Paycom Software (PAYC) 28 Apr 202020 Q1 Earnings call transcript

Good afternoon. Welcome to the Paycom Software First Quarter 2020 Quarterly Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there’ll be an opportunity to ask question. [Operator Instructions] Please note that this event is being recorded. to conference like now would turn over. the I go ahead. Please

Reform not welcome Thank on our quarter this are are Litigation those to outlook of objectives date XXXX statements of future only call. Private forward-looking and to These this XXXX. performance the facts, our related earnings that made first and meaning statements Paycom's as of expected the you forward-looking plans, conference including Certain conference call historical call. of within Securities Act statements represent the

While are recent filings we These uncertainties. based subject differ the with report the believe this any and Form annual forward-looking statements on our Form XX-K our on and are reasonable, materially most risks SEC, made including on and and statements on call expectations risks our could XX-Q. our uncertainties current actual are recent report most facts to in because quarterly discussed

and information. relying You when should factors to consider refer these forward-looking such on

speaks required the to update Any do statements, expressly otherwise, information, obligation any statement future made, of date disclaim result not alter law. as undertake events as our we a is it made except whether or forward-looking and forward-looking by new which applicable and on only as or of

call, and our investors.paycom.com. close of is performance issued the that in market release reconciliation to financial margin and showing today the the certain we non-GAAP our schedule GAAP course adjusted certain during measures, versus assess for gross included adjusted these EBITDA, will financial is non-GAAP website results and including planning use measures non-GAAP adjusted and Also adjusted A of we today’s on purposes. after profit, at to refer We income, available non-GAAP the gross review net expenses. press

Executive now Chad? turn Officer. Chief Paycom's to and the Richison, I’ll Chad President over call

and James call joining to our everyone you today. thank Thanks,

whose thoughts the been health to impacted my has First, by out those go pandemic.

who the have their lost reductions who faced We with their employees businesses and also sympathize workforces unavoidable jobs. in are with

in chain also medical to are supply the the on thanks my first those extend like I'd sincere to who responders, line. Additionally, involved personnel and front

to the to from Finally, thank at our home who working office. want I employees while who phase execute four and remain working our team also continue

I'll some spend XXXX achievements. our For on first today's quarter few results a minutes notable call, and

Craig that and Following provide perspective will our questions. and will financial then some review trends financials take on we

pleased particularly quarter. our am in with first I the performance

continued high guidance quarter strong First results by $XXX.X strength effects new range revenue our an our were adds. revenue March. in interest million business end spite margin and of business in of spike unexpected the unemployment high above in driven cuts recurring of the QX model of came and rate of

momentum as Adjusted of margins. was EBITDA ever. and record in strong result million of XXXX guidance the gross following our year a entered with QX also that retention above revenue value a $XXX.X than proposition in stronger range We record is

month Even of the see from the by of client of March to effects declining new though COVID-XX, continue strong was due to our revenues addition we base clients. current impacted

year, which demand last systems disparate elevated by are of marketing that and strength single compared created we efforts period creating and exposing The is the a is proposition. We the solution. to the value the are through experiencing also driving volumes pandemic same database Paycom higher seams lead our our for

than and position. our less and More we accessing will paperwork system the HR more across continue human been strengthen innovate input ever and never results to employees management and solutions usage The the with are the incredible doing to and employees capital pleased and than I today appropriate sales managers invest organization. and before. am of marketing are collaboration manual and I am seeing important has

well Data DDX adopt the above Exchange wins, patterns see to relationship overall Direct employees be usage scores full measured by or usage When $X.XX a to DDX our direct the QX data of products as as numbers strong database, strategy. improve employee strong efficiency and as at levels. employee employee companies as continue our continue a HR well the with We higher entry company real have point satisfaction. per and usage task with savings wins estimated from or

