Dayforce (DAY) 2 Nov 222022 Q3 Earnings call transcript

Hello and welcome to Ceridian’s Third Quarter 2022 Earnings Conference Call. I'm Matt Wells, Senior Director of Investor Relations. And on the call today, we have our Co-CEOs, David Ossip and Leagh Turner and our CFO, Noemie Heuland.

As a reminder, all participants are in listen-only mode and a question-and-answer session will follow the opening remarks.

Before I hand the call over to David, I want to remind everyone that our commentary may include forward-looking statements. to differ uncertainties or materially subject Ceridian's could present are to results from statements risks that and cause expectations. These historical experience can filings. reports of found such Securities as description some statements these Commission, and A in cautionary our of and Exchange in filed we uncertainties the the with the risks be

behind release to performance. and Please rationale review Additionally, over call, use available this for our of the with on we will SEC earnings the non-GAAP are press measures describe a press and Both non-GAAP the course reference filings the release non-GAAP these our earnings filings and measures reconciliation full of our metrics. website. GAAP our Investor Ceridian SEC for to of Relations

note, be replay will website. a Investor Relations call this available our final also of As on a

like David. And turn with that, I'd over the call to to

week. joining results thank next guidance as we we the speak our strong conference our and very you everyone, global prepare company Hello, as QX continued for scale. I'll Noemie Leagh Today, highlights customer And earnings open as about provide exciting call now elaborate the product our market on place year momentum ability and and then taking insights momentum will on in for questions. call. commentary to performance and for our quarter some both full our QX continued will the before well

a quarter. U.S. very Let stronger the me exceeded third of despite had across high our strong our headwind We with dollar. guidance end metrics all start performance. financial the We of a

interest basis, recurring and excluding return from income float a revenue grew continues constant to currency strong benefit Dayforce PEPM Our remains On revenue float. a normalized more environment. growth a XX% XX% rate and to

revenue $XX.X cloud XX.X%. scale to points of margins improvement a recurring XX% margin expansion of was XX.X%, ago when operation and million, business to basis at versus Adjusted expanded Our business EBITDA the was year very adjusted well. XX.X% EBITDA and XX a that year-on-year, pleased adjusted report I'm continues gross year-over-year.

and fuel our ability to product also continue invest We innovation sales revenue growth while durable in to scale operations. to demonstrating

in expansion cash Third last margin benefits. were quarter third and operating year $XX.X quarter, from float driven and the by operating doubling flows million

to of has and money post-pandemic quantifiable been world people, like a better. work The our as brand always difficult have the people Our make market, demand organization permanently saving in the focused the real for companies way robust. every has promise remains on work changed. growth value, ROI significant always the Dayforce meaning and Dayforce back worldwide a reality is has of result, Furthermore, delivery the is is asset to efficient most promised customers. And

high providing the value and efficient We quantifiable companies engine insights the way the for enterprise, of across real-time that are employees determine delivers engaging while value helps also This reported. organization. most the

I in will Given fact striving and are organization in every the demand efficiently more for to why ask is sales reality new of strong, today's a our is that all up of conditions, remains to work clear market and which Year-to-date pipeline moment. significantly, in Dayforce it's growing. the detail discuss Leagh operate

to Turning innovation. and technology product

We in year third that are to row. for pleased very a report the

a the Suites only worth noting named in its Quadrant It's the we employees. Gartner HCM alongside been more pure-play leader Magic for that leader vendor HCM have a by have ERP We X,XXX lenders. quadrant in Cloud organizations than that for are

our us our continually and ability We ourselves were scale from pace competition. separating have at innovate said, to resulting

and market to of our innovation at allows expand been or in breaking that’s when simultaneously, clearly consistent multinational, addressable We across people for demand when full our validated around a remains how delivering time global strong. serving suite native largest A old believe all capabilities point whether in what do paid. us it's segments get and we pace world's markets and models geographies the centuries,

to that we're provides customers. new Knowledge questions far better more XXX compliance employees than find work customers HR our for bases the delivered the and that technology to to and makes following which we've not HR in life quarter, their empower professionals Management, done. XXXX, ability proactively. our create HR answers So features with we In delivered to knowledge the common

way Knowledge our enabling through and build, and client edit provides to Mobile to enterprise Integration manage self-service HR with Studio, fast their that experience which customers and devices. employees their Management Management directly seamlessly teams Timesheet with and manage for integrations their hub. capabilities integration Dayforce. is And information provides efficient engaging employee to a delivered on mobile managers view deploy,

