Paycom Software (PAYC) 7 Feb 232022 Q4 Earnings call transcript

Good afternoon, and thank you for attending today's Paycom Software Fourth Quarter and Full Year 2022 Results Conference Call. My name is Daniel, and I will be your moderator for today's call. [Operator Instructions].

It is now my pleasure to hand the conference over to our host, James Samford, Head of Investor Relations. James, the floor is yours.

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

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

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

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

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

work like periods. very and the everyone to We and respective year call revenue execution today. James, X prior quarters hard XX% drove for of of ended more growth I'd XXXX all thank strong consecutive with or Thanks, thank consistent employees of over our our that the and joining results, to you

of highlights our minutes results on expectations year I'll XXXX high-level a our the and full and fourth spend few quarter XXXX. for

financials our our we take Following will questions. and then and guidance, that, review Craig will

EBITDA approximately Fourth very year-over-year, Our of margin year-over-year. adjusted an bringing representing year $X.XXX resulted of XXXX the up an to revenue adjusted XX%. and million, margin EBITDA full hitting of came $XXX also in adjusted The rate EBITDA margin XX% XX% year our of representing strong also adjusted XXXX bringing in XXXX our sum billion, EBITDA revenue revenue us at fourth million up quarter of quarter XX. strong, $XXX growth to came adjusted Rule our XX% very XXXX EBITDA $XXX full million, in

full with With outlook starting we guidance, solid Rule again XX. strong are year our the of once a for year XXXX

to we new sales new in I'm carrying the what near As new into year. anticipated guide with term. pleased recurring based the our and we on existing business revenue, can momentum a reminder, see the starts are we

On payroll a differentiated strong full rolling solution. the first Paycom our our product for front, was Beti, out benefiting from of employee very year year self-service XXXX

profitable rapid that are to deliver We position demand of year in growth strong us trends seeing XXXX. another

is and more liability reducing leading accuracy are caused employees processes by making payroll efficient We exposure businesses transformation when both improving and manual an payroll and and industry tasks, in eliminating by HCM HCM accurately. for done

lawsuits Ernst results payrolls, the lost that to increased it easy-to-use directly conducted software. which by and their A & are found exposure comes with Young average With organization a errors has in recent accuracy own study data a hours by doing wasted in correcting Beti, revenue, to and interfacing rate and employees payroll XX% fines. their potential when self-service,

cost average for errors. an and $XXX of upwards cost $XXX could mistakes time of unentered these of Each nonproductive

these see costly can errors over how time. you become So

million a correcting to identify in X,XXX-employee the automates empowered payroll over of common are mistakes. fact, the employees ahead that payroll and almost payroll year, errors wins. perfect to $X the unnecessary and processes could costs, deliver incur correct In course of company everybody Beti so potentially time

perform year advertising. delivering At demo continued sales marketing as saw well, leads strong aggressively Our in time, investments throughout leverage on are throughout XXXX. the high-margin spend marketing revenues plan we the deliberate marketing operating XXXX our delivering improving and and in we to in same the

We clients revenue fastest-growing with business with continue from to greater the be pulled than coming employees. of upmarket our in segment X,XXX XXXX

the the still us of larger only to is With from X% Paycom runway their our recognizing expand simplify today, approximately are to needs. positioned this organizations that We of well to there's seeing plenty And trend. HCM opportunity demand market for TAM from increasing are benefit ahead share.

recognition national organizations several received from XXXX. in Paycom

were we culture Companies, year. and focus. and These of client awards as in workplace, are our corporate Best our Women, Company well a Trusted consecutive Top Most for as One named Workplace testament award a As work, received we America's a Oklahoma hard thriving to our for tenth a

to headcount our XX% have XXXX, bolster employees, December retaining year-over-year As growth. to our success and continue high-quality at XX, future and we attracting talent further stood as X,XXX of up over great

Paycom in memorializes also want Award outstanding is Oklahoman. I to one Christian Thorpe back football college history. the Tomlinson Jim all-around Thorpe, an Texas recognizes Additionally, happened Jim in the This University. to Travis Jim defensive Hodges from athletes most of be and greatest congratulate Thorpe winner, award the XXXX who

are be and another for strong focus XXXX pursuing XXXX up fuel we new opportunities in and our the of will in I'm our the I'd set very to employee are year to XXXX. make about a great like list beyond. strong helping to we year To thank we and employees excited our such up, experience and client innovative long sum executing continue results well. on ROI for

the financials to call Craig? over for a that, I'll turn our of With guidance. review Craig and

