Q2 2021 Ceridian HCM Holding Inc Earnings Call

Customers began to show improvement compared to the last quarter.

The average employee count per day of force customer is now of larger than pre pandemic levels reflective of all moving to enterprise and also better employment levels.

This is expected to positively benefit our second half revenue.

Finally, we have seen strong market momentum for day falls wallets.

We now have more than 600 customers signed with over 200 customers live on the day Force wallets.

Inside our top quartile of live customers registration rates are averaging about 40% of eligible users.

We are now seeing impressive traction and spending patterns further positioning the day of course cod as top of wallet go to card for spending money.

The average active water in the water total loads money onto the wallets for.

5 to 6 times per month at an average of approximately of $120 below <unk>.

And in addition on average active users transact for the card approximately 24 times per month for almost every day.

In summary, our execution was strong across segments and geographies and our financial performance exceeded expectations. We are seeing significant momentum across all areas of the company.

We also have reopened our offices in the U S and I've been thrilled to see the level of engagement from our employees, whom I have met in various town halls across the country.

<unk> also been busy.

Visiting.

Our customers at their offices throughout the U S and some consistent themes have emerged for.

The desire to improve the wellbeing and productivity of their workforce.

Second the challenges to maintain and unify the company culture in an environment, where employees expect and do work from anywhere in a hybrid fashion and finally, the difficulties attracting and retaining talent in a very competitive talent market.

I'll, let each of the impact from conversations with the conviction that we are uniquely positioned to address these challenges and help our customers be more competitive.

I would now like to hand, it back to Jeremy to open the call up for questions.

Thanks, David as when you go through the Q&A portion of the call I will announce the name and at that point. We ask you. Please on mute the line and ask the question and then remove the line. We also ask you to please limit your time to 1 question on 1 follow up thank you the.

First question comes from the line of city of kind of <unk> from Mizuho Citi. Please go ahead.

Hey.

Thanks for taking my question.

It's really nice to see the 30% of recurring revenue growth back to the 30% of the guarding 30% plus of the second half.

I wanted to dig a little bit into your confidence level, mainly what's your expectation in terms of employment.

Going into the second half Q3, Q4, and also specifically on the enterprise segment tracked from what are you seeing there.

Really how ASI is helping you and how does that change your activation of revenue recognition on the enterprise deal.

Sure. So in terms of employee headwinds in the quarter. We saw employee of headwinds of 6 million, Inc. Q2, which was in line of what we had expected.

For Q3, we expect a 3 million dollar headwinds or an improvement of $3 million and in Q4, we expected to be $1.5 million. That's on the day of full side.

On the power of pay side in Q2, we saw a headwind of $1.5 million in Q3, we expect it to improve share headwind of $1 million and in Q4 had a headwind of zero point $5 million.

Our traction, especially in the enterprise segment and as well on what people major market too, which is the upper segment of the major market remains very strong.

So both a nice increase in ACB year over year, and we also saw a significant increase in the volume of deals coming through the system as well.

Okay.

For the Colorado.

Quick follow up on the day of course wallet side, it's good to see the track from there now 200 customer life. So what what could you do further to drive a registration of like you talked about 40% of in some instances so what else what are the learning last 1 year to drive further penetration.

You have to rely on the HR.

For the customer in the HR department of the customer or do you get can you do something else. So let's say of any other it's of great question. The 2 parts to that the first is when we look at the top quartile of our customers.

It's largely the customers who are in line for the longest so what we're seeing is month over month, the registration rates of eligible employees at our customers go up.

And as I mentioned, the top quartile, we're seeing numbers about 40% of again later goodbye.

The second piece that we actually see as well.

Is that we do.

Have the specific initiatives on the product side that we're adding on things like referral. So I can refer a friend gave $10 get $10 and that will come online.

In the next.

A few months. We also have added of messaging component into the actual system that will allow us to again encourage people to our use of the system. We've added enhancements on the direct deposit side too.

To help people set up the day force wallet as their primary dire.

The direct deposit accounts and Newberry other the various various other initiatives for getting on the product side that we believe will continue to drive not only of registration, but usage of the cards.

