Paycom Software Inc (PAYC) — Q2 2021 Earnings Call Transcript

Thank you, and welcome to Paycom's second quarter 2021 earnings conference call. Certain statements made on this call that are not historical fact, including those related to our future plans, objectives, and expected performance, are forward-looking statements within the meaning of the private securities litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this conference call. While we believe any forward-looking statements made on this call are reasonable, actual results may differ materially because the statements are based on our current expectations and subject to risks and uncertainties. These risks and uncertainties are discussed in our filings with the SEC, including our most recent annual report on Form 10-K and our most recent quarterly report on Form 10-Q. You should refer to and consider these factors when relying on such forward-looking information. Any forward-looking statement made speaks only as of the date on which it is made. We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements whether as a result of new information, future events, or otherwise, except as required by applicable law. Also, during today's call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, adjusted gross profit, adjusted gross margin, and certain adjusted expenses. We use these non-GAAP financial measures to review and assess our performance and for planning purposes. A reconciliation schedule showing GAAP versus non-GAAP results is included in the press release that we issued after the close of the market today and is available on our website at investors.paycom.com. I will now turn the call over to Chad Richison, Paycom's President and Chief Executive Officer.

Thanks, James. And thank you to everyone joining our call. Today I'll spend a few minutes on the highlights of our second quarter 2021 results and the opportunities we are pursuing as we look ahead. Following that, Craig will review our financials and our guidance and then we will take questions. We delivered very strong second quarter 2021 results with revenue of $242 million, which grew 33.3%, our fastest quarterly growth rate compared to the prior year period since Q4 of 2016, and well above the top end of our guidance range. The upside from the quarter was primarily a result of broad-based demand strength from new client ads and consistent cross-selling to existing clients. Our second quarter adjusted EBITDA was $87 million, representing an increase of 42% over the prior year period. With these strong results, we are once again raising our full-year guidance, which Craig will discuss in more detail. The investments we make in our products generate tremendous value for our clients and drive a differentiated employee strategy. Our newest employee innovation is Beti, the industry's first self-service payroll technology, allowing employees to do their own payroll, which we officially rolled out to the market in early July. Beti, which stands for better employee transaction interface, is an employee-driven payroll experience and represents one of the most important advances we've made to date. With Beti, employees do their own payroll, which allows our clients to benefit from increased payroll accuracy, while employees gain full insight into their paycheck, including advanced knowledge of take-home pay and how it's calculated. Employees have a direct connection to their paycheck to resolve errors well before payday, so they don't have to wait on or contact anyone for assistance. The additional clarity on how their pay changes and is calculated, combined with automatic alerts when items require their action, gives employees and clients confidence in the accuracy of their payroll. I'm very pleased with the launch so far. We are receiving tremendous feedback, including a VP of HR who said, 'Beti is the most revolutionary payroll product I've ever seen.' Another comment from the Chief HR Officer noted that 'Beti is giving ownership of payroll to employees and managers, which is great because they know better than anyone what their paycheck should be.' As we said during our Q1 earnings call, we're planning to have 100 pilot clients on Beti in the second quarter, and we easily achieved that goal. On July 6, we opened up Beti to all clients, and through the end of July, we've already sold Beti to over 1,000 new and existing clients. I continue to expect that all Paycom clients will eventually deploy Beti; it's the only way payroll should be done. Our marketing plan continues to deliver strong demo leads, and we intend to spend aggressively in the coming quarters to fuel future revenue growth and further expand our market share in a large and growing HCM camp. Our messaging continues to resonate with prospects as we contrast the shortcomings of disparate HCM systems with the value proposition of Paycom's single database solution and self-service capabilities that are stronger than ever. Employees expect their HR software to be efficient and easy to use. And once again, we had record high employee usage rates in Q2, as measured by direct data exchange or DDX. We continue to enjoy increasing traction with both smaller and larger companies. As a reminder, we added multiple inside sales teams as we've continued to have success below our target range. Due to the technological advances we've made and the demand building around our Employee Self-Service initiatives, we've continued to be pulled further upmarket as well. As a result, we are pleased to announce that we are expanding our proactive outside sales efforts from targeting firms with 50 to 5,000 employees to targeting firms with 50 to 10,000 employees. We've had success selling to organizations above our historic range driven by larger company demand. This change we are announcing today empowers our sales representatives to proactively target in this expanded segment, and we're excited by this incremental opportunity. We have clients in the segment already, so we're confident that our solution will compete and serve these clients effectively. On the Paycom branding front, we recently signed a 15-year naming rights partnership with the Oklahoma City Thunder that will transfer their downtown home into the Paycom Center. Oklahoma City is home to thousands of our employees, and I'm happy that the Paycom Center will be the home of the Thunder. We have now lapped the tough pre-pandemic year-over-year comparison, and Q2 is more reflective of our historical growth profile, record new client additions over this past year driving our growth. While we saw a very small headcount improvement in our pre-pandemic client revenue base, our guidance and future growth initiatives are not reliant on any employment improvement. In summary, Q2 is a very strong quarter that reflects the strength of our execution throughout the pandemic and the investments we've made to further distance ourselves from the competition. Innovation, customer service, and new client growth represent the foundation of our long-term revenue growth strategy. With only approximately 5% market share of a growing total addressable market, we continue to have a long runway ahead of us. I want to thank all of our hardworking and dedicated employees for their resilience and commitment to winning. With that, I'll turn the call over to Craig for review of our financials and guidance.

