Q1 2021 Ceridian HCM Holding Inc Earnings Call

Well, we expected on employee head count on the day of pool side to be $6 million to $7 million.

We saw a headwind of $6 million inside the quarter.

We expect that to remain the same for Q2, and then we'd expect to actively see a $1 million to $2 million of improvement in Q3, and Q4 on the power pay side.

Jeremy and Nuomi correct me, if I'm wrong, but I believe that we had expected a headwind of about $3 million when in reality, we only saw a headwind of one $5 million and on the.

Power pay side, which is in Canada, we did see better employment numbers than we had expected.

Okay, great. Thank you.

The next question comes from the line on cities kind of ground here of Mizuho Citi. Please go ahead.

Thanks for taking my question Hi, David.

We're looking at a $1 billion plus our revenue for 2021, that's pretty impressive if I exclude offender exiting $6 seven kind of month for.

A month run rate, that's almost like 19 95 billion above what consensus for expecting so where do you see mostly you know in terms of upside is it are you seeing more on the enterprise segment or what's driving your confidence and.

To drive such a kind of top line growth.

For a city, we have very good visibility as you know several quarters out so when we look at our projections for 2021 on $1 billion number we look at the backlog that we have already in implementation.

We have a high degree of confidence in our implementation G. We know that when a project kicks off day will go live on time and budget and never Laos us to model off the revenue line. So we have a high degree of confidence and again in Q2, we expect a force recurring ex flow to grow 28% to 29%.

It's up quite a bit from what we had given previously and for the remainder of the year in the second half. We expect April for current ex flow to grow above 29% and again that is based largely on the sales that we already have made on the projects that are under implementation.

That's great color and then a follow up on the wallet side, it's almost.

Almost been a year since you launched last year and for 50 customers signed up on 150 already using that's pretty impressive could you give us some kind of color on like what kind of you said start on youre seeing among the customers those who are using whether the number of employee or kind of volume of payments that are going to and what are the.

What are you learning moments here and how do you plan to expand the product features to see for their tracks on there.

That's a great question. So let me then switch of adventure.

Pension bench market share last quarter last quarter, we were seen registration rates of about 16% to 18% across customers that were using the wallet.

We have now seen the registration rates go above <unk> 20 per cent and in customers that have been used in the product along this we all seen at almost at steady percentage if not higher in some cases.

In terms of the usage pattern. The typical active user uses the product about half a dozen times per month.

Typically loading on about $120 per time.

So we've seen quite high usage of it.

In terms of the features that we are adding to the product they will be two additional feature rollouts. This year one in June and one in the second half.

In June.

Adding features for virtual cards. So you don't need to have the plastic present to do a transaction.

We're adding direct deposit capability, which means I as an employee will be able to just with a single click say I'd like to screen my payroll to my warrants at the end of every day currently they used to have to go to the wallet App say, hey, I'd like to add $100 to my knowledge this will be completely fluid.

To us that having to do that obviously with our guardrails for the for the use of how much they would like to add on what they've been imbalances and such.

We're adding additional pay card capability, which as you know it makes it a viable for miners to use the product as well and then we're adding some notification capabilities to the actual product as well.

So nudges and such.

In the second half of the year, we expect to launch a savings for the wallet balance.

We'll have various types of referral programs will be launching.

Our reward programs.

More in.

Self service or changed your opinion and things like that and enhance notifications and will start to move into areas of financial wellness. So we have quite a robust road map for the actual wallets and as we mentioned all of these features we believe will add two more adoption of the wallet high usage.

But also will help us on the day for sales side as well.

Thank you David.

I'm sorry.

The other thing I would add David is that we recently launched on the Wall Inc.

Canada as well.

We already have over 40 customers signed up for it.

That's a great point now Amy I believe we must be one of the only if not the only wallet.

That you can use in both the U S on Canada, and we expect to launch in the U K I E.

In the UK and Ireland on.

Next year as well.

