Paycor HCM Inc (PYCR) 2024 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to Paycor's Third Quarter Fiscal Year 2024 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the call over to Rachel White, Vice President of Investor Relations. Please go ahead.

女士們先生們，感謝大家的支持，歡迎參加 Paycor 2024 財年第三季財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。我現在想將電話轉給投資者關係副總裁 Rachel White。請繼續。

Good afternoon, and welcome to Paycor's Earnings Call for the Third Quarter of Fiscal Year 2024, which ended on March 31. On the call with me today are Raul Villar Jr., Paycor's Chief Executive Officer; and Adam Ante, Paycor's Chief Financial Officer.

下午好，歡迎參加 Paycor 於 3 月 31 日結束的 2024 財年第三季財報電話會議。以及 Paycor 財務長 Adam Ante。

Our financial results can be found in our press release issued today, which is available on the Investor Relations section of our website. Today's call is being recorded, and a replay will be available on our website following the conclusion of the call.

我們的財務表現可在今天發布的新聞稿中找到，該新聞稿可在我們網站的投資者關係部分找到。今天的通話正在錄音，通話結束後將在我們的網站上提供重播。

Statements made on this call include forward-looking statements related to our financial results, products, customer demand, operations and other matters. These statements are subject to risks, uncertainties and assumptions and are based on management's current expectations as of today and may not be updated in the future. Therefore, these statements should not be relied upon as representing our views as of any subsequent date.

本次電話會議中發表的聲明包括與我們的財務表現、產品、客戶需求、營運和其他事項相關的前瞻性聲明。這些陳述受到風險、不確定性和假設的影響，並且基於管理層截至目前的當前預期，將來可能不會更新。因此，這些陳述不應被視為代表我們在任何後續日期的觀點。

We also will refer to certain non-GAAP financial measures and key business metrics to provide additional information to investors. Definitions of non-GAAP measures and key business metrics and a reconciliation of non-GAAP to GAAP measures are provided in our press release on our website.

我們也將參考某些非公認會計準則財務指標和關鍵業務指標，為投資者提供更多資訊。我們網站上的新聞稿提供了非 GAAP 衡量標準和關鍵業務指標的定義以及非 GAAP 衡量標準與 GAAP 衡量標準的協調表。

With that, I'll turn the call over to Raul.

這樣，我會將電話轉給勞爾。

Thank you, Rachel, and thank you all for joining us to discuss Paycor's fiscal third quarter results. Our team delivered another strong quarter with revenue growth of 16% year-over-year. Excluding form filings, recurring revenue grew 20% year-over-year, driven by continued success of upmarket.

謝謝 Rachel，也謝謝大家與我們一起討論 Paycor 的第三個財季表現。我們的團隊再次實現了強勁的季度業績，營收年增 16%。不計入表格備案，在高端市場持續成功的推動下，經常性收入年增 20%。

Adjusted operating margins expanded 130 basis points over the prior year, while we continued to invest in go-to-market and PEPM expansion to fuel future growth. HCM demand remained healthy. We continue to see increasing top-of-funnel demand with consistent win rates. Our flexible open platform and robust talent solutions continue to resonate with larger SMB and enterprise customers who tend to purchase a more complete suite with higher average deal sizes.

調整後的營業利潤率比前一年擴大了 130 個基點，同時我們繼續投資於上市和 PEPM 擴張，以推動未來的成長。 HCM 需求保持健康。我們繼續看到漏斗頂部的需求不斷增加，且獲勝率穩定。我們靈活的開放平台和強大的人才解決方案繼續引起大型中小型企業和企業客戶的共鳴，他們傾向於購買更完整的套件和更高的平均交易規模。

Our growth is fueled by 2 primary drivers: increasing the number of employees on our platform and expanding the amount we charge per employee per month or PEPM. First, we are adding employees to our HCM suite through direct and indirect sales channels. We have grown our direct sales force nearly 70% over the last 3 years and are encouraged by the coverage expansion and capacity we have built in the 50 largest U.S. markets. Given that nearly 3/4 of our field sellers are still ramping to full productivity, we are planning to moderate our sales headcount growth to the low to mid-teens in the near term as we continue to expand capacity.

我們的成長由兩個主要驅動力推動：增加我們平台上的員工數量以及擴大我們對每位員工每月或 PEPM 的收費金額。首先，我們透過直接和間接銷售管道將員工加入我們的 HCM 套件中。在過去 3 年裡，我們的直銷隊伍成長了近 70%，我們在美國 50 個最大市場的覆蓋範圍擴大和能力建設令我們深受鼓舞。鑑於我們近 3/4 的現場銷售人員仍在全力提高生產力，我們計劃在繼續擴大產能的同時，在短期內將銷售人員的成長放緩至十幾歲至十幾歲。

On the indirect side, we continue to build momentum with our embedded HCM solution. Leveraging our industry-leading interoperability engine, we enable partners to embed our HCM solution within their platform for a seamless client experience. We continue to ramp this channel onboarding our third embedded partner and signing 3 new partners. To effectively scale for an increasing pipeline of prospective partners, we continue to develop this channel by expanding our team capacity, establishing partner frameworks and developing sales enablement tools to drive mutual success. While we're encouraged by the momentum, these deals have long cycle times and the new partners we signed are smaller in scope.

在間接方面，我們繼續透過嵌入式 HCM 解決方案增強勢頭。利用我們領先業界的互通性引擎，我們使合作夥伴能夠將我們的 HCM 解決方案嵌入到他們的平台中，以獲得無縫的客戶體驗。我們繼續擴大該管道，引入我們的第三個嵌入式合作夥伴並簽署 3 個新合作夥伴。為了有效擴大潛在合作夥伴管道的規模，我們透過擴大團隊能力、建立合作夥伴框架和開發銷售支援工具來繼續開發該管道，以推動共同成功。雖然我們對這一勢頭感到鼓舞，但這些交易週期較長，而且我們簽署的新合作夥伴範圍較小。

Second, we continue to enhance our award-winning HCM suite with new capabilities that add value to our customers and expand our future PEPM opportunity. We have the most comprehensive HCM solution in the mid-market. In the third quarter, list PEPM reached $53, an increase of 20% year-over-year and achieved our $3 to $5 annual target of list PEPM expansion.

其次，我們繼續透過新功能增強我們屢獲殊榮的 HCM 套件，為我們的客戶增加價值並擴大我們未來的 PEPM 機會。我們擁有中階市場最全面的 HCM 解決方案。第三季度，PEPM 清單達到 53 美元，年增 20%，實現了 PEPM 擴張 3 至 5 美元的年度目標。

We recently announced 2 product innovations that empower leaders to drive business performance by enabling cross-functional collaboration and addressing skill gaps. COR Space equips leaders with tools to communicate, align goals and motivate cross-functional teams that span multiple departments or fall outside of typical organizational structures such as project teams, employee resource groups, social event planning or work-based groups like a night shift at a health care organization.

我們最近宣布了兩項產品創新，使領導者能夠透過跨職能協作和解決技能差距來推動業務績效。 COR Space 為領導者提供了溝通、調整目標和激勵跨職能團隊的工具，這些團隊跨越多個部門或不屬於典型的組織結構，例如專案團隊、員工資源小組、社交活動規劃或基於工作的小組（例如夜班）醫療保健組織。

Paycor Skills leverages artificial intelligence to recommend skills associated with positions and people, which help leaders identify potential skill gaps in areas for skill development. Our innovative HCM suite continues to receive external accolades. Nucleus Research recently placed Paycor as a leader in its HCM Enterprise Value Matrix for companies with fewer than 2,500 employees and an accelerator for organizations with more than 2,500 employees. We were recognized for outstanding user experience and robust functionality.

Paycor Skills 利用人工智慧推薦與職位和人員相關的技能，幫助領導者識別技能發展領域的潛在技能差距。我們創新的 HCM 套件不斷獲得外部讚譽。 Nucleus Research 最近將 Paycor 列為其 HCM 企業價值矩陣中的領先者，該矩陣針對員工人數少於 2,500 人的公司，以及針對員工超過 2,500 人的組織的加速器。我們因出色的用戶體驗和強大的功能而獲得認可。

In addition, our core HCM and talent management solutions won 4 HR Tech awards by Lighthouse Research & Advisory. This is our highest placement to date, and we are proud to have won one of the most comprehensive talent solution and the best solution for midsized businesses with 200 to 2,000 employees.

