Good afternoon, and thank you for attending today's Paycom Software Fourth Quarter 2021 Results. My name is Austin, and I'll be the moderator for today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, James Samford with Paycom. James, please go ahead. Thank you. Welcome to Paycom's Fourth Quarter 2021 Earnings Conference Call. Certain statements made on this call that are not historical facts, 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 these 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. 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, and 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. Chad? Thanks, James, and thank you to everyone joining our call today. We ended 2021 with a very strong quarter, and I'd like to thank all of our employees for the outstanding effort they put in to making 2021 a great success. I will spend a few minutes on the highlights of our fourth quarter 2021 results, then I will review some of our notable achievements throughout the year. Following that, Craig will review our financials and our guidance, and then we will take questions. 2021 was a very strong year for Paycom. We extended our platform to the employee even further through innovations like Beti, which enables employees to do their own payroll. We are seeing very strong adoption and record employee usage as measured by the DDX. Strong demand continues to bolster our sales momentum and record new client sales in 2021 have positioned us to deliver another year of rapid growth in 2022. For years, I have been predicting the end of the old model whereby HR and payroll personnel's routine of inputting data for employees is replaced by a self-service model that provides employees direct access to the database. The old model is dying, and that is good for both the business and the employee. Paycom is leading this transformation. We will continue to automate the processes that generate maximum ROI for our clients. Our 2021 fourth quarter revenue of $285 million came in very strong, up 29% year-over-year. Our full year 2021 revenue of $1,056 million grew 25% compared to 2020. Employee usage, which is at a record high, is a key driver of revenue retention, and I'm pleased to announce that Paycom's annual revenue retention rate increased once again to 94% this year, which is a validation of the strong ROI our clients are achieving. Our full year 2021 adjusted EBITDA was $419 million, representing an adjusted EBITDA margin of nearly 40%. The sum of our 2021 revenue growth rate and adjusted EBITDA margin resulted in us hitting the rule of 65, reflecting the solid demand for our solutions and the profitability of our business model and was well ahead of our stated goal to reach the rule of 60. As you can see with our full year 2022 guidance, we are starting strong with a rule of 65. Our marketing plan throughout 2021 continued to perform well, delivering strong demo leads throughout the year as we spent aggressively on advertising. More importantly, our sales teams are successfully closing these leads, which is the key driver to our revenue growth. In her first year as our Chief Sales Officer, Holly Faurot has executed fabulously on her sales plan, and I'm very pleased with the coordination we are seeing across the sales and marketing organizations. We are capitalizing on the shortcomings of disparate HCM systems that are failing both the employees who struggle to use them and the businesses that struggle just to make them work. Our proven single database platform just works better, and we continue to differentiate ourselves with easy-to-use solutions that enhance the employee experience and generate maximum ROI for our clients. In response to increasing demand in 2021, we expanded the upper end of our target client size range from 5,000 - 10,000 employees, as we are seeing success selling to larger clients. We are also concurrently expanding geographically to meet the increased demand. In addition to the Manhattan office we announced a few months ago, we recently opened four outside sales offices in the following locations: Las Vegas, Jacksonville, New England, and South Jersey. We have now opened five offices in the last five months. That said, I'd remind everyone that we still only have approximately 5% of the TAM today, so there's plenty of runway ahead to expand and continue to capture market share. Paycom received national recognition from several organizations in 2021. Our latest innovation, Beti, was awarded a top HR product of the year honor. As a workplace, we earned a top 20 ranking in best places to work in the U.S. by Top Workplaces, and we were named a top workplace in Oklahoma for the 9th consecutive year. We were also named the best company for women to work. These awards are a testament to our execution and thriving corporate culture. As of December 31st, 2021, our head count stood at 5,385 employees, up 28% year-over-year, as we continue to have great success attracting and retaining high quality talent to further bolster our future growth. Additionally, I want to congratulate the 2021 Paycom Jim Thorpe Award winner, Coby Bryant from the University of Cincinnati. This award recognizes the most outstanding defensive back in college football and memorializes Jim Thorpe, who