Thank you for standing by, and welcome to Paycor's second quarter fiscal year 2024 earnings call. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I would now like to turn the call over to Rachel White, Vice President of Investor Relations. Please go ahead. Good afternoon, and welcome to Paycor's Earnings Call for the Second Quarter of Fiscal Year 2024, which ended on December 31st. On the call with me today are Raul Villar Jr., Paycor's Chief Executive Officer, and Adam Ante, Paycor's Chief Financial Officer. 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. Statements made in 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. 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. With that, I'll turn the call over to Raul. Thank you, Rachel, and thank you all for joining us to discuss Paycor's fiscal second quarter results. We had another strong quarter, with revenue growth of 20% year-over-year. Margins expanded 130 basis points over the prior year, while we continued to invest in sales expansion and in our innovative HCM suite. HCM demand is healthy. Our deal pipeline is up significantly year-over-year, and our win rates remain strong. We continue to excel upmarket, especially among the higher end of SMB and enterprise customers with thousands of employees, who tend to purchase a more holistic solution and are driving higher attach rates and higher average deal sizes. Our results demonstrate our consistent execution against our two primary growth drivers: increasing the number of employees on our platform and expanding the amount we charge per employee per month, or PEPM. First, we are expanding employees on the platform through a combination of direct and indirect sales efforts. We remain on track to grow our direct sales force approximately 20% this fiscal year to strategically increase our sales coverage in the largest U.S. metropolitan areas. As we expand our sales coverage, we are also increasing our broker coverage. We increased the number of active referring brokers by over 25% from the prior year, and 50% of our field bookings in the quarter were broker-influenced. We are also experiencing great traction with our Embedded HCM solution, the indirect go-to-market channel we announced in August. Leveraging our industry-leading interoperability engine, we enable software partners to embed our HCM solution within their platform for a seamless client experience. In Q2, we had robust new sales among existing partners and expanded our pipeline of interested partners. Second, we continue to enhance our award-winning HCM suite with new capabilities that increase the value to our customers and expand our future PEPM opportunity. In the second quarter, our list PEPM was $51, which equates to 16% growth year-over-year. This month, we introduced two powerful data-driven analytical tools that empower frontline leaders to unlock the potential of their people and business performance. Pay Benchmarking enables leaders to optimize compensation strategies and pay decisions based on industry standards and market data. We also launched Labor Forecasting within Workforce Management to help customers plan optimal staffing schedules for their businesses based on key demand drivers, such as revenue, sales volume, or customer foot traffic. These innovative modules will contribute to future PEPM expansion. Paycor recently received five Brandon Hall Technology Awards, which honor HR technology trailblazers. While we were acknowledged across our HCM suite, the COR Leadership Framework that we launched a year ago won gold for the best advance in online coaching tools. The framework enables customers to evaluate the efficacy of their leaders, reinforce leadership best practices, and to trigger development paths based on areas of growth identified. These tools are already making an impact in helping educate customers on how to transform their managers into effective leaders. Since joining Paycor in 2018, Ryan Bergstrom has been vital in driving the company's growth and shaping our HCM suite into the market leader it is today. Under his leadership, our PEPM has increased more than 75% since fiscal 2019, and I am thrilled he will now oversee our product and technology groups. Combining these functions will enable greater synergies and strengthen our capabilities to seamlessly power people and performance for our clients. I would also like to acknowledge our product and engineering teams for their unwavering dedication to building our award-winning platform and enabling its rapid expansion. We continue to strategically incorporate AI to add value to customers within our HCM suite, elevate our customer experience, and improve our efficiency. In our customer experience organization, we deployed AI Agent Assist technology, which empowers advocates to resolve customer inquiries faster and ensure consistent, high-quality experiences as we scale. I would like to thank all Paycor associates, especially our implementation, service, and success teams, for their contributions during our busiest time of year. Year-over-year, we improved execution, truly making it the most efficient and best year-end experience for our customers. With that, I'll turn the call over to Adam to discuss our financial results and guidance. Thanks, Raul. I'll discuss our second quarter results, then share our outlook for the third quarter and fiscal year. Paycor delivered another strong quarter, with total revenues of $160 million, an increase of 20% year-over-year. Recurring revenue grew 18% year-over-year, an acceleration of two percentage points sequentially, driven by continued success upmarket