Paylocity Holding (PCTY) 8 Aug 202020 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Paylocity Holding Corporation’s Fourth Quarter 2020 Fiscal Year Earnings Results Conference Call. [Operator Instructions] It is now my pleasure to introduce Vice President of FP&A and Investor Relations, Ryan Glenn.

Good afternoon, and welcome to Paylocity’s earnings results call for the fourth quarter and fiscal year 2020, which ended on June 30, 2020. I’m Ryan Glenn, Vice President of FP&A and Investor Relations. And joining me on the call today is Steve Beauchamp, CEO of Paylocity; and Toby Williams, CFO of Paylocity. discussing the announced market be release our will after issued closed. we the in results press Today, A webcast under replay for tab. the of this call XX on will days our website the Relations next Investor be available

statements can to are other beginning, and made information the statements materially or uncertainties, cause statements forward-looking are results the which Before remarks, these in to numerous the statements. results contain during must could that to statements. question-and-answer these caution forward-looking to projected solely by present based Also, today’s differ and risks implied we on important and cause differ subject results including are those forward-looking subject session, statements. from uncertainties These the you from that factors, actual risks actual

to more is that website paylocity.com schedule of currently filed and measures under and in results with reconciliation September Securities to regards over the upcoming that, any Investor SMID duty unavailable these non-GAAP detailing are directly release, James time a the Please GAAP the without to Also, information, August and schedule, Growth contained the comparable factors for Exchange like certain our with time X. at Technology is representative information there because the the Commission. Commission refer we their In will me do update our complete therein any we Raymond believe We to conference non-GAAP let effort. measure statements. these how on we Conference reconciliation today’s XX turn to either press additional our Relations call tab and available located is business, Please any let the and financial financial Exchange financial to on events. to on know measure to please schedule a non-GAAP during note not filings me which measures. With will our Securities for the this us internally unable course and you’d For of undertake call, needed of Citi risk is Global forward-looking we that at We other disclosures. unreasonable are measure the if attend Conference refer reconcile Steve. virtually Cap at with forward-looking which the

on and Ryan, quarter you, and all Thank to XXXX you our earnings fiscal us of joining for thanks call. fourth

discussing the to our want its on around I impact evolving Before COVID-XX first our results, provide to and update an business. situation

one than also health number to the providing while our Our service priority of and remained has our safety world-class employees, more ensuring XX,XXX clients.

our of throughout continue transitioned our more have with remote to through while XXX% pandemic business by I clients to than as these challenging All functions impressed clients. they no the fully dedication be operational environment nearly helping disruption working employees to our have of remained X,XXX the times.

of our QX total the million XX.X% given other of with the end we results, our saw of or COVID-related headwinds, terms revenue financial In growth and revenue guidance at the results, pleased which revenue million for quarter. with $XXX.X recurring of top $XXX.X were our

$XXX.X the for other margin. Adjusted growth. million or fourth XX% quarter growth For $XX.X million of recurring XX.X% with million or revenue revenue and was fiscal total EBITDA XXXX, or was $XXX.X XX%

For fiscal XXXX, $XXX.X adjusted XX.X% EBITDA million or was margin.

selling at to XXXX, end onboarded of XX,XXX by fiscal in new XX,XXX of new a client. more clients, XX%. adding our growth number product driven an clients the formula fiscal record be to We last to fiscal the year, to compared of continues and year increase Our each finishing platform with clients

of market a strength employees. clients, fiscal than demand XXXX. performance our successful with driven in of XX entire management. biggest continues our to number driver payroll, core array taking sales continue was The recruiting of to market. target part under to where the of with XX X,XXX onboarding, learning market, continues performance success by a clients terms the and the see products, new such In we record as across Unit more our we’re of HCM management, winning, to This broader strength segment employees

up are for of suite revenue by the see annual quarter New the started months first despite of in with to quarter throughout sales clients we fourth we And ever-changing nine our of market the comprehensive were address the XXXX. the value that of did workplace still features more than the COVID-XX, fourth XXXX Overall, we new product modern over realizing target macro landscape. headwinds the fiscal XX% our recurring attach year. fiscal pleased we continue the are rates as in in

to over continues in by high products with XXXX XX development Products when product development a to for what commitment Software Grid Paylocity increased research expense recognized capitalize. fiscal be marketplace, XXXX, ranking Satisfaction investment in and during Crowd on including top consider for XX reports fiscal the multiple and Mid-market, Our We HR, in Highest GX we our in Products Product you XX%, and Best top the categories. ranking Best