is one of the greatest all-around athletes in history. Jim Thorpe also happened to be an Oklahoman. To sum up, we are executing well on all fronts with innovative solutions, high employee usage, and increasing revenue retention. Robust market demand and our proven go-to-market strategy are fueling strong new client revenue momentum. I'd like to thank our employees for help making 2021 such a strong year, and we are set up to do even better in 2022, and we're off to a great start. With that, I'll turn the call over to Craig for a review of our financials and guidance. Craig? Thanks, Chad. Before I review our fourth quarter and full year results for 2021 and our outlook for the first quarter and full year 2022, I would like to remind everyone that my comments related to certain financial measures will be on a non-GAAP basis. We ended the year with very strong results, delivering a milestone full year 2021 revenue total of $1.056 billion, up 25.4% compared to 2020. Fourth quarter results were excellent, with total revenues of $285 million, representing growth of 29% over the comparable prior year period. Our revenue growth is driven by strong demand, new business wins, and adoption of recent new product offerings. Within total revenues, recurring revenue was $280 million for the fourth quarter of 2021, representing 98% of total revenues for the quarter and growing 29% from the comparable prior year period. We ended 2021 with nearly 34,000 clients, representing a growth rate of 9% compared to 2020. On a parent company grouping basis, we ended the year with roughly 17,700 clients, representing a growth rate of 10% compared to 2020. Total adjusted gross profit for the fourth quarter was $239.7 million, representing an adjusted gross margin of 84.1%. For the full year 2021, our adjusted gross margin was 85.1%. For 2022, our target adjusted gross margin range is expected to remain strong at approximately 85%-86%. Adjusted sales and marketing expense for the fourth quarter of 2021 was $72.3 million or 25.4% of revenues. Our marketing strategy in 2021 has been very effective at driving high quality demo leads, and our outside and inside sales teams have been doing a great job closing these leads. We plan to continue to invest in marketing in Q1 and throughout 2022. In addition, as Chad said, we have added four more outside sales offices, bringing the total outside sales office opening to five new openings in the last five months. We also continue to add inside sales personnel as we grow our sales organization to meet the demand. Adjusted R&D expense was $32.3 million in the fourth quarter of 2021 or 11.3% of total revenue. Adjusted total R&D costs, including the capitalized portion, were $44 million in the fourth quarter of 2021 compared to $33.2 million in the prior year period. We aggressively recruited talent in R&D throughout the pandemic, and we plan to continue to invest in our future growth through innovation and new product development. Adjusted EBITDA was $109.6 million in the fourth quarter of 2021 or 38.4% of total revenues, compared to $84.2 million in the fourth quarter of 2020 or 38.1% of total revenues. For the full year 2021, adjusted EBITDA was $419.3 million or 39.7% of total revenues, compared to $330.8 million or 39.3% of total revenues in 2020. Our GAAP net income for the fourth quarter was $48.7 million or $0.84 per diluted share versus $24.4 million or $0.42 per diluted share in the prior year period based on approximately 58 million shares. For the full year 2021, our GAAP net income was $196 million or $3.37 per diluted share. Our effective income tax rate for the fourth quarter of 2021 was 30.4%. Non-GAAP net income for the fourth quarter of 2021 was $64.4 million or $1.11 per diluted share versus $49.1 million or $0.84 per diluted share in the prior year period. For the full year 2021, our non-GAAP net income was $260.4 million or $4.48 per diluted share versus $203.5 million or $3.49 per diluted share in the prior year period. For 2022, we anticipate our full year effective income tax rate to be approximately 28% on a GAAP and non-GAAP basis, with Q1 GAAP effective tax rate expected to be approximately 30%. Turning to the balance sheet. We ended the year with cash and cash equivalents of $278 million and total debt of $29 million. Cash from operations was $319 million in 2021, representing an increase of 40.6%, 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 $1.9 billion in the fourth quarter of 2021. During 2021, we repurchased approximately 164,000 shares for a total of roughly $65.6 million. Through December 31st, 2021, Paycom has repurchased nearly 4.3 million shares since 2016 for a total of nearly $488 million, and we currently have $266 million remaining in our buyback program. Now let me turn to guidance. For fiscal 2022, we expect revenue in the range of $1.314 billion-$1.316 billion or nearly 25% year-over-year growth at the midpoint of the range. We expect adjusted EBITDA in the range of $524 million-$526 million, representing an adjusted EBITDA margin of approximately 40% at the midpoint of the range. We are starting this year's guidance at the rule of 65. For the first quarter of 2022, we expect total revenues in the range of $342 million-$344 million, representing a growth rate over the comparable prior year period of 26% at the midpoint of the range. We expect adjusted EBITDA for the first quarter in the range of $161 million-$163 million, representing an adjusted EBITDA margin of 47% at the midpoint of the range. 