and strong year-end form filings. As Raul mentioned, our growth is fueled by expanding the number of employees on our platform and the amount we charge per employee per month. Employees grew 10% over the prior year, primarily from new logos and, to a lesser extent, organic labor market growth, which has continued to slow. We now have approximately 2.6 million employees across more than 30,000 customers. As we continue to expand our product capabilities and move upmarket, we are experiencing outsized growth among customers with 100 to multiple thousands of employees. In the quarter, we grew customers with more than 1,000 employees by 18%, highlighting the success of our product and service investments. We gained momentum with our Embedded HCM solution, which contributed two points of employee growth this quarter, up one point sequentially. The average size of customers within our embedded channel is more than double our average customer size today. While we're encouraged by the early momentum, these larger embedded deals will begin to contribute more meaningfully to our revenue growth in fiscal 2025 and be accretive to margins as the partnerships ramp over time. Effective PEPM increased 7% year-over-year to more than $19 for the quarter. Excluding Embedded HCM deals, effective PEPM increased 9%. Driven by expansion of our product suite, effective PEPM growth has been powered by a combination of cross-sales, pricing initiatives, and higher bundle adoption. We expect more moderate PEPM growth contributions moving forward 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. In addition to driving steady top-line growth, we've consistently expanded margins as we scale the business. Adjusted gross profit margin, excluding depreciation and amortization, improved to 79%, 110 basis points higher than the prior year, while elevating our client experience. Sales and marketing expense was $50 million, or 31% of revenue, similar to levels a year ago, to achieve our sales force expansion targets. Comparable to prior years, we invested 16% of revenue, or $25 million, in R&D on a gross basis to differentiate our HCM suite with valuable capabilities for our customers. We are gaining economies of scale in G&A as we grow. G&A expense was $22 million, or 13.5% of revenue, an improvement of 100 basis points from last year. Adjusted operating income increased more than 30% to $23 million, with margins of 14.6%, up 130 basis points from last year, while we continued to make strategic investments to expand our sales force and deliver product innovation. We generated $15 million of adjusted free cash flow, or a 9% margin this quarter. We ended the quarter with $62 million of cash and no debt. As we look ahead, demand continues to be healthy for modern HCM solutions. The labor market remains tight, and our guidance assumes flat organic employee growth among existing customers for the rest of the fiscal year. The combination of steady labor market growth and our backlog of enterprise and Embedded HCM deals provides confidence in our second half. For the third quarter, we expect total revenues of between $185 million and $187 million, or 16% growth at the high end of the range, and adjusted operating income of between $45 million and $46 million. For the full year, we expect revenues of $650 million-$656 million, or 19% growth at the top end of the range, and we anticipate adjusted operating income of $104 million-$108 million. This quarter, we generated $12 million of interest income on average client funds of approximately $1.1 billion, an effective rate of just under 450 basis points. Based on current rates, we expect interest income in the range of $45 million-$46 million for the full year. We remain optimistic about our opportunity in HCM. There's plenty of runway for sustainable growth, as the vast majority of U.S. employees are still being paid by legacy systems. It's an essential capability for any business, and we're delivering compelling ROI for clients to switch. Adding to our opportunity is the continual expansion of our HCM suite, which has increased over 75% since fiscal 2019. We are demonstrating margin expansion as we scale the business and believe there is significant opportunity to drive further leverage. We believe we are well positioned to deliver strong revenue growth and improve profitability over the long term. With that, we'll open the call for questions. Operator? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. So that we may address questions from as many participants as possible, we ask that you limit yourself to one question and one follow-up. If you have additional questions, you may re-queue, and time permitting, those questions will be addressed. One moment, please. Thank you. Our first question comes from the line of Mark Murphy with J.P. Morgan. Please proceed with your question. Thank you very much, and, congrats on a nice, consistent performance. I wanted to try to double-click on the Embedded HCM solution. You mentioned it once or twice. That—I recall, you know, the announcement last summer. I think you've been refining the product in the go-to-market. Do you have any line of sight into, maybe some, you know, larger partners that might take it live and start generating bookings for you, maybe later this year or as you get into the early part of next year? Yeah. Hey, Mark. Absolutely. I mean, we have a pretty strong pipeline right now for new deals as well as with the existing partners. Just the number of deals that they're booking has been really strong and beat our expectations early. Of course, it's still relatively small, but