Good afternoon. My name is Tamiya, and I will be your conference operator today. At this time, I would like to welcome everyone to PACOM's second quarter 2025 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press the star key followed by the number 2 on your telephone keypad. Thank you. I will now turn the call over to James Samford, Head of Investor Relations. You may begin.

Thank you, and welcome to PACOM's Earnings Conference Call for the second quarter of 2025. 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 the 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 . 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 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, 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 gap versus non-gap 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 Richeson, Paycom's CEO and President.

Thanks, James, and thank you to everyone joining our call today. I'll focus my comments on our second quarter achievements and highlight our latest AI command-driven product, iWant. I'll then turn it over to Bob for a review of our second quarter results and an update on our full year guidance. We will then take questions. With that, let's get started. We delivered very strong second quarter results and we are building on our momentum by continuing to strengthen recurring revenue growth and margin expansion in 2025. Outside sales continues to set records and we recently released iWANT, the most significant product in our company's history. We already have the most automated solution in the industry, and iWANT delivers even more value to our clients through AI and automation. iWANT will transform a client's relationship with Paycom and with its own business. Hopefully, everyone has seen the iWANT demo we linked in today's earnings press release issued at the close of the market. If you did, you saw numerous use cases for IWANT on the employee, manager, administrator, and executive side of the software. You also saw how IWANT eliminates the need for a Paycom user to be trained on our software. With IWANT's command-driven AI, users either type in or leverage voice-activated functionality to command the system, and IWANT is designed to immediately provide the answer with accurate results. This means that navigation and asking others for system information is rendered obsolete. A critical component of AI is the data it pulls from, and because Iwant pulls from Paycom's single database, it eliminates problems created by inconsistent or duplicative data sets. On the manager side, Iwant supports HR teams and organization leaders with instant employee information. For example, a manager can use iWant to pull data on when an employee returns from vacation, see who's clocked in for the day, or analyze an employee's pay history. These are just a few examples of the power of iWant. Before iWant, executives like myself were dependent upon others to complete reports and provide critical decision-making information. Today, in iWant's executive mode, executives using Paycom now have the information they need at their fingertips, enabling them to be daily users of our solution without ever having to be trained on the system. Just tell it what you want and I want delivers, making executives even smarter and more effective. Now I can quickly find any information about my staff available in our single database because we track the entire employee lifecycle and have data from applicant tracking, onboarding, Paycom learning, expenses, benefits, time and attendance, payroll, schedules, surveys, and more, all accessible through iWant. Early feedback has been phenomenal with clients calling this a total game changer. iWant's command-driven AI engine will increase usage among non-daily users in our system, and I fully expect I want to increase satisfaction and client ROI. Voice-activated, command-driven functionality is the future for all software, and Paycom's future started last week. We invest in innovation to increase client value, and this is fueling strong sales for Paycom. Our sales teams continue to set new records every quarter, and I'm very pleased with their strong execution. Our sales force was recently recognized by Selling Power Magazine as one of the best sales organizations in the country. This is a testament to our sales leadership, training, and culture. Finally, Time Magazine listed Paycom amongst its best companies for a second consecutive year. Newsweek placed Paycom in the top 20 of their inaugural ranking of America's best online platforms and comparably recognize PACOM for best career growth and best leadership teams. I'd like to thank our employees for their hard work and commitment that are reflected in these awards. We had very strong results in the first half, and we are set up for continued strong momentum for the rest of 2025 and beyond. With that, let me turn it over to Bob.