2021 was a very strong year for Paycom as a direct result of the investments we made. We will continue to invest in talent, marketing, innovation, customer service, and geographic expansion to meet the strong demand we are experiencing and to support our high expectations for long-term future growth. With that, we will open the line for questions. Operator? Our first question is from Raimo Lenschow of Barclays. Hey, thank you. Congrats to a great finish to the year. Chad and Craig, I have like two questions. One was on the retention rate. 94% is kind of again up from last year. Very strong number, especially considering where you are playing in the market. Can you talk a little bit about the drivers there and is that kind of, you know, how are you thinking about this number going forward? The second question, where I got a lot of questions from investors, was around the customer adds. Obviously last year was a special year with the pandemic, so you had like a crazy big number there. That kind of moderated this year. Like, how should we think about it, especially in light of your comments, Craig, around the investments on inside and outside sales? Thank you. Yeah, Raimo. Starting with the first on retention, it was about three or four years ago that we started to increase that rate. We'd been 91% for six years straight, and then it jumped up to 92%, and it really jumped up once we started implementing employee usage products. You know, we'd come out with the app, it went up. Then we looked at the year before the pandemic hit in 2020, it went up again to 93%. Again, we had driven through the Direct Data Exchange, having employees make those changes themselves, increase satisfaction again for those clients as it increased their return on investment. 2020, we held the line at 93%, and that had somewhat to do. It's a trailing 12 revenue retention number. Obviously 2020, we did have some retreat in our revenue, just the natural attrition that came from those employees, you know, being laid off or leaving their business during the pandemic. Then now, in 2021, we've been able to increase it once again to 94%. In answer to that question, though, it's all really driven by usage. You know, the more success a client has using our products, the greater the return on the investment they're achieving, and that makes them want to stay with us longer. How high can it go? Obviously, at some point you do, Have to look at, you're always gonna have a certain number of clients that could be bought, sold, and merged. You know, we're very ambitious with that number. We're seeing a lot of satisfaction across the client base, so, you know, I wouldn't necessarily say we're done with our retention aspirations. We feel really good by being able to raise it again. As far as the client count that you mentioned, in 2019, our parent company group and those are client decisions grew by 6.5% that client number. Of course, today in 2021, it grew 10%. Last year it grew 18%, and that was really in conjunction with the fact that we added small business teams to sell small business units. We accelerated our advertising spend in 2020, which generated a high volume of leads. A lot of those were beneath the 50 employee range. That's when we added several teams to catch that, and that really we benefited that from a percentage growth unit add. I would point out that in 2020, even though we did have around 18% parent company group growth, from a unit perspective, our growth per client, billings per client annual lives was roughly flat. In 2021, that number's up about 14%. Okay, perfect. Thank you. Congrats. Thank you. Thank you. Our next question is with Samad Samana of Jefferies. Hi. Great. Congrats. I'll echo that as well, just a really great end to 2021. Maybe, Chad, one, just to follow up on Raimo's question, and you kinda touched on it a little bit there at the end. If I think about the net adds that you've added in the context of the, call it net new recurring revenue, you're getting to, like, an average customer size of new customers added, like, north of $70,000 of average revenue versus, like, let's call it Sure. It's been similar, you know, as what you've seen us tick up in the past. As we've continued to focus on larger clients, that's driven that number up. We're having more success selling larger clients, so you might say that, you know, the ones we're bringing in on average are larger than what we bring, brought in in the past. We're selling more of them, so we're just having more unit counts at that level than what we've had in the past. Obviously, we've continued to add product into the mix, which also adds value to each deal that we bring in, regardless of what size they're at. Great. Maybe just to follow up, you know, Beti is impacting retention in a positive way. I'm curious if you can maybe update us on what the traction is in terms of getting the install base to using Beti and how we should think about that progression in 2022. Yeah, you know, we're having