Paycom Software (PAYC) 3 Aug 222022 Q2 Earnings call transcript

Good afternoon. Thank you for attending today’s Paycom Software Second Quarter 2022 Quarterly Results Conference Call. My name is Bethany, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions-and-answers at the end. [Operator Instructions] I would now like to pass the conference over to our host, James Samford, Head of Investor Relations. ahead. go Please

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

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

to as A will our financial should Officer. that not these and and information, a purposes. it financial to consider to Richison, over to information. and date market applicable Chad? planning forward-looking factors statement review measures website we non-GAAP non-GAAP forward-looking release net Paycom’s our results refer on call Executive President investors.paycom.com. after Also schedule of relying made the speaks income, expenses. is I except adjusted otherwise, any and including and is adjusted during to gross today and versus on turn profit, Any the when non-GAAP undertake in the for adjusted close available such result non-GAAP adjusted we We the and statements, issued only gross now required law. as Chad margin the on of expressly do Chief at is press showing and use included certain will performance GAAP as disclaim assess whether forward-looking update made obligation events or new which today’s refer future certain You of these call, our measures, EBITDA, or alter by we reconciliation

few the Thanks, James, to another joining then our questions. and on minutes then strong everyone today. and our to Craig spend turn and over quarter. financials We our thank call take highlights we'll you to and guidance, had a review very I'll it

$XXX year-over-year Our continued very second in strength approximately in of with XXXX up from new sales. XX% came recurring strong, million revenue revenue quarter business

continue do as the experience XX% base That's Beti nearly to manual its no themselves. only to our continue is on to disservice. automation and the payroll We companies I management our the human off. their or more solutions are the the initiative all business that Beti year client systems to employee doing transfer any believe over is strong realize and Beti, have in will years for future sense demand employees, paying employees ROI we like usage and I've is innovative and our in embrace our see is payroll. employees been platform for is promises. payroll is deploy progress, a at business for clients archaic the doing If We’ve businesses and them, by any embraced XX,XXX XXXX payroll. order eventually self-service self-service that payroll, win it efforts in as wins inefficiently payroll At Beti. correct of their company itself do of great multiple the employees a finally the way already performed Beti. expect are having but our way and It processes. interactions data of employees clients company employee data usage core for through by clients When said, or leading capital how both employees which to makes of strategy The

this We through reinforcing marketing efforts. message our are

activities, unnecessary on calls particular, see target campaign to higher, to range. strong Overall, eliminate growth. feedback has and the our leads contributor average to across and marketing the ad new launched and market deliver recognition continues very recently demo plan and driving employees In per to early Our positive. strong an been we businesses our clients, leads brand important revenue strong client continue which from is their larger

to On our outside gains sales team XX our the sales front, penetration target well share into and continue driving deeper perform market geographies.

roughly very we geographically, have country X% large we a and estimate covered we the growing of have approximately While half only TAM. of

come. our of growth XXXX growth half rapid expectation for margin of sum second first have long and acceleration financial of finished XXXX results. expansion. a very the We the to year, become has for With we up, To many runway half for years with the year strong a

payroll Our our financials Craig on another milestone new growth a is self-service are for thank review and for to very with call employee resonating strong onboarding employees I focused want quarter strategy we making and differentiated With at to and the clients pace. of usage I'll guidance, this our turn over a Craig? that, prospects, product quarter.

Chad. Thanks,

I to that be would third financial everyone review XXXX, measures on non-GAAP a my quarter basis. outlook the like remind full I second relating Before comments and our year will and our for certain quarter to

comparable predominantly the Second year QX, over $XXX.X recurring client we strong quarter from year. very with XXXX growth, past of new total revenue additions results over excellent, million period. representing were of the had growth prior XX% revenues In