此外，我們的核心 HCM 和人才管理解決方案榮獲 Lighthouse Research & Advisory 頒發的 4 項人力資源技術獎。這是我們迄今為止最高的排名，我們很自豪能夠贏得最全面的人才解決方案之一以及針對擁有 200 至 2,000 名員工的中型企業的最佳解決方案。

Lastly, I'd like to highlight 2 recent cultural accomplishments: 1 associated with our customers and another focus on our associates. We recently held our inaugural customer conference, Paycor Connect+, aligned with our focus on creating an irresistible customer experience. Customers from across the country were able to network and provide valuable feedback to drive our product and service road map.

最後，我想強調最近的兩項文化成就：一是與我們的客戶相關，另一個是對我們的員工的關注。我們最近舉辦了首屆客戶會議 Paycor Connect+，與我們致力於創造令人難以抗拒的客戶體驗的目標一致。來自全國各地的客戶能夠建立聯繫並提供有價值的回饋，以推動我們的產品和服務路線圖。

I'm incredibly proud we also earned a Top Workplace USA 2024 award from Energage for the fourth consecutive year. Results are based solely on employee feedback, including 15 cultural drivers proven to predict high performance. It reaffirms our dedication to fostering cultural best practices that not only enhance employee engagement but also deliver tangible business results. This year's results highlighted the company's practice of listening and acting on feedback from associates, empowering leaders across the organization and providing flexibility with a virtual-first working environment.

我非常自豪我們連續第四年獲得 Energage 頒發的 2024 年美國最佳工作場所獎。結果僅基於員工回饋，包括 15 種經證明可預測高績效的文化驅動因素。它重申了我們致力於培養最佳文化實踐，不僅提高員工敬業度，而且還帶來切實的業務成果。今年的業績突顯了該公司傾聽員工回饋並採取行動的做法，為整個組織的領導者提供權力，並透過虛擬優先的工作環境提供靈活性。

With that, I'll turn the call over to Adam to discuss our financial results and guidance.

接下來，我會將電話轉給 Adam，討論我們的財務表現和指導。

Thanks, Raul. I'll discuss our third quarter financial performance, then share our outlook for the rest of the fiscal year. This quarter, Paycor generated total revenues of $187 million, an increase of 16% year-over-year. Our monthly recurring revenue grew by 20%. Recurring revenue growth of 14% was weighed down by forms filing.

謝謝，勞爾。我將討論我們第三季的財務業績，然後分享我們對本財年剩餘時間的展望。本季度，Paycor 總營收為 1.87 億美元，年增 16%。我們每個月的經常性收入成長了 20%。 14% 的經常性收入成長受到表格歸檔的拖累。

Most year-end form filing revenues such as W-2 and ACA forms is collected during the third quarter, representing mid-teens share of our recurring revenue and growing closer to employee growth. We saw some year-end form filing pull forward last quarter, and volumes were slightly lower than anticipated, representing a 3 point revenue growth headwind in the quarter.

大多數年終表格歸檔收入（例如 W-2 和 ACA 表格）都是在第三季度收集的，占我們經常性收入的中位數份額，並且越來越接近員工成長。上季我們看到一些年終表格歸檔提前，且數量略低於預期，意味著本季營收成長出現 3 個百分點的阻力。

Also, as expected, ERTC claim processing slowed as the program winds down and represented another 3 point revenue growth headwind in the quarter. Our recurring revenue growth is primarily driven by expanding the number of employees on our platform and the amount we charge per employee per month.

此外，正如預期的那樣，隨著該計劃的結束，ERTC 索賠處理速度放緩，並代表本季收入成長又出現了 3 個百分點的阻力。我們的經常性收入成長主要是透過擴大我們平台上的員工數量以及我們每月向每位員工收取的費用來推動的。

Employees grew 9% over the prior year, primarily from new logos. In line with expectations, same-store sales growth continued slowing, contributing less than 0.5 point of revenue growth in the quarter. At quarter close, we had over 2.6 million employees across approximately 30,600 customers.

員工數量較上年增加 9%，主要得益於新標誌。與預期一致，同店銷售成長持續放緩，對本季營收成長的貢獻不到 0.5 個百分點。截至本季末，我們擁有超過 260 萬名員工和約 30,600 名客戶。

As we continue to enhance our product capabilities and customer success motion, we are seeing outsized growth among our enterprise customers. This quarter, customers with more than 1,000 employees grew at nearly twice the pace of overall employee growth, demonstrating the success of our product and service investments.

隨著我們不斷增強產品能力和客戶成功行動，我們看到企業客戶的大幅成長。本季度，擁有超過 1,000 名員工的客戶的成長速度幾乎是員工整體成長速度的兩倍，證明了我們產品和服務投資的成功。

Our Embedded HCM solution continued gaining traction and contributed 2 points of employee growth again this quarter. While we're encouraged by the early momentum, these larger embedded deals will begin to contribute more meaningfully to our revenue growth in fiscal '25 and be accretive to margins as the partnerships ramp over time.

我們的嵌入式 HCM 解決方案持續受到關注，本季再次為員工成長貢獻了 2 個百分點。雖然我們對早期勢頭感到鼓舞，但這些規模更大的嵌入交易將開始為我們 25 財年的收入增長做出更有意義的貢獻，並隨著合作夥伴關係的不斷發展而增加利潤。

Effective PEPM increased 4% year-over-year to nearly $22 this quarter. Excluding Embedded HCM deals, effective PEPM increased 6%, driven by expansion of our product suite. Effective PEPM growth has been driven by cross-sales, pricing initiatives and higher bundle adoption. We expect more moderate PEPM growth contributions as we onboard larger enterprise customers and Embedded HCM partners with volume discounts, which will be offset by their higher average deal sizes and stronger margins. Revenue from our talent bundles continue to be a bright spot, increasing nearly 40% year-over-year.

本季有效 PEPM 年增 4% 至近 22 美元。不包括嵌入式 HCM 交易，在我們產品套件擴展的推動下，有效 PEPM 成長了 6%。 PEPM 的有效成長是由交叉銷售、定價措施和更高的捆綁採用率所推動的。隨著我們以批量折扣吸引較大的企業客戶和嵌入式 HCM 合作夥伴，我們預計 PEPM 的成長貢獻將更加溫和，這將被他們更高的平均交易規模和更強的利潤率所抵消。我們的人才捆綁收入持續成為亮點，年增近 40%。

In addition to delivering steady top line growth, we have consistently expanded operating margins on an annual basis. Adjusted gross profit margin, excluding depreciation and amortization, was 80%, in line with our long-term targets. It decreased by 30 basis points over the prior year due to the slower growth from form filing revenues. However, we are still anticipating expansion on an annual basis.

除了實現穩定的收入成長外，我們還逐年持續擴大營業利潤。調整後毛利率（不包括折舊和攤提）為 80%，符合我們的長期目標。由於表格歸檔收入成長放緩，較上年下降 30 個基點。然而，我們仍然預計每年都會擴張。

Sales and marketing expense was $50 million or 26.7% of revenue, down 200 basis points from a year ago largely due to lower marketing spend with the Pac-12 as we wind down our partnership, higher lead generation investments leveraging interest income last year and driving productivity as we scale and moderate sales headcount growth this year. Comparable to prior years, we invested 13% of revenue or $25 million in R&D on a gross basis to enhance our HCM platform and expand our PEPM opportunity.

銷售和行銷費用為5000 萬美元，佔收入的26.7%，比一年前下降200 個基點，這主要是由於我們結束合作夥伴關係後Pac-12 的營銷支出減少，利用去年的利息收入增加了潛在客戶開發投資，並推動隨著我們今年規模的擴大和銷售人員數量的適度增長，我們的生產力也隨之提高。與往年相比，我們將收入的 13%（即 2500 萬美元）投入研發，以增強我們的 HCM 平台並擴大我們的 PEPM 機會。

We are gaining economies of scale in G&A as we grow. G&A expense was $20 million or 10.8% of revenue, an improvement of more than 100 basis points from last year. Adjusted operating income increased more than 20% to $48 million with margins of 25.5%, up 130 basis points from last year, while we continue to invest in service, sales expansion and product innovation. We generated $28 million of free cash flow at a 15% margin, and we ended the quarter with $90 million of cash and no debt.