tasks Integration to see Dayforce the solution and it continuous where that reporting doing Wallet, of we incredible differentiated like more wrestle deliver traditionally companies efficient. so, highly it's of the single many in technology, and Studio engine our strength integration to makes Further, continue manual allows market a our us innovation customers momentum. that with automates calculation

than month. at increasingly eligible wallet to over employees industries. user of of the is all organizations X,XXX times per uses us, what telling trends These an sizes registrations our about have for payroll. XX and which signed live. the trend from becoming XX% Dayforce are the continue is and users It's Wallet illustrate modern across more Dayforce customers expectation and Today, Average the are Wallet customers wallet XXX typical

and Recall, real-time employees employees' thereby employee financial employee employer, Dayforce and for differentiated cost Wallet in the the by our when additional to that wellness to get significantly with they alternatives avoiding no improving reducing or in is turnover want customers. cost allows costly paid while it

conference more be to live our X week, time three held on this the Las first in in November customer of years, Vegas. starting display full next annual will for XX at All and

both introducing have our what of customers, to customers a number Reflective across we believe another and to high market prospective be breaking forward paradigm of innovation. and will demand, attendees you look I we

to you to EBITDA continuing flow all on and operating making meaningful execute our path give and details I'm by more Leagh our see results, to very us conclude me on growth over to cash initiatives of to adjusted Before passing on XX% let it our generation. progress pleased saying

to have long that. We and being quarter this of company is the market-leading a HCM continued global proof committed

it to Leagh, you. turn I'll over

David. you, Thank

As the we're momentum our region segments all while our every from same time to growth execute we large business scale. David which to noted, across continued on to at operate. QX, demonstrating our saw levers, and drive ability enterprise in continuing in In we of emerging

up our is sales by increase. strength years and we are This year-on-year. of engine, new customer in productivity sellers’ sales two driven net the Year-to-date significant see continue investment after primarily wins significantly of to

augmented deals offering which year-over-year, are up over both market million indicative with the mid-market XX% market. sales momentum Global stellar consistently our that's and strong of the continues or becoming up transactions period nine-month also above have large relevance in our the year-to-date, large mid traction with from our in and EMEA performance $X region a breadth of we is For move customers. notable enterprise the wherein global the in quarter, by third EMEA-based

release motion, the for XX% take demand. sales now wins to base, pipeline fourth the back pipeline note which strong, focused year-to-date we Dayforce. Our on that back-to-the-base represents sales. a customer our while illustrate our of suite, customer they also on strong Dayforce listed maintain like simultaneously strong is approximately very demand healthy QX, quarter earnings XX% and the delivering market I'd are The and in our of are in amongst building teams

quarter. As last we've choice is large course by very the customers all the of as our their evidenced scales of along, this selecting said platform over several and Dayforce global platform

them Dayforce reported, already Ceridian single handle retention benefits. of XXX,XXX payroll payroll employees work and one our As largest for processes live chose the of and and shipping its we logistics approximately on world's to At platform peak, offer and recruitment to Wallet critical successfully. the companies modernize shifted provide we seasonal to unique have this customer, Dayforce to will and getting

leading chose and XX,XXX As selected steel to Ceridian to North QX, a And across largest of Dayforce complex regulated the Ceridian Asia-Pacific. Europe in UK with well to employees provide retailer workforce full suite managed environment. and services America capabilities, in its its company provide XX,XXX employees a payroll highly including flat-rolled and management support in

that include large lever use the workforce the focused to to with A and in the company company With continuing payroll with our was base. help with momentum of its calculation while the to technology line In delivered differentiator global increase accuracy the continuous in in payroll. already selling efficiency. X,XXX and Dayforce in to key services mid-market financial provides growth back expand payroll strategy, management its with place, the and U.S. modern on in win to we’ve Ceridian’s employees enterprise, processes The this win ability Dayforce. streamlining chose globally

system with HR solution the global and compliance. chose global in as the into will looking manufacturing machinery to security A have platforms. was XX data can human a pay, strengthen management for in employees With company countries, platform, replace Dayforce unified visibility and Dayforce and company time its leader better its single multiple capital in packaging single the X,XXX

international have ahead global we’re greater centers cloud operating efficiencies adjusted to services as path at clear great now platform. footprint, and to addition margin sales gross our XX.X% scale momentum, shared a In recurring continue and leverage as to we our we

is customers service operational driven, to expect continue have scale our while improve to All come of being metrics, us. core the this we from

proxy to Customer record best-in-class. support monitor exceed Customer continue which despite tickets, efficiency a SAT to and a remain number customers. we both for continue customer retention of trend rates which supporting us scores, downward product are expectations daily