XX% prior was by growth XX%. and period. an achieve revenue revenue the in and expense million wins. and Total representing recurring second target period. comparable demand for XX.X% of strong margin business million to quarter million, year are compared quarter XXXX gross year total year quarter, was representing the Within of margin $XX.X new of for we revenues easy of or adjusted from on the use for solutions to to gross XX.X% focused $XXX.X Adjusted be adjusted the marketing gross driven continues in and revenues the second the adjusted $XXX.X total sales was success revenues, full of strong profit XX% XX.X% second of revenues Our to approximately attracting prior quarter for our growing employee for

of continue We remainder continue our and expense to invest strong plan Adjusted of in in investment $XX.X XXXX. and the to to aggressively spin on through marketing see was R&D return from advertising in million advertising second $XX.X or quarter capitalized portion second XX.X% period. were quarter compared prior Adjusted the million the R&D total $XX of in including total revenues. year XXXX costs, the the to million

or total innovation million compared total was We of will the in world to of second in revenues of or EBITDA $XX XX.X% quarter prior million in invest revenues. continue to products. class Adjusted $XXX.X XXXX XX.X% our in the year

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

For XXXX, we our tax effective GAAP rate XX% anticipate approximately income full to be a year basis. on

million the increased was held sheet. with of balance total equivalents million. on term the purposes, million of We cash and liquidity billion through Turning recently and but our ended of us proceeds expenditures up of corporate as million $XXX Potential daily $XXX second and are borrow general of buybacks. quarter draw not clients an quarter delayed of include, stock additional of behalf cash in approximately expanded the that debt needed. a to to balance $X to loan funds limited approximately We allows to $XX line $XXX uses credit The XXXX. capital revolving an average of and

of a of dislocation million advantage quarter of repurchased Paycom second took XXX,XXX million, XXXX, shares we $XXX roughly approximately have June repurchased has in and in total a Through million and program. we XXX total of our currently XX, nearly the for buyback X.XX nearly for million. XXXX, During market, stock XXX remaining the since XXXX, shares

turn Now, let to me guidance.

very year are to a guidance the billion second financial at strength our We expect billion XX% the We and $X.XXX in trends. the performance the of range demand or now year-over-year of full range. of continued raising $X.XXX of growth quarter strong as midpoint XXXX revenue result

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

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

We million representing runway $XXX expect million adjusted adjusted range. years EBITDA an high With for of the continued growth for for $XXX third a quarter XX% margin come. long to in range at only share the we margin a of of have EBITDA of the to growing TAM, revenue X% midpoint the

With achieved line and with way to our of for we margin open our improvement with client go-to-market and we solutions that, well the well adjusted raised the revenue new differentiated driving will we Our guidance a guidance, strategy, higher on Beti and XXXX. growth, are revenue Rule Operator? growth per EBITDA questions. client. XX Combining over working XXXX implies are deliver material in for particularly

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

Can there? a still Thank rate talk big Thank over you. data you for first Employment is we or second bit changes strong. there Congratulations of like changes in you're My can forward? going of very, fits question just remind Two you you again. seeing demand congrats Obviously, quarter. about quick But a everyone's questions. numbers question very macro the you. little out -- different that my is It's and end. customers? from Chad, mind. Obviously, question. what from us into everyone end for my behavior are that quite seeing a anything you're how last a Craig have bit on terms your

take You bet. I'll Thank you, Raimo. first. the

really very I will difficult back in was market. aren't believe seen change more past. as it's where market. it in XXXX, mean, to ago, from we're a people hire much much as in -- months that an where was no back we I not it we've say I an say equally way seeing employer-employee I Now were X maybe but yoked employee's that we what of nowhere of it's would And still to the

we're still there at talent. a very fight somewhat and jobs for lot of a of out all So, in still unfilled, a there's it's -- still

Raimo, every income, Fed interest about points of but interest that million on basis interest annualized rate it's -- goes layered the question, the for $X in. rate typically we up, XX get funds

some. and So, we then we one saw May, saw in June and July,

third in in some So in as and those quarter quarter, layer then fourth well. will some

Okay, perfect. you. Thank Congrats again.

you. Thank

Thank you.