us in our products. investment our introducing adding to to and Continued product existing research platform by functionality new and extend industry-leading suite development positions

a created, community with and classes the We usage the up our in all QX. up usage and during on within continue community a announced notable receive quarter, were management to saw strong provides of between learning client also matter learning forum and Expert, employees an within that also feedback release assigned a completed management experts. in Last platform. mobile significantly new we we feature significantly subject Ask increase Training and week,

they users with this benefits where organizations name environment. employees, new provides payroll, troubleshooting, and IT Expert, a in few. This get avenue as an relevant timely share will especially feature and such to to topics just which content groups answers access on new to an important with meaningful, can have is Ask direct

identify engage a employers of to rehire workforce new this to To addition to potential help support in product reinforcement virtual we engagement capacity management, released learning To shift keeping employees work and resources. recruit, their help effort clients manage maintain allows our labor launched newly we which employees. to collaborating virtual and environment, new props to to Expert, and an social released in configure, how Further, courses by released allows abide mobile features and time In managers, punch distancing in we their Ask rethink other clients a in safe within meetings. guidelines. number administrators environment, and for scheduling remote attestation, new they symptoms an CDC COVID two also in prospects recently including engaged

transforming for and help managing by can available onboarding now believe courses that within new the workplace and enables are in clients also leverage capabilities recruiting play and video organizations rehire launch our status onboarding rehires, will immediately more in leading learning video throughout virtual VidGrid past provider changing for role state VidGrid’s automatically on rolled April, validate rehire. to can work deepened geolocation and in we of out candidates expedite taxes process critical the We local HCM home around to address. opportunity recruit acquisition stress to also apply rehire via courses. video year, Paylocity submit see video product talent addition, enhancements Clients broadly employees a communication, mindfulness employee’s now modules, inviting early based our video an our jobs, furloughed the platform In applications peer-to-peer product. of This and communication easily our To invite in to and for To aiding the events capabilities we in specific employees and pools. suite. a strength expanding

training sales in by invest have channel force the also and productivity. initiatives at programs while reps, our drive investing continued in to time, to We new and sales marketing adding same

We in the fiscal to fiscal from year XXXX. this sales reps sales sales have force reps fiscal expanded in XXX XX% by XXXX XXX

clients HCM fiscal product our across entire In at part their as are uniquely lower deliver team sales single addition, a who and XXXX, SaaS-based positioned the are we believe in on market. clients, emerging target increasingly demanding modern a we of SMB we focused of to building components the solution, end started market. are Smaller

two our emerging this sales of ramp has a growth. we XXXX. While This count focused past sales, XX these an entering and again, and portion grown approximately market XX year, XXXX remain increase The team, approximately group are fiscal for a prior of reps reps sales reps on XXXX us from inside overall overall years. is XX up continue to XX% fiscal of the outside head with and the into efforts our gives small of XXX fiscal fiscal to in coming over total line with reps

fiscal XXXX. consistency more invest of investing in the initiatives continue also with our addition and XX% pleased remain channel, to which in in our business to continued growth we our new our in referral than sales deliver force, we In channel the to of

our for Finally, Toby detail to the our this exceptionally than provide employees want the and I’d across all this challenging of in like to their results efforts to hard an few I review now to highly the clients call been I work past past year. for guidance. and all through helping crisis. thank dedication These recognize our to fiscal and like X,XXX employees pass the quarter’s in time, months would financial more dedicated have country

for period revenues and X.X% revenue recurring an last the XX.X% same with fourth $XXX.X Total from year. Steve. other was of the increase quarter Thanks, and up million,

million we challenging the sales midpoint the above headwinds. Steve solid and of COVID-XX-related revenue quarter despite our As $X.X in noted, were to guidance team a a the rate-related in pleased interest had and face anticipated come of our environment,

were and XX%. recurring up XX%, was year, revenue total revenues the up other For and

and fourth profit the gross for quarter, was For our XX.X%. it XX.X% the year, was adjusted

total were ago R&D basis, investments total expense in investments XX.X% XXXX. overall XXXX. of were in combine fourth development And significant to is development. fiscal make we R&D, capitalize. Full in On dollar XXXX what we and basis, in year fiscal compared revenue combined a it both research of to year-over-year investment a to increased research fiscal total investments and our in by in important revenue quarter when non-GAAP compared XX.X% to On XX.X% to the continue We our the XX.X% to understand quarter. and in investment year R&D what XX.X% compared