a lot of success with the install base using Beti. I mean, internally, there is a little bit of a process change for our clients. You know, you're moving things that you were doing after the payroll ends, the pay period ends. You're moving that to the beginning. We continue to have success selling Beti both into our current install base. As a reminder, all new business that we've brought on since July of last year all have Beti included in its pricing and usage expectation. Great. Thank you for taking my questions. Mm-hmm. Thank you. Our next question is with Brad Reback of Stifel. Great. Thanks very much. Just a first, quick one. Chad, can you remind us how many sales teams, both internal and external, you have today, and maybe where that was a year ago? Sure. Craig? Yeah, outside sales teams, we're 54 now, you know, and as we mentioned, you know, we've added the four recent ones and then we added one towards the end of last year. We've added five of those. In terms of inside sales teams, you know, from our KPIs, we count the inside and the CRR group as one, but we've also announced that we've had over 10, plus we're adding to the inside sales group. Outside sales is at 54- Yes I think right now total outside sales teams. Brad, the last time we added a sales, outside sales team, we added in 2019, we added our New Orleans office. We did not add any in 2020. The end of 2021 is when we brought through Manhattan and then, you know, we continued on with four since then. That's great. Maybe just following up to close the loop on the unit versus pricing dynamic. With these added sales teams, would it be right to assume that we could probably see a more even split in 2022 with the 25% growth between unit and price, or maybe even a little more unit? You know, we're not as focused on unit growth, I would say. I mean, obviously, we wanna win our deals. Sometimes our unit growth goes up as it did in 2020 just because of the success we had with our inside sales group. Obviously, those deals have a smaller revenue contribution. So, you know, as we turned into 2021. We had success selling in 2020 as well above our range. You know, in 2021, we raised our range because we continued to have so much success. Our focus continues to be the mid-market, but you know, we also have success below, and that is really what contributes to the increase in unit count are those small unit deals. Got it. Thanks very much. Thank you. Our next question is with Mark Marcon of Baird. Hey, good afternoon. Let me add my congratulations. With regards to the revenue per client increasing by 14%, how much of that is just because of the bigger clients that you're selling relative to an increase in terms of the number of employees per client just as employment came back versus adding more modules or selling more modules? Is there a way to just think about that in terms of the three elements? Yeah. I mean, well, it's gonna be driven by size of client, number of modules sold into client for sure. Any contribution from improving employment in regards to our base would be minimal. Okay. That was a minimal contribution in terms of the employees in the base. Correct. Great. Can you talk a little bit about the assumptions for the gross margins? Obviously, it continue to be best in class. Wondering if you can just talk a little bit about the expectations here for 2022. What are you assuming in terms of average float balance and with rates starting to finally move back up, how much do you think you could end up capturing as rates start hopefully normalizing? Yeah. In our gross margins, we don't anticipate or we don't factor in any rate increases. I mean, obviously if there are rate increases, which they're talking about here in first quarter in March, you know, that would be a tailwind to us, you know. Based on the average daily balance, it's somewhere between $4 million-$5 million on an annual basis, but that would layer in, Mark. I mean, it, you know, it wouldn't come to us the day they increase rates. That's something that kind of layers in over time. Is that $4 million-$5 million for how many basis points? Per quarter basis per 25, right? Yeah. It would be on an annual basis for each 25 basis point increase. On our 12-month. Thank you. Excellent. Thank you. Our next question is with Ryan MacDonald of Needham. Hey, guys. This is Josh on for Ryan. Congrats on the strong year and quarter here. Curious, you know, now that you've just opened five sales offices, you know, what are you seeing in the macro that's kinda giving you this confidence here over the last couple quarters to open these offices? And then are you seeing improved activity in hospitality and some of the troubled industries from the pandemic starting to pick up here materially before Omicron hit? And then what kind of a pause are you seeing with Omicron, if any? Yeah. First, I would talk about the office openings. I mean, demand is really what's driving us to add more sales teams. You know, again, we started really spending heavily on marketing in 2020. It brought on high quality revenue that produced very strong margins for us. You know, we continue to have elevated leads. Again, we didn't really open anything in 2020, so you know, it was really time for us to start that