XXX implementations ecosystem of is ability scale of SI more than our of many Dayforce Our priming and grow our are now which to globally. customers’ essential to comprised partners,

long-term developing to customers proud we internally, health and the that growing people ensure reflect we looking are to And of serve we and the the that the of are so way business. our

VP As of XX% above our globally female, our of are examples, are and level employees XX% more female. than

four we we completely this result earlier a more, disparity pay our Equality were Index and on many these welcomed of Bloomberg and As the walls. have eradicated inside to stats year

pass just By and and to critical navigating I’d every just all simply to has uncertain like customers their together. is is made lives and for taking Dayforce work before business, and next for these prime We others, thank so times on like starting value during on who showcase customers Blackstone have people’s the partners measure, investment registered delivering stage Danone Insights North week. deeply the Conference And Coca-Cola that this so success. I it and how while better, America very healthy continued appreciate that are we Foods our and our many to return Noemie, a Fourteen

day-to-day the As each you thank quarter a in mission put for to quarter shareholders that close us would I and have our and quarter, the to Thank broader our you. our people. to to while I our year-over-year. you it we on that you in with Thank deliver like do after to and customers, faith make

And with over simply Noemie. I’ll it to turn that,

Thank performance you, like additional published press release is I’d provide detailed Relations quarter Leagh. which Investor and full to the on our website. guidance, third on our color in year

David currency, Notably, at Cloud third profitability and basis As performance highlighted, revenue guidance to points total our and XX%. headwinds of growth. excluding recurring exceeded across despite revenue FX float, XXX XX%, approximately all grew grew quarter XX%. revenue metrics constant revenue, grew Dayforce

revenue Adjusted by in efficiencies illustrated driven recurring EBITDA gross our adjusted margin points. of as as operational well of quarter XX.X%, XX XX.X%, of by exceeded margin an the as expansion our cloud range guidance basis upside

$XX.X million cash and last part margin driven Third benefits. year, versus of expansion in flow operating float operating by quarter doubled

by reiterate a that impacted to dollar driven Turning fiscal to previously compared growth our XXXX what anticipated. updated we want U.S. FX to by is year I stronger additional guidance. headwinds

a full are revenue metrics. all the range raising on year guidance midpoint our narrowing basis, across we constant However, currency and

ex-float we’ve average, to FX revenue of growth full XXX For constant XXX we growth revenue cloud and revenue reviewing at On QX, points. impact XX% the In FX total the our XX.X%, of impact to growth these basis greatest in is now want Dayforce headwinds I the basis XX% to year, XX% points that of recurring metrics currency. quarter by expect note year-to-date. experienced growth

of offset float to sales make want historically, partially we’re fiscal by raising year to assumptions largest our I upside flow-through EBITDA quarter. increased revised point marketing QX, sales our in profitability spend adjusted and last the XXXX guidance and is in reflect QX, Now

of margin the significant guidance year-over-year. improvement represents At midpoint, adjusted a full year EBITDA XX%

continuing efficiencies the said scale are As drive we while organization. for to before, growth future and investing across committed to

to I’d it Q&A. over back for like Matt the turn to Now call open to

you, Thank Noemie.

first Bergin come Bryan will Our question Cowen. from of

I’m would given Wanted afternoon. uncertainty. a it the just a to the demand Good to by high-level just Thank could geography, Can just really macro helpful. talk curious Hi. increasing seen and start by segment of have at you sense, us you. pace be give any decision-making just you pipeline size And question. buyer you impact or client if

out, out. anything haven’t you impact we seen Leagh pipeline Year-to-date, QX, all. sales haven’t our as Leagh, QX seen at had And significantly, very any the Bryan, pointed up any impact sales. Alex, strong would are as we looks robust. add? in pointed Leagh we quite very,

No.

a Okay. force. then That’s And sales follow-up, the just great. on

You talked feeling sales bit little here overall on bit dig you’re force? sales about about you the more just a in Can how in force retention levels, little a and that. productivity staffing

is good. quite Retention

We’re up, fully years. staffed. as Sales the out two significantly productivity is pointed Leagh last over

you. Thank

Our from Baird. Marcon question comes from next Mark

to quarter. a beating about guidance? afternoon you you and little and how here can drivers Good the about you it? clearly amount the the In a think we strong material third XX% some XX%. should on little bit about FX. there talk the by fairly bit Can sales congratulations results. of what down the Bureau up a ended Wondering, Appreciate being the talk You are mentioned in commentary,

Sure.