guidance. expenses XXXX. costs non-GAAP investment We and in ability and the provide a versus in the drive in and fiscal G&A XX% the fourth were revenue in revenue fiscal were fourth of to XX.X% R&D pleased on of Full On XX.X% quarter in remained marketing quarter annual as of our for our G&A with period $XX.X leveraging are on differentiation to costs to revenue million compared XX%. valuable and of focused basis, range basis, believe quarter margin to XX.X% basis. of were the year was in We same remain for XX.X% fourth or XX.X% expenses future $XX.X an XXXX, and consistently non-GAAP the a long-term us On we G&A EBITDA year. XX.X% have Adjusted last continue to XX.X% our million ahead sales product growth.

to was our XX% for of environment. $XXX.X results. XX.X% of Our We Briefly adjusted committed a XX% EBITDA once revenue covering revenue. we to total remain macroeconomic towards our year progressing return adjusted or to EBITDA the target normalized million of GAAP

For $X.X was and the income quarter, profit million. operating million, income $X million was $XX.X was gross net

gross with cash was full or million invested of net of the cash, the of year, compared sheet, of as as $XX.X ended million and corporate million $XXX.X the to million year, the regard For last an and $XXX.X balance to In equivalents million, XX.X%. income increase year $XX.X end we $XXX.X million. was profit was $XXX operating cash income

of fiscal drew down we cash as a or and operating we’ve activities, of revenue capitalized software of allowances facility costs, April, revenue from $XX.X of early was million uncertainty XXXX revolving fiscal which for in versus an million and we lease As abundance all of or define given also XXXX. out tenant purchase million in Free less flow, the cash from in caution, credit $XXX property purely our $XX.X equipment improvements, reminder, internal use XX.X% XX.X% experienced.

Before some like I operating reviewing on color provide would environment. additional guidance, to the current

environment. our impact period phone momentum environment, remained see of out quarter pleased QX Also, and team economic we we as platform, continues fiscal risk in reduction XXXX. for that revenue we going to see great On for While believe of COVID-XX in be continue which we the XXXX, depth business, duration their the COVID-XX as to headwinds believe months a related our began the retention cannot while via in selling fiscal report throughout we progressed. business sales, first we virtual of and nine a did April, from and to there time. our heightened are employees of that has above marginally to In on video XX% our in activity strong engage remains a prospects the with a experienced will predict they clients improved

more started quarter of QX fiscal funds XXXX. revenue recurring we regard noted, funds income, we in quarter held average fiscal was billion did fourth the fourth client Steve in of XXXX As client in annual balance new the to our and $X.X fiscal interest for and than In of XXXX. $X.X billion daily

the estimating points billion an in we yield approximately $X.X daily and in XX will of are assume be basis the quarter. We average first average balance approximately QX,

Finally, I’d and for our COVID-XX. guidance to to QX some XXXX, related which like known estimated fiscal provide impacts of incorporates

And in EBITDA the be range now $XXX.X midpoint you. or XXXX, to expected total adjusted ready first questions. fiscal of first of range the Operator, revenue. expected growth $XXX.X million quarter $XX.X the over for be million million. XXXX at $XX.X to is of to For of is to the Thank revenue quarter total in fiscal million X.X% we’re

Our Berg Instructions] line the of Needham [Operator & question with comes from first Scott Company.

they quarter? good guess relative Steve, And in occurring in the couple days know on our the Curious of sales in for same more the that you what your -- sales a of the third on fourth thoughts secondly, Is versus quarter. me. how quarter versus the maybe the to that that to actually trended partially of function quarter going in expectations. let’s quarter ago started I ARR -- a kind the then were. started quarter with be XXXX. the XX may conversation function I in that comments quarter, Congrats or the into guess, of sales start a occurred

Sure, Scott.

So we as entered the had in I we think pandemic, significant momentum sales.

two start in happy script, into what on how were last the called that: much and one that XX% we of be as we might had a But year-over-year in you the think year. last have did more to we pretty up quarter in already kind is, able to sell you than to going prepared submitted then, and docket. facets pandemic have and There’s delays so of mentioned we’re remember, obviously, I out bunch the the quarter. we submits,

than force fact there were think fact you tell sales able kind submitting delays, a last year And thing combine business. that actually you kind business really is both. And so of other when we momentum the some would more that was combination The but still built the were was new to I throughout the I start of then of the quarter.