relative to the rest of the business. But we've seen some early success. We're really excited about how the pipeline's building on both the existing clients and you know, future partnerships already. Yeah, Mark, what I would add is that, you know, the signing the partnerships is lumpy, right? It just takes a lot of time to get those through, and so we've built up a really nice pipeline that we're hoping that will start to go from pipeline to deals closed, you know, over the next 60 days. I see. Okay. And, just to double-check on this, we think that it's gonna be kind of margin neutral or slightly margin accretive once that gets going at the gross margin level? Yes. I mean, we are really excited about the margin opportunity here. Between the gross margin and the adjusted operating income, I mean, I think you're gonna see a little bit more favorability on the overall adjusted operating income over just the gross margin side of the house. But, you know, that's primarily driven by the really low sales and marketing costs. I mean, it's like multiples lower in terms of the sales costs to bring the clients on. And depending on the size of the client, if they're bringing a portfolio on, you still might see some more implementation costs associated with that, and that's what we've actually experienced thus far. So when we talk about margin expansion really into 2025, it's because there's a little bit more upfront costs associated with bringing those portfolios over, but the ongoing sales cost is significantly lower for the new business. Okay. Thank you for that clarification. And one final one. I noticed you mentioned that you're strategically incorporating AI into the business, which is great to hear. Are you seeing efficiencies from, you know, those products or initiatives that are significant enough to allow you to cover more ground or write more code per developer, you know, provide, you know, more support per person or that type of thing? I'm just wondering if I'm wondering if you are sensing any kind of noticeable uplift that might either be, you know, helping to drive some of the margin expansion or alter hiring plans or even just kind of change your growth algorithm in the next several years. Yeah, I think it's we're still in the very early innings, and I think we're leveraging the technology in all those areas. And I think, you know, as we move forward, we'll start to model that into our, you know, future guidance, from that perspective. But ultimately, it's helping us. Our number one priority is to deliver a better user experience. The number two priority is to become more efficient. And we think both are, you know, in line of sight, but we want to make sure the user experience is great. And then ultimately, we think, you know, as we continue to grow, we'll be able to do it more efficiently. Understood. Thank you very much. Thanks, Mark. Thank you. Our next question comes from the line of Gabriela Borges with Goldman Sachs. Please proceed with your question. Good afternoon. Thank you. I want to stay on this topic of growth algorithm, and specifically the delta between how you're thinking about hiring, I think you mentioned that 20% benchmark pretty consistently, versus the 18% recurring revenue growth this quarter and where that can go longer term. Maybe you could comment a little bit on how you're seeing tenured sales reps ramp within the sales force, how you're thinking about improving churn, and any other data points that we should have as we think about your overall sales force productivity over the next couple of years. Thank you. Yeah. Hi, Gabriela, it's Raul. You know, we just see such a big opportunity in the marketplace in Tier one and also in Tier 2 and Tier 3, that you know, we believe 20% is an optimal number for us to hire. And, you know, as we've talked about previously, you know, reps, you know, their productivity increases, you know, with their tenure. And so, you know, we're excited that we're seeing our average tenure grow, you know, year-over-year, and we believe that's, you know, what we're focused on, is continue to grow our average tenure, which will drive more productivity, which will drive long-term sales and marketing efficiency. Great. That makes sense. And then, as a follow-up, I know in the past, Raul, you made some interesting observations on hiring and labor trends within the SMB ecosystem versus maybe slightly above in the mid-market and enterprise. I know you mentioned broadly the commentary of the demand environment is healthy. Would love to hear a little bit more within that, any vertical specific color and any compare and contrast between the lower end of the market and the mid-market. Thank you. Yeah. I think, you know, we, we've seen demand in all three of our segments. You know, the low end of SMB, the mid-market, and the enterprise market, we've seen really strong top-of-the-funnel demand. So that's exciting. Nothing's changed there. I think, you know, when you break it down from an industry perspective, you know, we've seen some unique trends and new bookings, like we're seeing real strength in food and beverage and professional services. We've seen, you know, what I would say, you know, year-over-year, modest performance in manufacturing. So, you know, from that perspective, it kind of mirrors some of what you would read in the newspapers. But overall, you know, demand's been strong, you know, across all three segments that we serve. Thank you. Appreciate the thoughts. Yeah, thank you. Thank you. Our next question comes from the line of Bhavin Shah with Deutsche Bank. Please proceed with your question. Great. Thanks