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

just level it's that as seeing similar you needs afternoon, Chad, Maybe results. goes? cycles far and seeing of a great similar you as or deal good the first changes the in Are of the closing typical in What to seeing any are terms actually to? cycle? deals deal approval of rates to go lengths see strong terms one, in terms closed of Hey, you are

changes no from Yes, seeing. been we've there what

As those and that far would they're able in as say if first definitely up, the close we our and getting being into anything, in to have, going move more percentages, interest I calls timeline calls. second we're the

So in the our been strong similar we're that. But in close all having all, more success to and ratios very very they've remain what with past.

on just comparison? staffing still of -- the maybe -- and those And but maybe I compared openings the it's of in, we terms ramp, know sales Great. early maybe offices. office for productivity the the where prior we're new are in to newer Any on

is one any reps. going say of or over than as very of reps maturity today. Today's reps would far more our They're to we'll add of productive period. to offices continue number to reps going start to be But the then progression I three as productive would been. so have are the a more staffing reps off similar. course new the is yesteryears of X-year The that's what And with new similar.

point, at they're and both some and all fully with they course, Of backlogs. have staffed eight pipelines

X years, an the we quota in so would what cities those the city. have carry And after as had same -- existing

for again see good and taking to great Thanks questions, numbers. Great. my okay. Okay, the

you. Thank

Thank you.

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

customers employment of overall That's on great. that very have your your Thanks impact much. what type historically remind levels Chad, growth? has us you can

bit the And beginning and the year cycles. with two really months next the X numbers the but would for overnight, wouldn't right hard a say which I very today, little exception impacted We've mean, client be to because in they're be a solid us. still in they're had on unemployment. sit base, would unemployment that That low. little at now. a regards haven't an mean, if we're of impact of doubles I of still unemployment might multiple over to base, even here current pandemic me you normal I retreat year mean, there mean, the gyrations it will reasonable have But I unemployment thinking, one. remain XXth a months now our open as of to you said, employee already job where you different is Yes, then XX pandemic, was say gone [ph]. an -- have bit believe our we some through different. overnight some everybody fairly out start you still jobs wants have that point, have quite I with at And million with it does

That's great. Thanks much. very

Thank you.

you, Mr. Thank Reback.

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

and Chad Hey, Craig.

client what that bit Wondering, Let big a average little companies client? getting, size to me sort bit coming difference relative How to from -- a strong what ago? Terrific big add pipeline? are a into particularly now how you're you a seeing? can the you leads the larger about some about And results. now say that is talk my year congratulations. of talk of Can little the are the you're

Well, up increased it as up XX,XXX. our it you continues range remember, that to about longer ago, to a a was we little because maybe go year

so, a bit. than up that little whole go And us to to go massive there's shift continue for a say a to wouldn't higher now. been going it's lot right that obviously, I

us I more to that used that necessarily easy have single range. not of right and are next from the success. experience, been leads same a target getting really that say what A employees within having lot range, have the have still coming would is we're of went that that quadruple But there's continue engage to of our to we wanting use experience elsewhere, we're above they and at companies are now lot well range, company to. So is,

as yielding both great is So in and through say of indirect results our we're efforts, which for which leads I'll us. marketing lot strong well advertising bring continuing still having still through and to demo success a that as are

the great. X last to of effective That's the And regards able were yield was then, to balances, off what that you float with generate months?

haven't I fairly we short-term. disclosed we're Mark, Yes, it what but investing is, mean, still yield

money papers commercial have from as market We overnight well.

of a paying that chasing we're yield, attention not we're but to of So, mix and kind it.

more promising. Okay. Obviously, getting and Thank you. more

Thank you.

Mr. you, Thank Marcon.