Just one quick clarification on my first question for a minute country wish them well on me or what have you baked in for your guidance.

Oh, sorry, no trucking water conservation on city no no M&A acquisitions I.

Acquisition revenue.

If you are talking about the Thunder, specifically I think we have disclosed the numbers on this.

We can go into the detail, it's gonna be perfect run rate I think seen in Q1 in the month of March and so that's what's reflected in our guidance today.

Great. Thank you.

Yeah.

The next question comes from Dan Jester of Citi.

Go ahead Greg.

Thanks, Good afternoon, everyone. David maybe just at a high level can you just give us an update now that it's been disclose kind of how do you see the strategy in Asia Pac are evolving and if I look at a center you know I think that they sell payroll modules to customers who have other HCM software. So.

Do you think about over time converting those customers to day force, how does the push and pull between sort of HCM and payroll evolved in Asia Pac is that going to be any different debt. Then you saw the experience from the U S.

Dan.

Let me answer the last part of your question first.

We do sell in North America and EMEA.

Payroll.

Payroll on workforce management.

Without the HCM components, and we've done that at many of the very large customers and in that case, often the ERP is a system of record and they bring in best of breed for some of the town on components.

I believe the same passion will be in a P J as well now.

Now there is a up sell for customers that I'll say are in the major market segment to the small enterprise segment and in those cases, we do believe day is a strong absolute profitability for workforce management core HR and all the talent modules, we have as well in terms of the strategy.

We spoke a bit about it in the shareholder letter.

Over a four to five year period, we expect to migrate the accounts over two day falls.

<unk> via send their acquisition brings with it several different products. There are two products in Australia. Once a major market product one is more for government education and larger enterprises on the major market product. We are already beginning on migrations in the enterprise education and govern.

<unk> sector, we have to add some capabilities to the day for us.

Application.

Now in the rest of Asia with the exception of Japan, We have been building alongside the R&D team of Excel at T. A.

A day force payroll factory for most of the countries across Asia.

And we believe to have that online relatively soon which will give us native capability for day force across all of those geographies and we will be able to stop the migration.

And then in Japan, there is a separate product at a center has in Japan, we intend to keep that product given the uniqueness of that particular market.

Great. Thank you.

And then just a follow up on sort of building out the partner network, maybe an update as to how that's going on.

How is building that out and you know as.

Any impact on how youre seeing that in 2021 or is that going to be something that maybe it apart from the impact on the business more more more next year. Thank you great. Thanks, Dan we're very very pleased with how it's going with the build out of the system integrators.

First from a sales execution on our sales team has now begun to work very well with the size and we have examples now on successful examples of where we have signed.

On new contracts with S side's priming the day for its implementation.

And you'll see that reflected in some of the professional services numbers. So you'll see less professional services growth year over year as some of the S size are now doing the implementations.

And youll see that in the way that we reflect some of the numbers for example, the day for some incremental.

<unk> revenue and such will now start to focus on recurring revenue because we expect the size.

Size to begin priming on that particular side.

But in terms of number in terms of depth of relationship in terms of success in having the <unk> Prime and also success in ASI is bringing us.

Some very very nice deals and in fact, we recently closed.

A large deal in EMEA region in I believe under an eight week period that was prime by an S sign for what trust finance side. So really Great example of the ESI strategy, bringing for.

Bringing a lot of benefits.

Great. Thank you very much.

Next question comes from Mark Marcon from Spirit Martin. Please go ahead.

Thanks, Jeremy and good afternoon everybody.

David you in the shareholder letter you mentioned, a number of really impressive wins, including a fortune 100 companies in the health care space Global players I'm wondering if you can just give a little bit more color with regards to the wins that you were most proud of Hum and who you ended up winning from and.

They ended up really choosing you.

You know in terms of decisive elements and then Theres also commentary with regards to the sales pipeline being very strong and that there's pent up demand and so I'm wondering how would you characterize the sales pipeline today relative to our pre pandemic levels and what your expectations are as we go through the year.