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

of of XX% with revenue XX.X% over to results XXXX $XXX.X with excellent, Fourth up compared the growth the representing comparable with of very $X.XXX results revenues ended year We prior period. XXXX. total million, quarter billion, were year full year strong

was driven by wins of growth and new adoption business offerings. product revenue strong new demand, Our recent

parent grouping revenues, the total period. revenues revenue number XX% was of and XXXX million. the year-over-year growth roughly total ended XXXX growing to X% the XXXX. rate we On in XX% of ended with approximately increased We compared clients, up quarter XXXX. XX,XXX year clients, X% to XX% also for compared a Total quarter X.X company representing to records million recurring of the year XXXX employee basis, prior for fourth $XXX XX,XXX of Within from with representing a comparable

basis gross from revenue our was of retention the adjusted was $XXX.X average recent annual in an fourth X-year Total period average and more gross was prior points Paycom's quarter of representing which rate XX%, XX.X%. adjusted profit the million, XXXX consistent up margin X-year XX%. than XXX for of with XX%

year For margin our was gross the full XXXX, adjusted XX.X%.

Adjusted sales XXXX of or and revenues. the marketing $XX.X of quarter was for fourth XX.X% expense million

invest the strategy in very XXX in revenue marketing QX and year. marketing driving improvement as effective in to a revenues percentage to for been period a XXXX we of point demo basis the Our at has XXXX. adjusted in We plan and high-quality sales continue investments, saw marketing prior expense generated throughout leads from with

million of or XXXX including costs, R&D in Adjusted the $XX.X revenues. XXXX X.X% total the of Adjusted R&D portion, total was year fourth to the $XX expense fourth the were quarter $XX.X capitalized million prior compared quarter in million in of period.

clients for believe have our that create XXXX a very strong we development of will tremendous product We Paycom. pipeline and value opportunities in for

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

$XXX.X XX.X% revenues total to For in $XXX.X million compared XX.X% the of expansion. XXX points revenues full XXXX, of million year or EBITDA XXXX, adjusted total over representing margin of basis or was

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

$XXX.X year diluted in net versus the income was of income the diluted year-over-year. or the our quarter for year $X.XX prior GAAP per share, XXXX, million fourth XX% Non-GAAP $XXX.X net period. or share diluted $X.XX per For full or up per $X.XX share was $XX.X million million, XXXX

full $XXX.X or million $X.XX prior diluted non-GAAP up period, year the year-over-year. our versus $X.XX was year share or million net per XX% XXXX, in the $XXX.X income per For share diluted

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

balance the ended total Turning million. with to equivalents strong including cash sheet. year million and We of cash very $XXX $XX debt and sheet, of balance a the

total in has million of December repurchased total currently shares During repurchased nearly have shares our a XXXX for $XXX buyback since billion XXXX, a XXXX, approximately program. remaining of and XXX,XXX XX, million, we X.X $X.X nearly Paycom we $XXX nearly million. Through for

XX.X%. increase approximately fourth operating compared balance law. million additional $X.X on in was the Cash average been from approximately deferred to $XXX was of in free capitalize quarter as costs instead income our impacted The daily an $XX behalf XXXX. This under operations XXXX, new million billion requirement payments clients XXXX flow both previous and XXXX. in tax flow in cash expense of would in have of resulted R&D of that The to of representing cash held funds

For approximately compensation $XXX we anticipate million. stock XXXX, to be

total building City, be front, a to as XXXX. of and expenditure percent revenues in approximately in CapEx fifth now capital the On construction we're we estimate full in our Oklahoma of XX%

to me guidance. let Now turn

of in $X.X billion XX% year-over-year midpoint the billion we or fiscal the growth range the revenue expect at range. For approximately of $X.XXX XXXX, to

of million, $XXX the range. We approximately starting EBITDA margin Rule $XXX midpoint guidance of million the year's expect XX. representing EBITDA again, in the adjusted of range we the are at the an XX% Once to at of adjusted

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

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

for reflecting execution. prior and very XXXX year was a investments strong strength of Paycom, the consistent year

in to service continue strong expansion marketing, will are innovation, the geographic experiencing. invest we and customer to meet demands We talent,