That's correct. Thank you. Thank you.

Our next question comes from the line of Jared Levine, who is in place for Bryan Bergin accounts Geri. Please go ahead.

Thank you.

Sort of any change in the competitive environment, particularly on against ADP or U K G. This past quarter, not really Jared I would say that it's been largely consistent.

Since we've actually Ipos SG&A of 2 prime competitors in major markets. When we go upmarket into the enterprise and large enterprise segments of shifts a bit more to the ERP side.

Cash.

And then in terms of day force while it can you provide an update in terms of that revenue youre seeing per active user is it still pretty much an effect of doubling of that type of them with those active registered users. That's about right. Jeremy have we provided the actual are approved for accounts are doing things. The range, we have non but generally it's in line that we can effectively see.

On a doubling of the recurring revenue per active user.

Okay, great. Thank you.

Our next question comes from Daniel Jester of Citi. Please go ahead.

Yes, Thanks, Jeremy and good afternoon, everyone.

I noticed the wallet of this launch in Canada earlier. This month can you just help us think about the market in Canada.

So I think there's there's clearly other competitors that are trying to do on demand pay in the U S. But help us think about what the opportunity of candidate could look like.

You know Dan is looking very similar right out of the gates, you've got very good traction of the wallet in Canada.

Which is really tremendous to see we're seeing registration rates followed of those what were seeing the inside the actual U S.

It's a slight difference in that in the U S. You do have an unbanked for load banked population that's smaller in Canada.

But surprising me the registration of the desire to use the wallet doesn't seem to be any different income diverse as the U S.

We had some great coverage with the actual launch on if you haven't seen is a piece on CTV news of our and encourage you to look at.

1 of those great about that as the day interviewed random people on the streets to test the of the value of the actual wallet and the results were really great.

Great and then the.

The shareholder letter there is the metric that incremental day force recurring revenue per customer was up 8% year over year and if I go back a few quarters I think that was like 13% or for higher so.

Maybe just help me think about sort of what's driving the deceleration here because of client growth sort of like the force customers, it's been pretty steady, but that metric seems to have come down sort of what what's driving that please. Thank you.

It's mostly done that we're lapping.

So we started to move into the enterprise segment <unk> got a nice lift up into the enterprise segment.

So when we look at it at the moment I think you need to look at the kind of on an ex flow basis. The.

The number is actually 11% inside the quarter.

So if I look at Q2 of 2021 to Q2 of 2020.

Went from 93656 to 1 of 3.757, which is up about 11% year over year.

Okay I'll follow up offline. Thank you.

Thanks.

Next question comes from Mark Mark on.

Mark. Please go ahead.

Hey, good afternoon, and congrats on the strong results I'm wondering can you talk a little bit about some of the.

The wins that you ended up having during the quarter and I'm, particularly interested in the international wins in particular coupon can you talk a little bit about where you're seeing the international wins come from what's the pace of of momentum looks like.

And how you're feeling about.

International just in terms of being able to drive new sales.

First the growth on the global side is tremendous.

Year over year, both in the number of deals that we're doing the number of the deals we're doing with the actual size and the revenue side has gone up quite significantly year over year.

In terms of the particular types of wins, obviously, we had Cooper, which is just the tremendous software company I think everyone knows about the operating on the global basis.

What I love about that 1 is that it's great evidence that we are very competitive.

In the software industry as well.

Great.

Fitness company that I think everyone knows everyone uses everyone probably has a subscription for them on a global basis.

On noted my wife and family of <unk> support the NIM for quite a long time.

Dnb also obviously a great win as well in financial services and then you have the typical we had a great job.

On our call them.

And the environmental.

Resourcing the company.

Yeah, the out of Europe, which is of great name that we got on the New York typical retail on 1 veterinarian types of clinics. So we had a very nice and strong quarter. When it came to an end globally.

And in the domestic markets.

Richard when Cooper from your side of it was against the the Big ERP that you would expect.