In since be important we said product very that while launch I essential February, app. mobile solution. this Manager built it's was side employee at proving time still the believe to empowers tool popular. app manager had we our of the our the accessibility release most And leaders XX/X on-the-Go, into which I of launched single a we are self-service early, Paycom's existing with functionality to

first over client the Within flow employee more and adoption distributes its This period. Manager has product impediments on-the-Go approval since weeks the XX-week to our base launch, responsibilities self-service broadly the data functionality exceeded across and XX post-launch removes embracing easy-to-use quick it. managers comparable significantly are

way the we solutions Once with the with on desktop Manager them our now seeing. of pleased the completed majority are previously actions app. they managers are completed use on on-the-Go, trends and the mobile fundamentally the very interact change I'm vast

new of clients number new to their and platform. service COVID-XX, experiencing increasing our trends providing focused remain clients our technologies to of employment unfortunately many we added due to on activities, three world-class our are While significant the in clients, rapidly controllable fluctuation developing

changing day to digital business for transformation for in spirit proposition some and no more thank for winning confident And grit early. today, saying their value of wrong. products' may longer I've we like go-to-market is with all our time, been we're this strategy. am but display and ever strategy, the our employees our I I'd environment. accelerating. not The they we're be than in early every

turn the Craig. call to I'll over that, Craig? With

predictable. everyone measures I'll some become XXXX a that briefly first unprecedented comments I our would like plan are full related providing about certain I my and possible on outlook. remind trends and These we while quarter to Before annual results, are basis. financial QX our guidance, back non-GAAP times withdrawing cover as be review we financial and our more year I'll comments to get our soon high-level as provide results guidance unemployment to to quarterly where will

transparent we be as based possible know as to approach Our what on now. is

very Chad we new and from the strong quarter, revenues As unemployment especially pleased recurring range, above robust total pandemic. $XXX.X prior was the given driven representing cuts growth wins comparable the results, we unexpected the with generated million, spiking revenues. our roughly first year over of and mentioned, quarter interest In which our business guidance first rate period, XX% by of are

comparable As of the XXXX, a period. year banking were XX had reminder, only instead QX XX we there in the prior Wednesdays usual

revenues. represents quarter, As we Wednesday a a discussed last week's roughly half

$XXX.X for revenues quarter first representing XXXX, and from million the the period. also quarter prior Within XX% XX% total of comparable of total was the revenues, recurring year for revenue growing

see unemployment During client across the the the base, in trend continued that our we of reflected to country, month March, into a spiking started April.

to is across impact is The on client similar in net the unemployment as current effect today percentage the country. that our revenue the increase of

closely quarter year. of net for monitoring are basis for We $X.X business that base. on of the rate XXX point unemployment effect roughly client also trends the cuts We cuts the impact their impact our on occurred per interest the We're experiencing the estimate million is our rate balance March. and in

year margin a Total record gross adjusted representing period. quarter the basis gross XXX $XXX.X profit for points XX.X%, million, up of the adjusted first compared was prior to

efficiency. benefit We high-margin increasing customer recurring service revenue and from continue to

quarter compared quarter or administrative $XX marketing the in the Adjusted of $XXX.X sales for expenses the total and expense XXXX. were as to was of million revenues. for first of XX.X% million quarter million XXXX Adjusted first first $XX.X

in recent QX ad year. from continue results our are and campaigns positive throughout We and seeing the to plan marketing in efforts invest marketing and to

We believe our not back this plan. marketing to the off is time from

R&D In the total We more capitalized fact, or did are in innovation success in million first portion of were in growth the QX to year to we first of continue than increase and expense plan Adjusted period. future costs the $XX.X revenues. demand new $XX.X and total in to in the to $XX.X through having, XXXX million the million development. spend our due product plan X% of the prior Adjusted quarter seeing XXXX QX. to compared invest R&D we in in was -- including we're we

revenues or or total of million the quarter XXXX XX.X% was of first Adjusted EBITDA $XXX.X of of in $XXX.X the quarter revenues. XXXX first million total in to compared XX.X%

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

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

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

our XXX,XXX will we quarter be outstanding XXXX. the shares has XX, on buyback of shares XXXX, million March Paycom shares. we Today We Since X XX anticipate diluted over repurchased in XXXX. fully shares nearly since increased repurchased approximately second million have

the to balance and $XX debt million. with million the of equivalents cash We quarter of sheet. Turning cash ended and total $XXX

this of financing our reminder, represents a debt a at As headquarters. construction corporate

held was the $X.X daily quarter model. of billion our was profitability The in of of on XXXX. business reflecting for million revenue average our first operations funds strong from $XX Cash quarter balance performance of approximately the first and behalf the clients

said. To conclude, Chad what I'll repeat

and providing to client revenue on rapidly our the service our impact new the current of platform. technologies are clients, focused added clients the increasing new to number of We developing mitigating on by pandemic numbers world-class our

strongest a a model recurring business highly the industry. balance in value have We and strong profitable our sheet, proposition