for taking my questions. Starting with Adam, just looking at kind of guidance for the back half of the year, can you maybe just dive into the assumptions that are embedded in terms of the numbers? Seems like there's a little bit of a deceleration in 3 Q that might be just a tougher comp with forms, but more broadly, as we think about embedded payroll kind of continuing to take off, looking at how you performed in the quarter relative to the raise in the guide, it seems like there's a little bit more conservatism here. Can you just provide more insight? Yeah. Hey, hey, Bhavin. Yeah, we try to keep a consistent level of, you know, conservatism, and so not really changing any philosophy here. We do see that and expect that in Q3, the forms filing generally is gonna, you know, drive a slightly lower growth rate, right? Because form filings are gonna grow more at the rate of employee growth, plus or minus, sort of any pricing changes that may be happening. And we're seeing less related to ERC, of course, so that dynamic is gonna slow down slightly in Q3. And then we also just had a little bit of overperformance of form filings that came into Q2, which is part of the guide as you look at the total beat into Q... From Q2 into the full year. A portion of that is related to the form filings, and so we are gonna see upside to the full year for that, which, we think, you know, makes sense, just given some of the performance. So, just a slightly slower growth rate in Q3 with the form filings, which, you know, are outsized in Q3. Super helpful there. Just, just one quick follow-up. It's great to hear the additional broker traction. Can you just dive into a little bit of your efforts here and what's driving the increased kind of adoption within the active brokers that are kind of referring clients to yourselves? Yeah, I think we've just really focused our direct sales team on the best targets. We have four national partnerships that we're really focusing on to drive opportunities. As we expand our sales headcount, obviously, it gives us an opportunity to expand, you know, how many people are reaching into the broker network. You know, I think the value proposition works. They love the platform, and it's just about us continuing to focus on the benefit brokers that have the most clients in our target market. Great. Thanks for taking my questions, and congrats on the strong quarter. Yeah, thanks, Bhavin. Thank you. Our next question comes from the line of Terry Tillman with Truist Securities. Please proceed with your question. Hey, good afternoon, Raul, Adam, and Rachel. Solid execution here in the quarter. I did have a question and a follow-up. I would say the first question almost might be a two-parter, but hopefully it counts as just one question. Raul, in terms of, like, do you need a little bit of a, an evolving or different go-to-market and kind of product requirements for 1,000-plus employee deals? And then the second part of that first question is, I mean, if we're looking at 3Q and even early part of 4Q in terms of signing business, I mean, will you actually not maybe even see that much recurring revenue than this year for those kind of bigger transactions? And then I had a follow-up for Adam. Yeah. On, on the enterprise side, you know, the product, the clients are pulling us into the enterprise, so the platform hunts, you know, in the enterprise space. Lots of feature functionality on the talent side, which is really attractive to those customers. And so, you know, that's what's taking us there. We also, you know, have, you know, reps. You know, our most experienced reps are really focused on, you know, the enterprise accounts. So, you know, we've, like, slightly segmented the sales force from that perspective, to make sure that we have the right skill level that are calling on those accounts. Okay, got it. And I guess maybe just to follow up, Adam, it kind of relates to the prior question, looking at the full year guide and then the overperformance in 2Q. Has anything notably changed for the full year form filing assumptions or any kind of delta in terms of your internal recurring revenue assumption? Thank you. Yeah. Hey, Terry. No, no, nothing's changed. I mean, we see it's really there's a bit of operational performance that goes into getting the W-2s prepped and, you know, shipped, and we had some overperformance there towards the end of December, where we were able to be a little bit more effective at getting those out the door, and that helped to the overperformance here in Q2. So nothing on the full year that we would expect to be, you know, any different. And in fact, that's why we see the continued, you know, feel good about the continued guide and raise for the full year on both the recurring and overall. Okay. Thank you. Thank you. Our next question comes from the line of Scott Berg with Needham and Company. Please proceed with your question. Hi, everyone. Really, really nice results this quarter. Congrats. Thanks, Scott. Just a couple questions. Yeah, a couple questions for me. Let's start on the broker channel. I think you said 550% of your bookings in the quarter were a contribution from the broker channel there. How should we think about those contributions going forward? 