Paylocity Holding Corporation (NASDAQ:PCTY) Q2 2023 Earnings Call Transcript

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I think you’re just starting to see us normalizing in Q4 back to pre-pandemic level of growth rates as we get through some of the noise that was in the comps, which is pretty consistent with how we’ve talked about things over the last handful of quarters.

Samad Samana : Great. And then maybe a follow-up for you, Steve. As I just think about the company’s evolution and some of the questions you’ve gotten before this. Are you getting both a — obviously, your primary advocates turn out to be the HR department, but are you getting more in different buyers inside of the organization. Is that giving you access to maybe more dollars or budget that may not have been previously thought of going through that department? Or is that they’re able to allocate to you? How should we think about that?

Steve Beauchamp: It’s an interesting question. I think the buyers for the most part, have stayed very much the same, meaning it’s typically your Head of HR and also your CFO as part of that decision-making process. Historically, we would involve CEOs at times, but it would probably be more from an approval perspective. I would tell you that we’ve had better CEO conversations when we start talking about how you engage employees like you drive retention, how you’re driving productivity in employees with things like LMS, how you’re gathering feedback and making changes based off that feedback. So this engagement concept really does appeal to a CEO. You think people are the most important asset of any company. And so the ability to onboard new employees to drive productivity to make sure that retention is high to attract talent, I think we definitely — although the HR and CFO buyer are still the key buyers, I think we’ve extended the value proposition such that we’ve got more conversations and access to the actual CEO.

Operator: Our next question comes from the line of Brian Peterson with Raymond James.

Alex Sklar: This is Alex Sklar for Brian. I know the current quarter rents normally a big hiring quarter. Just want to see if there’s any change at the margin to your hiring plans relative to what you had laid out the last couple of quarters.

Steve Beauchamp: Yes. I would say it’s a little bit different by department. But if you think of sales, it’s really post year-end. So as we start to hit the spring time frame. So this month in February and March that things really ramp up and we start to put our planning process for next fiscal year and start ramping up sales headcount. So we’re fairly early in that, we sometimes get off to a little bit of a head start when we can, and we always do that opportunistically, but the hiring season is really ahead of us. I think really good success from a product and technology perspective, great retention in that group. You can see we’ve had pretty good year-over-year increase in investments there. We’re excited about the pipeline to that organization.

And we went into the year-end, really fully staffed just from an operations perspective because it’s a really important time here to be there for our customers and to be able to deliver the service that they need. So overall, we feel really good about the staffing levels and the employee value proposition that we’re selling in the market, a growth company in the software space that’s not looking to reduce expenses, but looking to develop talent and promote people and continue to grow really resonate. So we’ve been really happy with our ability to attract and retain talent.

Alex Sklar: And I also want to follow up on Terry’s market question earlier. So I’m curious, can you help frame kind of the percentage of your pipeline? I don’t know, either in terms of MRR or if you have a different preferred metric, but that’s coming from those upmarket opportunities now versus a year ago?

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