July. look And in we selling had at so as July, we a great month

And pre-COVID levels fiscal July. so much those we past are very we sales move year and as into approaching the

from then follow-up And question. a Excellent.

think do kind is forward after two been bump But about in I went net how as company is -- about level what XXXX X about even think think the you’ve later. I was the think my the ACA your But three still it to still of years partners XX%, me you kind size those we sustainable Yet level of is right talking you super business, tells long that math couple when which the last of revenue about. the Xx public. the the in your range? can know or of XX% XX% impressive in years Minnesota XX% generate years, be new maybe that’s that we as levels? go of next I

Yes.

relationships of thousands able our our pleased from the are potential and There So individual individual more really When I’m those thousands to new have really partners. come you are sales to partners. than between we be have brokers. of revenue XX% business think reps and

firms, reps. brokers leads those it’s to but not that sales provide just the our it’s the individual So

an be partners. our partners go-forward go-to-market in both be years, see we relationships to as it really we’ve existing opportunity as the of with -- opportunities of well we part really able couple get on to some last that new so our think deeper to channel over core a the as And made product as remains well a And basis. opportunity to able add investment marketing

of fast so near or as I’m business, has in will be feel years, forward it in it if And the past. pretty confident still it but been future XX% more sure not can important you that whether our be the six as another we

our with And Marcon from comes Mark line of Baird. the next question

the but Wondering it quarter, in? how strong strongly come the to this within I on specifically with bookings to Congrats know trending how to performance that quarter. just were in we quarter, compare relative year the ago? prior regards really did did a

business equation. our starts. drive to try definitely much the we’ve run off This we how of is kind based Well, very

at you’ve last happened of bit that about of And sales end quarter. happen little a starts, in so reality same think when our quarter, the got the lot bookings you a that but is

And XX% little saw bit the end we so we of were things the we pace we that’s we’ve quarter. prior build saw throughout perspective had. lull as that to April, back weren’t a July, on then we the the and months on ever up But same point entered pandemic. a of the one toward we best look from a at where of sales the and To

think to today kind I where of building early we the rest the in the point way it so of at of throughout headwind about a to good where after little is think sit certainly the really looking about that’s feel we bit And quarter a July. quarter,

employees per was during prior the way because And quarter that to in client? relative there is reduction headwind a talk client? Great. per And impact employees did much the bit you reduction in revenue on the of then a any terms of the of quarter? in about little can the see number you How the what terms the revenue of of quantify terms of to

Yes.

recurring growth entered the pandemic. other So before over near the several look last quarters you we XX% if and revenue was at pre-pandemic,

saw if that reduction platform, account workforce, the into at to And didn’t similar would very so we we if were we the that been you in a reduction in workforce the take rate. have have

kind gives math So terms fill the you I the to quarter. impact in opportunity of the in the that what think pandemic was of the of in

little And upcoming regards margin are you assumption going with more? about Or about what to bridging can are the to Or Great. talk you here quarter? then to we contractions? spend going areas think and -- bit the goes first What into gross should a there EBITDA how revenue that? for

Yes.

saw, declined up, So back very, build first employees and as way slowly. is we mentioned, to quickly it think but revenue, I then to on in Toby started think it April, the very about rather

we’re so gain levels and flat And as July I right into that July assumption we our kind now, is what that employment to put being momentum sales, in the mentioned, seeing very we continue would strong. in had of fairly We revenue assume model. that’s with

halt associated our So the and getting a another did that’s hiring in amount abundance quarter, hiring expense caution, we perspective, assumption of a we did the an building out And key But pandemic, and model. of mode bunch mode. then from of we throughout the of entered an momentum as part into the and our programs back some our as that. we of kind we fair of started investment get with saw onetime benefit of

thought our that so EBITDA the certainly quarter. number for of through is first And terms in

other continue term. want in forever, huge front it momentum. we view Our side to it last of going opportunity with of come while, a isn’t the and for to we is but long to to last this to is, of going need pandemic the got us. And out We’ve a invest

to when -- include I EBITDA Does could being more squeeze get back back that margins in XX% to what that? your If rates to is that normal. normal? XX% what would one interest And in. mind adjusted we

Yes.

declines. through the rate So meet several tough if of kind interest rate obviously, or our I first well XX% we adjusted was year this the We you absorbed And were go environment. year, pace the quarters interest exceed prior. from on mean, EBITDA a three had to of

have hit of to definitely take think bit little hit I rate interest environment. XX% had tailwind don’t longer low still a the so to would it a a that big bottom interest that prior, than need but We us end think we And It in might XX% achievable. rates could range. that’s in we

question next comes with Tillman line our the And of from Terry Truist.

