Just read through their transcript. Some notes:
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Very small beat this Q ($3.3M or +2.3%)
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Very small raise for year end guidance from $556M on the high end last Q to $560.5M now. That would be +29.4% over FY17.
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$85M cash vs $34.8M debt
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Gross Margins were down slightly QoQ (83.6% vs 84.1%) and YoY (83.6% vs 83.9%)
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Adjusted S&M expenses rose to 26.4% vs 25.8% YoY. The rise was attributed to a national ad campaign that started in Q3 & will see a majority of the cost hit in Q4. They mentioned in the Q&A they had some comfort that they were able to add this campaign while generally being able to hold the same EBITDA margins as last year.
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Adjusted admin expenses rose to 53.1% vs 49.0% YoY. There was a spike this Q due to bringing a new building online. They mention this new space is as big as their other three combined. While some of this increase is one-time, they do anticipate some cost increase carrying forward as well.
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Adj R&D was 12.1% vs 10.6%. They are continuing to invest in new products/uses based on customer feedback.
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They repurchased 30+K shares in Q3 after repurchasing 400K shares in Q2.
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As Saul mentioned in his write up, PAYC was named 5th on Fortune’s 100 fastest growing companies for 2018.
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As cgall75 mentioned, they have expanded their client focus from 50-2000 employees to 50-5000. A lot of analysts where pressing this point to see if they were changing their target market, but management was firm that’s not the case. They said they’ve often noted landing clients with >2000 employees in the past. They were now simply formalizing it for their sales staff. They implied there would be no change in overall headcount or sales strategy with this announcement.
To my admittedly unpracticed financial report eye and conference call ear, this sounded like a pretty meh quarter. Not great, not bad. Since the stock is down ~4% on a pretty good day for the market, I’m guessing I’m not too far out of line with that take.