XXXX growth We demonstrated soon being combination that that combination predictable. look we consistently still that become enviable factors able margins of are macroeconomic or the as have you for we confident quantify to deliver stabilized more as forward can and and to

Operator? the for open will line we that questions. With

now will We question-and-answer. the begin

one We is will [Operator Raimo Our person. question from from one Barclays. follow-up Go from have each first question ahead. Instructions] Lenschow and

question at and for everyone then hope I has best everyone. thanks the to my and wish taking Hey, safe all been Paycom

from you and and like kind to compare lessons you then? question saw back you follow-up. been -- have in of have me. And of and compares Chad, what then, kind contrast I back XXXX, just a crisis XXXX. how what learned First in a you mode Can guys now then then it

Sure.

really that in geo-focused more From the area. going I in you a period So obviously would And that we certain time, that risk point on and that were other at somewhat in We our mortgage time. XXXX Southwest smaller at time, ACH of managed you and had we we a time. we a crisis way cash the and at issue clients time Midwest were greater for company. lot management in because And the changed cash say XXXX, were us. became had it at that factors. flow for

now right cash we are the to risk. time the exposure at flow time. changes that things protect focusing made actually that and ACH at But back we on things three on three So focused we're for

We innovate continue to on aggressive providing were also our continue software clients. to we of new through to the we in focus adding development service world-class our clients, and rapid

And so a the today. those the lessons are and XXXX activities on that we're right from same focused little now, different but 'XX it's same or

the been of et then guys sales kind in video that. by Thank doing -- had you very question was saw we follow-up. month calls that kind for approach in like of maybe the good And -- And local. of And out over I gave had you your I working -- now think from Okay. of statement it you next have on cetera. a terms The I etcetera. home productivity

moment seeing you're what force your the engage, one terms engage in. sales see to of ability etcetera? you willingness the in month from field at to We're Can in

getting you're data points hopefully some So already.

Yes.

X inside about XX, them group. XX so, the added long we for of sold we built until a time X last months about And Again had in teams sales. years the over for then X and sales inside we face-to-face we've out

selling So a experience bit we've with little had of virtually.

into this to ran had very sales year value momentum. into We proposition the I strong Then came strong that resonate. continue will with say, we we a pandemic.

Sunday all the model. offices virtual moved them And sales so to and work-from-home March XX, closed actually we on

really of those During new XX March the all on appointments beginning and we of focused sales a the outside sales organization March on XX retraining our week weeks and model. rescheduled somewhat

business During those our for two XX% dropped weeks booked those about two sales weeks.

been April, we week the sales the March at the been booked of previously. we level our then XX, had XX% pre-COVID. back selling to numbers what believe of up booked rest actually the During subsequent And would began week of sales same we're which have was I were

week. a to sales perspective, used that business from sell a bookings to a could go on I through sales this. So tell we it calls be can manager continue six you

go two can six they on days. Now in

individuals with engaged are they still reps so And home. as also highly work from

virtual of type actually the us. -- actually say and of them clients into then are a our office to may clients virtually go -- Some use prospective should actually with our I engage technology

it's will to there But transformation accelerated still and digital buying tell through people good has time that is you out this. a there the buy. I

I value is stronger think today proposition our less so. not

success sales. And with having some we're so,

good Okay, luck.

you. Thank

Our next ahead. question Go is from Jefferies. Samad from Samana

good my this is and echo staying Hi, well I questions type Thanks afternoon. of hope for to environment. doing -- everybody I in would I taking safe and like

into to in first So consistent stands I that it you've you question with broadly. I change you in for pace seen April? more that Can pre-crisis control customer as base you've has month guess that of just my just seen -- does So that the one clarity clarify? Craig, guess for mean change unemployment from the been said kind what's Paycom's

can can think take would that that point an be unemployment. say increase unreasonable it The it chime U.S. market the is of of as I also I Craig not as sampling Paycom would relates and in size payrolls. the in. the to rate we're Samad to well would follow that accurate

industry-agnostic. are We

industries. So across we're diversified all

other are unemployment, day last out. your comes the check that comes Illinois the next going are There many to number having pay states it to states California, when impact we actually see from or before you're same either Oftentimes, where day pay date. unemployment to Massachusetts,

the last going receive And unemployment actually to so -- in being prior oftentimes to then filing and someone's their check within number.