Bureau about at largely the side, the platforms. to million On that’s end $X business, about QX on life the an about of secular of drops that an just Payroll which if of benefited in Bureau side QX. million was it of one $X QX I million, accounting down the $X Ceridian Acelity business, in true-up was There our look

QX. And down going obviously, there’s drop so a into

The largely quarter-over-quarter. other consistent line items are

for all [indiscernible] life is Ceridian if a So of you and true-up One anything? those movement in maybe items. mostly onetime an add end it’s Noemie, two platform the of can old

a Maybe guidance things couple revenue Yes. QX the for of on other specifically.

– grow XX% expecting to not constant have We at we’re now XX% to currency.

there’s at basis guidance bit previous million versus noted, $X.X a On you currency. recurring Dayforce headwinds maintained XX% about to range of we our GAAP XX% a our As of FX ex-float, constant on guidance.

guidance. recovery from bit of from little boost. Remember, really us second COVID a of hasn’t the had which time gave that in changed issued last we So we XXXX, half employment level some a

rates compare to growth a one, So at our the for but half second Dayforce difficult recurring is we’re maintaining slow.

upside interest them. environment, We’re other continued line sustained the guidance. expecting David which our a we’ve reflected float of top on of result rate a in bit And the as lines, touched

business very and throughout performance strong The is had to is Powerpay other primarily say to We to is on actually the single end year. due decline expected continue The digit, of would thing I holding but the Powerpay still headwinds. well. that core QX, we’ll a FX maintain in

Great. in be And regards just with new to continue clear, those correct? retention, of and terms to Acelity go client Ascender sales well, to and

are do, we successfully. in They quite and actually still Ascender market selling

you. Thank Terrific.

comes Panigrahi Our Siti from next Mizuho. from question

like XX,XXX Thanks the It’s in last talked for these quarters, taking another to few deal. XXX,XXX of impressive question. kind large-sized XXX,XXX, deals And about deal. see very users my you users

of Have vendor? about So what’s pipeline lately? Is legacy really talk demand? large you such driving And such it do? could a something by seeing demand Or really to driving such disruption what’s you started deals?

that. four this market the extensive starting journey of three, the the building years, has been for technology very and network quite thanks out proving Siti, in sales to with over an successful scale the that again, a last part force, large can to through organizations. Well, restructuring deployments obviously, the Remember,

Our the global market. helped also us inside actual to has the other relative footprint differentiate players

traction we’re very the quarter-over-quarter enterprise. say of So, coming large I’d into are continued together, things and those seeing four combination the

your expect deals recently, go-live some this like? these then to go-live? does you And December when comment is could also, of is of look year the do big typically, you them one How it year? closed pipeline And large you How month. about

which I a firm go will the live -- successful. Sure. actually quarter, that actually quite believe, large in Well, have is accounting we

probably quarter, another the deployment be well. We of or our line also a expecting people. we’ve over perspective, a go-live same expect few that. a quick successful very had it know, And we’re eight months So sales as period it’s you do as or must well seven QX. time about sales largest of those from quarter for XX,XXX inside about And strong going quarter a quite and

Thank you.

of Bank. Shah comes question Deutsche next from Our Bhavin

unmute. maybe you Bhavin,

Pfau our from take of Blair. question next We’ll William Matthew

EBITDA great. that Maybe for improvement. on the question operating specifically XX% going future, taking you -- what Hey just then target the Thanks. operating to can target do guys. in Wanted margin get you more are efficiencies seeing? efficiencies, you’re to you what Thanks my discuss And ask you the to margin see mentioned? EBITDA EBITDA that

Sure.

quarters. us heard last We’re the over focused, number about speak as quite of you’ve this

place. we’re Cloud is Firstly, seen the on the operational the customers a pointed at XX% customer even calls margin that we’ve better as processes Lee and from point. efficiencies one had number side though to where to more XXXX. in by The coming areas is software automation live, get XX.X% that support coming recurring of currently having used taking actually example. of out, is lot support She particular of in a from are gross and committed actually that from, robust record we’ve mentioned and to low, technology obviously We’ve the coming on type the to it more many which

On the we And of hold a marketing actual side recurring. two trends comes lot to from of to and a flat sales percentage relatively of as covers as expand. margin revenue actual the them continue P&T side,

revenue The revenue is every happens that part margin, XX.X% bureau currently from a and you first revenue Cloud XX% got has that the And as recurring comes the is has from Recall versus about a know, X%. come up percentage Cloud that side. year, that second percentage the goes total Bureau the recurring the of of the by margin.

lifts the lot quite movement margin to of significant, up it the XXXX, we the shifts quite of more that the improvements. Cloud be business. By that that a side, and drives actual overall recurring expect As towards recurring

Appreciated. guys. Thanks Great.