Thank you, Chad. Before I review our second quarter 2025 results and our commentary for the remainder of 2025, I'd like to remind everyone that my comments related to certain financial measures will be on a non-GAAP basis. We delivered very strong second quarter results. Total revenue of $484 million increased 11% over the comparable prior year period, with even faster growth in recurring and other revenue of 12% year-over-year, reaching $455 million. Interest on funds held for clients declined 11% year-over-year, as expected, to approximately $28 million in the second quarter of 2025. Gap net income in the quarter was $89 million or $1.58 per diluted share based on 56.5 million shares. Non-gap net income for the second quarter increased 27 percent year-over-year to $117 million or $2.06 per diluted share. Profitability in the second quarter also increased significantly with adjusted EBITDA of $198 million, reflecting a 24% increase over the prior year period. Adjusted EBITDA margin was 41%, representing a 450 basis point increase over the prior year period. Margin strength in the quarter was driven by revenue upside, efficiency gains in G&A, and timing of marketing spend. We continue to invest in the areas of AI, product, and R&E, and as Chad mentioned last week, we introduced our most innovative development to date, iWANT. Based on the strength of the first half of 2025, I am pleased to report that Paycom is in a very strong financial position and we are raising our revenue and adjusted EBITDA targets for the year. Our balance sheet is also very strong. We ended the second quarter with cash and cash equivalents of $532 million and no debt. The average daily balance on funds held for clients was approximately $2.6 billion in the second quarter of 2025, up 10% over the prior year period. During the second quarter of 2025, we paid approximately $22 million in cash dividends. Earlier this week, the Board approved our Corley dividend of $0.37.5 per share, payable in mid-September. We also purchased roughly $33 million of common stock through net downs on vested stock during the second quarter of 2025, and we still have $1.44 billion remaining under our stock repurchase plan. Now, let me turn to guidance for 2025. We continue to have success selling and onboarding new logos. Based on our strong first half results and our outlook for the remainder of the year, we are raising our full year revenue and adjusted EBITDA guidance ranges. We now expect total revenue to be between $2,045,000,000 and $2,055,000,000, up 9% year over year at the midpoint of the range. For the full year 2025, we expect recurring and other revenue to be up 10% year-over-year, including quarterly growth of approximately 10.5% and 11% year-over-year in Q3 and Q4, respectively. Our revenue expectation for interest on funds held for clients is now $113 million dollars in 2025, down 10% year-over-year, assuming two rate cuts later this year. Revenue upside along with continued automation of HCM and payroll manual tasks is driving margin improvement for Paycom. As a result, we are raising our full-year adjusted EBITDA guidance range to between $872 million and $882 million. This represents a second increase to our prior adjusted EBITDA margin guidance to approximately 43% at the midpoint of the range. We plan to increase our marketing and R&D budgets in the back half of the year in support of the IWANT product launch and additional innovation focused on AI and automation. Other forward-looking items include full-year GAAP and non-GAAP tax rates of 27% and 26% respectively, and stock compensation of approximately 7% of revenues. We are pleased to see employees across the organization executing very well, which is driving our solid performance year-to-date. Our go-to market and product strategies are working, and we are well positioned to deliver on our raised expectations for the year. With that, we will open the line for questions. Operator?

Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. In the interest of time, we ask that you please limit yourself to one question and one follow-up. We'll pause for just a moment to compile the Q&A roster. The first question comes from Raymond Linshaw with Barclays. You may proceed.

Thanks. Two quick questions, and congrats from me as well. The first chat is, if I think about iWant, how should we think about that in terms of, you know, driver for the overall business? Is it just like, you know, it's just a differentiation tool and that basically helps you kind of against someone that doesn't have that clean data structure that you guys have? And so then you kind of sell better and out there as clean as you? Or do you think eventually down the road there will be some monetization offerings as well? And then one for Bob, if you think about more AI, it probably means you need Chisholm GPUs, etc. How should we think about gross margin impacts that potentially could come there because obviously they need a lot more money and computers? Thank you.

Yeah, I'll start, Raimo. You know, I want is PACOM's voice command driven AI tool. And it really just revolutionizes how people actually access and navigate a system now. So think of any piece of software, any system in your life that you have to navigate. Imagine just commanding it. And we find that that makes it easier for the employees. They don't have to learn a system. They can just go in and command what they need or ask what they need. You know, employees don't enroll in benefits all the time. There are certain things in our system that they don't do all the time, and so there's not a need for them to be experts at it. So on the employee side, it automates everything. Same thing on the client side. You know, for me, I'm not a daily user in our applicant tracking system. So if I wanted to get a resume, I had to make a phone call. I'm not a daily user in our benefits administration system. And because I'm not a daily user, because I'm not set up as a user in those systems, I couldn't get access to certain information without contacting people. Well, now I can get access to anything. I just ask, I want, it'll go pull someone's resume for me. It'll pull all their past job history, pay history. It'll tell me who's all clocked in right now, who's late for work today. So basically right now I'm an expert in our system because I'm utilizing the I want command driven tool, which allows me to interact with our system differently. And so what's happening is as we've turned this on and activated this for clients, more and more users and executives are actually engaging with the system. And it's eliminating the need for them to communicate with others in their organization or slow down the chain of data moving. And then I'll let Bob take. And then as far as from a monetization process, I mean, this is everything. This is a different way to utilize software. I'm unfamiliar with any other SaaS company that has a command-driven navigation throughout their system. And so I do think this is going to be, you know, a thing for not only our industry, but any type of software where users are currently navigating it. So I'll stop that and let Bob answer the GPU question.

