Paylocity Holding Corporation

Hello, and thank you for standing by. Welcome to Velocity Holding Corporation fourth quarter 2024 fiscal year results. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to turn the call over to Ryan Glenn. Sir, you may begin.

Good afternoon, and welcome to Paylocity's earnings results call for the fourth quarter of fiscal year 24, which ended on June 30, 2024. I'm Ryan Glenn, Chief Financial Officer, and joining me on the call today are Steve Beauchamp and Toby Williams, co-CEOs of Paylocity. Today, we will be discussing the results announced in our press release issued after the market closed. A webcast replay of this call will be available for the next 45 days on our website under the Investor Relations tab. Before beginning, we must caution you that today's remarks, including statements made during the question and answer session, contain forward-looking statements. These statements are subject to numerous important factors, risks, and uncertainties, which could cause actual results to differ from the results implied by these or other forward-looking statements. Also, these statements are based solely on the present information and are subject to risks and uncertainties, That can cause actual results to differ materially from those projected in the forward-looking statements. For additional information, please refer to our filings with the Securities and Exchange Commission for the risk factors contained therein and other disclosures. We do not undertake any duty to update any forward-looking statements. Also, during the course of today's call, we will refer to certain non-GAAP financial measures. We believe that non-GAAP measures are more representative of how we internally measure the business, and there is a reconciliation schedule detailing these results currently available in our press release which is located on our website at paylocity.com under the Investor Relations tab and filed with the Securities and Exchange Commission. Please note that we are unable to reconcile any forward-looking non-GAAP financial measure to the directly comparable GAAP financial measure because the information which is needed to complete a reconciliation is unavailable at this time without unreasonable effort. In regard to our upcoming conference schedule, Toby will be attending the Steeple Tech Executive Summit in Deer Valley on August 27th. and I will be attending the Citi Global Tech Conference in New York on September 4th and HR Tech in Las Vegas in late September. Please let me know if you'd like to schedule time with us at any of these events. With that, let me turn the call over to Steve.

Thank you, Ryan, and thanks to all of you for joining us on our fourth quarter and fiscal 24 earnings call. Our differentiated value proposition of providing the most modern software in the industry continues to resonate in the marketplace and helped drive recurring revenue growth of 15% and total revenue growth of 16% in Q4. For fiscal 24, recurring revenue grew 17% over fiscal 23, and total revenue grew 19% and finished at $1.4 billion. Our solid results were once again driven by both adding new clients and employees and increasing average revenue per client. We ended fiscal 24 with 39,050 clients compared to 36,200 clients. at the end of last fiscal year, an increase of 8%. Additionally, our average number of employees per client increased to over 150, given our continued upmarket success. Average recurring revenue per client was nearly 33,000 in fiscal 24 compared to just over 30,000 in fiscal 23, an increase of approximately 8% as a result of increasing product attach rates across our client base. We continue to attach more product at the time of sale and have realized increased success selling back into existing clients as our products focused on the modern workforce resonate across our entire client base with learning management, recognition and rewards, and employee voice seeing particular success. Our sustained investment in product development allows us to continue to expand our product suite, evidenced by the release of several new premium offerings and feature enhancements in fiscal 24, including recognition and rewards, employee voice, advanced scheduling, market pay, AI-driven personalized learning plans, and our next-gen mobile app. We are pleased with the early traction of these new product offerings, highlighted by more than 30,000 market job searches within market pay, over 500,000 AI-assisted platform interactions, and our mobile app ranking is one of the highest in the software industry, with the majority of employee interactions on the platform now occurring via mobile. Our commitment to product development continues to be recognized in the market, with Paylocity recently being ranked as an overall leader for 10 product categories in G2's summer 2024 grid reports, listed as the best payroll and software combo by Forbes Advisor, named as TrustRadius' top-rated HR management software platform for the second year in a row, and recognized in Gartner Peer Insight's 2024 Voice of the Customer for Cloud HCM Suites for 1,000-plus Employee Enterprises. I would now like to pass the call to Toby to provide further color on the quarter and fiscal 24.