'Cause 50 seems like a very high number. Do you expect that pace to continue, or does it moderate from there? I think, you know, we've continued to think it would slightly moderate, Scott, but it's remained really strong. I think, you know, as we think about our, you know, three-year outlook, we think, you know, high thirties, mid-forties is probably where we'll be as we continue to scale bookings. But that being said, you know, we're still in the early innings. You know, there's tons of white space in the broker opportunity, so we're kind of just getting started, and our execution, you know, has gotten significantly better this year. And so, you know, the team that we have, you know, driving these programs for us has done a phenomenal job, and we're really proud of the results. Got it. Helpful. And then from a follow-up perspective, staying on the sales kind of route, can you give some commentary on progress around back-to-the-base selling, selling to your existing install base? You know, you mentioned your PEPM's up 75% over the last several years. Gives you certainly a lot more to sell, but any changes with the way that existing customers or maybe, you know, what their appetites look like for buying additional modules? No, I mean, it's been consistent. We're continuing to subtly improve, you know, modules sold. Obviously, Talent has a significant attach rate, Workforce Management, also significant attach rate. And so we feel good both at point of sale, that we're delivering a bigger bundle, but also our cross-selling team, you know, continues to really hit the ball out of the park, and so continuing to work with our clients to make sure they're optimizing the latest technology that we offer. So, it's been really successful and, you know, we still have, you know, a lot of opportunity in that channel. Great. Thank you for taking my questions. Thanks, Scott. Thank you. Our next question comes from the line of Brad Reback with Stifel. Please proceed with your question. Great. Thanks very much. Well, obviously, in fiscal 2023, you increased, or well, say, entering fiscal 2024, your sales headcount was up about 22%. You're gonna grow high teens this year, all up, so there's about a five-point delta. How should we think about those converging, you know, on a go-forward basis? What needs to happen to get those two to meet? Thanks. Yeah, it's really about us continuing to grow the tenure in our sales organization. And as we continue to focus on driving that tenure, which is really growing the person months worked, which, you know, has grown year-over-year, you know, and it's moving in the right direction. You know, that tenure drives productivity. So as we anniversary these large, you know, what we would call headcount classes year-over-year, we're gonna see improved productivity. And so it's really about us driving them from, you know, year one to year two to year three. Great. Thanks very much. Yeah, thank you. Thank you. Our next question comes from the line of Brian Peterson with Raymond James. Please proceed with your question. Brian, your line may be muted. Sorry, I'm bamboozled by the mute button. Sorry about that, guys. So just one for me on the embedded channel. So I'd love to understand, as you think about the 2% of lives on the platform already, is that fairly concentrated within a couple of customers, or is it maybe a little bit more diverse, and then there's kind of an opportunity to expand with some of those partners over time? Thanks, guys. Yeah. Hey, Brian. Yeah, I mean, it's just with a couple partners right now. It's still really early with us in terms of the number of active partners that we have on our platform. And so, yeah, there's only a few partners that are really generating, that, that sort of growth for us. And, and of course, you know, as we continue to sign new partners, we're gonna, we're gonna see a lot more expansion. There's not really a concentration from an end customer perspective. They, they do look a lot like the customers that we have today. They're strong middle market and enterprise customers, but, but the partners themselves are... There's still just a few.... And, and Adam, maybe a follow-up. So, so how do we think about the land and expand then in that channel? When you kind of get launched with one of those customers, does it get fully implemented across the customer base, or is that something that gradually folds in over time? Yeah, every agreement is unique. The ones that we have today had existing customer bases that they're converting over, and then they sell on a go-forward basis to new. And so we've been really pleased with the cross-selling ability of our partners to sell new, you know, on a go-forward basis outside of the existing base. And so that's kind of, you know, exceeded our expectations. Great to hear. Thanks, guys. Yeah. Thanks a lot, Brian. Thank you. Our next question comes from the line of Jared Levine with TD Cowen. Please proceed with your question. Hi, thanks. This is Zack Ajzenman on for Jared. First question on demand. Any change in the pace of prospective client decision-making relative to prior quarters? And further, any change in attach rates on new client sales? If so, what modules and functionality are witnessing a change in attach rates? Yeah, as far as, you know, deal cycle timeframe, you know, on, on the entire base, there's no, no change. However, if you break it down by size, I mean, there's a subtle elongation in the enterprise space, year-over-year, but, you know, we're on a smaller sample size. So, you know, but ultimately our core, you know, overall base, the same, no changes in the mid-market or, or SMB space. And as far as modules go, we continue to slightly tick up, so they're not ticking down. They're actually, you know, we're seeing slightly better attachment across the board. Got it. And then, a follow-up on retention. How did January's Gross Revenue Retention compare year-on-year? And if it was consistent, were there any underlying