隨著我們的發展，我們在一般管理費用方面獲得了規模經濟。 G&A 費用為 2000 萬美元，佔收入的 10.8%，比去年提高了 100 個基點以上。調整後營業收入成長超過 20%，達到 4,800 萬美元，利潤率為 25.5%，比去年增長 130 個基點，同時我們繼續投資於服務、銷售擴張和產品創新。我們以 15% 的利潤率產生了 2,800 萬美元的自由現金流，本季結束時我們有 9,000 萬美元的現金，沒有債務。

The HCM demand environment remains steady. However, we are updating some of our macroeconomic assumptions for Q4 guidance. Based on recent employment trends, we are updating our guidance to account for potential negative same-store sales growth among existing customers and it assumes no ERTC revenue. In addition, while we are pleased with the Embedded HCM progress, these deals have long cycle times and will have an immaterial impact in the fourth quarter.

HCM 需求環境維持穩定。然而，我們正在更新第四季度指導的一些宏觀經濟假設。根據最近的就業趨勢，我們正在更新我們的指導，以考慮現有客戶中潛在的同店銷售負成長，並假設沒有 ERTC 收入。此外，雖然我們對嵌入式 HCM 的進展感到滿意，但這些交易週期較長，對第四季的影響並不重大。

For the fourth quarter, we expect total revenues of between $160 million and $162 million or 16% growth at the high end of the range, and adjusted operating income of between $21 million and $22 million. For the full year, we expect revenues of $650 million to $652 million or 18% growth at the top end of the range, and we anticipate adjusted operating income of $108 million to $109 million.

我們預計第四季度的總收入將在 1.6 億美元至 1.62 億美元之間，即成長 16%（上限為 16%），調整後的營業收入將在 2,100 萬美元至 2,200 萬美元之間。對於全年，我們預計收入為 6.5 億至 6.52 億美元，即成長 18%（上限），調整後營業收入預計為 1.08 億至 1.09 億美元。

This quarter, we generated $15 million of interest income on average client funds of approximately $1.3 billion at an effective rate of nearly 480 basis points. Based on current rates, we expect interest income to be approximately $51 million for the full year.

本季度，我們平均客戶資金約 13 億美元，產生了 1,500 萬美元的利息收入，有效利率接近 480 個基點。根據當前利率，我們預計全年利息收入約為 5,100 萬美元。

Even with the tougher macroeconomic backdrop than when we started the year, we continue to execute against our strategic growth drivers and gain market share. The HCM demand environment remains healthy with higher top-of-funnel demand than last year. Most U.S. employees are still being paid by legacy systems, and we're delivering a compelling ROI for clients to switch to a modern cloud alternative. We are pleased with the progress we've made expanding sales capacity and our product suite.

儘管宏觀經濟背景比年初更加嚴峻，我們仍繼續執行戰略成長動力並贏得市場份額。 HCM 需求環境依然健康，漏斗頂部需求高於去年。大多數美國員工仍然透過遺留系統支付工資，我們正在為客戶轉向現代雲端替代方案提供令人信服的投資回報率。我們對擴大銷售能力和產品套件所取得的進展感到高興。

We have the most robust suite in the SMB market, and we continue to have outsized success as we expand upmarket. We are demonstrating margin expansion as we scale and believe there is significant opportunity to drive further leverage. We believe there is plenty of runway to deliver sustainable revenue growth and improve profitability over the long term.

我們擁有中小型企業市場中最強大的套件，隨著我們拓展高端市場，我們將繼續取得巨大的成功。隨著規模的擴大，我們正在展示利潤率的擴張，並相信有進一步推動槓桿率的重大機會。我們相信，從長遠來看，有足夠的空間來實現可持續的收入成長和提高獲利能力。

With that, we'll open the call for questions. Operator?

至此，我們將開始提問。操作員？

(Operator Instructions) The first question comes from the line of Gabriela Borges with Goldman Sachs.

（操作員說明）第一個問題來自高盛的加布里埃拉·博爾赫斯（Gabriela Borges）。

This is Kevin Kumar on for Gabriela. I wanted to ask about Embedded HCM. Adam, I think based on your commentary, are you seeing some of these deals get pushed out? How is that impacting kind of the guide there? Just a little bit more of color on kind of the pipeline there and kind of how you're thinking about timing of these deals?

我是加布里埃拉的凱文·庫馬爾。我想問嵌入式 HCM。亞當，我認為根據您的評論，您是否看到其中一些交易被推遲？這對那裡的指南有何影響？關於那裡的管道類型以及您如何考慮這些交易的時機？

Yes. Kevin, no, I don't think that embedded is really impacting the guide as much. We didn't expect a ton in this year in FY '24. We'll be considering more as we get into FY '25 and beyond and the long-term growth rate for sure. The deal is it's not necessarily that they're pushing out. It's just that these are large deals. Usually, the deals that we've been -- that you're hunting at the top end of the space, they just take a long time to come together. And so we have signed a handful of deals this quarter. We're really excited about that. They are on a little bit of the smaller side, but that's to be expected as we continue to ramp the program.

是的。凱文，不，我認為嵌入式對指南的影響並不大。我們沒想到今年 24 財年會發生很多事。當我們進入 25 財年及以後時，我們將考慮更多，並且肯定會考慮長期成長率。協議是他們不一定要退出。只是這些都是大筆交易。通常，我們一直在尋找的高端交易，它們只是需要很長時間才能達成。因此，我們本季簽署了一些交易。我們對此感到非常興奮。它們有點小，但隨著我們繼續推進該計劃，這是可以預料的。

Got it. That's helpful. And then maybe just if you can give an update on Paycor's move upmarket. I know that's been kind of in progress. So how is the pipeline converting relative to your expectations? Where are you having success? And can you speak to maybe the talent solution, which is helping you kind of land some of those larger customers?

知道了。這很有幫助。然後也許您可以提供有關 Paycor 向高端市場發展的最新資訊。我知道這一直在進展。那麼，與您的預期相比，管道的轉換情況如何？你在哪裡取得了成功？您能否談談人才解決方案，該解決方案正在幫助您吸引一些較大的客戶？

Yes, Kevin, it's Raul. We continue to have success moving upmarket. We continue to win deals at the upper end of our target segment, which is 1,000 to 2,500, so we're seeing really strong success there, and I think it's continuing to flow through the organization.

是的，凱文，我是勞爾。我們繼續在高端市場取得成功。我們繼續在目標細分市場的高端（即 1,000 至 2,500 份）贏得交易，因此我們在該領域看到了巨大的成功，而且我認為這種成功將繼續在整個組織中傳播。

And part of that success is a combination of 3 components. One is, as we mentioned on the call, we have the most robust platform with the most feature functionality available and the category talent, by and large, pulls us upmarket because the larger the company is, the more dynamic their sourcing, recruiting and then, more importantly, talent management, talent retention needs are, and our talent platform meets those needs.

這項成功的部分原因在於三個組成部分的結合。一是，正如我們在電話會議上提到的，我們擁有最強大的平台，擁有最多的可用功能，總的來說，類別人才將我們拉向高端市場，因為公司越大，他們的採購、招募和招募就越活躍 ，更重要的是人才管理、人才保留的需求，而我們的人才平台滿足了這些需求。

And then lastly, being the most open platform and the ability to integrate our platform with the other systems of record that they want to integrate with is really proven to be a differentiator.

最後，作為最開放的平台以及將我們的平台與他們想要整合的其他記錄系統整合的能力確實被證明是一個差異化因素。

Next question comes from the line of Bhavin Shah with Deutsche Bank.

下一個問題來自德意志銀行的 Bhavin Shah。

Raul, I noticed in your presentation, you guys switched up the language regarding sales coverage expansion, kind of now targeting low to mid-teens headcount growth versus 20% prior. Can you just maybe elaborate on rationale for you guys rethinking just the amount of headcount growth going forward? And how do you then think about the levers to kind of achieve your goals of 20% sustainable growth?