again. As it relates to Omicron, you know, I would say that oftentimes we don't really know why one company may be experiencing less employment today than it did last week and you know, why it may have more next week. I don't really see these factors as long as we have stability having a large impact one way or another on our quarters as we move forward. I'd talked about the importance of the need that we had to lap the pandemic with stability. You know, we've had that substantially since the summer of 2020. You know, we feel good about where we're at from here and feel like, you know, barring any major move, and I believe it would have to be major in some type of employment situation, which, you know, we don't expect. I think it should be business as usual for us as we go forward throughout the year. Okay. Got it. Great. Just a follow-up question on the interest income. You know, as that kind of returns to the model here over the next couple years, you know, investors are obviously more focused on free cash flow generation with the increasing interest rates. How do you think about the balance of reinvesting that interest income for growth versus letting it just fall to free cash flow and ultimately buying back more shares, obviously depending on how the stock price goes? Yeah, first prize is always growth for us. I mean, you know, we have been investing our profits into growth, and they're creating more profits. You know, that's just kind of what's been happening. You know, in regards to the interest rates, you know, we wouldn't do anything other than the things we're doing right now. Craig, I don't know if you'd add anything. No, no, I mean, you know, obviously, you know, as they come back, I mean, we would, you know, trade off a point of margin for a point of growth. But, you know, we're gonna still spend wisely as you see that we've always done. We're focused on growing as fast as we can in 2022. We have that locked and loaded and the funds to be able to do that. Great. Thanks, guys. Thank you. Our next question is with Siti Panigrahi. Siti Panigrahi. Hey, congratulations. Great quarter. I was getting to a question about your Q1 guidance. Sequentially, it was 21% is almost similar to last year versus prior to COVID is 30%+. Is there a similar kind of expectation from W-2 and form filing this year as well, Chad, or any other factor you have considered in your guidance? Yeah, there's a little bit of that. I would, you know, kind of point to how fourth quarter in 2021 was our highest revenue quarter that we've had from a fourth quarter perspective, meaning typically first quarter can outpace fourth quarter throughout the years. This year, fourth quarter outpaced first quarter in 2021. Really hadn't happened since 2015, and then it happened in 2014. Really what's happening is our revenue makeup mix. As we continue to sell more products, both at the time of sale as well as into the base, the contribution that those annualized form filings has on an overall client annualized revenue that we get from them is smaller. The recurring revenue, monthly recurring we're charging a client, you might say, is outpacing that we would have growth in annualized fees, if you will. Yes, I think you still have some of the trends that you know were followed in 2020 or happened again in 2021 somewhat. You know, I think our comps were a little bit easier comping over this year than what we had going into 2021 W-2s versus the 2019 W-2s. Anyway, all that's to say, I think one thing that's starting to happen in our revenue mix is that the monthly recurring that we're charging a client due to the additional products that we've come up with that they're buying and finding value in is outpacing any growth in our annualized fees. That's great color. Then quick follow up on, now great to see that you're already added four to five sales sales offices. How do you think the competitive landscape will change in your $5,000 above kind of segment now that you have sales office and they can do in-person, which is probably more relevant for targeting this high-end customer? How should we think about that, so you know, growth in that. Well, I think it still remains to be seen, you know, how prospects are going to buy this technology. I mean, most people are still buying virtually. Again, we're not gonna try to pull clients onto a certain way to buy. We're gonna meet them where they live. If they're used to buying virtually and they want to buy virtually, well, we have the solution for that. Of course, if clients are wanting us to come out there, we have that availability to be able to do that. You know, I would say that we're not seeing a huge shift to in-person selling at this point. We remain ready, but again, that's something that's going to, you know, we're gonna meet the client where they live on that. That's great. Thank you, Chad. Thank you. Our next question is with Bryan Bergin of Cowen. Hi, guys. Good afternoon. Thank you. How do you measure kind of the sales force metrics? Can you talk a bit about where sales force productivity stands relative to pre-pandemic levels? Sales productivity is way up from pre-pandemic levels when you look at on a per rep basis or even if you look at a per team basis, you know. When you lose one