question BMO. Dan next from our Jester And comes of

Hey business. Or margin you we sort evolution margin is that everyone. year? a levers of good to If we pull sort question. my for lot that the a that next slowdown just you to natural do afternoon the Are opportunity? -- just feels on it expand linear there that? comment, could on David. see of Maybe XXXX of get taking accelerate as of a like Thank the progression you Can organic, to is

Noemie Our year, we by in it businesses recurring spoke we can when QX Dayforce second see half results, of that said are the guidance business, the grow as we for about and you same. which about the would highly by second plannable our expect about half, the the remains the XX%

So tremendous we visibility, also get quite we can the means well. which control business

And a slowdown, buying any in see yes, improve the obviously we it can that go quicker. so is decisions the of don’t if again, et in in But these cetera. trends to market, which, pipeline, the if there we the profitability live,

not And APJ back changes to efficiency was lower QX, side, product making advantage go And footprint implementation through shy if be those being the business. -- of side, it drive offices. drive footprint the Asia, in the our recall, global acquisitions support we et that, technology organizations G&A, in and you those taking are the cost we cetera, of that if you side, of And footprint in we’re that finance, customer whether on leverage furthermore, the us part you about our you efficiencies. if back the go could saw operational to thesis did to to we doing

the on I Great. a been providing -- detail from you that here go-lives? the pace -- possibility quarter. pretty the further very back pace helpful. a somewhere XXX about we go-live a customer basis stable now if a past is appreciate follow-up go-live to Thank at look over And the wallet. see are of That’s here? XXX between Or really much. wallet on it’s it’s year, we accelerate a then I just there for

If backlog I I stream. we’ve think about it’s it, effectively got XXX go-live. a accounts in constant compare XXX, for

around taking a once active a we it’s the And registrations clients. employee of the of at particular per just last an we somewhat XXX from each look activating do so a day, to do until while. has users them those and for on constant little that, it, get bit of I we card When probably there’s been registrations And and accounts. the registrations time XXX then different that go when live matter over we basis the

you. Thank Great.

question next our from Murphy take We’ll JPMorgan. Mark of

Yes. much. Thank very you

your actually the I’m proposition value. you the And have to in you stronger interested going registration David, we access you’d strain an percentage there’d catalyst little focus maybe wallet in keep think So quantifiable employees script, more maybe typical sooner, that it’s perhaps this of a whether get do slowdown, the be mentioned with if and value extra to business on resonate moving a their to wanting higher? little pay into economic feeling

wellness don’t there’s Wallet a modern things. few a the solution. expect embedded the think definitely system any financial for really organization flexibility is benefit in the North have paid people payroll we provides, From is that’s doesn’t looking the wallet out Mark, through America become that charge that as that do especially modern employees So today there a not interchange. that the has wallet to in any the the same fees to that payroll through I use that wallet it a perspective, to given huge

our attrition rolled a typical rates more cost we’ve a wallet the replace organizations benefit value have is seen tremendous improved that to at and than which organization. quantifiable voluntary at perspective $X,XXX by that a have $XX,XXX those a person The out customers XX% for organizations to between the savings that from is those to

savings, our huge thousands hundreds you leaving of of a So say, can people if not organization.

very that on high and to change. to new expect payroll attachment rates customers don’t We’re I very, seeing

they’re that end kind which ask health, just macro the your keep you as reason at sounds data But on some it the in not point does of time. impressive, believe I the And like resources to quick amongst the of able it, you that like be Dayforce issues. running go-lives, seeing of you’re cycle, customers than help it migrating seeing Because are. follow-up, Okay. to you’re again, Great. providing is macro to some have up And check going clearly this I -- deployment manifesting you’re capabilities and not support. the to then think I and on providing the and the is ever all better bandwidth sounds understand they part be do to seeing find a if and

just you’re pandemic So, think when wondering in be instance, if then there, going better to I’m you place actually hit. the a for

From the to of CFO. like has every employees goal onset the Dayforce, been always make a think

strong investment very people focus a So our cost much to on return nervous strong, where and on efficiency. be customers. In focused an more on may economy or

Our ranked know, messaging one resonate for really as -- payroll, Gartner. for nicely. by you Because we one number compliance client number

have believe well. that We which investment as I in Forrester have done and spoken studies market, about, fastest customers on on the others have, our case think I return

implementation going product messaging taxes such, accounting comes when So on We’ve the to become leader it and that the I world quite of sale. very the QX mentioned resonates side. the Earlier believe in and one very, the with firms, I in is our live, nicely. day efficient was QX, the large believe, probably that