Raul，我在你的演講中註意到，你們改變了有關銷售覆蓋範圍擴大的措辭，現在的目標是青少年人數增長，而之前的目標是 20%。您能否詳細說明一下你們重新考慮未來員工人數成長量的理由？那麼您如何考慮實現 20% 永續成長目標的槓桿手段？

Yes. It's a good question. We want to grow 20% headcount growth, and we had some elevated churn that we've talked about previously. Throughout the year, we had a structural job issue within the organization that created this elevated churn. And so we didn't want to force hire in the fourth quarter to get to the 20% target. We felt like it was just too much to consume in the quarter.

是的。這是一個好問題。我們希望員工人數增加 20%，但我們之前已經討論過員工流動率上升的情況。在這一年中，我們組織內部存在結構性工作問題，導致了人員流失率的上升。因此，我們不想在第四季度強制招聘以達到 20% 的目標。我們覺得這個季度的消費量太多了。

And so we've fixed a structural issue. We feel really good about our go-forward progress. And as we continue to onboard the people that we have in the organization, we'll begin to reaccelerate hiring. We don't see any reason why we can't hire 15% to 20% in the future.

所以我們解決了一個結構性問題。我們對我們的進展感到非常滿意。隨著我們繼續招募組織中的人員，我們將開始重新加速招募。我們看不出有什麼理由不能在未來僱用 15% 到 20% 的員工。

We just wanted to make sure that we weren't over hiring or hiring too quickly and hiring poorly. And so we essentially just ran out of room in the quarter or in the year to get to the 20%. It has nothing to do with demand in the market. It's all about internal execution.

我們只是想確保我們不會過度招募或招募得太快而招募品質不佳。因此，我們基本上在本季或年度內就沒有空間達到 20%。與市場需求無關。一切都與內部執行有關。

Appreciate the clarification. So it sounds like it's more of a fiscal year comment more so than a go-forward comment if I'm understanding that correctly. .

感謝您的澄清。因此，如果我理解正確的話，這聽起來更像是財政年度評論，而不是前瞻性評論。 。

Yes, I think...

是的，我認為...

And then...

進而...

Well, I was just going to provide a little commentary there. I think it is a current state of the current sales hiring. And I think, over time, we think we can increase productivity and maybe not hire at the top end of our previous range or maybe hire towards the high to mid-teens and still get the same growth levels as before, as the organization ramps up and gets the full productivity.

好吧，我只是想在那裡提供一些評論。我認為這是當前銷售招聘的現狀。我認為，隨著時間的推移，我們認為我們可以提高生產力，也許不會在之前範圍的高端進行招聘，或者可能會向高中到中青少年進行招聘，但隨著組織的發展，仍然可以獲得與以前相同的成長水準並獲得充分的生產力。

Appreciate that. Adam, just quickly for you. I appreciate the help on the headwinds from ERTC in the quarter. How do we think about that headwind in 4Q and then going forward into next fiscal year? And then just kind of the assumptions on float revenue in 4Q would be helpful.

感謝。亞當，快點給你。我很感謝 ERTC 在本季遇到的困難所提供的幫助。我們如何看待第四季以及下一財年的逆風？然後，第四季度浮動收入的假設就會有所幫助。

Yes. So I'll start with the last one. On float revenue, we're expecting rates to remain the same clearly through Q4, and you'll see a little bit lower volume. So the rate will be close to the same on a little bit lower volume as you head into Q4.

是的。所以我將從最後一個開始。在浮動收入方面，我們預計第四季度的費率將明顯保持不變，並且您會看到成交量略有下降。因此，進入第四季時，利率將接近相同，但成交量略有下降。

The -- as we look out into the guide for Q4, we started to see -- well, with ERTC first, we've seen effectively little to none in Q3. And so we were expecting on a full year closer to like 1 point of growth headwind, and it's looking closer to like 1.5 points, almost 2 points of growth headwind on the full year, so really expecting that ERTC has gone here in Q4. We were much lower than what we had anticipated on the back half of the year, even though we're not expecting new filings going forward, just the revenue is -- it sort of slowed down a little bit faster than we had anticipated.

當我們查看第四季度的指南時，我們開始看到，首先是 ERTC，我們在第三季幾乎沒有看到什麼。因此，我們預計全年成長阻力將接近 1 個百分點，而全年成長阻力看起來接近 1.5 個百分點，幾乎 2 個百分點，因此我們真的預計 ERTC 在第四季度會出現這種情況。我們的業績比我們下半年的預期要低得多，儘管我們預計未來不會有新的申請，只是收入——它的放緩速度比我們預期的要快一些。

Next question comes from the line of Terry Tillman with Truist Securities.

下一個問題來自 Truist Securities 的 Terry Tillman。

This is Dominique Manansala on for Terry. So I just wanted to go back to the embedded channel, just one for me. After activating those first 2 partners and now this new partner and the customers, how does incremental revenue and new business visibility look with them and then also other partners in terms of new relationships?

我是多明尼克·馬南薩拉 (Dominique Manansala)，替補特里 (Terry)。所以我只想回到嵌入式頻道，這只是一個適合我的頻道。在激活前 2 個合作夥伴以及現在的新合作夥伴和客戶之後，他們以及其他合作夥伴在新關係方面的增量收入和新業務可見度如何？

Yes. The revenue visibility is really around -- I mean, there's 2 dynamics. It could be around a portfolio that they might be bringing over. Most of the small firms that we've run into don't have portfolios or at least not material portfolios to bring over. So you're not going to see a lot of revenue opportunity in the very near term in terms of like a portfolio conversion. And so you're really looking at net new business.

是的。收入可見性確實存在——我的意思是，有兩個動態。這可能是圍繞著他們可能帶來的投資組合。我們遇到的大多數小公司都沒有投資組合，或至少沒有可以帶來的實質投資組合。因此，在短期內，您不會在投資組合轉換等方面看到很多收入機會。所以你真正關注的是淨新業務。

And of course, we're diligencing those companies in terms of the size of their portfolio or the size of their customer base. Currently, what's the opportunity to cross sell back into that base? How much new business do they look at? So that's the visibility that we have, is really, as we go through diligence, we review the go-to-market motion with them. And then based on our experience of go to market is what's the ability for them to sell into their space and add the payroll and HCM solutions.

當然，我們正在努力關注這些公司的投資組合規模或客戶群規模。目前，交叉銷售回基地的機會是什麼？他們關注了多少新業務？這就是我們所擁有的可見性，實際上，當我們進行盡職調查時，我們會與他們一起審查進入市場的動議。然後根據我們進入市場的經驗，他們有能力推銷自己的領域並添加薪資和 HCM 解決方案。

I think like there's not perfect visibility just like there's not perfect visibility into our own pipeline. I mean the pipeline still turns pretty quickly. So you're looking at 30, 60 to 90 days really on the long end. And as we ramp up partners, that's the sort of diligence and rigor that we try to have with them, is establishing what that pipeline looks like and how quickly you can turn it.

我認為沒有完美的可見性，就像我們自己的管道沒有完美的可見性一樣。我的意思是管道的運轉速度仍然很快。所以你真正考慮的是 30、60 到 90 天的長期期限。當我們增加合作夥伴時，我們試圖與他們一起努力和嚴謹，建立管道的樣子以及你可以多快地轉動它。

Next question comes from the line of Brad Reback with Stifel.

下一個問題來自 Brad Reback 和 Stifel 的對話。

Raul, can you walk us through some of the changes you've made on the sales force churn side? And what's been the early success there?

Raul，您能否向我們介紹一下您在銷售人員流失方面所做的一些改變？那裡的早期成功是什麼？

Yes. So we had previously created a segment of the sales organization that was 50 employees to 250, and it just had a lot of elevated churn. And so we reverted back to the way we used to structure the organization. So it was a territory structure component. We did the change April 1, so we have 1 month of visibility, and we've seen 1 month of significantly better retention.