changes based on employer size segment or based on controllable versus uncontrollable churn? Yeah, I mean, we haven't shared, like, month, month specific month retention results, but gross retention has been consistent. And January, of course, is a big month for us, both on the starts and losses. And I'd say that it's been in line with our expectations broadly, you know, especially as how we're thinking about guidance for the full year as well. So, you know, no significant changes one way or the other on retention broadly. Very helpful. Thanks. Thank you. Thank you. Our next question comes from the line of Matt Pfau with William Blair. Please proceed with your question. Yeah. Hey, great. Thanks for taking my question. Just wanted to ask one on Embedded HCM. I think it'd be helpful if you could just help us understand the, the cadence of, you know, when a partner signed, how long it takes for them to build pipeline, and then how long it takes for them to convert that pipeline. So, so the partners that are currently converting, when did they originally start using the Embedded HCM functionality? And then, how long before we start to see a material contribution to, to growth from the partners that are in the pipeline and the ones that you currently signed? Yeah, every deal is slightly different in the sense that some have existing client bases that need to be converted. And so that may take a little longer upfront work on the implementation side. And then others are looking to sell new, and you know, that's a quicker go-to-market motion. So it really depends on the type of partner. And so I think, you know, from our perspective, you know, we're looking to continue to expand the partner base, and then continue to expand the penetration of existing partners. And new partners, you know, when once they're up and running, you know, they have contributions on a monthly basis. So it's the speed to success is relatively short. It's no different than, you know, the sales cycle of, you know, a normal mid-market rep, you know, in the industry. Perfect. Thank you. Yeah, thank you. Thank you. Our next question comes from the line of Matt Van Vliet with BTIG. Please proceed with your question. Hey, good afternoon. Thank you for taking the question. I guess one more on the embedded channel. Just curious, I know it's early, but what, what kind of attach rate of multiple products are you seeing? Is it drastically different, than sort of the overall average? And then maybe how do you see that trending? Is there something that is maybe, more specifically needed in that embedded channel that maybe is, less common or more common? So I'm just curious on how the, the number of products is per customer. Yeah, when we entered it, it was, it was really, Matt, with primarily payroll, and which is what we were focused on. And what we found is that people also want, you know, Workforce Management, and some of the other services. So it's, it's actually, you know, a broader suite than we anticipated, when we, when we, when we started the venture. So, payroll definitely is the driver of the conversation, but many are focused on Workforce Management, reporting, analytics, you know, a lot of the other ancillary services that our clients, you know, Talent that our clients are purchasing, that they're wanting as well. Because they, the end client doesn't really, isn't any different than the end client we sell. It's just a different way to go after the end client. Okay, very helpful. And then when you're looking at the roughly 20% headcount growth that you're looking for on the, the go-to-market team, any particular focus around, you know, whether it's the top 50 markets that you're targeting? Is it a little more top-heavy, are you trying to kind of reach out and further the breadth there? Just curious where you have, you know, a need for more capacity across those key markets. Yeah, I mean, we can add sales reps in almost every market in the U.S. sell. There's so much opportunity available. The way we think about it, and the way we've allocated our resources over the past few years, is that about 70%-75% of the hires go into a Tier 1 market, which we define as, you know, the 15 largest cities in America, and then the balance go into Tier 2 and Tier 3, which are the next 35 largest cities in America. And, you know, that combination is kind of the formula that we're executing against today. All right, great. Thank you. Yeah, thank you. Thank you. Our next question comes from the line of Steve Enders with Citi. Please proceed with your question. Hi, thanks for taking the question. This is Jordan for Steve. I think first, you know, there's been some noise with some of your peers in the payroll space. I'm just wondering if that's caused any incremental shifts in the competitive landscape and where you're sourcing bookings from? I didn't know there was any noise going on in the category. But that, you know, we compete against, you know, everyone in the category, and we take share from everyone in the category. And, you know, we'll continue to do that. You know, in a quarter, you don't really see any material changes, you know, that bounce around. Most of these decisions take, you know, a quarter two to happen. And so we'll see as we go forward, if that changes. You know, at the end of the day, what we're really focused on is our value propositions on, you know, delivering a perfect payroll every time. That's not that complicated. And really delivering tools for leaders so they can power their people and performance. That's what we go to market with. We have a modern tech stack. We deliver the most