wouldn't would be it follow so to that that. think we And unreasonable

million if out Unemployment, for there been months, of it kind run this. consistent. it's between last at and anywhere will to X.X% from XXX in X.X% the look XXX It's say workforce. to the available trailing on you XX I based fairly Americans that's million

So you calculate that.

to you jump. saw of last where that specifically March And or March; Since to that would really see unemployed. million We expect. March time we've It jumped X.X weeks think couple million that I for jump we X.X% million of is looks the XXth, could in April, XX in started you're looking XX about at hit like filed. -- claims had those since of April unemployment it

with the that XXX it up And it going to that you workforce, come over a do you're than or available X.X% unemployment that was that so division had the X.X-ish the March. different -- been number in

accelerate visibility numbers. some don't stabilize. into right that happening There is these we all necessarily with don't so know they'll that's if through And now We have saying we're We had know second are our changes if quarter. unemployment. will

And so I think it's just too early to tell.

factors have to an mitigating our revenue. we on But platform. continuing unemployment impact clients does current client new are The our add have that onto

We to might as as would say logo always been I clients well people adds. upsells are right any engaging have do by dwarfed those but now current we seeing new that

industry-agnostic. hotels, those industries though would I clients echo restaurants Chad we very like said. overexposed Yes. hit some do are Even of and are And who in what have those we're and any hardest industries to not

for a is lot component And who've typically maybe appreciate. a of thorough contract what investors based or a question you count answer. of Thank percentage then asked follow-up. the one There's is just processed. head that that's us been on payrolls Great. versus fixed really what about variable I

we're So, would any percentage as be you it us. helpful it framing can in Is directional math. just the give It doing XX%? XX%? Is

information this to out. I'm and talk going it I ahead to out just give billing. but Sure. I'm before going given Well, our go haven't about

one and a have fee base We is fee base that for employee.

to fee, system you we're have if right? employee all the Paycom you're Paycom using and so one with the base And have going

a base close client may that can on fee fees. gets smaller bill. employee few you and percent percentage might as client. base Now, the measurable distributed But -- to substantially the that be fee larger on multiple client's very revenue equal of loss loss gets into But base of a more the if states, employees you clients you a have ultimately percent to the have loss that employee add multiple becomes

it the in you to exactly figure is client with how before of base of really could So, out really size fee has there. just much do

client necessarily We're employee and/or attrition seeing is out when really of either increased increased not will we're count. we're going it someone The impact business. impact it as seeing about attrition talking units from say client seeing leaving whether relates leaving. the I not this. be Now, We're someone to

most working XX. checks go growth we're and the with but for that might running have in even with been are are again, now do XXX part, clients The that some not checks we running may from have that normally XXX the they're some have ones this, running several clients impacted, us, but all and

But to going impacted the be number still we're unemployment client. so we're that to have again by And going

the I'll appreciate wish and next pass along again. really and openness person. well you the Thanks I guys to

question is next Mark Our from from JPMorgan. Go ahead. Murphy

Samad's wanted you follow timing, I very good thank much. question up Yes, Actually to Chad. on

the Just math to clarify on unemployment. the

seen of workforce XX million. a of million So we've unemployment claims about out XXX

I I'm they for the -- a Paycom So you furloughed the then get that be they've if then right you'd paid be the about just and still employees not so furloughed is Or and wouldn't employees? are they're still and XX%. accurate? unemployment, getting applied -- system payee in curious for guess,

using job is mean, as through. not that term has a the furloughed still an really furloughed employee accurate. how it depending but would employee employees based their not That Paycom's number is model on is on goes I typically of be you're paid. paid

that want use from Now begin unemployment off remain that. app. number, check far how come as the and on They they employees would -- in when we'll employees included may furlough, billing them employee but active be as to and they would system. our in our furloughed continue to those also would And we receive to

similar our terminated, system, to number, furloughed, different different into back going to impact very pays. take But someone's have termination they in going in turn codes although active all have off activities should laid our have because those you're those a rehiring that regards to them as

understood. Maybe try it head in been then to think plan? count level -- up business might a it to think at they what XXX employees, you customer stabilize to And think to At able ascertain if as would all your their they instance, base bottom, trough Okay, think where to I'll May. just the to of when drop try going to they it's if you've follow-up, rehiring. for perhaps curious at inform would a ramp pace would customer XXX. survey to I'm your perhaps it had then back give XXX they

could You then plan able recalibrate reduction create some look? a that will anecdotes XX% to how and on to somewhat at enough try a least of been to like their do on headcount. anything even Have type scientifically or that in guess to have you

makes I things many Well, predictable. something be a able once some which see stabilization, we'll that trend do there's that think we and/or to

the if For many do clients, our it. factors about you of same they we think have that unknown