[ph] year complexity terms and you’re that. go-live talking of well $XXX in about So obviously, around tremendous a

becoming compliance take able And side from difficult. the payroll addition, today workforce So, HR and the will to and and implementations we’re more life system. in customers continue are more and I that with continue savings liability the compliance does of lower believe because in their will our do that to get our compliance

aren’t The that would either. only add is we I constrained other thing

be ecosystem years as well out are the and know you of last So, our to hands far couple we an so able more market spent to in the there bring building customers live. SI

you. Excellent. Thank

comes next D.A. from Robert of Simmons Our Davidson. question

you How coming conference you back year, so taking for [Indiscernible] catalyst be the do for guys to person’s INSIGHTS obviously, that but of the much year? next question. in going mute. Thanks much on a think this not

recurring the attending, million our customers healthy you always conference. perspective opportunities at we’re attending. $XXX in First, in company, we levels customers. the the perspective of are as customers perspective a customer customers And are to the terms think close looks number to think we very that the we’ve And I revenue INSIGHTS is When very, are as would know, wonderful customers. addition, are conversion look that from high. of agenda of rate probably with across very live expect excited that I The fantastic. high The of speakers a very seen well. attendance

conference you So very anything there. hopefully add on would Leagh, and see you it should good we’ll be that? a

I mean, would is And two it in quarter, I things. is us accelerates say important. pipelines it I all year, also which is think the the which It does build important. deals future current for helps

the three four meaningful So closing or days out accomplish this really in and what we is to the year one. next to success of

sales makes of you then And that? I anything it. That anything competitive pricing, approach, Got from are sense. seeing landscape, just kind competition call marketing, you in out product, guess the that’s different terms of the

would in difference is now with the respect which landscape. that going the and demonstrable alone single we Gartner I I there’s in by the me. that as the surprised that vendor looking say were we difference make forward we way are compete. think competitive will I very say the mean, the I fact What demonstrable a not David’s would leadership Magic Quadrant at only quadrant, a to HR pleasantly

you Got very much. it. Thank

And our next question comes from of McVeigh Credit Kevin Suisse.

Great. I to quarter. to way sales incremental in much. that there what initial relative reference was and fourth investment any some Is quantify expectations? Thanks Noemie, the think marketing you’d so incremental

next you hosting just week. we’re are As we about that conference talked INSIGHTS we having, our know,

in investments we’re definitely making QX. So the of part that’s

which our fourth our teams, quarter, our capabilities want increasing is historically for them talking and obviously because customers largest We’re in implementation also travel we the sellers in quarter. to the field

we’re which well, bit travel as incremental fully. supporting and So there’s of a little was expected which

the guidance So terms those for But adjusted are rest, year. in the the full main of items. EBITDA

we’re sales larger to QX continuing quarter. We’re from upside, profitability the our fuel make and the flowing through investments additional excess and to float

then And of on the just Great. would in rate follow that be flow? assumed QX up are quick what type assumptions

current we’re assuming rate environment. Yes, the

and The laddered embedded. hike have So XXXX it fed invested recent to core. we the because in specifically remember, beyond. if throughout that’s you’re rate will be is actually portfolio and effect But of referring half our

float And so current and current that's the the continued of and guidance that’s letter our the portfolio. environment rate

the If we ended question, quarter. we it the off X.X% you sorry, would fourth and in asked about of, float expect with a be balance rate to QX the of of X.XX%,

Thank you.

comes be Michael our might on next with question Wells from mute. you Turrin Likely Fargo. And

of Zukin Our next question comes from Alex Wolfe.

Hey you hear guys. me? Can

Yes, we you. hear can

or Perfect. me. guess two three just I maybe from

press was First, that talked bit more was partner. you a provider was there SI or that the you a an with just was could led guess, about reason the I an deal that partner? a I interesting? unique that by was XX,XXX I deal? for entire that And guys mentioned companies global really talk in a What Was suite. employees, a release highly that single operating a like want about is, SI XX strategic ask module seems And unique it little – it? about this again, you not a company, products. you but big metal solutions this multiple What complex about deal diversified

then follow-up. I have understand a is so And more little in of of, quick a that, those And got I to bit wanted the just pipeline? do you

say don’t just and you Why Yes, I grab right. a question. it’s great were it

further it were of to separate a partner. of are. was XX,XXX subtext the us you companies. that? the XX of be yes, And on think is They answer think And believe your with for this is They’ve time. XX and XX And by suite countries. replaced are solutions asked a unique operating doing the the it would was the And was there all, deployed partners employees. actually partner. across is, capable point did full I First deployment partner learning end it curve. who I a yes, locations, XXX some We they been disparate longstanding I