of your senses, the other takes over, and we became a lot better throughout the pandemic in how we sold. We got better at strategy, we got better at connecting to our prospects, we got better at marketing, we got better at retargeting. You know, sales has been very strong, and it remains that today. Okay. I, as far as employee growth or client employee growth goes, I think I heard you say it was minimal in the fourth quarter. Are you embedding any assumption on client employee growth in your 2022 outlook? No. All right. Thank you. Thank you. Our next question is with Alex Zukin of Wolfe Research. Hey guys, thanks for taking the question. I guess maybe, Chad, for you, if you think about the pipeline, the sales cycles, sales cycle length, and just in general, the impact of kind of the great resignation, you know, both the puts and takes on the business, where do we stand on all those fronts as we look at 2022? Yeah. Well, I would say. Thank you. Sorry, go ahead. Okay. I would say in regards to the pipeline, our pipeline remains very strong. I also would say through virtual selling, I do think it's been to some extent easier to connect to some of the players that you would have in a larger organization. You know, in a smaller organization, you might talk to two or three people, but in a large organization, you have multiple decision makers and in our case, multiple user buyers because we are impacting many parts of the business. As far as a tight labor market, I mean, I think that impacts all of us. You know, we've had a lot of success in the tight labor market, especially in the management ranks of being able to increase quality for us in those areas. You know, we're up 28%. I mean, from an employment perspective, we added 28% to our employee base last year. You know, I've definitely noticed it being tight out there, but you know, it's definitely you have to be competitive. But we've had a lot of success building our recruiting teams over the years with very strong learning management systems, where we're able to spin up employees quickly, get them started on their career. Got it. Maybe just a follow-up. Chad, obviously the amount of sales offices that you added in 2021 is, I don't know if you're, you know, catching up from where you weren't able to move as quickly in 2020, obviously. To the extent that that's a direct result of, like, more people being in a position to make a move after being stalled to some extent with COVID, whether it's, you know, attrition from your peer competitors like ADP and Paychex, or whether it's, you know, the competitive environment, there was a large hack, a ransomware attack at UKG. Like, what is, what is the competitive set or landscape look like, and how is your dialed in investment incrementally in kind of expanding the sales team number by a lot more than in previous years? What's the signal we're supposed to take away from that? Well, I mean, we're focused on, you know, dominating the industry and really providing businesses with a very strong return on investment. Really that's happening. I mean, you know, a lot of the things that we're competing against are just, they're old ways to use systems and, you know. I believe over time, and you're starting to see that, it just becomes more and more difficult to use them. We only have 5% of the market. I mean, that's the other thing. We have such an opportunity. Demand continues to increase. The popularity of our brand's getting stronger. We have stronger proof sources for larger clients, and we have increased retention rate, which shows you that they're just having a lot of success with it. What was your question about UKG? I was just asking, you know, have you seen any impact from the hack that they suffered or the security breach in terms of more clients? Has that been a pain point that has been used by more clients to switch providers? Yeah, I just wanted to get you to say it again. You know, we're having success with that. It's a pretty bad deal when you're down that long, and we are having success with that. You know, our hearts go out to those clients and especially their employees that are impacted. You know, but those are a little bit longer sales cycle when you're talking about the larger deals. I think this happened in December. Obviously, we're on it. We do believe that we're gonna have success taking some business. I mean, I think if you're a CFO or HR person, you know, you'd be hard pressed to stay in that environment without quite a few explanations. I mean, at some point you gotta read the room on what industry you're in, you know? There's a lot of restaurants that won't serve you, salmonella 32 days in a row. You might wanna eat at one of them. Thanks for the question. Thanks, Chad. Our next question is with Brian Schwartz of Oppenheimer. Yeah. Hi. Congratulations on a good quarter, and thanks so much for taking my questions. Chad, just a follow-up again on your optimism on the demand trends as well as the sales successes that you experienced in the quarter. Clearly, your marketing and sales expansion's having some fruition. I just wanted to ask you again here, are you seeing any changes at all in the environment in terms of maybe what customers are asking for on top of the payroll or anything, the