Paycom Software Inc at Barclays Global Technology Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : <_ALACRA_META_ABSTRACT>So when you joined Paycom like back many, many years ago, did you have a thought would be this big of a company?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : We're going to miss you, yes. And Chad, for you, like the world at the moment is there's too much change in there. Like it feels like when you reported your Q3 results, like since then like a lot of things kind of had the election, et cetera. How does it play out for you? Like we read in the newspaper, like SMB sentiment an all-time high like it's coming up, et cetera. Like how does it play out for you? What are you seeing there from your perspective? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:55PM, PAYC.N - Paycom Software Inc at Barclays Global Technology Conference

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : And I mean because you've been in this business for -- or in this market for so long, is there like -- how are fluctuations from like sentiment getting better, et cetera, like in previous cycles? Was there -- is it just whoever executes better? Or do you see those kind of changes?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yes. Okay. I mean it's funny, like I was on the Oracle call on Monday, it's like I was asking like who's doing back office, but it was the same message well, actually, people are taking a lot more attention to it again. So okay, that's interesting, yes. And then if you think -- the story for you last year was all about Beti. And a lot of investors were asking me is like why kept on determined. We're like -- for you, it also created some things that you needed to consider like trade-offs, et cetera. Like can you maybe just frame it for us, like one more time, like why do you think Beti is so important?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : And if you talk to your clients or while you're backing it out and getting a feedback from the clients, like in theory, it seems like a no-brainer like -- so how is adoption like then from that perspective?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : And if you think about it, if you're an existing client, like how much of it is a step-up or change were to go to Beti like?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : And so from your perspective, like if you think about the last year and a little bit before we all get them over now, like you have some struggle that's left, is that -- I mean you will continue to kind of help them on their journey, but like that's kind of so long way to focus for you, you're kind of pretty much done? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:55PM, PAYC.N - Paycom Software Inc at Barclays Global Technology Conference

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yeah. And then like I mean I remember last year, you had like your customer success team kind of helped a little bit do more. Is that still something you do? Or like are you going to refocus them again?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : And do you see, in theory, what you should have it, Beti kind of works and you see you have a lot of clients on it now, you should see like happier employees and heavier kind of customers because there's less reruns, people get paid more correctly. Do you see that in your kind of renewal rate with clients? Like is that something that -- or do you expect that to see in renewal rate clients?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yeah. Okay. I want to shift gears a little bit to talk a little bit more about the industry. If you think about it, like how do you think about industry growth that you're selling in? And the reason I'm asking is like if you look at the growth rates for pretty much everyone kind of came down and everyone is kind of struggling now with cycle like that kind of getting more competitive? How do you think about like the industry in itself and then like the last couple of years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:55PM, PAYC.N - Paycom Software Inc at Barclays Global Technology Conference

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Is that Craig's last project like you agreed?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Okay. No, that's interesting. And then so from your perspective, it doesn't feel like the market is slowing down or like the opportunity set has kind of changed compared to where you were years ago?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : I mean one of the -- like you understand where we are coming from because to look at the numbers and stuff. Like maybe one different way to think about it or like to answer is like, if you think about your sales scatter out selling, like how is that -- like you REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:55PM, PAYC.N - Paycom Software Inc at Barclays Global Technology Conference talked in the past about like, okay, making President's Club or like what's the ACV or like what's the revenue you guys are selling, like what are you seeing that evolution of your sales guys being able to sell?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : So then if you think about it, you feel it's good and it does feel like client retention is getting better, now that we kind of through this stuff. So from that perspective, it doesn't look like there's better times ahead?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Okay. Yeah. And then with all the Beti news, we kind of forgot a little bit to talk a bit about your kind of move upmarket, international. Can you update us on that one? Like what's the journey there?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : And can you remind us like how do you define those -- what is the mid-market versus upmarket for you? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:55PM, PAYC.N - Paycom Software Inc at Barclays Global Technology Conference

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : And then the -- do you see a change in the industry a little bit on the upmarket side? Because I remember, and we're going back I'm aging myself here as well, like going back to like when you IPO-ed, remember, we talked with clients back at the time, and there were when you talk with like a 10,000 employee customer, they were like, no, no, Paycom is like, sort of I want to do it myself. I want to own software and do all the little 100 tweaks. But I think the world has changed a little bit. Like what do you see on that upmarket side of people appreciating the full value that you're providing here?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : And then how do you make sure that you don't end up with elephant hunting? Because that happens often like, oh, I go off that is kind of 20,000 feature and I'm not selling in the meantime with luck?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yeah. And then more on the national side now, like how is your thinking about new offices? And remember a few years ago, we were like everyone was super obsessed about like, oh, how many offices do you want to open. I think we kind of all learned that's kind of like a city question. But like if the world is getting better, does that mean are your willingness to kind of do more on the office side is kind of increasing? Or how do you think about that? How should we think about that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:55PM, PAYC.N - Paycom Software Inc at Barclays Global Technology Conference

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Is part of this -- like I heard it from other guys that attrition was actually lower like because in bad times, like people want to stay with the company, they were successful so they didn't move around. Does that help you to increase like the guys that are already you have more of them available now because there was less attrition? Or does that mean trimming it?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yes, yes, yes. Okay. And do you still -- remember, like a few years ago, we talked about like the number of ZIP codes you kind of still can cover? Have you reported that opportunity set? Or are we still kind of in the same boat ride?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : And we talked upmarket like what's the story on the international side?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Can you -- like Canada, UK?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Ireland. Okay.

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yes. Okay. And if you think about it, do you think that's more helping as you sign bigger US companies that -- because they will have more international. So it's more that's the starting point? Or do you think more about getting like an international and international

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : And then how do you think about -- I mean you have solutions for four countries. How do you do the sales? Do you have like a sales team in the country? And then remember, you've been very disciplined in terms of like how much of a ZIP code sales territory is allowed to kind of sell into, like how do you do it internationally and can they do the whole country? Or do you start like small? Like, how do you do that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:55PM, PAYC.N - Paycom Software Inc at Barclays Global Technology Conference

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yeah, would that be that's further down the line if even --?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yeah. So you have like a lot of --

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yeah. Okay. Perfect. Yeah, makes sense. And then the -- I know the answer, but I want to ask it anyway. If you look about your industry, there was a always a tendency to kind of think like, okay, well, I want to do something else so I buy a company and in adjacent areas where Paylocity just did that on a kind of adjacency or ADP just would do stuff. With greater size for you guys, does that come up with you? Or like we've been doing it for 26 years now. I'm an organic guy, like how do you think about that?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : And then I almost feel the kind of -- it almost feels it that I've been waiting for so long, but GenAI or AI. Like if you think about it like in your space, how do you think about that for what you guys want to do? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:55PM, PAYC.N - Paycom Software Inc at Barclays Global Technology Conference

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yes. And then like, let's -- how do you think about pricing and packaging there? And like you've been always been more conservative because it's part of like what I'm offering, so I should give it you. There's obviously other vendors not in your space that was like, oh, yes, here's AI, just pay for it and it's not -- it works either way. How do you think about like the kind of monetization of this? Or like how does -- how it feeds into your offering?

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yes. And then last question I wanted to have is like -- Craig, retiring now. But you have also other changes on the team. And how should we think about it? Because I have a lot of investors saying like, what's going on here? Like to me, it's like a very independent of each other. But like if you get that question, like how do you enter that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:55PM, PAYC.N - Paycom Software Inc at Barclays Global Technology Conference

Question: Raimo Lenschow - Barclays Capital Inc - Analyst : Yes. Perfect. That's a good closing statement as well. All the best.