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

One you're on ask, seeing same again Chad, clearly the saying the the throughout Hi. Are Thanks similar for the taking here gotten terrific inflationary Chad, these And my trends quarter. in the have for closures Craig, for worse your retaining owe -- you, congratulations questions. that on I higher lead closers flow we also? one with you're then margin. like But question to deal I Craig. you results. EBITDA ASPs. know that the [ph] want to factors guidance commentary

the holding the you half year? maintain Thanks. second wondering, So to that is are I'm in of efficiencies sort just you overcome? to business margin the planned of you that the that because are you're that able maybe spend had back able of Or any of

Sure.

we remain the in on to on do of pressure strategy no opportunities that -- but marketing more generate target us. are I We're always bread still That's through doubt deploy larger That's the coming there's focused relentlessly first, mean, continue targeted -- also that clients, for and target also with our continue our that. very larger general we to leads to efforts, applied very the prospecting. we but So butter. leads definitely, been

the some any and leverage really some not but model Yes, question, holding inflationary for the we've in back inflationary to we're on seen look we're hires. where overall continuing and pockets terms of higher areas, seeing throughout

model. leverage finding the Just throughout

you. Thank

Thank you.

Schwartz. you, Thank Mr.

from Please go Ryan Needham. the comes MacDonald with question line next of ahead. Our

market my in country quarter. Thanks questions. taking nearly you've Chad, for geographically, Craig. this your great talked remarks, Hi, a the prepared on Congrats X% you dynamic Chad currently. but covered where about and got half penetration only

be perhaps investment? investment spend expansion think where and half you offices, most geographic advertising the continuing awareness, with you of teams? back of of brand pie, in to incremental about continued the build that this portion year Whether the Thanks. or to incremental expansion Paycom's As the it expand new sales do terms see value inside in continuing

us Well, outside at number one, the sales to better get is continuing process.

the in. opportunity market we're more there. there out that out X% within We have markets of only We the for have us

us continuing So, number there out I get selling proposition prospects. say at value would our one is to for better to

employee We pulled strong have be all level. we the value way are continued to up to because market, the proposition of down that delivering the

be as I And leads in tend aggregate, the past. little so, that more to well. bit we than more them are larger get say, And continuing what to had of would there's we've a in

been that's able that. executing our at better being is so sell really, focus to And getting and

alone that makes the at do geographically And have isn't able of better And at sourcing getting sense to leads, continue staffing do them. them. it strategy. our at expanding when leadership Now to We're better when we be bench look retargeting to getting only to course, we're then so. and we

timeframe the follow-up, off at Thank you the in the that a about looking investment, could that in you're of that you. can what investments advertising, yield that Thanks. the materially half near-term? a on looking do if for the see whether get impact marketing as when in return we years you look in slowdown sort digital just talk returns you're those of and back to of Maybe the terms

Well, measure we it Yes. weekly.

-- weekly. close demonstration. are So clients have product return mean, with mean for engage very I these these clients. I those mean, a are demo These we our strong good who aren't we ratios, once are And I we know leads. asking very

be it us. for of so, And that more would

And I we very now well proposition both this, extent, really strong far conspiring the with the have slowdown value the some as different very there, employer. to individuals and as to is half here us really their back deploy mean, resonating I well see utilize -- the can't in as don't just that. a technology. with which in As in world help I of year employees is way out the

And wrong. mean, early, that. so I the we're be said we at might I've forefront not many times, but we're of

going to next last continue this to well the employee we're so strategy -- year our And both usage half year. of as as drive the throughout

Congrats Chad. color, the for Thanks again.

Thank you.

MacDonald. Thank Mr. you,

Please Our Siti with comes Mizuho. the ahead. Panigrahi of question from next line go

This behalf I Siti of about a Hi. Panigrahi. on question Alex is had Beti.

quarter. this XX,XXX QX talked uptaking clients about You and in Beti

XK uptake of do You have the part that And per adoption? see of What I’ve a per about be kind can and sort Beti? what growth month answer drove XX,XXX employee clients. you of what adds Beti net from you and upside follow-up. Like

