our of For non-GAAP million the income year or was XXXX, per diluted $X.XX

over including X.X the the XXX,XXX shares we value shares million quarter shares have the repurchased earlier, the stockholders returned months repurchased quarter have X.X shares. approximately the anticipate over nearly we fourth in over program shares of our Chad to million initiated Since fully we the mentioned we As In million XXXX. in XX alone, XXXX, that first million in X.X over including shares the market. purchased shares ago, repurchased XXX,XXX form diluted open open course of some be market. We in of will outstanding XX over repurchased

cash Turning with debt cash quarter to the and balance total million of $XX.X sheet, equivalents of $XX.X we the million. ended and

of model. the strong to The of building this the performance profitability from our a and $XX.X at clients construction our for fourth was operations headquarters. business fourth held quarter, on according well Cash $XXX quarter financing reminder, funds reflecting to our debt of go behalf million continues approximately fourth Construction balance in and revenue average our of represents As XXXX. a million daily of corporate the was schedule. of

the standard. on both Now, Cuts our financial impact Act statements we'll also regarding that provide and federal XXX some accounting and Jobs comments ASC the Tax

overall XXX historically (m) In offset XX% This of tax the rate. factors, will a a variety be driven corporate and the including a tax of rate rate deduction, the our federal of will XXXX, we limitation, XX% its Section part XX% GAAP to effective As anticipate of reminder, of and XXX applied rate elimination range within handful in that Paycom by statutory smaller to to XX%. factors. Section be has other as tax by the the decline federal

rates. Cuts per or $X.X and required for of reduction assets was write-down Regarding of the December, XX% XXXX. the impact deferred those signed a $X.XX income expected fourth in federal Tax down tax corporate and Act to the future tax into at revalue tax rate to law this in reflect financials, our A XX% write assets the from December and lower Jobs under in share us was in XXXX. XX, recovery order This decrease to necessary to million certain resulted net the onetime quarter in XXXX

new effective new the are XXX, January will of under We and begin beginning using we accounting in and method have retrospective adopted quarter reporting first Regarding the using the standard. X, method adopted XXXX, full standard the ASC this XXXX.

to order early quarter provide XXXX numbers, XXXX recast we transparency certain full full the the each year for into financial XXXX end our XXXX of as statements of in of and metrics. have the and non-GAAP However, for as impact furnished on the and well a year

the not mentioned of As years. the numbers our the this representatives pay was new impact XX commission sales we expenses timing paid description Paycom. of standard, been found as expenses. we with the her be in practice setup be deal it recast as specifically change to on acquire been a along that with on us standards be earlier, fact will new Under Investor of reps primary the deal, in contracts, will When short-term In is has recognize of those live on after days. costs costs practice. his our we sells that has well site impact brief we the in the that This on implementation our a quarter we already any and have to primarily that of presentation rep standard result for deferring recognize Relations recognizing can these website The contracts over of certain a or one will of expense the to the recognized timing our sales recognize impact to how the implementation is the our related associated commission the the revenue the only available have the life continue Historically, new commissions our we when XX determined revenues, and the we and which contracts. a have client certain of incurred. of nature new when short,

on of XXX, those under have XX-year asset which the and the Now, commission's ratably impact and an expense. we our determined over the contract be of period life will has be balance out will the client. to the commissions sales benefit recognizing been subsequently sheet capitalizing costs of costs spreading as then This

and per to adjusted EBITDA expenses a such, expenses lesser and As will reduce increase it our degree, our marketing general will sales and our and, earnings share. administrative and

to XXXX Looking a sales both XXXX expect slightly we higher be ahead revenues a and and recast be on of general operating will expenses XXXX as basis, expenses and will a the similar quarterly figures. and administrative than to fairly R&D as the percent recast expenses of marketing figures, percent revenue