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

[Operator Instructions] of comes of line The Lenschow the question Barclays. first Raimo from

the little markets SMB of the Chad, software points a you're of market. talk about nervous, on of some kind coming be might can obviously, data in demand, about terms the end they in the in are on players bit segments questions. what other there weaker you Two the that of seeing

came just you're also XX what renewals So at looking a versus bit numbers, your at in XX. talk little the about seeing. We're

just Just us a kind bit a paint there. for picture little of

approach investment think of think balance nervous the the the guys you Just like do little for flexibility the about one economy and kind if And your new be then that how other there. about Craig, for you investments, bit and year seeing year? a talk about

Yes, mean I'll start strong. off. I remains very our go-to-market

board. selling to very We and the we've book continue strong Beti been have sales, across

employees New their using come XX% have doing Beti. payroll about within of clients in X of months that the their first own

And so that continues be to successful.

XX%, retention to to those X XXXX, of rate XXXX anywhere for was we years. From and XX% XX% from XX% X for of those had a years of

For the I our a the say a of But is X X I as XX% we you higher we've last to retention across larger rate would client of have expect what percent XXXX for one retention have much had Beti, Beti. XXXX, through rate that. a to as And from years. our also through continue base. rounding of clients at base of years, years There's retention rise play often deploys and those will who current of with look XX% much,

guidance on Yes, guide our a for given we've the our looking Raimo still very that on plan EBITDA. at on it's XX%. strong And as adjusted we're XXXX,

we service out remarks, the mentioned commitments then really, in have side, pull on and well. is side So we're the marketing any to -- to R&D area we continue And as as where the leverage. long-term going the the marketing spend there. side prepared can I one the don't in We

area needed we where levers pull is that an we if could So to.

Samad question of comes from next Jefferies. The Samana

I did employees. X,XXX think Chad, you north you Great. of you -- I I had just guess one, say hear first said

high slightly how Paycom the rate just should what we over hiring growth think that's think was of than increase? how we just just should is exit we're I for it's teens on prior it think year. in itself? you about growth the the XXXX. I'm hiring -- to slower curious context curious, just about I'm that expect productivity that rate Maybe is and the trends in it

client. hiring. you those hired strong We we're Yes. of to for I've with I just we're client was hire haves do look across more We're been year. quite already for it. just have less believe fix deployed Beti our we mean things. the mean, XX% and we efficient. time, definitely in adjustments, the out have a -- what I getting they're have-nots to our talking base are do around of clients when some usage having and efficient we have growth them. less I last look kind having who more to to much that less having and so We're about

we And year. need when using said, growth don't we That last so many a in very people Beti. as had people are our healthy employment

I so had we with that. success And believe

them Great. usually offices the about we a how are expansions you're think you in new takes lapped assuming office just just I there a planned little are the progressing? almost but over maybe And fully then XXXX productive, new about a how gave? bit should I if it think And fully we've know for -- any guidance -- by year become that that to those just year.

months. to always mean, I over about guide course we questions. office open can X of the We first, what X answer offices see. up We did I'll those

in those, December believe, was One I XXXX. of of

quarter were of others the in The first XXXX.

that wouldn't as all those on our They then they well full XXXX, of but quota year, at continue achieve staffing as same as would are. yet, next of progress. And year offices they be the this pipeline. backline full the to year would the in with mature All be throughout

this followed anticipate impact an for all as very we this but office as would both little a into year would as anticipate office we what us openings, XXXX. we while, you as of this far year on that that do know, expand to on XXXX openings would As to well have from have year more impact

Marcon Baird. The from of comes next question Mark

sort for the expectation effective the question. should we cash, are in mentioned with yield fourth you've that? regards of yield getting the is to the And for on clients billion course about balance Craig, What year? on $X.X that? how coming held think effective you you growing the over One got float held quarter. what of And an

Yes.