Thank you, Rhymo. Yeah, we see that there'll be a need, so we are going to use, we're expanding margins, as we've talked about, and we expect those to be up several percentage points throughout the rest of the year. And we're going to take that and reinvest that back into CapEx AI and equipment. And as a result, we do expect free cash flow to be similar to last year.

Thank you. The next question comes from Mark Marcon with Baird. You may proceed.

Good afternoon. Thanks for taking my questions, and congratulations on a strong quarter. Chad, the product is really slick. I like it. I'm wondering if you can talk a little bit about what the marketing plan is. Is it already turned on with all of your existing clients? If not, what do they need to do? What's the training methodology just in terms of making them all aware of it and how they can use it?

And then how are you going to unfold that in terms of national advertising? are you going to switch your your your campaign in order to focus on this all right so you know the marketing plan for I want first of all we turned on we started turning on our first clients on July 31st we've turned on 10% of our clients so far this week I would say by the end of this week we're at 15 to 20 percent activated and by turning on you know I want doesn't you can still navigate our system if you want to i mean you know you can still navigate it if you want to but most people once they get on i want they stop navigating it at the employee and other levels and so it doesn't uh if someone wants to keep using the system after i want the way they used to use it they can but once i wants there we found that people don't and so activation is about turning it on and making sure people understand what i want does you know if you ask it where the closest gas station is to your location you're not going to get a good response you know so it's important that people understand how to use i want and so we go through a list of about 20 prompts once we turn people on and they understand it and then they're off to the races and so we do expect to be able to activate all of our clients throughout the remainder of this corn uh this quarter you know there's not really any lift for the client on this this is gets them easy access i mean it's almost a reward. It's a reward for our sales reps for all the hard work they've been doing to get us to this point. It's a reward for our service individuals for all the hard work they've been doing. Now they're calling clients with very positive news. It's a reward for these clients that have implemented these different modules, believed in the single database system, and now they get instant access to all of it without having to be trained or what have you. And so this will be everything for us in the future. And really, I do see this being the way that Every company, and I mean every company that has business-to-business type software, even consumer software, I see this as the way it's going because there's just no need to be trained in a software now that we have new tools available to us. as far as the training there's not much to it and as far as the national advertising you know are we're doing a lot of full solution automation so I want think of that as a way that you access it you know you still want to be set up on gone you want to be having decision and logic you want to be set up on Betty and then I want is just how you get to access all that you don't have to become an expert and so we're really excited about it into the future and you You know, everything we develop now will have an IWANT component to make sure we keep it Thank you.

The next question comes from Kevin McVeigh with UBS. You may proceed.

Thanks so much. And my congratulations as well. I guess in terms of IWANT, how are you going to monetize it, Chad? Is it kind of part of kind of a base platform?

Is it an individual or is it just a core package you have to adopt based on a certain number of modules any way to think about just the the pricing and go to market motion on it yeah so you know i was with somebody in the elevator earlier and i wanted to look them up and see how long they've been here and what the resume looked like and their job history and everything at paycom well that requires me to have some modules so one way that i want you know i want will also expose uh data that you know maybe you haven't looked at in a long time so you're able to see it but you know if i'm asking i want uh if one of our clients is asking i want for resume information you know or if they ask them for prior work history information and they're not on our applicant tracking system you know they're not going to have success pulling that information and so in one way it'll help us is you know i do think there'll be more full solution deployments across our client base so that you get access to it another way is we do expect it to increase our sales volume it's a revolutionary product it's easy to use and i do think it's going to uh you know over time impact our retention as these clients become more engaged in the software and get the full value available to them i want removes all the impediments to value so now you just get it you didn't have to work for it as much and so uh you know we're really