Before I review our second quarter 2021 results and our outlook for the third quarter and full year 2021, I would like to remind everyone that my comments related to certain financial measures will be on a non-GAAP basis. We're very pleased with our second quarter results with total revenues of $242.1 million, representing growth of 33.3% over the comparable prior year period, driven primarily by broad-based strength with new client wins and consistent cross-selling to existing clients. Within total revenues, recurring revenue was $237.6 million for the second quarter of 2021, representing 98% of total revenues for the quarter and growing 33.5% from the comparable prior year period. Total adjusted gross profit for the second quarter was $206.9 million, representing an adjusted gross margin of 85.4%. For 2021, we remain on target for adjusted gross margin to be in the range of 85% to 86%. Adjusted total administrative expenses were $136 million for the second quarter, compared to $106 million in the second quarter of 2020. Adjusted sales and marketing expense for the second quarter of 2021 was $64.3 million or 26.6% of revenues. Our marketing strategy continues to generate strong demo leads both within and outside our historical target market range of 50 to 5,000 employees. We plan to continue to invest in marketing throughout the remainder of 2021. And as Chad mentioned, we have increased our target market range to 50 to 10,000, thus empowering our outside sales representatives to proactively target larger companies. Adjusted R&D expense was $26.2 million in the second quarter of 2021, or 10.8% of total revenues. Adjusted total R&D cost, including the capitalized portion, was $38 million in the second quarter of 2021 compared to $27.7 million in the prior year period. We continue to be very pleased with the high-quality innovation we're seeing from our investments in R&D, and we'll continue to aggressively recruit talent in R&D to drive our future growth. Adjusted EBITDA was $87 million in the second quarter of 2021, or 35.9% of total revenues, compared to $61.2 million in the second quarter of 2020, or 33.7% of total revenues. Our GAAP net income for the second quarter was $52.3 million or $0.90 per diluted share, versus $28.6 million or $0.49 per diluted share in the prior year period based on approximately 58 million shares in both periods. Non-GAAP net income for the second quarter of 2021 was $56.5 million or $0.97 per diluted share, versus $35.9 million or $0.62 per diluted share in the prior year period. We expect non-cash stock-based compensation for the third quarter of 2021 to be approximately $25 million to $26 million. For the full year, we anticipate non-cash stock-based compensation will be approximately $95 million to $100 million. For 2021, we anticipate our full-year effective income tax rate to be 24% to 25% on a GAAP basis. On a non-GAAP basis, we anticipate our full-year effective income tax rate to be 26% to 27%. Turning to the balance sheet, we ended the second quarter of 2021 with cash and cash equivalents of $202.4 million and total debt of $30 million related to construction at our corporate headquarters. Cash from operations was $57 million for the second quarter, reflecting our strong revenue performance and the profitability of our business model. The average daily balance of funds held on behalf of clients was approximately $1.6 billion in the second quarter of 2021. During the second quarter of 2021, we repurchased approximately 94,000 shares for a total of roughly $32 million. As of June 30, 2021, Paycom has repurchased over 4.2 million shares since 2016, for a total of approximately $455 million, while we currently have roughly $300 million remaining in our buyback program. Shifting to guidance, we are pleased to provide strong third quarter guidance that reflects the robust performance we achieved in the first half of 2021. And we are raising our full-year 2021 outlook as a result. Our Q3 and full-year guidance are as follows. For the third quarter of 2021, we expect total revenues in the range of $249 million to $251 million, representing a growth rate over the comparable prior-year period of approximately 27% at the midpoint of the range. We expect adjusted EBITDA for the third quarter in the range of $87 million to $89 million, representing an adjusted EBITDA margin of approximately 35.2% at the midpoint of the range. For fiscal 2021, we are raising our expected revenue range to $1.036 billion to $1.038 billion, up from $1.017 billion to $1.019 billion, or approximately 23.2% year-over-year growth at the midpoint of the range. We expect full-year adjusted EBITDA in the range of $410 million to $412 million, representing an adjusted EBITDA margin of approximately 39.6% at the midpoint of the range. When combined, we now expect revenue growth and adjusted EBITDA margin to easily exceed the rule of 60 this year. To conclude, we are very pleased with the performance in the quarter, which gives us increasing confidence in our outlook for the remainder of the year. With the launch of Beti, expanded target market, and a deep product development pipeline, we have a long runway ahead of us to continue to deliver rapid growth for years to come. With that, we will open the line for questions.