是的。因此，我們之前創建了一個擁有 50 到 250 名員工的銷售組織部門，但流失率卻很高。因此，我們又恢復了過去建構組織的方式。所以它是一個領土結構組成。我們在 4 月 1 日進行了更改，因此我們有 1 個月的可見性，並且我們已經看到 1 個月的保留率顯著提高。

Now 1 month isn't a trend, Brad. But ultimately, that's -- from our perspective, that was the driving force behind our attrition. And to put it in more like visible terms, like if you think about we have a mid-market sales organization and when you segment the job, the 50 to 250, it probably didn't give them enough opportunity to sell enough dollars that a normal mid-market seller would want to sell to earn what they wanted to earn and so self-inflicted.

現在 1 個月已經不是一種趨勢了，布拉德。但最終，從我們的角度來看，這是我們流失的驅動力。用更明顯的術語來說，就像如果你考慮我們有一個中端市場銷售組織，當你將工作細分為50 到250 人時，它可能沒有給他們足夠的機會來銷售足夠的美元，以至於正常的中階市場賣家會想透過出售來賺取他們想要的收入，這是自找的。

As an organization, gets much larger. That segmentation is fairly normal within HCM. But we're just not at that scale today where it was necessary. So we rolled it back. And we think that the worst is behind us from a churn perspective.

作為一個組織，規模會變得更大。這種細分在 HCM 中相當正常。但我們今天還沒有達到必要的規模。所以我們把它回滾了。從客戶流失的角度來看，我們認為最糟糕的情況已經過去。

And by the way, while we've been working through this, what we have done is elevated our more tenured sellers, and so our average months worked continues to increase, and it's at its highest point in the last 5 years. So we are keeping people. We were just churning new people at too fast of a rate in this 50 to 250 job. That's a lot of detail.

順便說一句，雖然我們一直在努力解決這個問題，但我們所做的是提升了我們的長期賣家，因此我們的平均工作時間繼續增加，並且達到了過去 5 年來的最高點。所以我們留住人。我們只是在這個 50 到 250 人的工作中以太快的速度流失新人。這是很多細節。

Great. No, it makes a lot of sense. And then, Adam, on the forms filing business, what changed over the course of the quarter versus your expectations? If you could just give us some specificity on that, that would be great.

偉大的。不，這很有意義。然後，亞當，關於表格歸檔業務，與您的預期相比，本季發生了什麼變化？如果您能給我們一些具體信息，那就太好了。

Yes. When the program ended or when they sort of rolled it back a little bit earlier, we were still expecting some form filings at that point, and it really stopped. So new form filings stopped. Now we don't -- that's not when we recognize revenue, so that theoretically shouldn't hurt us in the very immediate.

是的。當該計劃結束或當他們提前一點回滾時，我們仍在等待一些表格歸檔，但它真的停止了。因此新的表格申請停止了。現在我們不這樣做——那不是我們確認收入的時候，所以理論上這不會立即傷害我們。

But then the actual processing of the forms outstanding, I mean, we still have a handful outstanding that could generate revenue, and we just have not seen the processing come through either. And that's when we recognize the revenue is after the customer pays. And so that part of the processing and customer payment has just been a little bit slower than we anticipated in the back half of the year.

但是，對未完成表格的實際處理，我的意思是，我們仍然有少數未完成表格可以產生收入，但我們只是還沒有看到處理完成。那時我們就意識到收入是在客戶付款後產生的。因此，這部分處理和客戶付款比我們下半年的預期慢一些。

Next question comes from the line of Brian Peterson with Raymond James.

下一個問題來自布萊恩彼得森和雷蒙詹姆斯的對話。

So I just wanted to follow up on the sales dynamics. As you're thinking about making the changes to the back to more of a territory model, does that maybe make it easier or broaden the number of candidates that you could potentially bring in for sales hiring? And has there been any update, I'd say, over the last month or so on what you've been able to do? I know we're like a couple of months from the end of the fiscal year here. But how do we think about that hiring trend kind of into fiscal year '25?

所以我只是想跟進銷售動態。當您正在考慮將背面更改為更多的區域模型時，這是否可能會讓您更容易或擴大您可能引入的銷售招聘候選人的數量？我想說，在過去一個月左右的時間裡，您所做的事情有任何更新嗎？我知道距離本財年結束還有幾個月的時間。但我們如何看待 25 財年的招募趨勢呢？

Yes. I mean it hasn't been a supply issue. So I think what it does is it provides the sellers that we hire an opportunity to meet the success criteria and the earnings criteria that they're looking for. So we believe we're putting our sellers in a better position to be successful. And success obviously drives retention in any sales organization.

是的。我的意思是這不是供應問題。所以我認為它的作用是為我們僱用的賣家提供一個機會來滿足他們所尋求的成功標準和收入標準。因此，我們相信我們正在幫助我們的賣家取得成功。成功顯然會提高任何銷售組織的保留率。

Got it. That makes sense. And Adam, just a clarification. I know you were talking about the embedded channel. I think you said that there wouldn't be any growth from that in the fourth quarter. Are you talking about an incremental step-up? Or should we still expect kind of the 2 points of employment on the platform to continue into the fourth quarter?

知道了。這就說得通了。亞當，請澄清一下。我知道你在談論嵌入式頻道。我想你說過第四季不會有任何成長。您是在談論增量升級嗎？或者我們仍然應該期望平台上的 2 個就業點能持續到第四季？

Yes. No, I was saying more from the new embedded partners are not going to add anything incrementally to revenue in the quarter. And so yes, the lead time to revenue just is too long for that.

是的。不，我是說新的嵌入式合作夥伴不會在本季增加任何收入。所以，是的，實現收入的準備時間對於這個來說太長了。

Next question comes from the line of Scott Berg with Needham & Company.

下一個問題來自尼達姆公司的 Scott Berg。

I guess I got a couple. Adam, wanted to start with the guidance for the fourth quarter. I know you had mentioned a couple of different kind of headwinds to the revenue and assumptions at least for the quarter. But if you were to like kind of stack rank those, what's having the greatest impact, do you think?

我想我有一對。亞當想從第四季的指導開始。我知道您至少提到了本季收入和假設面臨的幾種不同類型的阻力。但如果你喜歡對這些進行排序，你認為什麼影響最大？

Yes. I mean you have a combination of the lower ERC and some of the impact on seller hiring to a lesser extent. But I mean, really more of it is on the macro and the potential impact of the macro. I mean we've seen, just like others have seen and you see in the broader market, the same-store sales has seen a steady downward trend for a while now. And as of late, we've seen some more early signs of potential negative growth. And so that's what we were trying to care for here this quarter.

是的。我的意思是，ERC 較低，而且對賣家招募的影響較小。但我的意思是，實際上更多的是關於宏觀和宏觀的潛在影響。我的意思是，我們已經看到，就像其他人看到的以及您在更廣泛的市場中看到的那樣，同店銷售額一段時間以來一直呈穩步下降趨勢。截至最近，我們已經看到了一些潛在負成長的早期跡象。這就是我們本季試圖關注的問題。

Got it. Helpful. And then, Raul, as you think about fiscal '25, I know you're not guiding to fiscal '25 on this call at all. But given what you're seeing in some of those changes that's impacting the fourth quarter, does that impact how you think about how to invest into next year? And that's independent upon how you're kind of making some of these subtle changes or fixes to the sales organization. But does this add a new component or dynamic to how you think about, I guess, investing in the business in your Tier 1 territories next year?

知道了。有幫助。然後，勞爾，當你想到 25 財年時，我知道你在這次電話會議上根本沒有指導 25 財年。但考慮到您在影響第四季度的一些變化中看到的情況，這是否會影響您對明年如何投資的看法？這取決於您如何對銷售組織進行一些細微的變更或修復。但這是否會為您明年投資一級地區業務的想法增添新的組成部分或動力？

No, I think it doesn't. We want to be able to improve our seller retention. We believe that we've done enough on the onboarding, training, enablement and now territory structure to do that. And we're growing a lot of territories. So I mean it's complex to begin with. However, we remain committed to continuing to expand in our Tier 1 markets. And we'll continue to invest in expanding our direct sales organization. Obviously, we've also invested in our indirect sales organization through this embedded channel.