But I have a question from Nuomi share so on the pipeline side as we've mentioned the pipeline is very strong it's definitely higher than we had pre.

Pre lets say Q2, all the 'twenty to 'twenty.

I also think when I look at the quality of the pipeline, it's a better quality of pipeline as well.

You spoke about some of the examples around the marketing success, particularly around the virtual events.

But we're now seeing effectively a close range of about 15% of those people who attend the actual summit.

And just given the breadth of how large the summit saw the large summit had I believe 700 attendees and we have another summit coming up relatively quickly in terms of the actual wins is hard to say a favorite time on do you think your losses Sarah.

All of our customers are on.

Our our favorites, but theyre also on that I really do think that our grade if you look at the size of some of them.

You've called out one in particular.

In the shareholder letter, where we talk about a large kind of health care organization.

Quite involved with them as well it is quite a competitive deal against irregular.

Our competitors on some of the ERP that you would suspect to be playing and I believe the way that we explain the value proposition, that's where we could really create quantifiable value to the customer.

Worked very nice and again it was a deal where we were supported by a larger Si.

And then can you talk a little bit about on.

On the wallet.

Any pushback from any client any one that's installed it and said you know what.

<unk> become too hard or too difficult.

So you know what percentage of on time or are you seeing that.

So mark this is going to be one of the easiest things to implement at a client.

Literally check a few check boxes.

And India employees download the App of the Google play on the iOS store.

It does the and NATO customer piece by pulling the information directly from the day falls out vacation. So theres a for fewer cases that you have to do and then you get your plastic in the mail with just a few days later.

And in fact, when we launched in Canada I was one of the first users to use the app and it is really easy to use.

So we don't get any pushback from the customers and that this is too difficult to do.

From a payroll administration fees as well it doesn't complicate the process. It's not a reconciliation of the payroll team has to do they don't have to change the way that they do the funding it's not a bolt on system, it's just embedded with inside the application we've.

We've had tremendous feedback from the customers that are using the wallet in terms of ease of use benefit to their employees and we've got a whole bunch of case studies, where employees have written to us talking about the benefit from a financial wellbeing perspective.

So we remain very very confident.

I believe the direct deposits on the screaming a pay feature that low launch in the June release is going to be very very well accepted.

Excellent and then can you just talk a little bit about the EBITDA guidance for the second quarter. Just what are some of the puts and takes from what are what's kind of temporary.

And transition here.

I think so on the on the margin as we mentioned before we are clearly in a in an investment year.

We're making significant investments in our product and technology book, especially around the wallets around the build global capabilities in Germany.

Other places so that's why you're going to see translating into higher on product and technology expense as a percentage of revenue as well as a higher cash spend on R&D, which is not something we're doing consciously in order to gain some market share and we're seeing also from increased spend themselves.

Marketing as we're expanding our capabilities with the current large enterprise customer sellers as well.

Moving the Si partnerships and so on so that translates into a higher sales and marketing that from here.

Also youre going to see also crossing here. So that's why we've provided guidance for the full year adjusted EBITDA margin around 15% to 16% of revenue.

Thank you.

Next question comes from Matt Cox Who's been from Mark Murphy of Jpmorgan.

This is Jeremy.

That's on the strong quarter guys can you just help me understand.

The net dollar retention youre seeing now versus a year ago I know you usually just report.

Gross retention once a year, but it is the net dollar retention something you've seen improve since last year.

It remains very strong and it's above 105%, maybe a 106 per cent.

It hasn't really changed I.

I would say over.

Over the years, what's remarkable is that it remained at that level, even with lower employment numbers.

And that's how customers.

Got it Okay and then.

He now has the pandemic change the priority of HCM relative to other I keep purchasing and in other words as modern HCM viewed.

It's more critical now than it was a year ago relative to other software applications and have you seen that sort of come through in Pi.

Pipeline and sales forecasts.