Yes, client should well, One, to reasons. has way I into client that's be really of every year, way is only But on as mean, deployed It the is our grow we new Beti every doing better payroll since quarter of year July upsell reminder, come July continues new to so it's Beti, we them every client. a that's two a part our offering do since -- and a today. to last continue continue for current our someone payroll. to it base for of last system product

revenue you base as with into of it Beti, so upselling as incremental And in opportunity our both is has client then the And opportunity a far mixture of got for us. increase those. that

profile. accretive to it's But we that have different focuses in on modules. every year, So

any and we're Because base. having next greater service payrolls it'll upselling on to go drives we are be to we usage. the of of So And amount corrections can service continue year reduces positive. it does our their correct, really again, through have client. of produce in be I'm doing calls. usage year, if sure of it to to course, and But the provide what the going process corrections not is Beti to -- are focusing one and to client Greater this XXX%

our Beti And employer opportunities. right they service leads satisfaction expectation more experience end so, of changes leads greater for ultimately any we leads on as leads it believe for employee that what that that would also it with done of which experience, clients changes clients, self-service to to way, less to greater the usage us that the expect the their

in Got continues on new of a how to trends expecting slowdown bookings far is your it. so source ADP and potential for my from see you. are Thank major you? and follow-up any was macro trended retention new And And rates, in the second ADP new bookings slowdown business does -- better half? still have business a

Yes, better it company experiencing already the since their impact rates is I'm ADP to take business. ability sell retention sell But to has our started in our retention been surprised I ability not XXXX. XXX%. and and at doesn't

to And it's product again, comprehensive. It's their way As data. be that employees is just easier should more use. interacting our with the own

you. thank right, All

Thank you.

you. Thank

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

Hi, kind recession you. here question. guys. Good to afternoon [indiscernible] with Wanted and thank start of the

macro of how think you versus event, thinking it's are what growth the does fall the think the just of a more you just key change So are And what the may about you bit into a remains the trajectory U.S environment. about unchanged? composition, swing growth in factors that challenged sustainability as

their level happens away. employees on of first about really We're I company, have the that growth shift just some time, I on on and have unemployment. that the macro, a all, thing job. growing. massive impact only the very that incrementally right that would doesn't a could focused automating making a but happen be impact in would to quick somewhat us. on of mean, focused would actually see over we're we're us back talking think do and significant easier That I would office We're focused for on it Well,

get the regardless there. do that's to on that what's means more. to be popular so And opportunity automate And going with have out people always oftentimes when less something they to going

I happened unemployment type hit saw in that's of change something than And and would it us. But pandemic what happened but there. something I'm recession, would larger to we you say happen. unemployment -- I'm impact would our probably not really that. would the a And much just see, have ability we in we expect of have during we'll to say, saying couldn't what necessarily the really that kind about expect at -- definitely feel what grow I happened that weather, to again, once. mean, all is and a good would not sell massive quicker, some But what to lot this take so, prevent in really from rate And But year continuing I XX can't whole would And at that strong really our next a us see rate. business. lot years I a again, through to

So, we've been through different recessions and been past. on different cusps of recessions in the

a Okay, margin comment How thanks. forward this you then free And Can any just Appreciate conversion trends? flow flow. on that. just free free XXXX? cash land cash just you to on follow-up thoughts year? those longer cash term flow for for on And expect

thing have this quarter tax we some year, impacted And benefit or that last some from vestings. our related -- was saw a quarters second level. rate. didn't quarter, just One we We cash year, to free item had the the quite some stock to this we flow, the same discrete

seeing that -- the XXXX think what would then be kind throughout roll as of XXXX. into of this rest would the year I and So, out with we're we indicative more

Thanks.

you. Thank

from comes ahead. Capital with of Jason go Please line question Celino Markets. KeyBanc Next the

from industry for here, how just especially execution? results macro seen upside Thanks given specific company that question. describe would we've and my strong you the taking attribute or backdrop, resilience versus drivers Great. the Really Chad,

a at XXX% billing have going quarter, the it good starts a overperformance into deal a billing only of of of visibility get we when end But going that We believe of could much we of XX% talking upon starts. upside starts about the we start. so it. of we at within to beginning really or quarter, good that have maybe quarter quarter -- third a dependent into get one When when for deal, a Yes, you're quarter course, always deal because starts our revenue really a any is quarter, when matters. in that the if deal the a is