XXXX. about So at Mark, on rates look if this you it quarter, throughout it's at different it -- grown the balance, grew

lower So than typically expected be. it's to grow going to growth rate our at what going is a rate revenue

period are as for of Part is that held to those of that a continue we time. funds move upmarket, less

make much We have payments to those quicker.

we'd rate at up same rate. as market, our keep So growing that growth move that from the

some basis the yield, are we really of terms but to do in every a the rates would as get time. say of expect to rate. given the investments continuing on started some we're lower yield exact move haven't up layer we actually And portfolio, it In But we've we layers for look our about what And XX million. to those those. at over is in of longer-term that as points, for $X little

You that can see earlier of some filings. from our

little slower banks -- points. not are a get to the those XX and basis we're give going also So to you

get layered a in. of it to takes So quarters those couple

would funds than lower Fed rate. something be it the So

the Would to of XX% be XX% thumb, to funds of think with good kind delay Okay. of a Fed rule rule of? a thumb of

mean I I close. -- you're think well,

mean that's kind in would range, I I that the Mark. say of

We're sub-X today.

Yes, we're sub-X.

The next Brian Oppenheimer. Schwartz question from of comes

or activity wanted the real any question Congratulations seeing say, a flowing terms larger job of are business behavior on about pipeline organizations the either by demand customer to the companies? the in you versus, momentum nice the the with XQ. just Are I ask in that of the business size. you through or a the smaller differences pipeline

market. as done Well, even IPO to increase since our we continued we've as have creep we've continued to definitely target up

was employees had year, with last X,XXX XX% or that up more. clients fact, revenue In

demand are So do favorable. as continuing we higher, actually Beti that their pulled to are seeing definitely especially so be to deploy a their businesses looking can own employees

how And left buybacks? remind me then in you've real any Did just the for quickly. authorization you Craig one you back can follow-up again just buy And quarter? stock much for

Yes.

-- quarter. back So didn't think we any buy this I don't

left For buyback. we our bought we $X.X think back have on billion worth. $XXX million the a I year, about full And

comes Reilly Needham. The question Joshua next from of

If we in you versus historically how existing? for at growth last seeing about the trends look in customers think software mix bookings, the As growth different net their existing customers, know of new expectations the XXXX from you couple do has smaller while here, of growth new we're years. And different increased with some vendors.

logo -- of our objectives. that ads at when just continue look ours We're Yes. size from to the new primarily going to order come by need we to revenue hit is in grow to you

have out much adds. primary going be growth a had logo so clients. year to our been been call are. lot going has current per It's We ACA. really what We've perspective. price with us. ads current consistent ads we new healthy as from But level control And the first had logo new to consistent, always at upsell a don't each that new percentage be exception than smaller is just a pace clients upsells year logo the is to on been for a to of And to it's

last Got we as helpful. there? March or impact from anything the turnover it. quarter impacted about XXXX revenue? to year, due because how here, was Remember, year-over-year WX of here basis the to in Are what trends normalize a with in should given That's on to 'XX COVID. And in to look we that the QX going happened think this highlight then hiring

more like feel are they normal. Yes. I

WXs, growth all to as Meanwhile, understand these I has have you but lot revenue as we WXs services as point, products the one far XX somewhat at other our the other XXs added XX provide been substantial. of XX that far added a we've you client. year-end as important think what That XX. to changed in it's our hasn't as the a years -- last

it's base or the the just the so our year-end amount And past because client has what same services was than it overall is growing much the just that in percentage at not now lower rate. on it's

I would mean from say, yes, normalization. say, would yes. a I I

what year saw years business hiring you of more last normal year's -- than you and past past. think so couple I a in patterns in had

in say normalization were I filing, that yes, a we from would of So year there. forms

comes question Enders Steve of from Next Citigroup.

just little outlook guess year to next a side. on want on dig for the into margin I bit and particularly I the more

that flow if in line. some income that I past bottom that, to the down think you would float about talked about we think flowing of that the through

So trying how you're in down kind about biggest of investments are the about of from think and lead just 'XX into and areas were to in thinking the that's layering that EBITDA, where guide for incremental where we 'XX. are slight coming

continued marketing, invest Yes. sales we and Primarily, the prepared We're continue and assuming we've there what that's going continue to work. to remarks. and invest going to to in on said it's to

continue to So the invest. where going that's area really to we're

have works, Also in the I side R&D, to of continue the as R&D and the hire a mean, well. in we'll in we projects lot aggressively

guess how that the out there what's guess, awareness the changed you on initiative kind a dollars putting spend all, you're that I marketing brand of of I it's kind you the funnel for Okay. more? kind conversion there, that on of that gotten those know activity seen have you've And seen? been out recent or campaigns more the rates as I ROI have And has been top of