We to way. really talk the we So different clients. good little impacts, able industries over definitely of might be I staying get different being might them it that just early our a board. kind in But to to to information mean able be been and timing. all areas and see a basis it's continual close but potentially are we we've on on

themselves. quarter that as decision steps throughout really we'll on There's still goes information we to have point on for go don't is know a upfront? the Do take that made took a We don't or they year, them We the that it March a state for remain think at know this certain hit a because And stabilizes in I March phase more it yet. that. at. additional they where And into stabilizes. hopeful some company just steady

you with -- thing some payroll one forgiveness people too assistance. like applied loan so the example we you a and those have they of gave, the may XX% on program Mark protection have then see of as for use if rehire that well. And that but under some Yes, the that rules to can

discounts environment? very Craig one asking prospects change final is deferrals then to or question, And for respect in any price this, or of, customers payment kind with there Okay.

model pricing impacting that's is thing actually us It's the very Our now. fair. right

off paying Our within of based pricing system that model is you're number the employees substantially. the

maybe were before XX I so to going employees. us that I'm and they paying Well, when company. And employees employees, XXX that take now employees. said XXX they're for there are obviously XXX

they're us paying XX. Now for that they're XX,

So pricing make we reason would that's our model I this at any model fair changes see wouldn't a and point. that to

very good. so Thank Okay, much. you

You bet.

Go question ahead. Our is next from Brad from Stifel. Reback

Thanks Great. remotely? your can new the a business give implement you on Chad us of ability sense very to activity, much.

the Yes. lot to is to we say done. not able it's were to doing, necessarily our to a mean way of similar implement be implementations. very I'm I going

client. have the transition with definitely conversation You rep the that with

either You Oklahoma go implementation done has most through training and/or Dallas of that way. all the But area. substantially City our through been

so lot done was and of exception the the the with really And training of a anyway data remotely it collection.

we've an for also sales group As inside a reminder, had quite time. some

So, seeing implement. for not more -- to difficult it no more us we're difficult being becoming

traditionally In faster what had. fact, implementations they our are than the and measurement through quarters first going

And somewhat. Tuesday have -- honestly, you is set on have call we two appointment three might a we or sales we've in I that weeks. an so the tell can and a that process before

on people at having Now And we most be appointment table. we're Wednesday. a we're setting getting Tuesday, the on that that could appointment

-- from able being wouldn't I definitely it it's so, us say And to hasn't down slowed convert.

to bit even that that right clients have clients situation where -- have But have current out a due I could really to in will don't that. anything regards that that's longer, be that anyway, leave you may to but You choose I in, little call to they the would now. wait

-- paying you or the Great. four over on follow-up. customers one number it quick basis the Have a the people Thanks. in decline weekly that last we'll a of seen paying moderation are call your rate And weeks? in you're of three

follow would what back go wouldn't continue to to rate. unreasonable in the that think we I'll to I It be said. Well increases unemployment

some that that to point. hoping level of would you And stabilization be at so, moderate would some

it. you. Got Thank

You bet.

from Marcon is Go Baird. question Mark ahead. Our from next

question wishes you safety for for Craig. can I'm Hey, best wondering, good just the bit, my unemployment. a Thanks during of the times. and talk little this impact on taking follow-on Chad and a afternoon,

number If client terms the just decline think sizes. of there? varies But you paid, we're know taking at sensitivity from across should revenue a portfolio we about that? we the perspective? in about to a as employees have a how that does it I of if How different what look a think the should translate the X% whole,

mean up clients, fee a from that, larger I larger does the be ratio been you're base it's size a Smaller one-employee company. closer a to eaten really meaning clients. going to clients. close yes, But to depend X:X, clients, be going X:X in on you're mean lot of larger less, that, to has by I because client, that it the definitely

Now loss be have you're to to mean, close revenue. of XX- to going I quite if ratio up going to mean still talking XX-employee to client X,XXX, in equals X% going X% there. I bit But about or closer in the you're XXX, once company, their loss in you're is XXX, a base a X,XXX, employment XXX, current