XXX%. in we Of quarters, course, subsequent get

going have us. look -- on have quarter-to-quarter. as for But starting really those say visibility, pretty far at So of when visibility are guiding that, by we top And wins. it's outperformance we then new as to you have delivered always I'd good being the deals client great

Okay, Craig, quarter, perfect. growth the then, very And again, in impressive. XX%

Curious second this. the think some assumes macro kind deceleration. you've for of I guidance on half what assumptions built the modest into

mean, I this guidance, seen at coming as we were Yes, we into mean, point, haven't anything. I

about but half macro we to it, in of of the to very year. we've starting back haven't how guide we're for any sort to see. similar We the baked impact what a done guidance our to hear we the Really, past. You're guiding

As quarter, the And the on off little closer cycle more fourth we a we can that see quarter. get to that's fourth the quarter runs. has bonuses, the

the guiding So, in sitting here how to the we're by beginning we're as in of similar have QX, we past. very

Thanks Okay. the clarification, for Craig.

Thank you.

Celino. Thank you, Mr.

Our next Piper question comes from the line of Arvind Ramnani with Sandler. ahead. Please go

question. thanks taking my for Hi,

separate existing was clients of But expansion of are able kind growth driven how at much new logos? client you results. dimension versus your to I’m good to clearly So trying by

Sure. that making Is the just sure. I'm question?

the but there base. all products we And our business to land do we ahead, new revenue a base. that revenue We believe use if the are I've client and client we and drive correct revenue that question, opportunities majority We as the Okay, the employee into large, that client do to into said our for be we never expand Go clients wins. way to sell that experience. onboard, our new able expand. land that's of us have overwhelming that, continue should to comes Craig. our from

our our new those sales only bringing sales team, thing Arvind outside is, clients, say, One on logos. are teams XX outside would I

So that entire group is bringing on new logos.

an -- still and it's has been past, with of last the logos going in majority did the So where be we exception been new to that what the have the the has came few mix similar years is similar very that But upsell, to upsell. logos. about overwhelming mix the very immediate it to been to was ACA new such --

equal? Perfect. And pricing if been has can here. revenue? been sort been able to layoffs And then is, headwind clients with through? of follow-up on pricing, if second the has just quick turnover thing a that push of or comment you it roughly sort sort Have existing seen you've on you of Or any increases

said in then to Now where it And our about move client only the to that going I far product a talked base. to over pricing pricing our adjustment valuable, that on And that pricing pricing, through a more isn't something about past sense talked we first get time. we've about just also we model was that as the we XXXX. our headwind. we makes We as it create we but believe reasons, in as share the that small subset competitive did small adjustments talking of pricing I've forward, our our do always we're did for we in adjustment, value as did make

thank Perfect, you.

you. Thank

you. Thank

Our the Wolfe next Please Alex ahead. Zukin Research. with question line go of comes from

Hey, guys. incremental a so all have modules on like squeezing for and a more maybe congrats me to I'll lot sounds but try at Thanks selling Beti. guess, of way. you're same these great ask because the It been questions an time, I asked, having in out success it quarter. of different

You're a new of amount tremendous still seeing business.

headwind You employment impacting don't really see rate. a recessionary

incrementally? how the that periods? bookings, look your of you question versus and more you’re main the that is, getting of from are you that value kind the you constitution at growth at I units, from your of prior compare if larger fact would your deals look increased increased guess I new are So have to Meaning does

when of say overall our I represents which added employees, to the comparison XX approximately are year companies business, of have sales very our to than inside that past we your revenue. group on similar would more of exception with those less X% emerging businesses, for that every

companies about think way overall that's X% XX have to is employees less revenue. represent that So, it of than our one

has what growing of is our the clients. size average so, And been other

sales to below our system, companies going be part and we added this employee factor in all emerging XXXX. inside is when diluting we that so divided the And It from different you that any just unit continues been of diluting factor, up. number in if hasn't part year employees that XX year again, of added that group by year-to-year. the of take it total to in And expanded those of go count