不，我認為不是。我們希望能夠提高賣家保留率。我們相信，我們在入職、培訓、支援和現在的區域結構方面已經做了足夠的工作來做到這一點。我們正在擴大很多領土。所以我的意思是，一開始就很複雜。然而，我們仍然致力於繼續擴大我們的一級市場。我們將繼續投資擴大我們的直銷組織。顯然，我們也透過這個嵌入式管道投資了我們的間接銷售組織。

And so we believe in the market, the opportunity. We're winning share. And so outside of our own self-inflicted issues that created some elevated attrition, we feel really great about our value prop, our position in the marketplace, our win rates, our broker channel. Like all the components to win are there, and we're winning share. We -- and as we stabilize and prove out our changes are working, we'll put more gas in the car, so to speak.

因此，我們相信市場，相信機會。我們正在贏得份額。因此，除了我們自己造成的問題導致人員流失率上升之外，我們對我們的價值支柱、我們在市場中的地位、我們的贏率和我們的經紀人管道感覺非常好。就像所有獲勝的要素都在那裡一樣，我們正在贏得份額。可以這麼說，當我們穩定下來並證明我們的改變正在發揮作用時，我們將為汽車添加更多的汽油。

Next question comes from the line of Jared Levine with TD Cowen.

下一個問題來自 Jared Levine 和 TD Cowen 的對話。

In terms of client employment levels, I just want to clarify, for 3Q here, were they sequentially down relative to 2Q. And then in terms of the 4Q guide, does that assume a sequential decline there?

就客戶就業水準而言，我只想澄清一下，第三季相對於第二季是否連續下降。那麼就第四季指引而言，是否假設該季度​​會出現連續下降？

Yes, I think there was a -- well, there is some seasonality in Q3 that leads to some sequential growth actually quarter-over-quarter, although, again, the year-over-year continues to slow. And so we do see a little bit of sequential decline into Q4, more of a sequential decline into Q4 and -- but again, on a year-over-year basis was more of my commentary where now that year-over-year growth is potentially flipping negative.

是的，我認為第三季存在一些季節性因素，導致實際季度環比出現一些連續增長，儘管同比再次繼續放緩。因此，我們確實看到第四季度出現了一點連續下降，第四季度更多的是連續下降，而且，我的評論更多的是在同比基礎上，現在同比增長是可能會轉為負值。

Got it. And then in terms of ERTC just given the lower expectations, any updated thoughts in terms of what that would present in terms of a headwind for FY '25 now?

知道了。然後就 ERTC 而言，考慮到較低的預期，對於現在 25 財年的不利因素，有什麼最新的想法嗎？

I mean no -- well, it's going to be less of a headwind in the 25% just because the revenue number will be lower here this year. But expectations would be that we have less than a point of revenue this year in ERTC now.

我的意思是不是——嗯，25% 的人面臨的阻力會較小，因為今年這裡的收入數字會較低。但預計我們今年 ERTC 的營收不到一個百分點。

Next question comes from the line of Mark Marcon with Baird.

下一個問題來自馬克·馬爾孔和貝爾德的對話。

So if one were to strip out the ERTC and the form filings, which you had talked about last quarter being pulled forward, if we just took a look at recurring, would that have been more in the 15%, 16% range for Q3 on a like-for-like basis relative to a year ago?

因此，如果要剔除 ERTC 和表格備案（您在上個季度談到將其提前），如果我們只看一下經常性的情況，那麼第三季度的比例是否會在 15%、16% 的範圍內？與一年前相比是否相同？

No. Actually, we noted in the prepared remarks that it was actually 20% for the quarter, which is up from 18 points or 18% growth in Q2. So slightly faster this quarter if you back out the year-end form filings and the ERTC. So that's where a little bit of the continued bullishness comes from and positivity as we think about that growth and the underlying portfolio.

不會。因此，如果您撤銷年終表格備案和 ERTC，本季的速度會稍微快一些。因此，當我們考慮成長和基礎投資組合時，這就是持續看漲和積極的來源。

Okay. And -- but you're kind of guiding to recurring and other -- if we take a look at the midpoint of your guidance range for this coming quarter and then we factor in the interest income. It sounds like you're looking more towards 14.5% to 15.5% for recurring and other in the fourth quarter. Is that -- is the math right?

好的。而且 - 但您對經常性和其他方面的指導 - 如果我們看一下您下個季度的指導範圍的中點，然後我們將利息收入考慮在內。聽起來您更希望第四季度的經常性和其他費用達到 14.5% 至 15.5%。數學正確嗎？

Well, I mean, just like I mentioned, Mark, I mean there's a couple of other headwinds as we're going into Q4 that we just noted that are slightly different, including 0 ERTC which again has been part of the low couple digits or points of contribution over the last couple of years. So you're seeing some points there, a little bit of the seller hiring that we talked about and then again, the macro with some of that same-store sales growth, which is now going to be potentially dragging as we look at that number in Q4.

好吧，我的意思是，就像我提到的，馬克，我的意思是，當我們進入第四季度時，還有一些其他的阻力，我們剛剛注意到這些阻力略有不同，包括0 ERTC ，它再次成為低位數字的一部分或過去幾年的貢獻點。因此，您會看到一些點，我們討論過的一些賣家招聘，然後是一些同店銷售增長的宏觀因素，當我們看到這個數字時，這可能會拖累在第四季度。

Next question comes from the line of Daniel Jester with BMO Capital Markets.

下一個問題來自 BMO 資本市場的 Daniel Jester。

So Raul, you talked about your user conference, and I'm sure you had a lot of opportunities to connect with customers. You presented a bunch of things about improving integration speed, new technology, customer success. I guess could you just expand on 1 or 2 of the things that your customers are most excited for leaving the conference?

勞爾，您談到了您的用戶會議，我相信您有很多機會與客戶建立聯繫。您提出了一系列有關提高整合速度、新技術、客戶成功的內容。我想您能否詳細說明您的客戶在離開會議時最興奮的一兩件事？

Yes. I think 2 things. One is, clearly, interoperability and the ability for them to continue to connect all the data from the HCM system of record to other tools is critical. Obviously, in HCM, people care about having a success team to help them leverage and optimize the utilization of the bundles. And I think that's probably the biggest takeaway I got, is, over the last 5 years, the HCM bundles continue to expand. The number of products people purchase continues to increase. And most people are initially focused on getting their workforce management and their payroll and HR system live. And then how do you bring about analytics critical reporting, integrations, talent management, benefits? How do you bring those live after the initial event? How do you continue to change workflow with the customer? So more change management.

是的。我認為有兩件事。一是，顯然，互通性以及他們繼續將 HCM 記錄系統中的所有資料連接到其他工具的能力至關重要。顯然，在 HCM 中，人們關心的是擁有一個成功的團隊來幫助他們利用和優化捆綁包的利用率。我認為這可能是我得到的最大收穫，在過去 5 年中，HCM 捆綁包不斷擴展。人們購買的產品數量持續增加。大多數人最初關注的是讓他們的勞動力管理以及他們的工資和人力資源系統上線。然後，您如何實現分析關鍵報告、整合、人才管理和效益？在最初的活動之後，你如何將這些內容帶入現場？您如何繼續與客戶改變工作流程？所以更多的變革管理。

I would say that's the biggest takeaway that we got from the conference. And obviously, we're focused on providing them tools to be more successful in that area, and we'll continue to work with our clients to help them with that change management as they continue to buy more products from us.

我想說這是我們從這次會議中得到的最大收穫。顯然，我們專注於為他們提供在該領域取得更大成功的工具，隨著客戶繼續從我們這裡購買更多產品，我們將繼續與客戶合作，幫助他們進行變革管理。

Great. And then maybe just another one on the sales force and maybe more from a productivity angle. I mean if you exclude the portion of the sales force that you've talked about with regards to churn today, you just focus on the rest of the sales force, maybe any sense about productivity levels and your confidence that you can continue to sustain improved productivity into next year?