Okay. And there with with regards older the you in any the that the clients some mix attraction way more any Is there to self-service Or changed sounds would from there of that get been you terms shape any bit lead has sales or form? talk mobile that? special who in you're about Can providers? little from? tremendous. -- regards to has a new to then change winning Is like capabilities

hitting on-the-Go, will the say usual stronger people as usual this on rate We're about was ways. Manager rate It's We us. what period. we've weeks the using for a out having. XX mobile much our Manager question. as almost first are DDX as app for adoption them was mean same do for By that now. gone suspects our we're for employee it's the well success product interesting app through on-the-Go Many an I the Ask launch the Here employee talked environment. our have the rolling I I adoption double,

having levels engagement. we're so of high And

of engagement have not our competitors have. say I any the And would of so level that we

do we so from to And continue people suspects. the onboard usual

there models have may in even in-house now those environment. much are do regional very in that more some right or And licensed using systems out more You some were been that have competitors software. this nature disrupted

have ago. that even more of them value We efficiencies. low-hanging call we have extent, two forced what now, to Right to proposition success, But to years us lot who fruit people also make area. of the or So additional going think They the back. just in understand was a a ready lot for it It it's was. having are we the pitched clients, be weren't I move. we're one because look to the

companies all more our this most what think to on side. I of that's just make do come we're the going part efficiency out to leaner and efficient happens and sure

you. Thank Terrific.

is Daniel ahead. from question next Our from Jester Go Citi.

employees at I clients' seeing is in the Great. Thank of there so your comments volatility. you churn for impact you're account. But as macroeconomic is the just situation taking risk my question. I appreciate reduction this from suspect higher your about extends most that the of of far

is a up over even you're keep great wondering, job these the just times? retention, done I'm to retention improve uncertain putting place in there So you've anything improving or specific help in years

we really go about might out you're a retention, a business mean, of talking helping business, impact actual there. whole the I for can if client of in there's that loss them that other them of lot might make stay find help than not resources

employees. Now, what even than XX announced have I companies that of derived from XX% revenue is we will our greater IPO, is that at say

point away. be that -- us, not a at far bet is of more as for And what going greater XX% to than so decrease than and a we're only so it's well, My revenue. percent as today, higher that's is seeing this it's a much go

client we Now, as things how how we are call long improve this. here of in But out long someone failure improve? We -- can't I really out out that on can on answered that to out last? when some they can call sit is may We business call we today. What -- those a unemployment -- today, in business be Do can't having revenues. call failures. business those business can impact we failures should say, revenue

And not? briefly wondering then of wonder you. times there. I'm your improvement and move prepared back either Thank -- whether do you. the remarks well turbulence? of just times or managing mentioned these even stick people to about crisis, they're just the customers across your in does you've Thank and you in go seen from automation? this through on engagement DDX usage the what based is in away old DDX Great. automation times ways of in in consistent Or I

good a That's really actually question.

DDX of has level we've scores right some through seen score environment anecdotes. that, you DDX had XXX% It's going areas. just to XX% you kind couple in people say to sort this, have saying the that not and but the we're it go see impact score we'll were to go I the a you'll -- adopting, now -- DDX adopting in where a on of continued -- made their I'm not have forced had to -- clients have this up. can a actually of XXX% are adoption. If of adoption, negative let's it scores. certain that been not DDX they to forces It just have you We DDX tell up.

system a the measurement is DDX a way. and employee measurement actually the using of usage of Now correct

they so the would than more past. that system I the what correct by saying And using the more way in are today people had just answer and

very much. Great. Thank you

Schwartz Oppenheimer. from Go Brian question Our is ahead. next from

sales was or this us color If seeing ahead. could wondering, by you be Yes. activity in Thanks. there's Chad, on my think reason the size the the additional either for that some lead you're Thanks activity provide I question should for to company size. different what the if sales terms by of just elevated materially any business Hi. taking for company afternoon.

No.

on So, a I'm not doing from announcing anything different size we're what perspective.