$XX the approximately noncash stock-based expect of to for million. quarter compensation be first We XXXX

year Now XXXX. let first full guidance to fiscal me the turn quarter for and for

this numbers growth reminder, As the and recast new a takes guidance account the ASC comparable XXX using are into for standard, XXXX periods. calculated the rates

of $XXX the of in we growth over the first XX% the comparable the period midpoint range rate XXXX, million prior range. revenues approximately million, representing expect a the year at to quarter total For of of $XXX

expect $XX We at adjusted range representing first quarter of the the in for the of the of approximately million, to range. adjusted XX% an $XX EBITDA margin EBITDA million midpoint

fiscal XXXX, guidance a the range. For the XX% at $XXX year-over-year midpoint revenue $XXX of million our or to million growth of approximately range is

of we million, the midpoint XX% range million for approximately open the an $XXX guidance EBITDA representing margin of that, adjusted of a Our XXXX line questions. adjusted With the EBITDA will full-year has to Operator? range. $XXX at

ahead. Lenschow question of first comes Please from Instructions] go Our Barclays. Raimo [Operator

know all your opened of First of a Chad, That's role five, little need for give puts below impacted you factors like and is Chad. rate we question there's a six, of normal you. about about run year, playing to talk Thank normal what it? think different that you that Can is bit kind new us kind takes there. and here. of I kind offices. XXXX, three in the that the Just

early. set you're year. this amount back don't we one the type see will we that open we that and to in fact, had program of both additional maturing did did up four three. odd and office five somewhat last some open work early, as offices, we before And forward. would to move we organization or know mature open year, Matter believe in we staggered we year. openings throughout I increasing try numbers where it's the well the period. and I same of and we've we to that And so announcing year, even Last the strategy that opened don't early did as staggered in as continue our We lot backfill know of up sales that the one going I year be We preparing right. announced our XX-day us we us a our opened last

not and this, not - it’s internally - about et not a location issue. the kind senior backfill, move the to of it's the So finding people you like demand if guys cetera. more you It’s think three is

we been That's backfill, on ready did the really to see year. changing as as well factor. think good back successful, and I talent new develop is market we and It's gating And It ready relocate. I end. enter was a in our us to our year that would development that last having throughout both continuing managers this strategy way. of always It a job how being strategy

guidance in mentioned a it question takes in little like did Craig. the kind a on we areas, and and down EBITDA ticking margins. then? at the in marketing EBITDA it's if going of see year behind thinking a last higher, margin, seems I about like Craig, you Can little XXXX what for look little and it I driving bit bit sales new profitability And and what’s bit a your of higher, of what's R&D, terms talk the little puts you investment terms

two R&D, the as remarks some sales in that on The well and as prepared I the mentioned were marketing.

Our gross hiring for high for pretty and in ahead. certain we the year to little may full - on little dependent be margins of the times the finished really making behind on times XX%. our that XX% a I year trends guided XXXX we year the and a and That's certain hiring

to area to kind is of the We'll model and So takes we're are. where continue going efficiencies that's in one as though. look for where well. the puts G&A look definitely

then, think about about - like thing in kind XXXX conversion that's in the have I I cash how the really as think the like I idea doesn't any of saw terms so about and if that do of of think you XXXX cash And same level of that number, kind change XXXX?

assume would similar fairly in I mean, it be I you and would what that XXXX. XXXX saw to

very impact bigger or Some of I the the that similar. be it to that, CapEx the would items other so than cash expect and

Our John Jefferies. next Please comes question from of go DiFucci ahead.

guess conversion operating to potential talk Actually, a companies. flow been last businesses benefit I and lower assume unlike line, have operating below for you follow-up the here to from a - can the really due lot little that tax I question a long Craig. of is States, have Raimo, to The the software a just you time cash in about profitable there rate? for this so cash and the All your I are guys

some has ASC there. expenses benefit little you’d assume XXX out little though you're that no flow of impact I some cash And assume I the a moving see bit. even on to So

the it cash, yeah, as to XXX. will relates it no relative our position On cash on impact have ASC to XXX,