PEPM in the category. And so we're going after all competitors. We're not focused on any one. Great, that makes sense. And then just to follow up on embedded, you know, I think you've talked about how each of these deals tend to be somewhat bespoke, and there's a bit of a, you know, an onboarding process. But I'm just wondering if you could talk about, you know, the learnings you've had from the partners that are ramping so far, if there's any kind of commonalities that you can leverage to kind of smooth the onboarding process for future partners and, you, you know, kind of speed up the flywheel of the product. Thanks. Yeah, for sure. I mean, I, I think we're, we're starting to understand the frameworks. You know, while every partner is different, they do get bucketed into what type of partners, and, and a lot of that is what type of partners. Is it a workforce management solution? Is it a vertical software solution? Is it an ERP? You know, those type of things. They all have slightly different needs, and we're building playbooks by partner type to help make the implementation more efficient, and to make the cross-selling more effective over time. Thanks for taking the questions. Yeah, you're welcome. Thank you. Our next question comes from the line of Daniel Jester with BMO Capital Markets. Please proceed with your question. Hi, this is Kyle Aberasturi on for Daniel Jester. Thanks for taking the questions. On the two new launches, benchmarking and forecasting, I was wondering if you could provide any further color here. Are these two new modules, are you charging for them? And then how you're thinking about the growth opportunity relative to other modules. And then my second question, just if you could dig a bit deeper into the booking conditions you saw during the quarter, maybe any shifts as 4Q progressed. Thank you. Yeah. So, you know, the two new products will, you know, each add an incremental PEPM. I believe it's $1 PEPM per for each of the new products. And they're really a combination of taking our data analytics capabilities and providing insights for frontline leaders, so they can be more effective with compensation strategies and scheduling strategies with their employees. And so it, you know, fits right in line with our strategy and where we're trying to help our customers. You know, for our second quarter or calendar fourth quarter bookings were consistent. You know, consistent across all of our segments and, you know, we didn't have you know, anything that, you know, jumped off the page from that perspective. You know, it's kind of what we expected. Thank you. Our next question comes from the line of Mark Marcon with Baird. Please proceed with your question. Hey, good afternoon, and thanks for taking my question. Wondering with regards to, you know, the enterprise accounts, you talked about them a little bit more, and I'm wondering: how, how far upmarket could you be pulled? And to what extent are you, you know, managing the sales force in terms of making sure that they, you know, stay within the target market, or how are you thinking about that? Yeah, I mean, as a savvy, long-time HCM analyst, you know, while we define ourselves by size, like, clients don't define themselves that way. Their needs define, you know, what kind of platform they can use. So it's really a needs analysis, you know, that we look at. And, you know, we sell into the thousands. You know, we have clients with over 10,000 employees. And so it really depends on what the client what needs the client's looking for, and, you know, we present it that way. Obviously, our most tenured reps are the ones that are focused on the enterprise accounts. So they understand the power of the Paycor platform, and they help, you know, the customers, you know, make sure that we can meet all their needs. So, it's, it's... You know, obviously, we're in the early innings, you know, here, but, you know, over the last, you know, four or five quarters, you know, we continue to get pulled up market based on the power of the platform. And, you know, we've continued to educate our reps, and for reps to be able to meet the opportunity. That's great. And you mentioned the tenure of the sales force. Can you talk a little bit more about, you know, the sales force, just in terms of, you know, your increasing effectiveness with regards to selecting, training, and, you know, keeping them? Yeah, I mean, so, you know, that, that's the number one priority. And what I would say is we've increased our person months work by, you know, over 15% year-over-year, and so that's really positive for us. And we're really focused on, you know, onboarding and activating the reps, and making them successful. And so, you know, that's an ongoing process. You know, we could clearly do better there. We wanna do better. And, but, you know, I think, you know, we're making good progress. And, you know, if we continue to see this kind of progress, it will continue to drive productivity year-over-year. Fantastic. Thanks a lot, Raul. Yeah, thanks, Scott. Thank you. There are no further questions at this time. I'd like to turn the floor back over to Raul Villar for closing comments. Yeah, thank you again for joining us this evening. Demand remains healthy, with plenty of runway for sustainable growth, and we remain focused on executing our strategy to capture market share. We look forward to connecting with you at several upcoming events, including the JMP Securities Technology Conference in San Francisco. Have a great night, everyone. This concludes today's teleconference. 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