For metals I think there's been a benefit to demand across the pandemic attendance go on in phases. The first phase I think a lot of the companies who are still relying on paper forms April manual processes or had on Prem systems. We're in a mad rush to get into the cloud and to digitize all of their interactions with their employees.

And that has continued to drive demand.

The what we're finding now is that when I call out and I speak to customers and I speak to probably about 20 customers per week, what I'm finding across the C level.

Is that there is a real concern that with people having been working at home for over a year that.

That is becoming more difficult to maintain the culture and the bonding African organization.

And so on a lot of organizations are looking for products like us.

That can really help communicate and bring employees together. So that you can maintain and strength in culture, and obviously keep engagement levels very high.

And the shareholder lever I spoke about how we are how I've been describing how we've used the application.

Firstly, we use the hub that we recently launched and we did that because we revised our values. We removed one added to and so we use that as a way of communicating the new value to our employee group with embedded training on all the different values embedded videos on such.

Second we've been using the <unk> dashboard.

From an ESG perspective, and that's been very very helpful for me to actually see trends and to make sure that we're moving in the right direction to make sure we have proper diversity and balance inside our executive team and that's gone very very nicely.

We've been using the engagement features to keep.

Score on track from what our NPS levels have been making sure that we are addressing important items for the employees and losses EBITDA for smaller it really has given on employee is much better financial flexibility in wellness and knows all the things that people are looking for this when do you bring it together that keeps the company together and.

In times like this is very important and I believe those are all on the reasons that we've seen such a strong demand for our product.

Thank you very much.

Okay.

Next question comes from Samad Samana Jefferies.

Hi, great. Thanks for taking my questions as Jeremy smiling, because I was reaching to turn off the mute button.

So maybe first one David you know the pace of M&A it seems to be picking up for the company.

It seems to be more concentrated in the APAC region, just maybe how should we think about is there a structural change in and maybe how M&A is thought of as as a lever for growth.

And then again on a regional level should we think about it just happens to be in APAC right now or should we see it be more balance maybe going forward and then I have a couple of follow ups.

First of all I can say I'm very proud of our M&A capability I think we've built its strength and we've been able to execute on a number of transactions and already gave kudos to our M&A team headed up by a generic or eczema I think he's on a really really great job.

When it comes to M&A strategy as you know we are focused on net regional consolidation play and I've spoken about that before there are many companies out there that in particular jurisdictions that have legacy technology typically focus only on the payroll side, great opportunity for us to acquire a nice multiple.

<unk> used the knowledge of their people their operations to really build out debt capability quickly inside day falls and then over time look at migrating their customers onto the day force platform and we get tremendous benefit elsewhere in the world by having that capability in that particular region. We spoke about debt on the last shareholder.

How we were seeing a pickup in global sales because of our a P J capability and that's continued.

We are looking at other regions around the world now and I would expect that we will do some transactions like that over the next couple of years.

The other area of M&A way, we've been quite active and you see this is the ideal acquisition, which on a go to say is really a great piece of software. The team is exceptionally strong.

Talking about a big group of data scientists with very deep knowledge in terms of talent and talent acquisition, we had been partnering with them on the day for side for over two year period already had embedded inside the product.

So we knew what the product could actually do but we are looking for acquisitions like that as well where you acquire specific type of capability that allows us to leverage that capability inside the day falls for us to get more of an advantage relative to our competitors.

Another example, where you saw that was on the benefit side to have your logic, we acquired them several years ago that gave us a benefit decision support the benefit intelligence piece also which has gone really really nicely in market.

So yes I.

Do you think M&A of those two different flavors will be a part of our future.

Great and then maybe a follow up for you on just the revenue categorization saw that where the dollar buckets are put in and in the shareholder letter, but just maybe you know most of the acquisition from in the past have been fully allocated the Bureau, just trying to understand maybe why some of the sender went into the day force bucket at the outs.