We small continue both to earnings teams I sell inside we four our it continue think to out in have out above that market. I I also had range. and to that that business was last called called sales -- call, sell

seen always above, range even see So come to in top very for us. we've we clients or that. I consistent been continue end of would at say that's our the Yes, but

that the that so, we see. consistent it's very also leads been And would be consistent and with

you. Thank

Capital next is ahead. from Alex from RBC question Our Markets. Go Zukin

for staying usually? of there. bookings Maybe taking one quarter can traditionally you're Chad, the kind a glad how just maybe, one. business? from an on And Hey, visibility first out intra-quarter hear and you question typically, have then, the on or you us of our guys. like, remind the to quarter Thanks typically the linearity safe do on perspective, much

Yes.

is our they'll on month. mean, month bookings, you can well, was to So, two our say typically largest first tell I August that, this. I -- all, Typically month years ago, of of great sales would say I'll month. change. summer I kind the booked

So it pipeline, up ebbs fill over. you just pipeline. depends. then your close You It and They're right? flows, all

us. common be prospective would your most is our a industry It space would would come, where end largest that tell for because the for all the booking is in January year clients start for admittedly most numbers month of you, just companies large our

higher. be do you so, expect to sales And

sales of December can call kind say matter it industry time even we're leads question. which booked for They'll visibility your pipeline, through in selling for a season, fact, point on a sales significant open do It continual As to which out I tell up the season. in hard to has is it's for selling other. really to the really with with, to how one September us gearing frame. of we're clearing basis versus Paycom, you we're area and that people some our fast

get them they've likelihood being of in days, the been somebody our have period. the to get to closed smaller. our up continue goal we engaged throughout six be able them today, and pipeline move It's with in that our much pipeline for that to within we forward process If deals XX-day XX the to close, is eight-week to closing, a sales in to

get when them pipeline on sure sooner because should the than we have going to it solution, wouldn't as to trust we six-month start we a myself, to six-month So rather visibility? sales, so that it ROI the they be those comes relates some. receiving Do businesses I have able that to three can visibility, booked later. for are

a just as And it. Got then, maybe follow-up.

anticipate probably to in to about the to trend sell balance in any like, any those -- into do you're I to continue? of you when And, changes you of to customer something little seeing and kind this of have new meaningful to April much customer, some of how being levels kind Do a year, is that you're from off? of if hear insulate that are pre-COVID anticipating anticipate so, Do that the that? base anticipate bit kind returned think, think not you us surprised pretty churn. levels you bookings

hope what a to confidence -- level our today now. were between we I those if think, in think, through continuing, as right of that be able say of than I trend there's a quantify appointment difference if high that have we're doing I April we mean, providing I they -- have of and were even and be to I a the numbers similar would are we lot anticipation. more information really Well, -- will pre-COVID. able

down. meetings the interest and our hasn't ability hadn't so, slowed down to And slowed those have

your say, a hope long. we As mean, I drop And, if I client XX when to I happens might doesn't I mean, XXX visibility. going what their I can to that's for a great not far certain example know in as really answer on maybe, happen. employees, would business, have that, the losing something clients, from after use to which environment see to that same too don't we're client I'm again

making their per really decisions it's they're That's a basis client -- on about what to depend going business. almost

now. hard point but think come So now. be that, -- I it's there's to going judge hard don't about it's that I'm I going we'll in we're to have talking that. that unable -- And think forever to do a hard right better tell right time on information just to to to it's judge where it's

Thank it. Got you.

Go is MacDonald Our head. Needham Company. next Ryan from question & from

in to furloughs Hi. Chad of or your with of difference, a clients employee think furloughing just versus and versus a employee. whether Craig. the this I mix entered seeing you're Thanks for far layoffs before of about thus have taking that that's code talk seen off Can in terms there's an my at you a an question. you Chad, bit what point? the lays extent you that customer mentioned

just between go an type really between later. through difference okay, a between revenue or from be going to off the between that or them, -- method go said. laid employee an back furlough, going some will do onboarding clients using termination back I what on something the you're to of a employee you asking The understand different might perspective. be to method would same impact through you're I don't I and even us No. know

code mean, someone who not laid put has for be exact those a give of I and the I termination in impact within those furloughed off. to no, though, one wouldn't you versus the any that's furloughed revenue able So, numbers have our been of going and/or system it's on All them terminated to say, same choose. payment, they're they active, left receiving or those to which regardless but one of if

in it. just on a follow-up. touch Got then I to wanted the And gross margins quarter.