And over of all continuing see you about the guess as kind in front? the couple do Do of future? about buying see the every momentum next of I you increasingly, incremental everybody modules, incremental you up if think years, it that think potential year modules coming you Understood. that is when

said always or half time half modules that of people least at them. sell have the that that greater we've we Yes, buy at the we

Of course, been time. in we've some business

the sales to little them them more would the time base, have at a you have go There's for to modules sell into what's didn't required go it's it's just modules they say going would what an client in half to wouldn't than they as a I that sold a I do the not have in for order payroll. more employee accurate. needed past. of into the the own because because several we in we bit XXX% But client that some have. their because say to back have to say than I'm now and we it's actually be new current beginning. So of

a With than usual. bigger through clarifying usual, respect And than you like it pass did to Perfect. a raise -- the looks bigger guidance, just question.

think it'd hikes incremental from of from coming coming raise, I the that of be much out the So rate model? just understand, is helpful to the how

a in then June. at really end those toward as start. quarter-to-quarter, not not another we've the the maybe of and some those basis from how sorry, business when We've for the mean, sort layered be talked to end sales middle really in what's to does XX also little is necessarily impact XX quarter, That's about they in matter points July. had -- rate the said, then about layer basis going I which say it yet we're not us, of and in in new you the We've are and how positive Well, to have that going of May, driving increases, of talked that July. some somewhat the had the you in it's

first expect absolutely be that us, layer have talked growth been and to we price quarter So those positive still the impact about the a in has how But we've in logos. next would which and on subsequent new quarters. both for so

Perfect. Thank great a Congrats quarter. guys. you on

Thank you.

Thank you.

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

relates the of improvement congrats Are the lot echo question as Thanks on mentioned the taking Chad, I a Great. those and of already retention, my you to seen maybe Beti. any it you've from Or results. what yet? about for strong my benefits that But utilize is talk you customers don't there? to seeing early? that maybe can ones too Beti you it just still

much doesn't. changes to Beti, once than the use the to definitely expects what to game Beti have and that of employee deployed they've someone are use that an mean, usage business. it the and patterns stronger And deploy able kind of I in clients Well, expectation be going Beti

our impacts that absolutely so And retention.

so ours. As saying, for any out usage that definitely drives what I've really software there, I been believe retention. is And but

a quick I sure or Helpful clarification float. follow-up I there. on just that understand just to Craig make want it. And

safe Is it the up no guidance assume account is to of and rate that rate accurate? increases impact July into So assumes the takes that your increases? all until layered further

be and in layering that up know rate what any through would Yes, July. accurate. It not we increases, future include would then

Perfect. Thanks taking again for questions. my

Thank you.

you. Thank

Next Capital Daniel line ahead. with the Jester from question Please go BMO comes Markets. of

Great. Thanks for question. my taking

Just one margin. on

about great benefit the Another expectation you like with margin I just margin. did margin. line. a that EBITDA going year-over-year EBITDA think some know for I there quarter would expansion full But Craig compression gross the the on income on have higher, gross about on have year talked line. float XX% of you'd

investments, trends? us that that about margin the you. impact potentially, remind you can you're Thank that making could gross So

Sure.

revenue margin gross to eventually gross on with on to as we margin hire hire an impact have So the in grow that going growth, and that's of the front line, thing and into then the you'll that. one continue

ahead train capturing and of hire to that have revenue. You

facility then brought Tier to the that aggressively. data also, continuing grapevine we're So center new center. hire And and on we X data

So the our depreciation you're income areas of starting some to statement. the see different of hitting

on margin, the that full to still least at be had well a that -- had expecting level XX% that small for impact gross -- the we're but at on as an So year.

Great. Thank you very much.

Thank you.