This speaking, both your for tonight. most Tillman is your when comes guess, product over David differentiator five areas critical the like it broadly right customers which you based last in now? replacement observations, Unger are guys Terry to the biggest winning and months, on deals? perspective been to existing I for suite what’s filling And in

Sure.

way you So strategy, think most a everyone designed running features customers. time I has lot arrangements changing or our of think doing product if home the process. it are And at, training worker. about had able platform, we how performance appeal to opportune to business, we’ve employees, the are be employees, you as revolves really modern And to really a you look that take very a a how it added are modern platform step flexible transition to or and management to to our and they’re you available being work becomes to your around have from how their work the back really you onboarding the

think And a resonated prepared think be of added, allowed and product but on pre-COVID. to to sales we has continue go-forward with I so specific that also I to terms that COVID, we in are important the lot and the to as said a going really also our basis. remarks, that momentum features in We’ve features us had really

that via the and and So about has very acquisition communicating we’re be to the customer portfolio. idea of able so become our that to set into excited our video ability integrate commonplace within

virtual environments increases different before, those than have community they ever So they be LMS. and we a we saw go-forward employees as products in ways in all on huge in helpful or think increases we basis. in to are ways for employers in as increases connect We working saw with will surveys, saw

lever think growth, expand do the of have to to When think in expenses in OpEx order pull win prior kind of you I that most about leverage the managing feel deals? to just near balancing to regards you then the question active kind on which you of in And versus analyst. expenses the term growth and from area focus on previous the

Yes.

I of whether expenses, our think products, right, building expenses people-oriented them a or servicing our into selling fall lot customers it’s customers.

we’ve R&D gotten long long term. investing in had margin. investing in G&A. marketing of an A and then term where HCM for leverage And always and products so approach historically is more out carry and margin we’ve the of And the sales a naturally towards our for gross higher over lot

think I leverage kind so in of phase next to investing of create and our enter this to the as back in pandemic, same the marketing gross for And at we be G&A ways roots growth. we and in finding R&D, want go time, sales to investing of able to margin. while And

some Now to people to work take that’s workforce going reduction a basis. numbers take requires back might but approach because to come come get while and to to back on little that positive a territory, of go-forward leverage the it those really we’re

one just one. then And it. Got quick

was average Is is of the to the You that the end just get year? the retention XX%. want that period? mentioned rate for that the Or right. I

fiscal year the of we the So annual number end retention each give our at year.

than us XX% XX-month is retention, for period. consistent a number XX% So which -- greater the entire for revenue very is

our Brian line with And question from Peterson comes Raymond next the of James.

It you to in can of business of adding ask all sounds obviously, like in out? sounds it size terms there linearity hey, changed, is macro. July pretty one curious terms attach obviously, have products, Hope going the what it commonality actually to strong. question, new the not. doing certain so you’re things in any because, or, I’m But was the you’re improved just ripping just you’re rates I’m -- if quarter. believe like throughout just or well. I’m the curious,

things think about what drove on and as improving into June anything right? share can you So we July, that’s

Sure. Yes.

delay We would are lot bit obvious I much. makeup quarter overall, reasons customers didn’t lose of delays is opportunities. would think, for hadn’t the really as times, being the we throughout onboarding implementation their So definitely saw is really And of that little But changed decisions. people the say in a a at what their I we disrupted. business of that

get finish it bit a across little took Sometimes, just them longer the us to line.

the So saw quarter. we strength unit still throughout

on business moving. is we also still So moving small then larger And saw with board organizations, us.

remember segment. So terms to little but the or like over characterize difference in a nearly of with that go a in clients, activity little got wouldn’t places you XX,XXX XX,XXX in is that market you businesses less we’ve only Obviously, thing expect I after. over we industry can any a would market hospitality, got XXX,XXX

on that at So are very think I the get build those July. in to levels on then that start and customers pre-COVID to was then probably force really disrupted saw that less pretty and continue to sales very, throughout acute quarter really focusing activity momentum close we increase the back

from our Zukin next And question comes the line Alex of with RBC Markets. Capital

environment. competitive about bit the competitors? take pandemic versus numbers follow-up little has to about the a in share your and market And -- -- more saw wanted of an got given ask quick you Has terms share a ability this to you I actually question. what based on I’ve mind