excited about what it can do for us on all this front thank you the next question comes from steve enders with city you may proceed okay great thanks for um thanks for taking the question here um i guess just just to start uh i just want to understand like what actually maybe was different versus what you were expected coming into the quarter because it looks like the you know the upside looks pretty solid versus maybe what we've seen in the past few quarters so i guess a what just kind of happened there and then i guess secondly just as we think about you know i want

and what that means is there any implications for what that means for you know betty adoption or we need um you know need to adopt betty to get the kind of full functionality of of i want yeah i mean i think as far as the quarter you know we've been talking about record sales and eventually those things uh materialize and they turn into uh revenue as they start uh you know that's something that we've been focused on. I would say our sales organization has been doing a great job. And, you know, and so we've had some outperformance there. And I think you're seeing some of that here. And then as well as, you know, on the margin side, I mean, you know, we continue to see efficiency through our full automation goals. You know, and it does slow our pace of hiring a bit and also our willingness to backfill some open positions just because of all of the automation. So we're getting some more efficiencies on that too. As far as implications for Betty adoption, it's not required that you've implemented Betty to get value out of I want. I do think that the more of Paycom's products that you use, which would include Betty, the greater the value you're going to get from it. And the more questions it will answer for you, the more insight it will give you. And so I do think I want makes it easier to use all that additional functionality. But there's not a requirement that someone would have Betty. Although I will say, I believe Betty is a very important product. And I still say that it's the best way to do payroll for employees. And actually, we have a lot of clients that boomerang back to us because they felt it when they left and the need for having accurate payrolls to prevent errors before they become problems.

Thank you. The following comes from Jason Salina with KeyBank. You may proceed.

Yep. So, you know, I, admittingly, I looked at the demo, you know, 30 minutes before this, and it looks pretty intuitive and helpful. But, Chad, I mean, I think you're calling it the biggest release since the company's founding. You know, that's quite, you know, a bold statement. But obviously not charging for it. How do you envision, you know, recognizing the full value that you're providing here? I hear you on the full platform sales, but, you know, what are some other mile markers we can kind of think about?

Well, I mean, I just mean what I said. It is the biggest. I mean, you know, an F-16 is hard to fly. I mean, sometimes you can have a lot of different people that know it the more you add to it, you know, but we've made it one button or a command that now you can fly the whole thing so that's what i mean is it's our biggest development i mean we've removed the barriers to value uh you know the more you add the more functionality you have in these types of systems and enterprise type systems you know it does require a level of training for someone to really to be able to deploy it even some employees require some level of training this removes all of it and so you know it's the biggest it's the biggest innovation that we've ever done at our company since its founding just because of the impact that it has. I mean, you know, I'm actually, I mean, clients are just overjoyed by it. I mean, they're really overjoyed. You walk the floor here in service and you hear them talking to our clients. I mean, they're just, they're amazed and it's working very well for them and they deserve to have it. So I'm going to really stand by that. Not only is it the biggest development, I think by the time we do version two and three i don't even know what else i could develop after that as we have the full solution automation on the back end so you know i'm gonna i'm gonna really stick by that uh and then how we're going to uh recognize the full value i think was your uh was your other part you know is obviously in our go-to-market uh it impacts that and then again when you remove barrier to value that increases the value that your clients are getting and so when you can do that and they don't have to do that work we do think that that's going to create a more meaningful relationships with our clients more meaningful relationships they have with our system and we do think that that will impact retention and then just a quick follow-up

for bob you know the 12 percent you saw on recurring in the quarter you know very impressive theory on the on the back half um you know the the slight decel but was there anything in second quarter from like a one-time perspective that that or timing related it's just i'm trying to understand the the um you know the beat and then the implied detail in the second half thanks yeah thanks jason no there wasn't anything on a one-time beat other than the timing of the marketing spend that we've been pretty consistent about and and the first and second quarter and then obviously we never know what we can anticipate in the fourth quarter for