偉大的。然後也許只是銷售人員的另一項工作，也許更多的是從生產力的角度來看。我的意思是，如果您排除今天談到的銷售人員流失問題，那麼您只需關注銷售人員的其餘部分，也許對生產力水平以及您對能夠繼續保持改進的信心有任何感覺。

Yes. So even the entire field sales organization, despite our elevated churn, we are increasing our tenure and we have increased our productivity. And so we actually feel really good that it works. It's about graduating people into the next year. And so our overall productivity continues to increase as we're growing the sales organization and despite the churn that we have. So -- which is why we're bullish because we have a winning value prop in the market that resonates, and we just had some internal execution issues that caused a slight delay.

是的。因此，即使是整個現場銷售組織，儘管我們的客戶流失率較高，但我們仍在延長我們的任期，並提高了我們的生產力。所以我們實際上感覺非常好，因為它有效。這是關於讓人們畢業進入明年。因此，儘管我們有客戶流失，但隨著銷售組織的發展，我們的整體生產力持續提高。所以——這就是我們看漲的原因，因為我們在市場上有一個能引起共鳴的致勝價值支撐，而我們只是遇到了一些內部執行問題，導致了輕微的延遲。

Next question comes from the line of Steve Enders with Citi.

下一個問題來自花旗銀行的史蒂夫恩德斯 (Steve Enders)。

Okay. Great. I guess maybe to start, I understand the factors going into the guide for 4Q. But I guess as we're thinking about the models moving forward, how should we be thinking about those factors maybe impacting the quarters after that?

好的。偉大的。我想也許首先，我了解第四季指南中的因素。但我想，當我們考慮未來的模型時，我們應該如何考慮這些可能影響之後幾季的因素？

Well, I mean, we clearly haven't given any guidance for '25. I mean we continue to be bullish on the embedded channel, and we have a couple of partners that are not even boarded yet, right, just booked, haven't added anything yet, and we're going to be in the process of implementing those and standing up those partnerships over the next couple of months. And those will begin to be additive next year. And then we have a partner who is going through the migration right now. And they're coming online here this quarter and next quarter. And that -- the whole process when you bring over a portfolio takes 6 to 9 months usually and maybe a little bit longer with some of the tails of the portfolio.

嗯，我的意思是，我們顯然沒有為 25 年提供任何指導。我的意思是，我們繼續看好嵌入式頻道，我們有幾個合作夥伴甚至還沒有登機，對吧，剛剛預訂，還沒有添加任何東西，我們將在實施過程中這些並在接下來的幾個月裡建立這些夥伴關係。這些將於明年開始增加。然後我們有一個合作夥伴正在經歷遷移。他們將於本季和下季上線。當你帶來一個投資組合時，整個過程通常需要 6 到 9 個月的時間，對於投資組合的一些尾部來說，可能需要更長的時間。

So I think we have -- we're expecting an ongoing ramp probably for a while. And we'll love to share, I think, more at Analyst Day as we sort of onboard these clients and new partnerships and really, we can start to unpack them in a little bit more detail as we step into '25 and beyond.

所以我認為我們預計成長可能會持續一段時間。我認為，我們很樂意在分析師日分享更多內容，因為我們會加入這些客戶和新的合作夥伴關係，實際上，當我們進入 25 年及以後時，我們可以開始更詳細地解開它們。

Okay. That's helpful there. And I think you called out seeing continued healthy top-of-funnel activity or maybe you said it was better than it was a year ago. I guess any segments or geographies or anything to call out there for maybe what's helping support the better levels there?

好的。這很有幫助。我認為您呼籲看到持續健康的漏斗頂部活動，或者也許您說它比一年前更好。我想有哪些細分市場或地區或任何值得指出的事情可能有助於支持那裡更好的水平？

Yes. I mean we've been focused. We've had really strong execution generating MQLs and first deployment. So our top-of-the-funnel growth has been excellent, and that's growth on a per-seller basis, so not just overall growth but growing as we continue to grow the sales organization. So our marketing team has done a great job of generating top-of-funnel demand, and so that gives us a lot of confidence that as we continue to fix our tenure and increase our tenure, that will drive FTAs through the pipeline into closed one.

是的。我的意思是我們一直很專注。我們在產生 MQL 和首次部署方面擁有非常強大的執行力。因此，我們的漏斗頂部成長非常出色，這是基於每個賣家的成長，因此不僅是整體成長，而且隨著我們繼續發展銷售組織而成長。因此，我們的行銷團隊在產生漏斗頂部需求方面做得非常出色，這給了我們很大的信心，隨著我們繼續確定我們的任期並增加我們的任期，這將推動自由貿易協定通過管道進入封閉式協定。

Next question comes from the line of Matt VanVliet with BTIG.

下一個問題來自 BTIG 的 Matt VanVliet。

Curious on how much you feel like you were able to add to the pipeline and sort of to the overall opportunities coming out of the user conference, obviously not a like-for-like comparison year-over-year, but that's to your benefit, I assume. So curious on what the key takeaways are in terms of business development.

很好奇您覺得自己能夠在多大程度上增加管道以及用戶會議帶來的總體機會，顯然不是逐年進行同類比較，但這對您有利，我假設。很好奇業務發展的關鍵要點是什麼。

Yes. I mean on the user conference, obviously, it's a huge opportunity for our client team. We have an amazing client sales team. And for them, they have the ability to spend time with our clients there. It does generate more opportunities to cross sell and folks, some of our great solutions like talent and workforce management and benefits and analytics.

是的。我的意思是，在用戶會議上，顯然這對我們的客戶團隊來說是一個巨大的機會。我們擁有一支出色的客戶銷售團隊。對他們來說，他們有能力與我們的客戶共度時光。它確實產生了更多的交叉銷售和人員機會，我們的一些出色的解決方案，例如人才和勞動力管理以及福利和分析。

And so we're excited about it, and -- but it was a relatively small conference. And so we'll continue to grow that conference. We've got great feedback on it. We'll hopefully double that conference next year and continue to increase the number of clients that we're able to touch and impact. But it's a great lead generator obviously for our client sales team.

所以我們對此感到興奮，而且——但這是一個相對較小的會議。因此，我們將繼續擴大該會議的規模。我們對此得到了很好的回饋。我們希望明年的會議數量能夠增加一倍，並繼續增加我們能夠接觸和影響的客戶數量。但對於我們的客戶銷售團隊來說，這顯然是一個很好的潛在客戶生成器。

And then you called out enterprise as being particularly strong. Curious what the trends were at the lower end of the market. We've heard other companies continuing to struggle recently on the SMB side. So on the smallest area, how much of a headwind is that now and sort of baked into the fourth quarter?

然後你說企業特別強。好奇低端市場的趨勢是什麼。我們聽說其他公司最近在中小企業方面繼續苦苦掙扎。那麼，在最小的領域，現在的逆風有多大，而且會持續到第四季呢？

Yes. I mean we definitely see in the micro segment, I mean, it's declining marginally. Now that still only represents like mid-single digits in terms of our total revenue, but it grows at a much smaller pace. And then in terms of the number of customers, it's actually marginally declining. And that's been the case for a while.

是的。我的意思是，我們肯定會在微觀領域看到，它正在小幅下降。現在，就我們的總收入而言，這仍然只佔中個位數，但成長速度要小得多。然後就客戶數量而言，實際上正在略有下降。這種情況已經有一段時間了。

So that's not necessarily a new trend, but it's definitely persistent. And we've seen some lower growth really up into the 50, so that sort of 10 to 50, which we would call like the lower part of the small market, that segment is growing much smaller or much slower than our mid-market. And that's from either a turnover perspective but also like on a net new business, of course, we see a lot more growth in that mid-market. So the same-store sales growth in that segment is a little bit slower, and we see the losses at a little bit higher rate, of course, in that micro segment.

所以這不一定是新趨勢，但絕對是持久的。我們看到 50 強的成長速度確實較低，因此 10 到 50 強的成長，我們稱之為小市場的下部，該細分市場的成長比我們的中端市場小得多或慢得多。這既是從營業額的角度來看，也是從淨新業務的角度來看，當然，我們看到中端市場有更多的成長。因此，該細分市場的同店銷售成長要慢一些，當然，在該細分市場中，我們看到損失率要高一些。

Next question comes from the line of Mark Murphy with JPMorgan.