And drove in XXXX. XXXX, we advertising teams. we have of about spend XX% That of year the money inside XX% we believe unit added sales size X us. went those and we that on then one all marketing, with as Yes. do years, marketing up our X growth. also count call we another inside I clients that teams. sales Marketing in started our I was mean added

coming experience above responsible have that is marketing any what in you our that's below. as And than we below it XX provides XX for XX employees employees, it direct so responsibility but some at And different, go-to-market's business directly employees. support above more level for

it guidance this we highly a work, to Craig into we as marketing. which did prize, return as expect profitable revenue, XXXX, first healthy produced we spend see which also, And look EBITDA adjusted Growth talked to for which expect with at would has healthy itself year, But margins. about. throughout we

The next of Mizuho. question Panigrahi comes from Siti

size, that more like X%, of a level, growth clients' if look it? at slowing anything how is think we about should in rate used sure Chad, I but kind going there's you're XXXX, And moving factor there up down which to be the anything should in that's client forward? -- else versus teens. of markets pre-COVID your or impact we growth client I'm

I the added in sales it. reps comp a sales. had that little would X XX. with roughly XXXX, we do had to then XXXX, XX. Yes, XXXX, XX, to sold Prior In inside we another bit added And we say

working. business, as small selling started much a we in advertising way So emerging business stronger the was

business I to don't but say it units. prior, -- because different XX% was a did of a contributed count and and unit growth it add we lot in that was units So want inflated small our to

I in again, XX% did it -- and did think where had that revenue the growth. we've year we

we year, you small and I a had above adds of like in didn't year had lot more add we clients. say midrange look last business we success and XXXX. teams in think midrange And business small we XXXX somewhat really in normalized our would last I were as could because deduct any selling So that

factored And conservatism into know guidance. into is this come your guidance, you a in definitely to then as sort but have of guidance? sort follow-up, macro help of into environment your baked going year, you're this what floating what I your

Yes. guide $X I million in continue mean, to range. we the

over year quite started year, we we guide This done a growth. XX% we XX% done we that starting we're a a year I guide go had had our were we year over XX%, have where comping growth. and our XXXX, at where for we last we started visibility quarter-to-quarter. as So it -- bit in comping will at XX% say of

and our achievement can changed And matters haven't We we we throughout year. so to see approach guidance. what the guide

as year. what we so focused And on move throughout the that's we're

guide can to your we conservatism. throughout time, unload what look the we we musket the answer each I and trying see I'm mean, to quarter. to so And

next comes Bryan The Cowen. with question from Bergin

on I follow wanted up first. to retention

heard prior smaller clients Beti this is So turn among about client about But as Just larger trying you that downtick year-on-year comments talk it is years. here, think clients? -- and of to Or the relative stability the a the churn? I can from understand being we about dynamic. lot just higher

we're -- Well, for perspective, more pre-pandemic, client the of revenue a course, definitely that from there's do I -- what you're smaller of more smaller prop But amounts. you a market. contribute client like up they seeing you're maybe more perspective, from them smaller mean sending I less and think a in trend -- saw

For most within new years. about of the fell businesses, X believe, XX% first I them

play So business. all that's smaller working when you're at with

started we mentioned, just those units added in XXXX even small really -- XXXX I throughout started obviously more and and business continue then XXXX. adding in As adding

definitely plays that it. so into And

I revenue it's also retention that would a say number.

efficiencies So are that some number and you Beti I've about using the have with. a that talking what for clients time they're quite dividing been start you gaining.

have same having those with charge not fact, Beti. them that lower and at fix. them a being we're we're And In then -- prevented just margin often the really would now are for to with hiccups we

running an still at some I rounding type got So mean do them. clients have Beti, then rate got I've a again, with a XX% but all there up industry-leading we're at seen also, is to things that's say play. I And retention number. play, from XX% couple you've And with what expect, you've at of that

Beti, to our a as there. current gains continue And base different we over expect little to convert we So bit client have some that. to in it's

always have losses, will bot some uncontrolled that I sold mention type we businesses. your merge

that's that isn't to I -- an continue have believe to XXX% up opportunity usage through to usage come product. retention, bump appropriate of and But achievable. our getting to So we going

then follow-up Understood. Okay. a here. And on margin

Should efficiency So land Craig, the and increased say I may explanation gross S&M? did you both year-on-year, development. also R&D that your expect have around but more XXXX? to Or in is where expect EBITDA sales new product in margin hear I you've marketing, R&D I message increased, guess, And missed mentioned and and you downtick ramping? we about it, on it