our a been sure we’ve path to use, customers single small complete customers really got well marching Okay. our Sure. down the at time easy saves We’ve it solution that’s this as customers' for works that of top as making larger market. HCM end really of and

increase to the demand we really seamlessly, that many them what whether product features, we is modern saw it performance way learning with with community in is pandemic. do is what pre-pandemic. a And management, of management, would it And is, what started or really your our say onboarding to I so more interacting accelerated these in found employees absolutely

their way and to really modernize need we’re the and customers are prospects solutions newer these of really that resonating, Some interacting employees. they realizing they’re with

economy. a the it So we ahead yes, will had time, we good in start see us to strategy recovery really like serve feel well as of we and

different what either. guide, quarter really of improvement if the Perfect. is that? consensus of you’re right, some flat the or understood a then visibility? didn’t remind you look full month with about also similar this when about I assumption how obviously, year I are that’s -- Or July, to to peers guidance decreased is didn’t $X year? think of us of I for quarter, kind this posture your shy conservatism But give nice million at level respect sequentially, full talk level versus you levels, that beat. had typically The guidance you something to to month And about what And the visibility then there thinking just seeing the what you you a in your quarter at of for or the QX. last comment, employment extent point and have -- maybe But in

Sure.

saw let’s a of So bottom in small it we April. rate. at clear, dramatic reduction And on pretty that saw platform off of come the in a employees very early we number be

So pre-pandemic in terms are levels nowhere we platform. our of number employees of on the near

we not as so is saying we’re we’re next number. And any improvement expecting move into already lower further to what that quarter,

able been just the take this last that mid-XXs, just like levels, us were were in the we we you back would finished, to few If have we to quarters. pre-pandemic past in quarter

we guiding probably of kind really prior. that biggest roll one It’s through reduction where of you between workforce were we’re next the the as to that and seeing. where we’re so run to that rate And in quarter, differences on that’s

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

trends before a we and being doing the the July the count, quarter. head being Glad ask things the all record considered, year, in the XX% on just new should June, to fiscal all If think sales, then in well how in up been XXXX. given sales bookings growing especially about XXs low maybe just It’s well that? curious, strong performed I hear that year-over-year. could you are I’m rep guys and

why sales the slowdown maybe just So hires? rep in

Yes.

of say. would a I So couple things

So lot a were and head quarters, first we XX% that driven first three driven count, year-over-year, by of by up a the all, but of portion was significant was productivity.

we some good So trends. had really productivity

at able As planning with pre-pandemic, obviously fiscal day, trend next we continue into for of is end our the which of more could like much grow business. we went and we felt the which to think we increased great to a even happened way that be efficient the process year, the productivity,

hadn’t an and hiring. that. the rate completed, pretty about at a recover slowed off number we were the I able perspective of we of XX% towards to felt as of of the we rebooted get we being of run back quarter. end the XX%, obviously, still productivity kind from economy the pandemic, day, of end pre-pandemic. the into good went starts to kind we think We opportunity based to all see down a As for that And that And to same that time, we period on to get our

XX% count. head thought was increase process that in went So to into getting the that

available V-shape, publicly employment pace difference we improvement then guys see say not use Got market? and side. in you. some can asked data better for end plunge dare national your reconcile answered month-to-month to on and in just then we’re Paylocity And customer know you trying control kind kind May from of base what’s the how trend -- I we to don’t how April that versus we of the numbers or employment of June, what of guess I’m maybe broader and track understand between kind I base. but the kind the to May, I the guess do to I But the -- deep just

the Yes. a I’m big there sure not is employment. broader difference so between

looking punch see time, data kind We’re at workers information very I very, look and hourly for at week-by-week how trending. So real right? of that’s in can

flattened, increase correlate start impact and before fashion of in little So you tie in and things things saying the that and it right that recovery of you seeing the a does a bit what time. actually from if the but to kind is fairly forecasting applying of if well. of the we it was of unemployment in that’s And think in real have kind platform, of we have real-time about more assumed minor, for that we’ve advantage we very our was a what to think assume fairly our get But a rate of people that what reports, where think you there and kind at unemployment of terms in perspective, looking nationally the guidance. of number you’re we’re think now of

just they’re generally So a think -- decent They’re indicator. I lagging. can be those

line from Jester with comes question Citi. of Daniel next our And the

I hear So I on about on the appreciate on-demand didn’t anything LMS. product. products and updates your community the though pay

looking an this in update So how environment? that’s about give could you us

Yes.

would due say I trend a continues. call say accelerated has pre-COVID out that So product that I that, be wouldn’t grown but it would would the I that to COVID, the throughout quarter.