Debt since usually it's the acquire and convert mechanism. So maybe just I think it would be helpful to understand that yeah, you're right the majority of it.

On to Bureau, but there's a portion of the Thunder solutions that is not a pure cloud solution, David referred to the Japanese cloud platform. That's also a part of the Asia Pacific solutions that is not on the clock.

Now that we're going to continue to support and then build upon a bill day.

Day for second user interface on top of it and continue to sell as well as upsell some of the HCM modules for that population. So that's the piece you've seen in cloud revenue, which is about one five.

$2 million on coding services framework.

Great and then just one last one for you David but the new hiring a with the higher than your Chief revenue Officer.

Bringing rocky on should we expect any changes to the sales organization. Our go to market model underneath that that any major changes that we should anticipate what the change in leadership there.

Okay.

As you know over the last us for three years now we've been investing heavily in really super solved from a talent perspective.

Rocky falls into that really a tremendous background as you know most recently.

Here on one of the ERP is largest regions I.

Again complete P&L responsibility. So he is really a true powerhouse that we bring into the actual organization.

I think we've already had a lot of change with inside the sales organization in terms of segments in terms of moving to enterprise from time to come.

On a really empowering our relationships and such and no I think our Rockies real goal is to maintain that focus with inside the organization and make sure that we execute even better and really to focus on making sure that we have a great culture inside the sales organization as well so our guidance.

In fact, you see massive changes inside the go to market, what I'm expecting to see continued great execution in our go to market.

Great really appreciate you taking my questions. Thanks again.

Next question comes from Chris Merwin with Goldman Sachs Go ahead, Chris.

Great. Thanks, so much for taking my questions.

Wanted to ask one about the wallet I was just curious if theres any other features you youre thinking about adding debt core product for you to further monetize the funds running through.

The wallet or Alternatively are there other partners you could add cash out for venmo to give users.

Users more flexibility about where those funds may ultimately sit just just curious anything you can share about the product roadmap or or thoughts about where that product could evolve for you in time. Thank you yeah. So you'll see some of that already happening in.

In the second half for lease of the actual product.

So when we talk about rewards will do the rewards for one of the obviously the programs out there they probably two big players in the U S.

That is a revenue share because the way that the model works is that the cardholder based on bidding number it does get a cash back and as well as the merchant pages to network a fee for the actual purchase and we will probably get it well, we do we get a split of that.

With the actual partner.

We'll probably also have hockey shifts for bill pay and as well for kind of for kind of.

Click switches if you go to.

Amazon or Netflix, making it very very easy with a simple click to use the T J.

Enter in your day force Cog as a source of payment.

So I would expect to get that in terms of where the people can keep them money. Yes, we will start off for the savings on interest based savings accounts, where the cardholder can select which bank. They would like the money to be held off on the interest that they would like to get on that and then over time, we'll get into more financial wellness types of products as well.

Perfect. Thanks very much.

Okay.

Our next question comes from Scott Berg with Needham go ahead Scott.

Hi, everyone. Congrats on a good quarter on thanks for taking my question.

David I, just wanted to kind of follow up on the similar questions a little bit.

Heavy acquisition for you know a whopping a couple months now so far is how do you think about the growth rate opportunity, whether it's Australia for Asia Pac relative to ceridian as a whole.

For Scott, who will take us a bit of time to get going so we're in the early days for the integration, but in terms of opportunity. We know that the a P. J market is growing quicker than the rest of the world. So I would expect to growth opportunities for there to be at least equal to the rest of Ceridian, Inc.

On a go forward basis.

Got it I know you you mentioned, the new staff, 80% attach rates of wallet to your new customers, which is obviously a fantastic attach rate, but as you look at the the rest of the portfolio of solutions, how would you compare attach rates for the other talent management modules today versus maybe the pre pandemic level.

In the fourth quarter of 19, we've seen the attach rates go up.

If I look at the add on.

In Q1.

Aleve, where assets are Jeremy Nuomi I think it was 28 per cent.