Thank you.

the Our go Credit of line Kevin next ahead. question Suisse. McVeigh with comes Please from

across much. So what's utilized the Great. revenue base? what is -- Hey, to as way, your Thanks Beti Beti existing you were frame revenue across way impact XXX% client the impact if another said adopted the if becomes any client so was XXX% base? is, there

of modules one XX have. we Well, that Beti is

have an would impact. Again, new making logo where So opportunity impacts us to it business I the mean, gives we're the definitely that. do ads, and Beti

think Beti you'll client impact once a have impact it's retention. every single we better I where impact for some I think on, Beti for going think I sure, I mean, because we're will of have see it. But charging to

As product. XX%. been were we've has We impacting seen, usage at our retention of

I up. think to it go was X it's or X years continued and ago,

by And really Beti so usage driven usage. been stronger our that's generate products. of And

believe our to that on is Beti deployed history used of us, those greater and also, if generating impact actually and have of an clients will retention. once company in indicator, all from for other to are one now. employees So, employee that And it, goes it's our next, all that expect lifecycle generates a have seeing an would be then we normal as ROI, we even as clients going to companies as been to they go the we've flow leads market, an the

remind on the then, helpful. can to terms maybe reinvestment the to in float in opposed philosophy us as of And just market the you business? Very

we'll to Yes, have on that. see mean, I

on think those when it the I lot a of of we might timing investments. of depends make some

say it's to a look going can we're company definitely invest generate we're at. revenues. also and like additional [indiscernible]. let's if or at that something we advertising to that's doesn't R&D, But going look And that's that You something in,

we're So going it. not spend just it to to spend

see to to will we'll fall let the line. We an extent bottom the opportunity, we don't that that

Thanks so much.

you. Thank

go of Please Our ahead. with next question comes D.A. from the Davidson. line Simmons Robert

there the are parts particularly Hey, well to Beti, market embrace apt it? guys. certain want Thanks most responding are for to and that taking that it the the question. of industries I was wondering, are to

is I would benefit it's Beti about is been Beti agnostic. say No, of I talking employee. mean, industry you're to the -- the

really and them. is what automate the like their employee types within would is -- their needs really the you doesn't weekend, industry it's reduce process, that an and for for it of accurate those liability matter going do business every And around will And is employees. Beti to their actually again, check to into anywhere to that payroll that. lot reduce, have there every right really way Beti a then be So exposure really, industry, the deploying of

Beti industry other. And would so work stronger any now, I can't than say that the that there's

the mean, situation? to far so date, both year, of been from UKG to can the for that benefit also see much to bookings Got of it. Great. have second I And then how you about talk the and you half terms in pipeline able this year?

say plan of everyone. and this that to it their at Yes, clients pause, I see I'm I as makes everyone the ourselves. that I that the sure those an think employees. -- their don't looked a competitors I and to very someone have absolutely, employees opportunity it's for looked do make you wouldn't everyone for I get I think produces we make as -- produces the opportunity. I so in in things, sure mean, opportunity. a kinds think it has I take know together, they that everything can hack it's what the that mean, everybody's for differently opportunity many got experience But also system mean, to good have same produces we're an sure world at right all always Yes, paid. single I fact

to have than systems our them in So multiple what's opportunity so And passwords. would employees wins an more their to past. the they have that's trying to what find are I happened their say, where drives

Got you much. Great. very Thank it.

you. Thank

Chad pass waiting would back Richison remarks. are questions conference to There the no closing additional for at this you. time. to any Thank I like

our thank Thank you continued all to to success. contributing Okay. call today, of for and employees everyone our joining you to our for

of and Global Citi in Operator, Paycom. to in Technology the New York at Conference; in Technology and at TMT disconnect. and with Conference, you with may Vail Vegas soon hope schedule busy meetings and speak We you will week September, the San appreciate interest your meetings Forum Wolfe the at Conference. BMO. with Oppenheimer hosting Francisco at in-person KeyBanc be Technology Las in ahead Deutsche in have virtual next meetings Bank we starting We a many the In

you concludes enjoy your Thank That day. all second call. quarterly the results quarter software rest conference of you. the XXXX hope Paycom I

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