Hey first of all, congratulations. That was an amazing quarter and an amazing return to high growth. Chad, quick question on the decision to go towards the 50 to 10,000 employee clients now. Historically, you were always a little hesitant because sales cycles seem to get more complex, longer, etc. How do you manage that process? And can you still do it with the same sales force, and then I had one follow up.

Sure, Raimo. If you remember, it was about three years ago, our range at that time was 50 to 2,000 employees. We continued to be pulled up. And so, at that point in time, we made it official allowing our employees to proactively target companies of that range, because again, we've been pulled further upmarket. The same things happened here up to 10,000. We continue to be pulled further up market; I would say that the buying criteria for companies of that size has changed. We're all working with the same kind of employee; there's no such thing as a large market employee and a small market employee. You can work for a 300-employee company and work for a 10,000-employee company the next. And so, we're providing a very easy-to-use standard way for employees to interact with their data. And we're finding it easier to work with larger businesses as they look to displace multiple disparate systems with one.

Yeah, okay. Perfect. Makes sense. And then on Beti, like, if you think about the 1,000 clients already signed up, like what has been the feedback so far from those clients? Have there been some surprises that you've seen there that you can utilize for the rest of the client base? Thank you. And congrats again.

You bet. Employees, like I've been saying, pretty much fly blind into every payroll. They do the work, they clock in, clock out, put in their expenses, manage benefits, manage time off, and everything else, and then they get blindfolded before payday. And then they find out on payday what it meant. It's similar to blinding the pilots right before they land. So, what we've done is taken that blindfold off to where employees understand how their checks are calculated, and they can help the payroll department have perfect payrolls. There's not a payroll person out there that doesn't have anxiety going into each payroll day because they want it to be perfect. Beti helps everybody get to the right level of accuracy. It also eliminates a lot of the after-the-fact, manual checks, voids, and adjustments that clients often have to do after an employee's check is incorrect. We know how important it is for employees' checks to be perfect; they expect it. So, we're having a lot of success with it, and I expect that to continue.

Perfect. Thank you.

Hi. Good evening, and congrats on that 30% plus growth. It was great to see that come back. So Chad, my first question for you—

Yeah, I couldn't say that our cross-selling today as a percentage is more of our revenue than what it's been in the past. I would say the percentage still cross-selling for the biggest percent of our revenue is during that year of the ACA, where again, everybody had to take it. I do believe that we're going to have three or four quarters here of some pretty good cross-selling, as we move everybody over to the better employee transaction interface, which is Beti. Also, as we're selling new onboarding clients now, Beti is a part of that. Our sales reps—Beti comes with the payroll package now. It is an additional fee for that; but it is included on every quote moving forward for new businesses as we believe this is the way businesses win and achieve their return on investment with our product as it relates to the payroll side of what we do.

Great, really helpful. And maybe as a follow up to that, this was one of the biggest beats on expectations. So, I'm curious if you could help us unpack how you think about it in terms of better new bookings versus this uplifted Beti versus employment recovery in the install base, as we think about the strength in the quarter?