From the better came in up and free kind of pandemic, we probably were up to 20% level.

Excellent and then last.

Quick one for me is I know you talked about 20% on registrations on on wallet as customers ramp up and you have seen one or a few handful at 30, what does that number look like do you think it kind of peak levels is that 40 to 50 per cent of employee base or do you think you could maybe be higher than that number.

We look on we're talking about if you can share what I can say is we've seen it go up quarter over quarter.

And we are seeing customers above that 30%.

The only real Mark study out there would be the one at Walmart, where I believe the registration rate has doubled year over year and I believe there are close to the 50% range.

I would think that would be a reasonable range once we get to be a kind of all the water features for.

Moving to the actual system.

Now with us it might be higher because we don't have a charge we don't charge for it.

AP for usage, whereas I believe and in the case for Wal Mart Day March.

Got it thanks, Congrats again.

Yeah.

The next question comes from Alex Zukin at Wolf.

Hey, guys. Thanks.

Thanks for taking my question and congratulations on the quarter. So if we zoom out David and we look at this year kind of ex COVID-19, you're going in with a great pipeline, you're kind of you've successfully switched for new customers to pet from our provision and you've got really exciting partners that are signed up and you have differentiated technology on a global payroll.

Where we start checks indicate you're winning deals against other HCM vendors as a result of that functionality. So stepping back if I think about the kind of growth execution that you're looking to put up you've given guidance is there.

A lot of things have kind of fallen into place not to mention you've also hired another rockstar for the sales how should we think about the durability of growth exiting COVID-19, you've guided I know this year, but longer term bigger picture, what's the right way to level set kind of the opportunity set that you've kind of put in front of you here.

Alex as you know we've been quite consistent with our current levered since we IPO Ed.

When we acquire new customers around five to 600.

Two.

We build out additional capability, we go back to the base you saw from additional modules I spoke about the 28% add ons that we're now seeing third we move up into the enterprise space and you've seen that if you read through the shareholder letter you'll see some great. Examples of some very large organizations for.

We move on a global basis, and I think on execution of UK AI has been wonderful on look at the deals that we're signing in the EMEA region. They really are tremendous and we're only two years out at the gate for the.

The moves that we're making on a P. J, obviously support that as well on and I expect we will make some of the types of moves elsewhere in the world and so that's growing very very nicely and then we've always spoke about adjacent products like the wallet, which allows us to drive more recurring revenue from the people get yourself systems now in order to do that we have to obviously invest quite.

Heavily in talent, if you look at the people that we brought on people like know Amy people like Rocky people likely people like Joe all of the individuals that we brought in have experience at scale.

And they have experience on a global basis and that gives us the confidence that we can execute against those five different growth levers and I think we have on most are very proud of how resilient sorry, ceridian was over the time of the pandemic.

We spoke about in eating into the pandemic and come out even stronger and I think that is the case.

Perfect.

And then if I think about kind of hiring trends and the hiring trajectory not so much employment levels, but your own direct sales organization.

Allergies, if you've commented on this or if this has been asked but what should we be thinking about in terms of.

Just.

Go to market team hiring.

For this year and getting ready for next year as it compares to either pre pandemic levels.

And I think in our guidance numbers on any what you want Inc. Finding embedded in the EBITDA number as well on the investments, we're making in sales and marketing.

I don't think you're going to see massive hiring will continue with the hiring levels that we've made over the last year, we'd never really slowed down on the hiring side on sales and marketing.

And so we'll continue to make those investments.

Jeremy on the amine anything do you want to add specifically around sales and marketing investments. So I think that's right, we're continuing to invest and we're upskilling certain departments.

Departments to be able to tackle the large enterprise segment historically, we've been more focused on the majors and we're actually building capability to go after the doctor onto price segment, and we're also building capabilities to work with our size and so those are the other areas won't be investing as long as sales and marketing.

Perfect Congratulations guys on a great quarter. Thanks, so on them.