So brand isn’t time. customer a our successfully this live to new to And were they ecosystem. partner bring in record able that

you the years of of over know out yes, shift can The course question is, of it’s is there imagine well that many. in our significantly there? the more you as And answer to couple that direction. next And the is those ambition

our of into subbing rapid many in projects do to speed in so we’re develop order over And in more cases can partners to so is that time. be what we’re able we even at that other and learn doing

guess broader question. also I maybe Perfect. just a

they you David, backdrop way we up you good. let’s what in it, qualify you’re environment. the very particularly on QX. when wish opportunity in bookings I what performance again, get sounds putting is QX, now, of we from see like I really and that saw go for forth you very, call it you’re maybe more are in that back of know the guys, strong Absent there kind this, And a scary macroeconomic specifically, a incremental very bookings So could to

it course You’re lengthen of of I see quarter, that but to not over is more and demand types and making of cycles this backdrop seeing cycles delayed? or resilient space out, various next deals economic given to this not before more been going these do How just the through these you the the yet. why you in out this something want coming there COVID just playing later? year. getting specifically, you’ve see Is companies. anything understand Are of

things. A few

was more it is world becoming now first pandemic much than The work from anywhere. is beforehand. from global home quickly The work

we’re that for than really with And a a you finding of can built construct record to global employee product. so workforce global capability has single nature’s handle before. market system there greater capabilities anyone the nature the capability, actual payroll the in And into management isn’t else where be requirement

viable enterprise and employees lot which other enterprise And the up employees. X,XXX decisions where In side goes there even XX,XXX the I to the driving the customers us up goes for space coming that that’s on to don’t majors so a because are think really solutions market. market, to of are in see we us,

you There They significant across you the because when have move a cost each is come employee together. to a infrastructure, the savings record different to all single application, pay for of database, the the modules. don’t

lot efficient efficiencies operation tremendous inside the payment of for people use there’s and a subscription So I much it’s a much more the And more just natural decisions driving of And to obviously perspective. from from that. think the that’s then system, market. an

people to they’ve we in space been finally, paying vendors issues customers in in about the had come cases, with then accurately. And strongest always many have other us compliance. And the because

we And very do obviously well. that

to provides and and Joe's dashboard, add-on in In compliance an features the what going are fact that is about by terms employee that jurisdiction one there that payments of a requirements show the information hardware changes compliance INSIGHTS of now is the to such.

So I think of that's a part it. big very

Thank Perfect. you.

And be may we'll take Samad, our next question mute. from Samad you Samana from on Jefferies.

on Leagh, This Sorry congrats for Boretz David, on strong the about Jordan is results. that. Noemie, Samad.

the bookings wanted to touch maybe on mix. I So

you So up remarks. the that's that in Leagh, than deals million of number are and XX%, obviously, impressive. extremely $X prepared greater The noted

us bookings mix give on maybe of segments you versus trended customer mid-market this color maybe quarter by prior versus some quarter? could the enterprise how So the

are down that maybe I that just pick up mean up is that point to I'll put significant and XX% in suite. call true I what full of customers would buy $X it, $X is million-plus million Sure. those the of year. say, But number this the deals a a large you deals as are upmarket, number let's we're it just that mid-market underscore the a in enterprise. enterprise also deals so seeing PEPM

seeing I finer it seeing it emerging a and are EMEA our seeing point market. put categorically America, momentum, We're APJ. that. North just respect mid-market, on it say, would that's I in in We're With we So our in everywhere. to

segment seeing degradation not our any enterprise, in above seeing one seeing X,XXX the enterprise, is in where we we the in, it operate to David's is are And We're in slowdown between a There momentum. XX,XXX. XX,XXX. we're point, which it and pipeline large or that

M&A. a Great. I on That's quick to question ask color helpful want you there. David,

in bit last closed out valuations broadly quite a HCM acquisition that last then. of in guys have since year. you tech the December was come So And

any you're M&A, any in been for regions And more thinking there about specific globally? has So others are how there change M&A? future than maybe you're so targeting

There's change. been no

M&A we have held buyers jump obviously, any to burning versus don't a the think there's the I on. And markets. expectations we lag public companies In a terms bit privately between have of of strategy still of

So we're countries always quite around XXXX, white have huge be are and the in patient a which payroll, DAC to wait into actually and see where what comes the the the bit at German quite of we moment. way, out. all, is we we backlog a payroll of Areas have Nordics, would inquisitive We the German for exciting. launching by customers space that

quarter. question for and Awesome. on taking the my guys again strong thanks Well, congrats

Our next Steve comes from Enders question of Citi.