下一個問題來自馬克墨菲 (Mark Murphy) 與摩根大通 (JPMorgan) 的對話。

This is Arti Vula on for Mark Murphy. One area I wanted to double click on and I think, you hinted around it, but some of the kind of incremental headwinds you're seeing in same-store sales, can you talk about how that looks across the different kind of enterprise mid- and small end of the market, please?

我是阿蒂烏拉 (Arti Vula) 為馬克墨菲 (Mark Murphy) 發言。我想雙擊一個區域，我認為您已經暗示了這一點，但是您在同店銷售中看到的一些增量逆風，您能否談談不同類型的企業中層的情況如何？嗎？

Yes. So the same-store sales growth, it's fairly consistent. It's not as much by size. I mean we see a little bit more pressure on the smaller end of the market for sure, but it's a little bit more distinct by industry. So we see a little bit more, like on the food and beverage has slowed down considerably. We see manufacturing sort of flipping a little bit. Professional services has been a little bit stronger actually. But those are more of the dynamics that we see. Things like arts and entertainment, the same-store sales has slowed a little bit and started to flip and drag just a little bit more.

是的。所以同店銷售成長是相當一致的。從尺寸上看，它沒有那麼大。我的意思是，我們確實看到較小的市場面臨更大的壓力，但按行業來看，壓力更加明顯。所以我們看到更多，例如食品和飲料的成長速度大大放緩。我們看到製造業發生了一些變化。專業服務其實更強。但這些更多的是我們看到的動態。像藝術和娛樂這樣的東西，同店銷售已經放緩了一點，並開始翻轉和拖累一點點。

That's very helpful. And then on -- if you're kind of thinking about the talent solutions, is that something that could be kind of potentially affected by some of these variations? Or is the fact that there's reskill and upskill and kind of make it a priority for the customers anyways?

這非常有幫助。然後，如果您正在考慮人才解決方案，那麼這是否可能會受到其中一些變化的潛在影響？或者說，事實上，有重新技能和提陞技能，並且無論如何都將其作為客戶的優先事項？

Arti, I missed the first part of what you said. Maybe if you're saying if that's an optional product, is that what you're saying?

阿蒂，我錯過了你所說的第一部分。也許如果您說這是可選產品，那麼您是這麼說的嗎？

No. I was wondering if the change in kind of the hiring patterns is affecting the interest in the talent solutions suite or whether that's kind of being offset by the fact that there's reskill and upskilling and other factors of that, that customers are purchasing it for?

不。

Yes. It doesn't -- the labor market doesn't have a huge impact on talent in the sense that, even in a tight labor market, companies have normal organic churn of their employee base. And so they're always looking to recruit employees. So that tends to be fairly stable on the front-end recruiting modules. And then I think in a tighter labor market, people do focus more on, hey, how do I retain the great employees that I have now. And so some of the talent retention modules that we have are really popular and helpful there.

是的。事實並非如此——勞動力市場對人才並沒有產生巨大的影響，因為即使在勞動市場緊張的情況下，公司也會有正常的員工流失。因此他們一直在尋找員工。因此，這在前端招募模組上往往相當穩定。然後我認為，在勞動市場趨緊的情況下，人們確實更關注，嘿，我如何留住我現在擁有的優秀員工。因此，我們擁有的一些人才保留模組在那裡非常受歡迎並且很有幫助。

Next question comes from the line of Austin Cole with Citizens JMP.

下一個問題來自 Austin Cole 和 Citizens JMP 的路線。

Raul, I'd love to get your take on how you view the AI opportunity at this stage. Are you hearing more or less interest about AI from your customers over recent months or about the same?

Raul，我很想聽聽您如何看待現階段的人工智慧機會。近幾個月來，您是否聽到客戶對人工智慧的興趣增加或減少，或者大致相同？

I think there's a lot of excitement on this call about AI. I think there's a lot of excitement on my leadership team about AI. The opportunities to continue to enhance the insights that we provide our customers, the opportunity to develop products faster, be more efficient with marketing, continue to provide better service with AI tools, all those things are really things that we're diving into. And each area of the business has unique progress going on.

我認為這次關於人工智慧的電話會議令人興奮不已。我認為我的領導團隊對人工智慧非常興奮。繼續增強我們為客戶提供的洞察的機會，更快地開發產品的機會，更有效率的行銷，繼續利用人工智慧工具提供更好的服務，所有這些都是我們正在深入研究的事情。每個業務領域都在取得獨特的進展。

At a customer level in the mid-market, they're users or they're experiencing it, but they're not really asking about it, right? They'll take the benefits of it. But most of them are consumers. They read the articles. They get worried about the pros and cons of AI, so we have to clearly explain in the product how we use AI, et cetera. But I would say, in the segment we serve, people are like saying, "Hey, can you walk us through what you have in AI in the product?" it's -- they're seeing the benefits in the product versus asking for it specifically.

在中端市場的客戶層面，他們是用戶或正在體驗它，但他們並沒有真正詢問它，對嗎？他們會從中受益。但他們大多是消費者。他們閱讀文章。他們擔心人工智慧的利弊，所以我們必須在產品中清楚地解釋我們如何使用人工智慧等等。但我想說，在我們服務的細分市場中，人們會說，“嘿，你能向我們介紹一下你的產品中的人工智慧技術嗎？”他們看到的是產品的好處，而不是特別要求它。

Okay. That's helpful. And then maybe just as a quick follow-up. Are you -- do you think that in the enterprise space, that might start to change a little bit or no?

好的。這很有幫助。然後也許只是作為快速跟進。您是否認為在企業領域，這種情況可能會開始發生一些變化，或者不會？

I think where we're operating in the enterprise space, it might come up a little bit. But it's not going to be that prevalent. I think as you get up into 10,000-plus employees, it becomes maybe more of an opportunity for them to think about how they can streamline their products and platform. But ultimately, we're not seeing it at all.

我認為我們在企業領域開展業務時，可能會出現一些問題。但它不會那麼普遍。我認為，當員工數量超過 10,000 名時，他們可能有更多機會思考如何簡化產品和平台。但最終，我們根本看不見它。

Next question comes from the line of Siti Panigrahi with Mizuho Group.

下一個問題來自 Siti Panigrahi 與瑞穗集團的關係。

Raul, as you see some of the payroll companies' results and the growth guidance raised some kind of concern about growth of this cloud payroll industry and there was some concern about saturation, how do you respond to that? And what gives you that confidence you can accelerate revenue from here?

Raul，正如您所看到的一些薪資公司的業績和成長指引引起了人們對雲端薪資產業成長的某種擔憂，以及對飽和度的擔憂，您對此有何回應？是什麼讓您有信心可以從這裡增加收入？

Yes. I think it's more of a point in time than a trend. And when I look at the overall category, the 3 modern cloud providers in our space, we have about 15% to 20% of the eligible market and that the lion's share of the market is still on suboptimal regional service bureaus, ERP systems or legacy providers like ADP and Paychex. So we view that as a ripe opportunity to continue to grow and continue to focus on disrupting the category.

是的。我認為這更多的是一個時間點而不是趨勢。當我查看整個類別時，我們領域的 3 個現代雲端供應商，我們擁有大約 15% 到 20% 的合格市場，市場的最大份額仍然是次優的區域服務局、ERP 系統或遺留系統ADP 和Paychex 等提供者。因此，我們認為這是一個繼續發展並繼續專注於顛覆該類別的成熟機會。

Ladies and gentlemen, we have reached the end of question-and-answer session. I would now like to turn the floor over to Raul Villar for closing comments.

女士們、先生們，問答環節已經結束。現在我想請勞爾·維拉 (Raul Villar) 發表結束評論。

Thank you again for joining us tonight. We are encouraged by the underlying fundamentals of the business and remain focused on executing our strategy. We look forward to connecting with you at several upcoming events, including the JPMorgan Technology Conference in Boston, the Baird Technology Conference in New York City, and the William Blair Growth Stock Conference in Chicago. Have a great night, everyone.

再次感謝您今晚加入我們。我們對業務的基本面感到鼓舞，並繼續專注於執行我們的策略。我們期待在即將舉行的幾場活動中與您聯繫，包括波士頓摩根大通技術會議、紐約貝爾德技術會議以及芝加哥威廉布萊爾成長股票會議。祝大家有個美好的夜晚。

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

謝謝。今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。