Okay.

Next question comes from Arvin anatomy from Piper Sandler Urban Please go ahead.

Thanks for taking my question.

Wonder if I put it back on digital wallet.

You'll have indicated that.

It has some impact on employee retention rates for.

For some of your clients.

And with that.

From your win rates.

Just given the the embargo.

<unk>.

If you.

You are centered in on digital wallet.

Right.

When rates can go up and.

And also just on the phone out for that are there any specific investment.

They are seeing and then weighted traction our digital wallet.

So two great questions over there.

Other doubt having the wallets has helped our win rates and they probably are two reasons for that.

The first is we always speak about that we are differentiated in market and net we have a continuous calc engine, which means that when you change a timesheet and HR record.

<unk> record, we immediately calculate the net earnings for <unk>.

Wallet leverages that capability and so when we talk about being able to offer the wallet. It also clearly explains to the customer the advantage of having the continuous calc engine, which the others don't have and so I do think it has helped us tremendously.

When we speak to the HR team and we speak about talent and about how we can improve the engagement deliver benefit and also improve their ability to attract new people into the organization.

Some tremendous that's coming from the wallet on we spoke about them last time that we found that when we look at active cardholders versus non active cardholders in the same companies involuntary attrition rate goes down by 42 per cent and when we talk about the speed for.

And then I open job vacancy, we see that improving by about 10% and those are really really great numbers.

In terms of industries I can actually just looked at it rideshare lucrative part of life for you.

And so if I look at my kind of industry of dashboard or they were.

We're seeing kind of success right across industries with peak at the moment.

In retail professional services manufacturing financial services and construction.

Great.

On my hopeful desktop kind of a separate question for me on the competitive environment.

For some off the legacy players.

Continuing on to Oh wait.

And without taking on I mean, sorry, I didn't know if that is continuing to innovate.

Hum.

On the demand environment Twenty-twenty suddenly it had an excavator demand for on a cloud based solution. So that's been a backdrop of like a day.

On environment puts us probably.

Looking for from a cloud foundation.

And it sounds like I guess I can ask on continuing to innovate are you going on.

Sorry, if I could kind of on the distance you have from an offering perspective.

Relative to the competition or you feel like some of the legacy there that are sort of starting to catch up.

In terms of the legacy says I I I don't know if there is much catch up happening.

It would be the way that I, probably would describe it.

A number of aspects that are do you think for a differentiated as you know from a product side. We have the features like the continuous calc engine. We have the single database single rule engine, we have David.

Net.

We make very effective use of AI and ml, we have the global capabilities were strongest I believe in compliance and on a measure by Gartner and others. The second area, where I do think were differentiated R&R service levels and if I look at the client satisfaction.

Scores as measured by NPS and implementation or if I look at it when they go live on <unk>.

Believe on NPS scores are probably best inside market and those two things combined really a great client experience with leading technology.

We're also not a segment on the technology.

If you look at the work that shows Joanne I remember <unk> is our chief product and Technology officer.

The work that he's doing over there in terms of user experience.

Really a focus on data and intelligence for the use of AI and ml.

Of the lift that we're doing to the various talent modules at the moment and also the work that we're doing in terms of interoperability.

Really have Oh, I think for our best in class.

Alright.

Well, thank you very much look for.

For the year. Thank you very much appreciate it.

The next question comes from Brian Clark with BMO. Please go ahead.

Hi, Thank you for taking my question I just wanted to ask about the international strategy in EMEA, and specifically with Germany payroll Rolling out this year, how do you think about the strategy over the next year, taking advantage of that payroll launch around Germany and building out.

EMEA customer base and.

Additionally.

How should we think about how that translates into what you guys prefer to a dose global deals and global customer wins. Thank you.

Brad we're already very happy with the traction that we're having in EMEA.

We launched the UK is several years ago, and we're seeing great wins inside the market.