Sure. Well in regards to Beti, it had very little—zero impact on the second quarter. I talked about on our May call that we would look to put 100 clients on it that quarter. We achieved that within the first couple of weeks. Then we went through that. On July 6, we released it to all other clients. So, that was within this quarter. Beti would have played zero impact as it relates to last quarter. We do think it's going to be a part of our differentiated strategy moving forward. So, new logo ads, as usual, are what contributes to our growth, followed by upsells to current clients. As far as macro, we've been going through this for a little bit. I’ve been talking a little about us having some improvement with the pre-pandemic client base. As far as this quarter, I'd say we saw an improvement in hiring during this past quarter, and the impact that it had on our revenue for this quarter from our pre-pandemic client base was $1 million to $1.5 million for the quarter. So, that's about $100,000 worth of weekly improvement on that number that we had talked about prior.

Great. Appreciate the questions, and congrats again on the strong results. Great to see.

Great. Thanks very much. Chad, as your sales people have the opportunity to move further upmarket, do you think that changes the sale cycle length? And if it does lengthen, how do you manage that?

No, I don't. I mean, a little bit, it's hard for me to say that a 5,000-employee company sales cycle is going to be the same as a 150-employee company sale cycle. I will say the 5,000 employee's sale cycle is the same as a 10,000-employee sale cycle. So, I don't know that there's some major differences between the two of those as far as what their sales cycles would be. We're still not looking to engage with a long sales cycle that requires us to link up with multiple disparate systems.

That's great. And then one quick follow up on Beti; can you help us on the monetization of—sorry if I missed it—what type of lift you get from an existing customer that's adding Beti and been on net new, what type of work?

Yeah, so we've added products in the past where we got 100% usage very quickly, and I'm thinking of DDX and Manager on the Go. Those were products that we just included in our pricing. With Beti, it is an additional priced product, even though it's now included on every single payroll deal. We believe our pricing is competitive. I don't like to just put it out there; you may be able to find it out there. But all I would say is it's reasonably priced like many of our other modules.

That's great. Thanks very much.

Thank you.

Hey, good afternoon and let me add my congratulations. With regards to the rapid ramp in terms of the clients using Beti, with the 100 that that first came on, can you talk a little bit about what sort of experiences they were seeing? Did it really ease or increase the accuracy that they ended up experiencing? Or are you getting any feedback from clients about our payroll department doesn't need as many people? And how easy was it to lift? You opened it up on July 6, and now you've got over 1,000 on Beti; how easy was it to convert them to Beti?

Yeah, with Beti, we're already on it. It's something that we turn on for you. What we have to work with you to convert your processes. We've got a lot of these processes that happen after the fact, and we need to have those happen at the beginning or during the payroll transaction. Once you do that, a lot of the processes you'd normally do after the fact are irrelevant. We're able to displace those. We eliminate a lot of processes. As an answer to your question, we haven't had anyone turn it off. Once you turn it on, and that's what your employees are doing, you have a very high satisfaction rate with employees, and we have a very strong ROI. Beti itself 100% pays for itself. It actually helps even pay for the entire payroll module because there's an incredible amount of ROI when you're not having to do manual checks, voids, adjustments, and wire money into employees' accounts to cover NSF fees they may have because their payroll was wrong.

That's great. And do all of those clients have time and attendance already set up? Or did some have to add that?

You know, that's a great question, Mark. I would expect that most of our first... Well, most of our clients at Paycom already have time and attendance. But you are right; there will be certain modules as we move to Beti that would be required for a client to implement.

Great. And then one last one, just on increasing the target range from the upper limit of 5,000 to 10,000. When you first expanded from 2,000 to 5,000, how many of those 5,000 employee companies were inbound and kind of approaching you guys?

We do not have a marketing strategy for companies above 5,000. We do targeted prospecting. Our targeted prospecting strategies have been three years ago, they were companies below 2,000, and then we moved that to below 5,000, which we've experienced for the last three years. Now we're moving into 10,000. What that means is we'll start proactively targeting these. We have continued to have people call us of employee sizes in that range. The more we've had, we've continued to move up our market. What it allows us to do now is do targeted prospecting towards those. As salespeople make calls, they can proactively make those calls.

Great, congratulations.

Thank you.

Hey, great afternoon. Thanks for taking my question. It seems like every day there's a new story about how tight the labor market is. So, I'm just wondering if you could talk about sort of how the tight labor market may be or may not be impacting inbound demand that you're seeing.