competition? Or is your optimism about the demand trend just kind of strong productivity across the sales force today? Yeah. Well, I think we're definitely have a strong productivity across our sales force, but I do believe that that's driven by high-quality leads and a differentiated product strategy that clients are having a lot of success for it. You know, you sell one thing, but we're able to prove it out as well. You know, we go out there, we onboard clients onto our product, and then we're able to prove out the value they're receiving. You know, the more you do that, the more that increases demand as well as it increases confidence with your sales force, you know. The salesperson goes out there and has an incredible amount of success bringing someone onto our platform, and that's a happy client. You know, a lot of confidence is built up within the sales staff. You know, we had to shift strategies here. We didn't start off with the employee, you know, does the work and inputs the data into the system themselves through the DDX. We didn't start off with self-service payroll. There's been a little bit of a shift from our sales department selling it one way and really, you know, coming into their own with understanding the value of selling it the correct way, which is how the clients are gonna currently use the product. You know, we're very bullish on that, and really our demand hasn't seen much or any of a tail off, and I'm thinking of since 2020, or since we came out in 2020. Of course, it's up from there, from what we would have sold in 2020. Since those first couple of weeks in the pandemic when we shifted into virtual leads and increase in marketing and really becoming more efficient in our areas, we've had a lot of success since that time, and I haven't seen us take a step back since that time. Thanks, Chad. One follow-up for Craig. Craig, I have a question on the 4Q cash flow. It came in far above what we were modeling. You pointed out the revenue upside as one of the driver. I just wanted to ask you, did some of the spend plan for 4Q, did that get pushed into 1Q, or were there any other anomalies to explain the outsized cash flow growth in the quarter? Thanks. No, I would say it's mostly just timing. You know, a little bit of timing, Q3 to Q4 to Q1, but I mean, really nothing unusual there. You know, I mean, part of it's just the overall strength of the quarter. You know, we had a very strong quarter from a revenue perspective as well for Q4. Thanks, Craig. Our next question is with Robert Simmons of D.A. Davidson. Hey, thanks for taking my questions. I guess most of them have been asked and answered already. I guess, have you thought about giving new updated for ASC 606 long-term target margins? You know, under 606, I'm not exactly sure of the question. You know, we're continuing to The long-term margin target. You used to give, like, a long-term EBITDA margin, not guide, but, you know, a target. I was wondering if you would update on those new realities. ASC 606 long term. Yeah, correct. We did. I think we continued to hit that, and then we would update it. You're right, as we went to ASC 606, we have not updated those long-term margins. You know, we have strong margins that we're starting off with right now. Again, we are focused on growth, but our growth is producing high-quality, profitable business. You know, for us, we're focused on the growth side, but we do have healthy, strong margins. It's something we have to take a look at internally of when we may be able to update what a long-term growth margin looks like. You know, we're focused on growing for the foreseeable future. Yeah. I would say, you know, I mean, you know, one thing we're really starting this year, adjusted EBITDA margin off at where we finished last year. You know, coming out strong out of the gate. You know, a couple of things, you know, kind of looking into 2022 just on a modeling, you know, stock comp, we would expect it to be, you know, around $110 million, up slightly from this year. You know, one thing we did bring our Grapevine office facility online here at the end of the fourth quarter. We're gonna see a little bit of an increase in the depreciation for 2022 as it relates to that facility, probably up, you know, around 50 basis points as a percent of our revenue. One thing else that we've announced is the expansion in Oklahoma City as well. CapEx will be similar to last year as it relates to CapEx. All of those play into our margins or some of those are added and subtracted out for adjusted EBITDA. We're really excited about where we're starting 2022 with the rule of 65. On the CapEx, is that similar dollar amount or similar percent of revenue? Percent of revenue. Got it. Great. Thank you very much. Our next question is with Bhavin Shah of Deutsche Bank. Great. Thanks for taking my questions. Chad, just any commentary you can provide in terms of which modules are seeing increased adoption as HR becomes more strategic with the great resignation? And then are you seeing any customers. Like, are you seeing more customers come back to the table or even the size of land get bigger? Yeah. Well, first I would start with the modules. You know, we've always had healthy uptake, and I've always said the longer