Jason Celino: Great. And Ryan, when we think about the 2 to 3 points of headwind from the staffing levels likely being flat for the coming year, will that be pretty consistent each quarter? I imagine it was, I just want to check.
Ryan Glenn: Yes, nothing I’d call out from a seasonality standpoint. I think it’s pretty consistent in each quarter. There’s nothing of note from that perspective.
Operator: Our next question comes from the line of Andrew Warren with D.A. Davidson & Company.
Robert Simmons: Sorry, this is actually me. This is Robert Simmons on for myself. You touched on the general topic. But more specifically, can you talk about how Blue Marble is performing in terms of helping you win new clients and for cross-sell?
Steven Beauchamp: Yes. So we’ve called out the success that we’ve had up market, and that is where you run into more international opportunity, so customers might have employees in multiple countries. And so definitely Blue Marble has been a component of our product suite that has created some nice differentiation upmarket. So if you’re a customer and you’ve got 1,500 employees and you have 50 employees in 3 different countries, we’ve got a great solution for you. We can handle everything that you need. And that does become a differentiation point in terms of us selling those customers. And so I think it’s been a nice contributor upmarket. It continues to grow as well when you look at the risk stand-alone revenue that we bring in from those opportunities. But the biggest thing is really focused on the differentiation upmarket.
Robert Simmons: Got it. That makes sense. And then, great to see the revised long-term targets. Do you have a time frame for when you think you can achieve those and get into those ranges? And then also, how long do you think you can maintain 20%-plus growth?
Ryan Glenn: Sure. Maybe I’ll hit the second part and let Steve hit the last part of your question. I think when we set the previous targets in August of ’18, I think we’re 5 years later, and we were well into those ranges. So I think that’s probably the right way to think about it. We don’t have a specific year that we’d expect to hit those. But I think at the same time, our expectation would be we’d continue to make progress beginning in ’24 on an annual basis towards those revised targets. So continue to have a high degree of confidence in being able to grow the business at a healthy rate, at the same time, scale across the business as well.
Steven Beauchamp: And in terms of continuing to grow at 20%, I think Toby mentioned earlier, we’re definitely focused on growth as a big priority for us and what’s going to drive that. We’re going to make the investments in product. We talked about how we’re excited about what we’ve got coming out. We have a rich product pipeline. That is one of the key elements that gives us some confidence on being able to focus on that. Bringing in the talent from a sales perspective, 18% headcount increase puts us in a really good position to be able to drive that. Huge TAM, right? We’ve got relatively low penetration in terms of the opportunity. So it really comes down for us to be able to kind of execute. Size of the opportunity is big enough.
We’ve got enough product differentiation. We’ve got a great pipeline. And so — and I think as Toby mentioned, we have strategically made some smaller acquisitions that also have enhanced our capability. I just answered the question around Blue Marble. And so when you put all that together, I think that’s what gives us confidence in terms of being able to continue to grow at 20%-plus.
Operator: Our next question comes from the line of Siti Panigrahi with Mizuho.
Sitikantha Panigrahi: I wanted to ask about on-demand pay. That’s on something you announced long back. And now most of the — most of your competitors have that solution. How important is that for your customer? Like what sort of — we haven’t heard from you any kind of traction there. Are you trying to revamp that product? Is it more to help you win? Or is that really generating revenue? Any color on that?
Steven Beauchamp: Yes. So we were one of the first to market with our on-demand pay product. So we’ve had that available several years. And I would say that the customers that really see value in that often have larger hourly populations where they will actually request early access to their wages fairly frequently. And so that product worked really well for us. We’ve made, based on customer feedback, some enhancements to the product on an ongoing basis. The product is doing well. I think from the first date that we launched it, I never said this was going to be a big needle mover. I really characterize it as a nice feature that customers could take advantage of. And I think that’s kind of how it’s played out for us overall. But I do think you need a product like that and customers are getting value from it, but it isn’t a big driver for us.
Sitikantha Panigrahi: All right. And then I want to ask about the AI assets like you guys announced that in March. Any feedback from our early adopters? But broadly, I want to ask how do you think this HR and payroll industry will evolve as we start seeing this AI adoption? And where do you see an opportunity to monetize for that?
Steven Beauchamp: Sure. I think if you just take a step back and you think of some of the big challenges that HR teams have. You’ve got a very dynamic workforce, Gen Z entering the workforce, gig work increasing, globalization kind of back on track and increasing as well. And so it’s just a complicated environment for HR teams to really get the talent that they need in a fairly tight labor market. And so I think when you then overlay that with AI, AI creates opportunities for efficiency for HR teams. It creates opportunity to then use that time from efficiency to be able to drive a more engaging environment and actually really compete on a culture basis. And so we see our early clients doing that. So they’re communicating more with their employees.
They’re driving engagement. We’ve got a ton of use cases that we plan on rolling out over time that will make it so much easier for communication, engagement, culture-building initiatives. And I think that’s going to be really important for our clients as they attempt to win the war for talent.
Operator: At this time, I would now like to turn the call back over to Steve for closing remarks.
Steven Beauchamp: Well, first of all, thank you to all of you for dialing in and having interest in Paylocity. And I just want to kind of restate my thank you for all of our Paylocity team members, 6,000 strong, that delivered a fantastic fiscal ’23 and looking forward to another great year in FY ’24.
Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.