of pay seen and more their percentage in we I on-demand It and But employees. what we than an for saw And customers of our surveys and as a still, would total COVID. LMS for on-demand add growing. small relatively say, demand community to option so terms things customers for more like is did lot due we’ve pay

you. on you your go signing quarters historically, want pushouts. still implementation be up of a booked business about within remind we deal? And kind you can what or us, then pass you clear seeing the that? percentage Are new live Got couple call, from did to of of that last of talk I bookings And just a

Yes.

think So first will it’s weeks if typical order for three a and before rep a that to sales customer, all, yes time start. that time to the they us get the you submit our of from of six

get running Once a X-week it’s happen takes larger bookings time the in in quick we that market, frame. time relatively couple longer. within that client a a of our certainly candidly, and a of up little weeks. a you Most the of get end And frame. customers on while, of small can bit So

things starting clients look the of also of get in I What So but kind cycle. of are our data both terms live. July pretty as a at to it’s see going would the is, in say back to normal, sales quick terms activity, in we definitely quarter, we post

back start about really might of business. and a signed their you If have a going up take the to was step There’s didn’t at it, client happen to what know think pandemic the June starting their understand business. of they environment. They know fair clients up amount signing But kind impact the May we’re to of are and that July, in the in that uncertainty. a

And with starting those dates, start time through so saw in you what people we get less disruption play generally on that’s in July. of and terms

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

end But basically for adjusted September you the guidance, your So than guided. in but higher quarter, consensus. EBITDA your at was high of revenue below EBITDA guidance QX came is much

item So I saw you I’m saw wondering were and QX from QX. and if there shifted your any marketing down Because to R&D sales expense are sequentially.

So I’m sequential wondering is that there that’s or of else any that down. expenses kind anything shifted driving kind of

Sure. I’ll that Toby let take question.

I hit Sure. it. I you Siti, mean, think

the of April frame when describing the areas beginning were pandemic So of -- Steve business. spending the was and impacts, the end of time of in we then the in its March paused as many midst we earlier, and across

quarter. said, So lasted the you as well. had pause you as hiring on But things T&E, Steve had like significant in a which pause

think look got there’s May what that we under understood mean and us like. about lot into So the as feet of and going environment a really as I April uncertainty. our was to

see we end frame, so the we the across that And the in time And have pause place. on driving on the say back, you sort started taking into point. normal of a of growth saying then typically as as But the Steve hiring pushed we got to lot and cadence And was as business back started the wouldn’t quarter, refocus hiring -- been coming towards on I you would of and May that all June of then investments. the in get the also to we’re way areas. to

go-to-market that as So and about R&D. think

it want of managing momentum to perspective. prudently came with. all is from that out we be Our this, a But come we same when out regaining the this, in to we way goal of spend the come through

And spend those coming as I have where you and have been it paused started did we’re gradually cadence continuing. sort So in -- then you QX, that the to shift QX, levels into and part a think saw would see in of terms in you of earlier back. come

then That’s clients the their switching And for your great. vendors. key just payroll to HR now understand wanted I drivers

these it’s you year better sales than So some last booking now. of new talked about,

So pre-COVID? trends talking just pre-COVID? vendors? their saw -- what thinking want those how post payroll switching Have new about all leads these are new you about replacing like after I guys April, payroll started started now to understand their the the discussions And clients

Yes.

ever July which which employees their to definitely, increase. you has in time, to early the the from we’re part think become It’s saw pandemic to But the type after strong all was of continue done is more really say of and and proposition levels I the we of would a time, we’re you is give that’s the a before. efficiency save also understand April connect started get we And going you might have all ultimately, certainly lot going would what started a the part we important environment. going that sales. the this sales to contributor July to really commentary really ways with same, easy-to-use What platform. mean as perspective, equation sales important to the moved strong bit was tell and going through market that started. even is of not I you in we prospects to quarter. But and business, the quarter is to a early used particularly So And to a what clients uncertainty the the is give for this activity value of see you remains little

a April. in of closed just necessarily post wasn’t are conversations Those backlog we during through July. that that that and the started came So then all activity pandemic

we good So message our resonates. that feel

Okay. then last quick And question.