bonus runs and etc thank you the next question comes from daniel jester with bmo capital markets you may proceed hey good afternoon thank you for taking my question uh bob i wanted to go back to a question earlier in the company made about free cash flow i just wanted to clarify is that free cash flow dollars or is that free cash flow margin and i wanted to see if you contemplated any sort tax benefits from uh the uh the new tax bill yeah daniel so that was margin um and we are evaluating the bbb now there will be some some cash flow benefits on that in 2025 and that's built into our guide okay thank you and then just on the the sales and marketing investments i guess should we anticipate um you know this is a very intuitive product but maybe you want to devote a little more resource back to the base to sort of help people out in those initial phases um is that is that where is this maybe temporary uh investment that we're going to be able to harvest in 2026 or do you think this would be a more substantial push thank you i think you're

talking about our sales and marketing spend as we look into the remainder of the year you know we did know I Want was coming out. And so we have been preparing for that spend in third and fourth quarter. You know, I've always said with marketing, you know, you don't just throw dollars at it. You have to measure it. It's got to be having a return. So we're always cautious on marketing spend and we measure it. But it's our intent right now to, you know, maximize our budget in the third and fourth quarter for marketing just because of the opportunity that we have right now.

Thank you. The next question comes from Jarrett Levine with TD Cowan. You may proceed.

Thank you. I just wanted to dig in in terms of 2Q. You had a pretty notable sequential increase in the within CAPEX, specifically on PP&E, and it sounds like you're contemplating pretty healthy spend there as well for the remainder there. Can you dig into what exactly you're spending there and kind of when potentially that could taper off?

Yeah, I mean, I can take a little bit of this, Bob, and then you can jump in. You know, we've always developed and hosted our own platforms. And as we move into AI, it does require, you know, a certain level of spend. You know, so as we look at that, I do believe it to be more transitory in nature. But as we look at that, you know, that's going to be front-end loaded for us right now. and that's really what we're looking at and a lot of that's going to be uh you know through capex i think bob explained kind of uh we do expect to take the benefit that we're receiving in the additional margin creation right now and put that into some of these capex expenditures and then we would expect our margin for free cash flow to be not dissimilar this year to what it was last year Again, I do believe these spins will be more front-end loaded and transitory. So, you know, we'll go from there. I don't know, Bob, do you have anything to add to it?

No, and the only one thing I'll add, Chad, is that, you know, we see this as a growth opportunity for us, and we have the capital to take advantage of it right now, and that's what we're doing.

Got it. And then just one more here. Can you talk about your back-to-base sales productivity by CRRs year-to-date?

I mean, they've been back in the field. So, you know, as I've mentioned before, it's kind of a per-territory basis. We did kind of change, you know, the way that group books and starts deals a while back that I mentioned. And that really became the new normal. But they are having success. They're more successful this year than what they were last year. And, you know, we'll just see how time works those out. But I do think IWANT is going to help them quite a bit because, again, in order for you to get the full solution automation, you need to have the full solution. And, you know, there's no better way to get it than just asking for it. And that's what IWANT helps you with.

The following question comes from Alex Zilkin with Wolf Research. You may proceed.

Hey, guys. So maybe on IWANT specifically, when you think about how it fits into the overall product strategy with Betty, maybe help us a little bit where you're getting the most customer interest. What does success look like for IWANT? And also any update or mix around retention with Betty and kind of as you see that mix with Betty and IWANT across your customers growing, kind of where is the opportunity for retention in that world to go to?

Yeah, I think both produce significant retention opportunities. I mean, I think they're both the best way to do something you know but the way to think of I want I mean it just it it runs through our entire system so you know Betty touches multiple modules I want touches every module and every piece of data in our system every field everywhere so it's quite a bit different you know your users of I want it's going to be everyone your users are Betty you know you can obviously have the employee at the time where they're doing payroll and then you have the payroll department and what have you both significant and very important but but think of I want is just a new way to access information I mean you know you could look at this the way you access your bank the way you would just talk to it and tell it what you need like I can go into I want right now and say you know I had a baby need to add them little Adam I'm going to I want right now and ask who somebody's spouse or wife is and it does it I mean they'll bring it up for me. So I can ask it anything. If the data is in our system, it's going to respond and give me that data. And so, you know, we're really excited. And that's really a giant change in our industry, but really any industry where you use software, where you're now voice activated, command driven throughout the software. So they work a little bit different than each other, but I once just going to make Betty sweeter, I guess would be a better way to put that.