Definitely, I think it plays a role. We've done a lot of surveys, and employees like easy-to-use technology at work. An employee shouldn't have to work to work. You definitely have a frustrated employee base if you have multiple pieces of technology that are difficult to use. It's also a hunt for talent out there; you want to retain your good employees; that's a must. Good technology helps you do that. You also need to deploy pretty good technology on the talent acquisition side because everybody's in a dogfight for talent right now; it's a very tight labor market. I do believe that there's some of that in there. Everything has shifted to digital transformation and the right way to do something, and it only makes sense that employees would engage with their data. We're having success with that. The labor market might be tight for a while here, but I still believe we're dealing with somewhat of a tight labor market. I don't think the macro on a go-forward is going to impact us significantly.

That's great. And then just as a follow-up, you've been selling virtually for about 18 months now. You talk about adding inside sales team. I'm just wondering if you can kind of reflect on once you actually get back to the normal environment; does this change your philosophy about adding new sales offices?

No, no. I mean, its timing, we're just now; our managers are getting back into the office. Throughout the rest of this year, people are going to be filtering back into our offices as we go back to the office to do our selling. We've been paying attention to why prospects are buying and how they buy. We're going to support the methods that best help both the prospect and us to display our product and have a clear understanding of the ROI for them.

Great, thank you very much.

Thank you.

Yeah. Hi, thanks for taking my questions. And congratulations on a great quarter. Chad, maybe if I could just start there on the quarter. Can you shed any light on just how the bookings or business activity trended in the quarter? Just how linearity was, we'll start from there.

Yeah, I mean, we've had really strong bookings since April of last year; things kind of took off, and we were doing well anyway. But I mean, we've had very strong bookings, in fact, these last two weeks that we just had here in July, those last two weeks it's the largest number we've put up in bookings. So, bookings have been strong as we've continued to push a differentiated strategy that's gaining a lot of momentum here in the marketplace.

Thank you. And then Chad, one question I had just on the target expansion move here. I'm just wondering if there are any industry verticals that would have, I would think about fewer organizational complexities to them, and therefore would just be right for Beti and more likely to switch to self-service when you target.

I really look at it as it's a product for everybody. From the employees' perspective, I would even say the more complex it is, the more you need to deploy Beti. The more data points you have on a check, the more important it is to deploy something like Beti. I'm not going to say that any specific vertical or either easy or complex type of company that Beti would be best for. I think it's best for everybody. And it's 100% best for the American worker to have a product like this to engage themselves with their data.

And then last question for Craig, just on the marketing and advertising campaigns. Given the bookings momentum year in the business, the commentary, I wonder if you have any plans to increase your advertising spend here in the second half of the year in support of the Beti product cycle and the current momentum in the business? Thanks.

We're going to continue to spend aggressively on sales and marketing. You've seen that in the past, the back half of the year where we've ramped up sales and marketing. I would expect to see the same for us through the rest of the year. Obviously, the marketing plans we've currently baked into our third quarter and full-year guidance.

This is Michael Rackers. I'm on for Ryan McDonald. Thanks for taking my questions. So, we've heard from multiple vendors that churn ticked up slightly on the quarter, as some of the customers that may have wanted to make a change last year couldn't do so because of other pandemic-driven priorities. Did you experience any similar uptick in churn within your customer base? And did you see any more opportunities to replace competitors during the quarter given this dynamic?

What I would first say is it's a bad idea to use our competitors when in relation to churn as a proxy to us, but we do not report either gains or no gains as it relates to retention until the end of each year. What I would say though is that we're having a lot of success deploying differentiated product, both to new customers and to current customers. Those clients that are buying product are staying. We're having a lot of success. It's a differentiated strategy. As we continue to have increased DDX usage, where more employees are making the impressions on the database and not through another department within the company, we have an expectation that we would continue to have a strong retention rate.

Right, thank you.

Hey, guys, this is Matt Diamond on the line for Siti. I want to add my congrats for the solid results. One question that's come up, and I think we've alluded to it a little bit, is around Beti. It was mentioned that there will be three to four quarters of continued pretty above-normal cross-selling. We also know that Beti necessitates all of the Paycom modules in order for clients to be eligible for Beti. Can you help us handicap really what size of the existing client base has all of those modules? It sounds like it's pretty widespread, so that we can get an idea of what the magnitude of that cross-sell opportunity looks like over the next three to four quarters?