In your hiring terms you of back. the about, talked trends clients

loans, who trends, You of the kind back but told tracked applied you guys loan. let that can like talk people maybe something those the that? hired go, got they Any you you see beginning, they about PPP PPP about furloughed did clients after in

some off bottom, were the back. people people absolutely macro trend early people of then people April. most So those the hire was see end I think the towards go, in furloughing April, letting the to level, workforce to started reducing of their employees, at we started And of

lot the business And businesses in the of saw others of might some entered slow that rest spike reopen due out seen the just the in I’m or we’ve throughout to PPP point and saw rate that where, And of a cases. some and different July quarter been this was, as we parts flat have that a started increase of model now to you country, to again. fairly sure, figured as to line different loans at were we due a

depends And of bottom hit kind It PPP of it a sudden nowhere equation. out did moved employment, that. the it in lined. depends forgiveness So have April. bit think get to near came we’re that so little It be levels because now weeks see up use part you XX the you for could loan to legislation in work through you’re able remember, a plays PPP to doesn’t you’re sudden, all where the flat extended And that. that that, be long loan. later and a for of I to has able but loans pre-COVID the But if how cliff to up it going going

able impact levels some So I that’s out, and higher to we PPP of seen still the may probably have think the dollars loan, that net of in the we’ve all gotten that the and those others that loan we impact to But think of cycle of of have employment. have access the you to some saw. may maintain if be later I

of the line with Ramnani Piper. from comes question Arvind next Our

quarter. had of quick I here. just good a on questions a Congrats couple

clients pricing are operations seeing clients, particularly that any have ask discounts? for challenging So you

Yes.

I our So pricing think very is fair.

start let’s So with that.

end automatically customers they up that us workforce, And so get their way. a if reduction in less paying

conversations so that, around less pricing. I we see think because of And

factor enough small, to we so any was And but not customers that, some those the out, but we those I worth of in of with not was really conversations, it and big relatively say it had work a a try number would have calling quarter. we where

underlying sort the of And frustrated executing or issues But business are just Great. players? facing legacy those move has churn and clients try the understand where and of of of challenges, it kind some clearly, are essentially of from some client essentially you of some who distracted kind a kind actually and with players -- HCM guys Are legacy to Paylocity well. clients has these to they’re actually, of mean, are some the I’m core sign-ups. this accelerating I quite pressure basically the -- of kind Great. business slowed? situation is of And with more this

regained we’ve is used seen sales we’re really we places has momentum what so as the kind same getting Well, from clients had I the that July to. strong force a usual of and think

payroll traditional players, in-house regional of small our been changed the methods, providers, we’ve So compete And able to the all message hasn’t a those. with the lot.

home. the I There more different because be temperature required that in think manage the office. more connect and fact spending is important are what’s bit as a working time employees little looking from that how for are a transparency customers is become to to employees shifts ways necessarily much terms with you to you’re what you that. might of and having exchange able into for testing Things not scheduled more like come a

But we offered the proposition a so pre-COVID. little post-COVID that if about find rate employees really what concepts need have of to to for same. trying to at an maybe good are and time pre-COVID. themselves features, we And really probably the They’re more are we pretty bit so even anything, it’s accelerated with looking ways value connect But stronger they because saw new a than save modern feel platform. the and the

Yes. Yes.

So interesting. that’s I mean,

because rates of So kind do kind you you kind like of whatever being better or post-COVID if kind than gave? crisis growth explanation the in out look subsides, environment of of the were care just you of anticipate they health pre-COVID what the

similar of Yes. would very for prior. number if we I growth last you at have platform it our that would reduction quarter, rates if the on in been employees wasn’t experienced, at look say, we

we that last just like had several in in the quarters. been mid-XXs, So

from good pretty perspective. got sales we’ve so a And momentum

those yes, a comp are confident So to we really of obviously, been have back reduction that back terms get we year can quarters to rates. kind you to those of quarters. growth assuming in tougher levels, workforce start And later getting some

growth. we’ve bounce more little get to always opportunity environment, -- a And so on that we to a is enough yes, front bit of we get as focused in big as us. The XX%-plus market there’s normal potential but for around

executing. the in right investing We’re things. The team is

growth. think to So we we perspective, long-term get from model that back XX%-plus of long-term a

closing now over Steve CEO, turn will remarks. back Beauchamp, for to I the call

interest just to job by forward. big that for for thanking a Paylocity. have again, once like the I’d that you momentum employees you, months great up in last and just and your over a a had you reiterating as have Yes, thank And us we’ve building wrap of the four move all Thank everybody, tremendous done night. to X,XXX-plus we

and today’s for you participating, may call. conference disconnect. this gentlemen, you concludes now and Ladies Thank