I rate, out terms range the In XX. of to tax XX the called gap of

payers we lower been tax so the benefit years, taxes. some have several would full see are We and for from

Murphy ahead. Our next go Please of JPMorgan. Mark comes question from

and Albert and a for Chad my thanks Congrats Chi Craig, is Murphy. This great Mark on for taking question. on quarter,

little For that and capitalized change leverage guys any a the know of in of it any is down looks that year-over-year. R&D, the outside but software I like bit have seeing? And a you're there slowed points it declined direction or sequentially development lot you

see as fourth increase as a to Well, XXXX, mentioned, for percent quarter we continue higher than to thought. expect And had in what would of that a capitalization No. revenue. we little originally we we did

then point more And guess one the I on guidance.

full would is kind guidance a you you For a EBITDA there the XXX? the that the able that under of for can what you're are have looked numbers margin about talking give to that sense XX% of year, like number older give Like us? us adjusted ASC

ASC the will not into we - XXX we mean, not quarter. full we be will retrospective, I since be as any the adopted we first numbers showing move

So, because into, we'll what-if really that to something be a actually no reporting area we where that. there ASC will showing under don't it's XXX get want be

ahead. Marcon next R.W. Our Baird. Please question of go from comes Mark

in you me margin of add got year. of seeing an wondering color perspective. my Let new some markets bit a older retention productivity the in of I've trends, I'm in what great client the EBITDA if markets, terms congratulations, sales about question. versus change any can then, little talk just competitive sort And you're a from

last And The the sales initiatives so, remains we've group our into put for productivity us. strong. to produce continue year that

I'm happy our have year the that. so with We're very starting and off starts And strong you. what with

we're So, part was What of on the No. the question? focused second that.

retention. client Your

retention. client Yes,

been to somewhat that X% we've our out I like to number six loss X% that for And routine XX% increase important can and point so, bought-sold, XX%, And industry. trailing years. we retention competitors, last cash can't a flow. merged There it's due are for and revenue, standard certain XX% to measured our think believe a a Mark, and on and/or taken there’s do the has on which retention that’s is control, not our certain I clients we rate, that. it's been control have the focused client we maintained and price we've been

the continue the allows on that to drive ROI. Paycom through that produce focused so the client be And efficiencies pricing and and to the we we experience client

base hoping last in at for we line impact six rate, so we that. are years. amongst the have both to to on held on And but service the an product our we're XX% And continue to that focused client make make and improvements

for then, XXXX EBITDA projection to to margin the with XXXX. relative And regards

up. expect one terms mentioned go or basis-point of heavier sales marketing basis how than You will you more you going the to R&D investment? about thinking both be are a on and are and in Would that you up proportional, other

to slightly the We quarter might one between other think than in overall be the the be two. higher but investment fairly is fairly going mean, the similar terms I increase. of similar

next from Credit of go Michael question Our comes Suisse. Nemeroff ahead. Please

just many and XXXX average initial a staggered I or jumped you're can if give us another in office XXXX maybe how your then plan Chad, sense improvement give the call. can sense productivity result you do of maybe openings? assuming as any you off you the how outlook? growth openings has just a share And us improved in metrics also, XXXX, to do office what's a of in much productivity

it. Obviously, to But as up focus have on. some XXXX, in I that into the believe that has that us actually, that had the much and we throughout something number not head update currently. I gains year. do the have gains we gains we'll should we that this sales that put organization had I'd grown so And in so get XXXX, sales productivity we had we out in organization, capacity every I we Those updated well but end year say as efficiency closer it. we which pretty set the toward And $XXX million as number have

than continue set year year. office we ever this are going were But what to strategy. really than better up the say, we other to to guided open we're last even We openings up haven't to offices

the both In think Are changing the and that gains? think should basis. XXXX the in past, about in forward-looking far the you've said openings one is productivity we so office do office office now? February? you only openings How business So that year-to-date I on number it drive and a lower openings

mature of time, standpoint. it's unless say think openings zero last It's opening say So had wouldn't of the But the to and other. I drive year that those wouldn't open. our you're so I really our cycle. the when piece on make And offices, don't offices in growth growth. office up a through impact I about their get you we maturing openings later office opened obviously from talk an one life this offices. strategies at year, they're

for our And productivity so, drive office gain strategy, well important with to mature continue throughout the open us offices. as it's to those year as