Thank you. The following comes from Bob and Shah with Deutsche Bank. You may proceed.

Thanks for taking my question. Chad, you just kind of mentioned earlier that you think the CapEx will be a little bit more transitory as you build this out.

And kind of with you owning the entire tech stack and once the entire customer base is up and running on iWant and extending usage, why shouldn't there be more continuous spend from a CapEx perspective as users kind of use it more and you're kind of running through GPU cycles? well i mean i think there's a certain amount of spins you have to do just to get to the starting line you know and then i think uh on on an ongoing it becomes more incremental uh but i think as you're looking at rolling out massive usage you know like i said i mean we would expect to activate all of our clients this quarter so uh you know there's going to be a certain level of first hit as they're using it which we're already seeing and then you know in subsequent quarters and in years you know of course we will add to that you know also kind of you see it over time the cost of technology comes down but the cost of power doesn't you know uh and so there's just different things you have to look at as you go through building these things out and we've incorporated all of that in our guidance and in our uh you know on our comments today and just i guess just following on that just given how like useful iwap looks and how intuitive it is like why not more directly monetize it on a PEPM basis or a usage basis versus kind of indirectly monetizing it on better sales and and driving a patch of other modules I believe that every client should access their data this way and you know we've had clients that have been with us a long time and there's no reason to make them pay to get the value that's available for them where I really think that this is just going to take off for us so you know I really just don't think we need to do that. Plus, I don't want to spend a lot of time having to go out and sell clients and charge them on things that I can really get them to use the full utilization of the system. And I believe that will create other opportunities for us, both with these clients and definitely with prospects. So, you know, I think we have to be careful to stop and pick up the change on the ground when there's opportunities out there.

If we remain disciplined and really help the clients achieve the value available yeah the next question comes from joshua reilly with needham you may proceed all right thanks for taking my question i was just curious maybe a little different angle and some of the other things we've been talking about but how are you adjusting your sales and marketing processes internally with all the new different ai sales tools that are out there for front end lead automation and then also along with that the way that customers find you might be changing as well with organic Google search traffic declining kind of on a secular basis over time. How do you kind of square all these items up to manage sales efficiency over the next few years?

Yeah, I mean, I would divide marketing separate from sales. I would say our marketing group's been using those tools efficiently for quite some time and continue, you know, the tools available to them and continue to seek more to that. I mean, from a sales process, we went right back to the way we were selling back in 2000. We went right back to that type of training, leverage, and influence when Amy took over, and that's been working very well. I'd love to think a product sells itself, but that's not true. At the end of the day, you have to have great salespeople who are out there working with the client to help them understand the value that's going to be created, and you have to have a very strong ROI case so you know we're going to continue to sell the way we've been selling but I would think about this as a just it just changes I mean it's night and day you know when we rolled this out on July 30 or 23rd to our very first client I mean it's night and day how you utilize our system on a go forward from a simplicity standpoint and I do think that that's going to weave itself into sales I mean again and by the way we turned our first client on July 23rd I don't even think we gave it to sales until last Monday, you know. So, you know, they're just now a week in maybe at the most to actually being able to go out there and talk about it. So we'll kind of see the impact that I want has on the sales organization here over the coming quarters and years for sure.

Just a quick follow-up. Is it fair to say that the new sales activity was up sequentially from Q1 to Q2? And how do you think about that in terms of visibility for revenue in the second half and how, you know, level of visibility that you have into the updated revenue guidance?

I mean, what I would say is, you know, we were talking about record sales in first quarter and, you know, we just reported second quarter and now we've talked about record sales in second quarter. So, you know, obviously those haven't really, a lot of those haven't started yet. So, you know, let's say most of those haven't started yet. And so, you know, those will be reflected in subsequent quarters. And then, you know, we always guide to what we can see, but I would say there's a level of excitement across FACOM right now that's different than it's been in a long time. And, you know, we've always been a pretty exciting company anyway.

Thank you. The following comes from Siti Panitrahi with Mizuho. You may proceed.