And not only women's in terms of sales, but in very lives and reference ability. We have also had tremendous success inside Germany with our work force management product.

Great customers like Siemens globally, Henkel cast the Lidl Kaufman all of them on leading organizations in Germany and across EMEA as well in terms of the build out of Germany that will be ready in 2022, we already have developers and operational people on salespeople on.

On the ground in Germany.

Once we have Germany up and running obviously, we're going to expand very quickly to.

For the jurisdictions that are surrounding Germany, or do a lot of work with our kind of Germany and so we believe that we will be a leader in that region as well.

Great. Thank you.

And our next question comes from David Robinson at William Blair Go ahead, David.

Alright, Thanks for taking my question. So are you kind of touched on this previously but for.

Regards for the kind of increasing attach rates of certain model module this quarter compared to for the past I was wondering.

Have you seen any increase from kind of certain areas as companies are anticipating a reopening.

Both on the North America, and kind of in the other different regions around the world.

Just trying to see if there's any interest around maybe even recruiting on boarding modules for.

How that's been trending.

Sure.

David I think Youre right.

So there are a few things look for us there's a lot of focus now on employee communication.

We launched the day force hub recently, and what that is effectively a homepage for the customer can tailor based on jurisdiction type of employee I think we put that branding on it. They can make you look until a really meet their own personality you can have deep linking with inside our application.

On deep linking to external applications as well you can have time sensitive content and action items for the people and Thats, obviously it to be a central communication hub, which is very powerful as I mentioned, we use it internally to relaunch our value is now it's very successfully.

Second on the recruiting side, we're obviously seeing a lot on talent acquisition now on the tone on acquisition.

We just acquired ideal.

And what are they already has is that they have AI that is used for grading of the candidate to apply and it's a true machine learning algorithm, which means that if a hiring manager on the recruiter doesn't agree with a great day can correct in the system loans based on behavior.

They also have great capability from a day I perspective, so when you're actually going through the candidates you're making sure that you don't have any type of bias across the hiring managers and we believe we can use that capability as well in areas like performance management.

On the like we're very very strong on employee on boarding and when I talk about employee on boarding the single application becomes very powerful because you normally start off with a landing page for you of a message from the CEO for multimedia you then go into the sign offs and instead of just saying Hey have you read the code.

Company ethics for behavior of privacy, you now embed learning directly into that experience. If you take the course of minutes signs for you. All you have the various checklists for various forms that cannot be competed digital digitally which obviously helped tremendously. We then typically bringing benefit enrollment. So we go through the benefit decision support.

To make it already pleasing experience do you typically bring in a bit more learning management. So you have on the job training setup. The person's 30 day 60 day 90 day development plans on the like and so it's very a kind of a it was very very nicely now at the same onboarding module excuse for for CT transporting so you can think about people.

Returning to work and putting together a proper experience where people will be coming back to offices that don't look the same debt.

You add that they were before COVID-19.

COVID-19 pandemic, so obviously, a big uptick in matches well.

We also are doing quite nicely on areas like engagement as I mentioned before is the top concern for any CEO and making sure that engagement levels are holding inc.

And while people are at home ability do pulse surveys for engagement surveys leveraging again a lot of intelligence features like sentiment analysis to read through the comments.

So that you can make sure that any comments at all on positive on our Delta correctly.

So obviously quite a lot on.

What is another area is on the global side.

On today's work from home using tools like zoom and such.

On one six is no longer as important as it was prior to the pandemic.

And so the ability to have global payroll capability to be able to do things like compensation management, either on a constant currency on a local currency from a budgeting perspective becomes very very important but also on to handle how do you pay people varying Brazil author in Portugal is there in the U S, Canada and a single system.

All of those seem to be driving the add ons.

Very helpful for banks.

Great well, we actually have no more questions from the queue and such that concludes the call today I would like to thank everyone for joining us. This evening and we look forward to touching base with you for the future.

Great. Thank you everyone on everyone you guys later this evening.

Bye bye.