Toby Williams: Yes. Brian, it’s Toby. Yes, I mean, I think overall, we came into the year fully staffed, which we’re really happy about. That’s been the case over the last few years, at least. And came into this year, growing the sales force at 18%, consistent with what we did last year. And I think overall, I feel really good about the mix of talent that we have in that. Certainly, a skew as we would have historically done towards folks coming in with industry experience, which has always been productive for us. And I think we’re overall really happy with how we’re staffed as we come into fiscal ’24.
Operator: Our next question comes from the line of Patrick Walravens with JMP Securities.
Owen Hobbs: This is Owen Hobbs on for Patrick. So I’m curious about the — like the customers’ time line to kind of ramping up with product adoption. So if they like, say, start out with the payroll product, how long would it take them to kind of adopt other products in the suite?
Steven Beauchamp: Yes. So I think you can look at it through 2 different ways. So one is if you — we talk about the number of employees that we’ve got kind of on the platform, the average size customer that we have, we give you the employee count, you can really calculate that realized PEPY, which has kind of typically been 50% to 60% of our maximum PEPY. And so that gives you a sense because we bundle and package, that gives you a sense of what they’re buying in terms of the total available opportunity. So there’s still lots of opportunity to drive that higher. And so that’s probably the easiest way to look at it. I think conceptually, as we build new modules, we definitely feel like that we can get that module into the 10% to 20% range over time.
That gives us the ROI and the conviction to be able to kind of build something for customers. Some of our modules are 50%-plus product penetration rate. We’ve got some still below that 20%. But we’ve got to have conviction that we can get into that range before we actually build and launch a product.
Owen Hobbs: Awesome. And then — so I know this isn’t like the main focus right now, but thinking kind of longer term, the expansion opportunity within the business, kind of how much of that is driven by the increase in a customer’s employee count versus increasing PEPY via new products?
Steven Beauchamp: Yes. So historically, in a growth GDP environment, say, GDP was growing 2% or 3%. We would typically get 2% or 3% in our client base of additional employees, which translates to roughly that same revenue growth number because people pay us on a per employee basis. So that was pretty typical. As Ryan mentioned, for over a year now, the number of employees on the platform has been flat. So our clients aren’t losing employees, but they’re also not adding employees. So there’s no necessary tailwind from that. So really, at this point, when you look at the results we’re delivering, there’s no help from extra employees on the platform, that all just comes from us selling new customers clearly. And so it’s really being driven from selling more to every new customer that’s kind of coming on board. And then having that inside sales team I spoke about earlier actually selling back to the client base, that second part being a smaller portion than the first.
Operator: Our next question comes from the line of Scott Berg with Needham & Company.
Michael Rackers: Congrats on the quarter. This is Michael Rackers on for Scott today. I was just curious kind of on your thoughts and maybe some commentary around the opportunity with the global payroll space. I mean do you see international kind of as the next stage of growth over the long term? And just what are your kind of thoughts on the general trends there?
Steven Beauchamp: Sure. Yes. So I think we’re definitely squarely focused on the opportunity in the U.S. We still have relatively low penetration in terms of the target market that we’re going after. So we see huge TAM that we’ve got to focus on. And we’ve definitely got a product set that we think creates differentiation. Where we do see a need to be able to have some global capabilities is when you’ve got a U.S. headquartered customer, who may have some number of employees abroad. And so that’s why we obviously had purchased Blue Marble and integrated that into our suite, so we can handle that need for customers. So they can Paylocity customer and they can pay their 10, 20, 30, 50 employees abroad through Blue Marble and the network of partners that we leverage.
And so that has been our strategy globally. And we’ll always look for interesting opportunities, but our primary focus will be U.S.-headquartered companies. And with the size of the TAM that we’ve got in front of us, we think there’s plenty of opportunity there.
Operator: Our next question comes from the line of Samad Samana with Jefferies.
Samad Samana: Maybe first one. Just as I think about the bookings cadence or linearity in the quarter. Can you maybe just help us understand how, from April to May to June, trends went, and how does that compare to normal booking seasonality in the fiscal fourth quarter?
Toby Williams: I mean I don’t think we saw anything different from a linearity perspective in terms of the bookings coming in. I mean I think, obviously, when you look at — as I said a few minutes ago, when you look at last fiscal year, you had heavy compares coming in, in the first half. But I think as we got to back half of this last fiscal year, I don’t think we saw anything different in terms of seasonality or difference in performance for the quarter or than year-over-year from a sales perspective. I think the only thing probably note is just going back to comments that we’ve made over the last probably a handful of quarters and that Steve made a few minutes ago just in terms of how we’re seeing incrementally better performance upmarket. But I think that just reflects probably the strength of the solution and what we’ve done from a product perspective, just being more competitive there over time.