Okay, great. Thanks for channel I taking on the to more here. the ask want question initiative.

out opportunities at is you guess this brought more good a point for you in I think partners. called opportunities that you much engine channel into the in I how fulfillment versus channel bringing some from were you?

It's pipeline brokers, what kinds, system that's I great question. a touching integrators, they're partners, lot is through influenced XX% that our or say, the plus that's win minus we're pipeline do better a now. that would our And seeing our partners increasing that because in of that's all and segment is pipeline but of they is the pipeline of quite are rates qualified. when significantly

Got Okay. then here. on That's question quick another And maybe you. helpful. guide just the

terms in flowing how kind in about of income Just and of thinking float EBITDA you're there.

float in the up of about line. you're of then you're of that kind investments past float Is well. here? And kind XX% I further the upside we're think side, how beyond to as any thinking utilizing the of mentioned and kind about how thinking about change thinking bottom kind of you in there XQ there going

XXXX, about recurring $X change. top know, XX% billion X% been of – as no what on focused, we EBITDA. margins when there's see We've No, about you quite we and look towards line,

the that EBITDA adjusted will We also very numbers, flow cash to number as be EBITDA operating close well. believe

can Regarding you amount are the It's a fund, in around of in. rules invest do governments and which in the types we the largely as invest we that well. AAA-rated of can means and corps are float that that AAA-rated quite we float, limited securities certain there levering

we a balances And goes And lever XX% typically a about of portfolio. X.X other put the there, overnight. typically we portfolio the that into We years. get about XX% out liquidity the into

so would And But of this bit a which if raise expect it time full longer to as kind the I that down will the the more XXXX. interest the at is rates come prior than – takes well. get call gives to of they moment, actually we down, little The do at I us come some that point, impact of environment. it for they to normalized that we're down similar of rates. Quite rate before in wind

always you our it's operating been type and like, – of part of model, if the business. of So

technology. product In terms in of investments, we continually invest and heavily

see delivering Insights that we're look in our we continue the and you marketing, at get what Sales actually well. products sellers. have we that Conference, growth the that we've million of But in a is investment invest in year-over-year investment we investment alone. that about event in If all from sure actually mindful the made to QX, can probably you which on particular return $X do very making investment. investment we're as

Okay, Perfect. Appreciate – there. the color

from comes question next Barclays. Lenschow Our Raimo of

and hence, people demand wanted talking you. mentioned are back What you elevated in other people Thank comment well. that don't post-pandemic? as earlier cetera. as on questions But demand you more know the to I pandemic well seeing got go again. could for were to post I and questioning one. vendors a its as HR. et the compliance like to David, like You one as already, why of when point seem market, feels pain that HR like does It the if strategic you see

clients. out coming pandemic, across rates So the of attrition you the had in increase

have So succession it that. have I was to our like proper as more mentioned, a more more outline around global strategies became planning, movement, of and important There workforces. things property

that to to the about did so business? enough Because to a finding And could that. system important. of capacity a were you all and Analytics you had HR sudden, report a think push have that trying workforce your on handle people you very became through global manage

that's metrics And around without difficult to very obviously having very, people, your do.

of more type it's makes today can fairness weekly. been analytics world requirements. It – much on difficult. of So were actual the tax like rules employee are to you of there’s one a yes, system we the kind continual become pandemic where employment. the movement almost of during And changing employees, that And the wage almost those that started employees, things a like all for that ways database minimum rules rules architectures Compliance for at sophisticated rates has full that privacy, in employees. easier. payment handle types for focus elsewhere need where

people. You as make get can as from sure your possible have you to that much

stay to the for that your make experience build that they you as sure out that want have You possible, so their at to as continue have to careers is and people best those organization.

experience AI that to And have if learning talent you you on bringing need are the you and throughout systems have sure learning you experience and rely ML have management strategic the on have leverage the when And actual people. acquisition right right to you systems do the have to candidate to do to make need that of embedded you vacancies, there people. have churn, because is that

aren't of more of era I think that last all are to there add very, probably a I workforces return is become So with I cubes. would back going important. know, back is the the hasn't been to as to distributed, over today think go piece and very that, the kind people And you deal office. And

new doing you so of of new and can work. management And that sharing ways in collaboration really world help have do to with this idea performance HR need systems

if to thorough manage I'd answer, thing people used inside to only I office. could, is shoulder-to-shoulder that add, that we an The very

And as pandemic. Given significantly has technology that question, a to and your strategic more post direct answer aren't is to a HR people the are work, HR period. office, result, become returning organizations relying that on to technology support

yes. leave Congratulations. it I’ll Okay, there.

Raimo. Thank you,

our session concludes you that And Q&A Thank evening. for the everyone.