R&D we're years. narrow We for doing Yes. it's margin gross a And the EBITDA, adjusted both for several marketing. our didn't the sales last and range about for really I the been but plans XXXX. last would as several say for pretty and looking years. we've Yes, talk

of The next Jason from question comes Celino KeyBanc.

about a vocal and looked when been I automated feel HR mean what HR Maybe, is opportunities you the Chad, mean, in if up it? could you've and think like payroll excites your Paycom it we most for generative -- you've about broader about And I pretty into AI, whole? this what alley. technology as

get year forces we market. got that there's I problems client employees be of do case. have Well, somewhat you've with, Beti solving hadn't say last bringing XX% play, selling be you've it mean, and of they automation about into paid we Beti believe full usage appropriate really and and that been can are I product year base, the that I was the automated that within for is more can our believe correctly. the the can our and which came doing. processes until software for so the to the correctly, And start to that But our which I client first using will got employees to client that

we're success for a so having that. lot And of

a But believe you like AI thing. something to I valuable do for AI of I think AI believe good can client. use that's something and you to sake that consistently I can if that, the isn't the do really

could businesses our automate a it automation of that, see that and be expect don't clients year would that with now. type wide more by right thing have experienced types for this machine looking industry problems our we learning but I within platform and So you'll as more I used other to think

a fair. Okay. Craig, No, one. And then just, that's quick maybe

end beat on what higher the on I the last million, timing to of we've the $XX over X in the expense some beat years. note Anything toward anything investments? typically seen think of quarter, strength, X% the management,

higher are little that that's marketing helped the that quarter, fourth a really One, beat. those X your had things of when that on really or initiatives. little and we revenue. new EBITDA X buckets Beti planned. spend doing higher-quality development, A focused we capitalization are marketing there that rate on just drive some generate is mean I and was higher clients

year had $X.X a quarter, of we net million incurred bit proceeds and current saw that. And in of both the were So about insurance for expenses little prior that a we then quarters.

really EBITDA what that's adjusted beat. drove So the

The next Ramnani of question Piper Arvind from comes Sandler.

are wanted I from think a who growth ask should about How to clients expanding question. just existing their we client base? own

past. the the mean, we've different than some year, clients what the different COVID you but some any out past. In you again, experienced of experienced any we've not. year grow, than what have that, given any I'm have clients in in I Not not removing

business. clients some have You buy

You clients business. sell some have

believe that growth so Maybe And hit But Maybe new itself and I lose mean, our really, Holly some. our somewhat sales to always how targets. the adds. logo drive win by we I some. is for we out. worked growth, going we're that's numbers has booked us driven that's revenue

this -- base seems averaged time -- part with base those client out of XXXX an within expect exception XXXX guide, to and/or that downsizing done XX a that make stability. we years of assumption within tends We have growth to across within period. the think really have -- our -- current of we over as look we stability assumptions client current XX,XXX-plus I've last our in the I the do some don't it

of kind How just XX% me expansion? can X% those new I reconcile you should logos growth if employee versus two help interpret And the numbers? to in Terrific.

of been success out that and X,XXX mentioned up I X,XXX. you would ago, XX,XXX. ago, mean, A we the or couple further well X to further be to Well, pulled go we're A growing to even -- as there. years about up client tell I've that I years about of to call continuing went market. We talked having we're years couple is from up that size that continuing to going continuing further. we're I how

small want success larger less you lot going unit a And to business overlook also I unit. I a that so for don't the a of count would employee But that's we've of had get say, count. to the fact on potential with

looking exception groups, -- employee that we're clients the you're you're really grown. a small from they're we when been count to decided growth, business, or hasn't percentage. X on emerging larger that it's whether XX,XXX-employee teams trend going The you're we report years our business I created count everything created units, unit of now our But And the unit you're equal. grown. teams unit a XX mean and is where unit, haven't to add a a have X whether at just equal all which with of

units. course, to add Of business we small continue

Shah comes question Bank. next Deutsche of from The Bhavin

to the I you relates sales looking maybe this few Chad, cycles earlier are on are over pipeline seeing call, we changes know bit the months? in reasons anything the customers a or Maybe past take generation selecting switch touched but in and to as why it even up.