Hynes ahead. next Please comes from Our go question David Canaccord. of

cities of numbers maybe Curious Is of you you felt that Chad, running here. sort time, How now working? regions? to about that's maybe to could want have that about the think we TV ask offices? stuff. share just that set how why the running tracking I That you the do could business. effectiveness? Is across start to Anything like is mature on Nice is all in how campaign. contributing right

selling. mean, and I of a have Well, I view certain advertising relates to strategic versus marketing specifically as it

a there start last does out I was specific ran embarked and of our some think branding. as We middle campaign. to and on, sporting campaign events national want awareness-type year a we brand ringing. But expect really say, don't part news advertising the ads phones we advertising provide I branding. for put It on allows primarily that to that

how is talked we if our as selling continue really haven't grow, model. of would much will to or we But important. piece I that We more be think of about one strategic that. But our of continue branding it

against bump We're almost we an up the is model? long-term EBITDA XXXX. margins then, XX% contemplate maybe to And that How Craig, as going updated front up on high in that on numbers. here

under long-term a had ASC XXX. We model

under long-term ASC our model at looking still XXX. We’re

company, to to a efficiencies continue high-growth along also to achieve going look We’re be some but the way.

update some that may point long-term to model. So, as we we get decide the throughout at year,

go Our Please of from next question ahead. comes Brent KeyBanc. Bracelin

mean I or pipeline that think does hit year factors? your NFIB the Chad, of optimism. a you for just on high business business here one on kind First have the What kind First either Small on question. macro think I macro Business at impact small a as XX-year Index hiring about this level, of

be time our meetings seen in in help good and well. before. market favorable somewhat the drive that's that and I the I and client we've think that. as collaborative can't we our that really work an year business results with do margins clients business. have go have you can XXth a where company We've ROI-driven type it's environments but regardless to environment company of Well, definitely ROI-driven - that for a We're current us good mean, any been to on

do on level again I but So, we've can't provide any index positive lived the through a there, some plenty. have it a time margin you help But environment. very that out think positive to of

follow your new you view you one the and last as software here past. scenario about in in value where the HCM number doing mentioned consider features the what's And over What think that payroll and several years, then that? would to You meaningful cloud way you’re pricing you've the the providing here stack in you’d around up added the just pricing? raised a customers change of haven’t

so within answer sale. I We client point, haven't delivering that. to ROI that value - for are we conjunction But And question, go in raised in we for prices meetings we not we at the we're software don't your we with to those In with there's those in developed And give is the do functionality priced in have has meetings. been client and when in conjunction that the where additional that additional believe prices. produce fairly client. that actually client

the making was through sales the ROI client we're process. call and so our receives in very sure the then discussed ROI that delivered focused transition it's base on and that And

well. handle know, we're time, the that. same on become to get should software to over it you the focused And they acclimated client as so And as easier

the expensive so provider. still But out we're ROI, least low the you cost include when our And there. we’re believe definitely I not

And commissions XXXX sales changing and should impacts going standard ASC here again as XXXX just changes, And Craig, then think in or we should what there commissions, cash accounting us you that last XXXX, the as can the continue could you as if are perspective assumptions? XXX pay about payout expectations talk remind payout that about think cash one cash think flow for are you well? sales from to we about cash the about sales flow you a CapEx XXXX, our of are also also then commissions in you and way some to to outlays

