Paycom Software, Inc. (NYSE:PAYC) Q3 2023 Earnings Call Transcript

Operator: And our last question is from Alex Zukin with Wolfe Research.

Alex Zukin: Thanks for taking the question. I guess maybe just a clarifying one. If I think about recurring revenue versus services revenue, what’s the right way to think about services revenue specifically for Q4 or implementation revenue? And then for next year, is that just going to be something that trends down significantly from where it’s scheduled to end this year. I know you’ve typically not provided that level of detail, but it sounds like this strategic shift is associated with maybe some elimination of that implementation or services revenue.

Craig Boelte: Yes. I mean there’s going to be two pieces. There’s a services revenue and then obviously, the unscheduled to do some of those corrections as well. So I mean, as you’ve seen throughout our history, you kind of see a sequential Q3 to Q4. So you can tell that a lot of those services revenue and on schedule, even though some of them relate to bonus runs, there’s quite a few of those in Q4. So as we were looking out to Q4, that’s really the impact that we saw into Q4. And some of that’s going to carry over into 2024. And that’s why we thought it was important for us to give that initial look.

Chad Richison: And we’ve got 80% of our employees. Okay. Go ahead. That’s fine. We’ve got 50% of the ones using Beti – the clients have deployed Beti, 50% of their employees are now doing their own payroll. So that eventually goes to 100 and then eventually, we continue to work with their client base. And so all that’s to say is our clients should be getting more and more efficient if we’re – if it actually works, that’s the way the value would be showing up. And then to us, it will show up in go to market. So, all right.

Operator: There are no more questions. So I’ll pass over.

Chad Richison: Sorry, I’m going to go ahead and – very good, want to thank everybody for joining the call today. Over the coming months, we’ll be hosting meetings at a few conferences. In mid-November, we’ll be participating in meetings at the TD Cowen and Needham Virtual conferences. On November 28, we’ll be attending the UBS Global Tech Conference in Arizona. In December, we’ll be in San Francisco at the Barclays Global TMT Conference. We look forward to catching up with many of you soon. Operator, you may disconnect, and thank you.

Operator: That concludes the conference call. Thank you for your participation. You may now disconnect your lines.