XX% the I margins here, range. been quarter think in past over running first to have gross few XX% that years

that something there these at a really products strong we XX%. or of increase Is saw expanded on What quarter? year-over-year some drove the performance nice self-service perhaps else? a had it during from You usage the basis that

than that because it same into right? little I Craig volume are gained understand even but well, calls even on of product. clients prior the And less we're calls the are correctly. -- we product Yes. bit I mean, from their our a I'll has in now let definitely usage so receiving call about the are into using been and Paycom efficiencies and you're equal it volumes using to year the coming this, quarter, that or employees talked Paycom, having mean, call definitely correctly. less having chime They coming you're before

having And been doing strategies usage we're full a and with clients year. onboarding success. a And lot we've over we're more also for that so

And clients do fixing strategy. all the a have of to so don't if will, right lot the you getting we to

have So gains some definitely I'm you there's of will about. sure efficiencies other some that, talk Craig and

department department larger a to I as Yes. correctly, service the clients -- is to as system well. volume service able system are are using and handle the mean, our a use obviously, our able

as past in we've that about So that we've talked the seen well. and

thing To XXXX. servicing had give Ryan, one was of the clients clients number same individuals more as end we December individuals in on the December of servicing XXXX had number you that of service we that at the the -- service

Yes.

Chad in think XXXX and XXXX. I

Sorry, XXXX and XXXX.

XXXX and XXXX.

we had we service the number end basically of Not at the XXXX at of XXXX. as of The clients same was had servicing individuals end the XXXX.

using service to are have better. service the going that when efficiencies because you're to the more is you So client clients individuals system get some able

for the Great. Thanks color.

You bet.

Siti from ahead. Panigrahi is Go next question from Our Mizuho.

about something we're Panigrahi. up following Yes, activities the new hearing. taking Thanks for Siti we that's a leads comment application. mission-critical different Chad on businesses is have just pre-COVID your my question. mostly What focusing seeing business level, on been

starting... Is a the do that these for switching payroll now motivation sharing what of motivation point? think So, And -- kind you you've customers pre-COVID are been then different mainly at those this right level? what's there then most of their

And I will important would that also very a things to part lot more I of that looking extent and Well efficient. still I They're have the I doing No. say system business waste. and to say the benefits become a this. payroll in we're business does. is of liked don't what any would businesses ever waste. say think the any administration

critical I someone know same So, is to environment that align of thought is when engage now their with I that functions, the don't critical. types employees this that right with we're about doing during talking that less things

call lot there's Yes, No. really say we all? drop the them don't out all we've train then, sales pistons But we don't top to have businesses of all been to dropped flow two the sales. booked definitely many since priority weeks week them to of a that they're in And of took I and kind save out we throughout back. third areas get efforts the that people U.S. their to took sales. perspective, understand to top am week weeks are. continuing and to success going those and we sell to I in pistols But And our the for coming for cash all the have from back having it in I regards where anything are XX% firing firing results XX% did we're this and And the we for other sales we and business. -- having the us we Are businesses? week. the one manage a drive priority management to two have

in Got sales, others? I than given inside inside sales inside particular And verticals there to -- more any hire is activities are increased sales also year? to it. wanted efficiency more you seeing And this interest like ask are planning that you

Yes.

are be through continue are going Paycom. time great There a that employees. what what, We that XXXX-employee companies industry-agnostic. And to you convert there's to know XXX -- now industries to are

you pay only for You the through. XXX employees work like year-end that almost conversion. It's a

convert so, great Paycom. times are to And to those

We're industry-agnostic.

right? this. doesn't it market on in we've us, want going to got we that And be focused rate. gaining through is. got as the the matter come some winner We through we For to headwinds, come share someone where this. net interest We're as be We've

Now We've it's at continues zero. that got to unemployment climb.

us which we've will. through reverse you give doing service product three absolutely like we absolutely mentioned on that have the organic right to we some continue more to is rapid which to clients have going key things this; during add areas tailwinds continuing focused done we're that to roll out done continue our platform, world-class as which and the we're to on this development if we're feel things I If these and

want to So, furloughing, growing face it's clients want we right focused very if do important laying this. now, just employees. business. now a doesn't on We we Right like all. in is get of for client who stay are them to clients we're matter open We the It those already to that me off all. those get terminating,

Chad. Thank you,

you. Thank

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

call thank joining all everyone on like valuable to I'd today. a doing. send for the All Paycom for us right. the want they're thank I employees to you to work special

are to on Over Thank we we'll May continued the the JPMorgan operator. conference meeting investors with conferences. many of these We with And at you will at your on virtually June virtual. you, XX. be look Paycom May participate next of in meeting in XX. Stifel also and months, interest conference the Both be Needham in of We'll Baird soon. and appreciate the couple forward

disconnect. may You

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

You disconnect. may now