I'll take changing the on for and plan client revenue XX days, the commissions I on client pay the past, we've, the is one we pay really estimate we will way the sales in rep mean, ran we the last after first. annual based the don't commission that.

so And pay impact way the we the only XXX no commissions, we recognize expenses. ASC the will have those way on

an as we've CapEx probably of the at on terms coming of billing as you CapEx online, expenses. have CapEx we those guide get level little we of is fourth we've And spent look line but CapEx, you of sometime mid-year. back the mentioned to a In elevated know how bit that, could typically don't historically the and on we close some

elevated spend, mid-year after to to And the then start that you that CapEx should normalize, way right think it? is about

past haven't slight given completed. that. a billings guidance once We any might see really We is that off drop

ahead. go First Greendale of Corey next Please comes question Analysis. Our from

year-end taking on Wang for Ken and Congratulations strong on is for This a question. my thank you Corey.

So is same upsell, if during new your whether XXXX growth XXXX. for wondering you any between saw not can expectation in split the wondering revenue just and just your split little customers speak about a or the during change and remain to if bit about QX just you

the overwhelming I even guess I sales to sales, remain to - the would even expect, same. the we say through majority that into to is client current one of because your our always, from can much year new ACA any sell revenues win you product and the one all year where what primarily is revenue delivered our so dollar through client I’m client for a the first yes, we our base. where larger than the about always be going value new this, split the were but had of We’ve wins

well time require with sure to are number incentivized and of our products they the the that receives As client using is salespeople the as of Paycom, the purchase. make initial at

it what wouldn't as to in than XXXX as any the that. so in different was on far breakdown I expect And XXXX be

has or just content, that can one any sales wondering the of more the for effect addition on you of then LMS the broadly? course module your more me, platform And comment, if has positive just had

or courses two course upon announced They in that LMS actually three in the years prior. followed those November, Well, developed prior, that November. probably at LMS product we LMS we years three least

be produce expect rates courses to do adoption that module. that we would able greater so of those LMS And

that. We’re of that aid would to continue we're market. stages proposition that value But the early expect as still would in in I in our out there the

from go question ahead. Wells of is Fargo. next Our Please Siti Panigrahi

the kind about Ankit addressable market the is you're seeing overall to talk market? in what This penetration of Siti. Could trends for you

I think about perhaps new wins penetration talking and… you're client

to trying I'm what That's out. figure

we to we competitive in add that we wins that our to reasons. say not that, And That's would regards about our backs. do something our versus achieve I continue goals talk for X% We that X% are I TAM. the will the TAM this. others. have sales represent overall stronger teams and us to it's some still to a available than growing of say

focused wins. we're on so, those still new And very business

of comes question America/Merrill Please go Subramanian of Shankar next Our ahead. Bank from Lynch.

and XXXX. projections on XXXX? you I'm through for question fiscal than opportunities you with expecting little the revenue revenue you're can a looking as in XXXX this higher bit growth of your Can for the the is productivity so is should the revenue The of reason be - upside revenue that the had at. because the what of My what you customer XX that or and is more if visibility and rate the fiscal XXXX year about as upside per is year, about growth including this that, I'm in growth improved ARPU maturity fiscal sell well that asking talk and are

is wins think number any to new on. greatest so important. client of bringing really a the client performance that new years’ Well, wins, I That’s you’re upside

year year year converting as we'll this we change already I our what didn’t most that focused guidance Our deals or mean have from within pipeline approach on from an well those our period the of them. before as hit based or last eight-week to quarter-to-quarter. on be both and backlog we really the can on see

very we guidance then will the see we're And on so both update year, based that. we the numbers focused And that on as can we at time. move what and throughout the

Our Stifel. question from Please Reback Brad is ahead. go of next

talked you’ve like people of Can last us a you I give reps promotional the about year? last sense to year what XX this January. promoting look executive Did think

specifically You information far as times as us. know on those end January I typically someone strong the We toward that. in can have often commissions and do not as that those because either more would after starts February be the December are numbers for have hits rep executive

to time. so this numbers at update don't have And I those

should continuing quickly the sensitivity interest of to And How and rate about with just think we really rise. interest rates? balance flow