I do want to say one thing; Beti does not require you to have all of our modules. There are a lot of modules you don't need to utilize Beti. It would make sense for someone to take the modules; however, things like talent acquisition, recruiting, Cobra, a lot of our modules you don't need to run Beti. A lot of those are fairly popular products for us. We have several clients that don't have them. I do appreciate our sales reps who are probably working with a lot of those clients that are already ready to go where we can just click a button, eliminate most of your processes and shift a few to the beginning. There is an opportunity for us. As far as handicapping it again, we consider our pricing competitive in nature. Our revenue gains are primarily driven by new business wins.

That's a perfect segue to my next question. Is there anything that's being done differently or that's been adjusted on the product side to address these 10K customers and above employees? It doesn't seem to be the case, but anything that can be commented on in regards to the R&D spend and what's being prioritized for that customer base would be helpful?

No, we're not doing anything different for a 10,000-employee company than we're doing for a 2,300-employee company.

Hey, good afternoon. Thank you. A question here on Beti. Can you comment on what level of client adoption you're anticipating by the end of 2021? And the clarification on the new sales—I understand it's being included in each deal you bid, but are you sitting near 100% attach on it as well here the last several weeks?

We started selling it July 6. A lot of them would be in conversion. It would be rare that we'd sell a client on July 6, then they would have started by now unless they're smaller businesses. For smaller businesses, you could have had some of that. Yes, I mean, because it's the way we're training and setting them up. We're not training on the old model now. We're training on how employees do their own payroll. So, it would be illogical for me to think that anybody even tried to do it the old way. Our ROI cases now include Beti and it's an important part of the ROI. You can use Beti and actually it can help pay for the entire system depending upon how many true issues you've been having in payroll.

Okay, and then just another thought, a common question we're getting around Beti, and the potential offsets of existing service revenue, can you help kind of frame the magnitude of that work within your business to begin with in terms of error correction and things like that? And then clarify your view on revenue accretion of Beti versus those types of services that might automate away?

There's definitely going to be Beti that's going to replace some what I'm going to call bad revenue for the client. The client didn't have visibility, and the employee didn't have visibility, so they have to void a check, do a manual check, and send a wire. To the extent there's a tax event created because it extends into a different quarter or tax period, you have to deal with that. There are definitely some fees associated with that. That can be labor work on both our side and the client side, which can carry a higher or lower, I should say, operating margin as it relates to that. From a Beti perspective, there's not we're doing to it on our end, and there's not anything the clients having to do. I would tell clients, 'Our competitors got themselves out of doing your payroll; we get you out of doing your payroll.'

Hey, this is Alan on for Alex Zukin. I just wanted to drill in on the new business going forward; obviously, it sounds like you guys are seeing a lot of strength there. I was wondering if you can help kind of put the context what you're seeing at the lower end of your customer employee range and the top end, and how you're thinking about that for the second half.

I would say more of the same. We don't really get to dictate what size companies are coming in from our lead volume. As we use our advertising assets, you could have a three-employee company clicking on it that has a pet store, and you could have a 10,000 employee company clicking on it. We're going after those of all sizes and have been, so I wouldn't see how we would expect it to be dramatically different than what we're seeing right now. Our move up market, we're already here. We just announced that. We're getting the leads; we're already selling the deals. We've got deals larger than 10,000 that are already using our company. We’re just making it more official, flying the flag out there right now that we're open for business and targeted prospecting those clients up to 10,000 as well.

Thank you.

All right, thank you. I want to thank everyone for joining us today on the call. As we communicated internally, we're gradually making our way back to the offices and hope to be back as soon as conditions safely permit. I want to thank all Paycom employees for their perseverance through the pandemic. Over 70% of our staff are either fully vaccinated or in the process. I like to reiterate that I believe getting vaccinated saves lives; for every 100,000 fully vaccinated people, less than one will lose their life from a breakthrough COVID-19 case. Please get your vaccinations and let's end this pandemic. On the investor outreach side, this quarter we'll be presenting at the Oppenheimer Conference on August 10, followed by the Wolfe Conference on September 8, and the Citi Conference on September 14. Paycom will also be hosting one-on-one meetings in August and September at KeyBanc and Piper Sandler conferences. We look forward to speaking with many of you very soon and appreciate your continued support with Paycom. Thank you, operator. You may disconnect.