Oh, thanks for taking my question. And, Chara, I want to ask about a demand environment, How are you seeing, you know, in the first half and your expectation for the second half? And then are you seeing any kind of changes, you know, in the competitive landscape, especially with all the consolidation that happened recently in your space?

Yeah, I mean, I would say our demand environment remains strong. I've always said we also create demand. And remember, we have less than 5% of the total addressable market just in the U.S. even. And so, you know, there's many opportunities. From a change in the competitive market, I think they all got a lot less competitive a couple of weeks ago, to be honest with you. And this is going to be a thing. I mean, you guys will kind of see this will be a thing moving forward. I mean, our client feedback's been really good. I think that I know competitors will say they have the most automated, the most this, the most that. But if you can't talk to it, it's not the most automated. It's not the most modern. You know, people might want to drive an old car or motorcycle or fly an old plane. I mean, those things are nostalgic and cool, you know. But driving an old HCM system around, it's not cool. It's just sad. So, you know, I do think that you're going to see a lot of clients gravitate toward this type of experience because why should they work extra hard to get the value, which is why we created it in the first place.

Thank you.

Thank you. The final question comes from Jake Roberts with William Blair. You may proceed.

Yeah, thanks for taking the questions. When you talk about I want taking off for you, where do you think it shows up most? Is that new logos? Is it retention? Is it new product adoption? I guess what should we be looking for on our end, and when do you think it actually starts showing up more meaningfully in the numbers?

I mean, I think it's going to start showing up in all those areas. I mean, you know, I'm very bullish on it showing up in all those areas. Obviously, new sales, new logo ads has always been the largest opportunity we have to increase and drive revenue growth. So, you know, I would definitely expect that to be probably the largest bucket of that. But I will also tell you, I expect to have a huge impact on our retention over time as people are using it and becoming more acclimated to it. And I also think it's going to have an impact on our CRRs being able to go out there and be able to talk to someone about, you know, if you want to be able to pull data from the complete employee lifecycle, and if you want your employees to actually be able to leverage all this, you know, it's really important that you have these other modules that we have. And so I also think it's going to make an impact there. And I believe winbacks, you know, we're already seeing that. I mean, we're seeing clients that were gone from us in a real short period of time come right back because of betting or gone or some of these other things or just client service that they like, you know. And this just changes all of that. I mean, I don't know how you go from being used to commanding a system and just telling it your problem that it solves. I don't know how you go back to navigating and trying to find out how to fix your own problem. It just seems like, you know, people don't usually go backwards in technology. They don't do that too well. None of us, even in our consumer lives, none of us go backwards in technology very well. And I think that I1 has made it easier to access all the automation, And I just I think it would be very difficult for clients once they're getting full value to, you know, want to have less.

OK, that's helpful. And then can you talk about how the initial rollouts of the new offices in L.A., Raleigh and Providence have been going? And now it feels like the business is in a much healthier place. Should we expect a more regular cadence of office launches moving forward?

Yeah, I mean, you know, I don't know that we've had as much of a regular cadence. may be there for a while. We were doing three or four. You know, our sales organization is doing very well right now. In fact, one of those offices, I'll go ahead and call them out, I think it's Providence, had a million dollars in new sales faster than anybody's, any of our offices have ever gotten to it. So, you know, they're ramping up well. And again, the more successful offices we have, the more successful managers we have, the more successful backfill for those managers we have the better the opportunity we have to open up additional markets and so that is a part of what we're doing as well as increasing the dollar volume in every territory that kind of gets us to those next levels thank you this concludes the question and answer portion of today's call i will now turn the call back over to mr chad richardson for closing remarks well i want to thank everyone for joining the call today we look forward to speaking with many of you over the coming months. We will be participating in several investor events this quarter, including Deutsche Bank Technology Conference on August 27th in Dana Point. Then on September 3rd, we will be attending the Citi Global TMT Conference in New York City. We will also be hosting meetings at the Wolf TMT Conference in San Francisco on September 10th. With the strong results in the recent launch of IWANT, I'm even more excited about how the future is shaping up for paycom i want to thank all of our employees for their contributions to our success and with that operator you may end the call thank you this concludes today's conference call you may now disconnect