I mean time have that increased, spends most money account. very our balances strategy our lot not A little but has that investment of changed. our of in

We rates are invest receive guided But that with would that interest haven't for that. of in some portion very for to way investment going the within we're and we is we up, very or as it gain go and the to a revenue conservative strategy. small us. what Obviously our represent that gain same revenue

next Brian of Please Oppenheimer. comes from question Schwartz Our go ahead.

on here. industry and up building an Kind I to ask it one your question responses. Chad, of switch want of

greatest question your industry it pace potential upper market, want to - staff], business a really standardize a wanted services about wins and to moving vendor. client The towards the markets You of on preference. the [your strategic that let's HCM you the the approach upper and occur. the big the the they mid-markets, I new the mentioned and They year upside half want we've buyer they last preferences with that call the ask workflow. In in platform the an and shift the and over is so not seen here for in wanting a the to buyer market

is, have down here to market I just third you maybe possible wondering your about moving And creating trickle I'm is the pop in to And to so and new acquisition biggest forward? tailwind the is it are market? be the trends trends into in within deal the ask to the to question if a regards those just then them which wanted started if starting rank question Thanks. those customer off the tailwind engagement, this trend to could

answer to the way try I it. I'll understand

pretty and I call mid-market depends on really and had sure we wins which is client, a enterprise or situation us you to value not disagree the it said as having sure even In to that true and client that starts everything. for don't pool And for or and the large you want a Clients been unique actually want the relationship I and needs stayed on client lot of with be. software exactly proposition where, we handle market package coming gaining XXX% we And always could that much we to talk what the to. past about it, our the one enterprise we're think I of said XXX% realizing case. with being into each do right we're out, we've say system sure I've them to so market one we'll organizations wins it in mid-market, opportunity market. that pulled a but target that they're was depending think a I'm have clients' stops draw I you. obvious I that quarter rolled those our that benefits had were those use business realization. their line where between above will this I that And before, that's typically used they are the mean, and always, success

market type a conversion. And much larger do and If product gets process continue We right businesses bit that. up us well. so, little lower just have so do good fit a for on sales easier, we to to the we'll as now for have opportunity have year-long do tolerance for mid-market, it move because we

Lamba Our question Mizuho. of ahead. from Abhey next Please comes go

on Parthiv Abhey. This for on Congrats results. is the

of quick ones. couple a Just

and the up between of those full the offices split end For you that ramping where the are the then, XX mature are update XXXX. those expect on to on to towards maybe get end mix And you just an the have, fully currently wanted toward that up productivity.

many How have. maturing? still is we now, that right So,

Nine maturing.

We that that have the in Six we in nine year that come maturity maturing right? and year. maturity have into will year. will five into come throughout this Is the

Six year. this in

point. this at mature not are that nine And

Okay.

staffing your note market to maturity and important is call what And we that the in mature it is quota. of beginning initial

or offices that been three to fact typically will opened years five, mature six continue to office one. two have that's those an In been outsell couple our offices a in opened even

And the recognition then the marketing and expense to sort of with more was million expense the understand G&A change written. is respect that $XX there? one with What restatements, over sales we in driver

of are I obtain more to the the that are and recast numbers, mean, were in fulfilled at XXX through the cost fulfill we you G&A look the as the and going really costs. ones

closing This question-and-answer concludes the Chad session. to any our for turn to Mr. over back conference like Richison remarks. I would

University for the we're the the thank Well, joining has also to today. to I from next everyone quarter. I and what Jim us. congratulate you in defensive Minkah of back Paycom excited guys all store be the Thorpe Like year. we'll Fitzpatrick, Minkah, talking for want this And Alabama for call want for Thank to you XXXX winning Award

today's presentation. The conference has you concluded. attending for now Thank

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