we have a module, the more uptake we have in it. When you deploy Beti, it does require certain modules to be implemented into the client base, into that client in order for them to use Beti. That's helpful, oftentimes, with our modules, you know, especially for the new clients that we bring on that have Beti, of which all of them do. That's helpful there. As far as module impact that we see, I mean, you are seeing some impact on learning management, just as people are looking to both, retain as well as spin up training for new employees. Obviously, our recruiting product has been very strong, going throughout the pandemic, to be able to identify those people that you want to hire. As far as when we look at the product mix, we've had healthy usage across all of them, and it really just depends on what industry and what area a client might be in to whether or not they would use all of those modules or not, if that makes sense. Then, as far as seeing customers come back to the table, you know, we're not having a lot of losses on customers as we just talked about our retention rate going up. When we do lose a client though, it is, you know, we get a meeting with them normally pretty quick just because of the usage around their employee base. You know, if we're looking at a DDX of 95% where employees are making 95% of all the changes into the system, that's a client that finds it difficult to leave without, you know, destroying their return on investment and all the automation that they had achieved through our products. We have a lot of win backs there, but I would just start off by saying we're not really losing as many as we once did. Got it. That's helpful there. Just a quick follow-up on your office openings. I mean, as you guys open up five offices after not opening one in a handful of years, how do you ensure that you don't see any disruption to your productivity with your other offices as you shift around personnel, and make them sales leaders? To the other point of like, how do we think about sales productivity ramping for these five offices? Is there any change to the historical cadence? Well, you don't ever take top managers out of an office and relocate them to a new office where they start off with zero employees and you don't have some impact on that office where those managers came from. These are some of our top managers that we relocate like that. Now, what you're gonna gain out of that new office is gonna cover up anything that you may have negatively impacted on the old, and then by the time they get to maturity, there's not much difference between the two. Well, there's not a difference between the two on what their quota is and oftentimes quota achievement. I wouldn't say it's necessarily a giant sacrifice that we make, but you know, whenever you do move managers out of an office, you do have an impact. Now we're disrupting five of those. You know, there used to be a time where we would disrupt four out of 12. The disruption to us is a little bit less. I'm using disruption, I don't know that it'd be the right word to use, to be honest with you. You know, it does take a little bit for those managers as they get into those new territories to spin up. They're our best managers, so they spin up pretty quickly. Got it. Helpful. Thank you so much. Mm-hmm. Our final question is with Daniel Jester of BMO. Great. Thanks for squeezing me in. Piggyback on the last question, are all of the five new offices fully staffed today? No. Our method is. Ah. Oh, sorry. Go ahead. No, no. Finish, Chad, please. Our method is that typically we'll hire. A fully staffed office has eight sales reps. We'll start off with three or four in an office. They get selling pipeline, they start getting starts. As we've said in the past, it usually takes 24 months for an office to get to maximum maturity, and that's where they have the same quota, the same number of reps with the same level of pipelines and with the same level of expectation that we would have for their success as any other mature office. Gotcha. Then, just to wrap up on Beti, when the product went live, Chad, you made some comments about how long you thought it would take to get full penetration into the base. Now that we've seen sort of the growth and the adoption, any updated thoughts about how that progression is gonna evolve? Thank you. I still feel strongly about what I said in the past. I mean, Beti ensures perfect payrolls. It ensures you're not gonna have manual checks, you're not gonna have voids, you're not gonna have employees with overdrafts and everything else. We continue to have a lot of success deploying Beti, and I still expect that all of our clients will be using Beti at some point. Okay, great. Thank you very much. All right. Thank you. All right. Well, I would like to thank everyone for joining us today on the call, and a special thanks to our employees for helping deliver another very strong year. This quarter, we will be participating in the KeyBanc and Morgan Stanley conferences in San Francisco on March 8th and March 9 th respectively. Both should be in person, but we'll see. We look forward to speaking with many of you very soon, and we appreciate your continued support in Paycom. Thank you, operator. You may disconnect.