business on as for we it's us, I mean a marketing and product to demonstration pay those advertising, but leads. say strong our of I continue been usual. some were can function oftentimes September have and on been year, leads, that's we we for back were single doing hybrid last were in We've field some back in more meaning call, since actually of a the virtual, person. where before every site

So having through get process. we close. the I to would to but speeding go the anything, conversations say we're client the having that's calls with up I process, think I less better say, necessarily can't if as we're

out to nothing call there. really So

whatever I in paw about client thorn times it's had today, and be when looks than out. Paycom it Other have pull could in their to demonstration, to say, looking past, that product a would about Beti. we'd be a calls And

today in we So it's type different are generating. of lead the little a

how And -- growth you XXXX? areas that of par some of saw relative Any in specific just to the follow-up, modules XXXX do the that it. a think are about opportunity you Got in

them have clients Well, Beti us the purchased product we to drives still so are definitely do have clients have opportunity would as can we to new our their within work pace been continue stronger well I current certain sales. PEPM, the really or to to and value on current get it more do have look to with product because have used deliver, in PEPM would obviously, definitely being you them mix really at a XXXX We say Beti -- We -- from an opportunities that And still and over as to for XXXX. better, us base selling than that those XXXX client in deliver a selling to business clients. and achieve in we that. at there's that set have get to

And Capital Daniel of Markets. of our final BMO question the line comes from Jester

Great.

at update year-end? that base has us about percentage on the can what Just comment Beti you of Chad, Beti,

plan We're about process Beti and different detailed we're we of to were our we're onboarding as we does meet the as around the going when require change system. through there every a how employees conversion It's type we to in both clients. year-end, clients with through it utilize as November, continuing go client there's of a they for that choose is But their the client deploy. how current objectives side conversion where us and when with as go out reported clients. to XX%. There's on them

of deploying it all it your I more they're a I quicker large -- clients deploying what as larger XXXX clients point into or a small businesses converted lot it Current mention lot would sold clients that might once clients since whether than smaller are any that and have quicker. also be deploying are your size, current would Beti. a July been of say

to our So that. current that base talking we we're really prior about client had

and a on touched sort And the you of opportunities. couple and times then success just this upmarket lastly, of Great. about

X there's year, year because sales in to down year and tactical investments. As opportunities more this maybe attack seeing those tactical in so strategic, I in opportunities. be Is those and is and opportunity you're i.e., you're upmarket, investing you about devoting you smaller resources the you're of see another think deploying sort which more more and you're more out, sort market opportunity upmarket? resources Or think of you that kind can with specifically of how this

product you been have and mean a one I'd time the for client. to some employee employee thing say I've everything around I an even and client the job. carries And saying benefits the paying It both. for little shifted employees usage liability this to that which exposure, help it's a has providing how applies quite correctly, bit exposure them use leverage else. of Yes, now, shifted. less When employees, our some process, industry

all so these And believe the I -- self-service that helping the technology has client. really been

Jan this, a work say substantially Smith to XX employee, that XX,XXX I employee when as works they it Smith and regards the HCM how is or to employee reason works it's as for payroll same in Jan comes has. that at a Jan with Smith, the needs whether whether The an products far Jan

things Are is employee very So the what employees of and for. I on we're company we stayed run and into going we've some which a larger company they run what that be to than employee that. regardless focused would an there say we have Absolutely, work changes into that's would just some employees? there's going know XXX might in a in to different that company

end I the back lot that having do looking say on the you're level, the issues the And you back make able that employee you're well because is if of fix make I a as and/or with we're more more comes end that we're will tactical it. you're you're data having play at to the things not the into provide to to to do, where doing for. on the employee sure that's less sure strategy back-end having to they're would moves But say the doing as experience making

days. And these points a they work to so large lot of extra you companies, prevention for don't lot either. of want a do And get

I Thank the like we conference to back time to will over you. now Richison question remarks. closing that, our And hand and conclude answer. with would of Chad for

want and you for XXXX. today, year The to our special great for contributing employees thank great a continued we're send for everyone success. want to Paycom, I thank is another our and up Well, to to set a joining the I year XXXX for call in

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