Okay, Great and then just in terms of the guidance can you talk a little bit about some of the the drivers with regards to the EBITDA guidance, where youre, obviously of investing there's obviously all sorts of different opportunities where is the incremental investment company.

Yeah, let.

Let me just start by talking about EBITDA in the quarter because as you can see it came in meaningfully above the actual guide in fact, we came in.

About $9 million I think about the supply of our guide for the quarter on EBITDA.

If you look at it from a dollar perspective, it was up 6.4% here of the year.

We've kept the EBITDA number of conservative.

Because we are investing quite heavily in products and if you read through the shareholder letter we've highlighted a lot of the number of initiatives that we're actually doing we're obviously doing a tremendous amount of investment from the day force wallets as well and we also on our investing heavily in in person marketing events, which we didn't have in the prior quarters, we have the <unk>.

<unk>, that's coming up that he is really exciting.

Talking that in Vegas, and New York and then we'll follow up as soon as possible in the UK and in Singapore.

We've been doing some smaller sales events and customer events in New York, We'll have 1 coming up in L. A in about 2 weeks time as well so a little bit more on the marketing spend I don't know what I mean anything that you would want to comment on margin you've covered it well in Q2, we had obviously a beat in our adjusted EBITDA versus the guidance, which is primarily.

The result of the end of the revenue beat that we saw but we've continued to invest consistently as we said before in the areas of David just covered on our product and technology is the significant area of spend for us as David mentioned for the wallet as well as for the global expansion and maybe they're all capabilities. So you would expect that to continue throughout the year.

As well as the investments in sales and marketing to support the effort to the up market.

Great. Thank you so much.

Our next question comes from Matt comps at J P. Morgan is a place for Mark Murphy on that.

Please go ahead.

Hi, good afternoon.

David in the shareholder letter you mentioned the core delivery metrics remained strong and continued improvement with customer satisfaction scores of something that you saw.

I assume things like no starts of probably smaller or perhaps nonexistent to begin with but.

To the extent that they do of this can you talk about any headway you've made there.

And then perhaps along with that the trajectory of.

Things like NPS scores overall customer sat and the growth in the number of customers willing to be references. Thank you.

Sure.

And then have the.

Our share for group of clarity on the first part of your question, but the second part of your question. We've seen NPS scores go up materially year or the both on the implementation side and on the customer support side, we've got.

Exceptionally strong schools now on both of those metrics in fact on a doubt that there is anyone on industry, who is as strong as we are when it comes to NPS schools and as you know NPS is a very on this metric.

What was the first part of the dessert has to be what do you think you used the word no stops yes no starts just.

Like for like I mentioned I assume that you probably don't have any customers who sign and then just never end up going live.

I just wanted to see if that had been it would be the absolute rarity of for us to see that gain when I look at the service organization and when I look in the actual number of K Cups and go lives they've done and done very very nicely and when I look at the accuracy of our services team enabled being able to predict when a customer is going to go lie.

<unk> is very very strong I think most of you know that every other week on <unk>.

Each with the services team we go through the company by different segments any account that has a potential of pushing more than 30%. We go deep into it.

And if I look at it quarter over quarter of we're seeing tremendous accuracy coming out of the service team.

Okay great.

Got something on the services I think we've seen the other piece on the other line coming back in growth territory of this quarter. After a couple of quarters of decline for that.

That's a pretty good evidence of them getting off of more efficient and lot of taking cost of the life. We have seen from increase in the professional services margin as well and we had a higher share on our value added services, which customers purchasing of our solvency is supposed to go live on.

Well, we also have significant value added on to help those customers taking the best of Orion the development on the implementation of the solution.

Okay. That's helpful color. Thank you and then maybe just on the better employment levels at your customers. If you're if you think about the jobs lost for the peak of Covid in March April of last year, what percentage of those jobs do you think are back and then.

Maybe if they're not all back.

When do they come back on.

Matt as I actually mentioned when I look at the average employee count across our customer base.

It's actually higher now than it was pre COVID-19 levels, both in Canada and in the U S.

So I would actually argue that the jobs of XD coming back into the actual market and when I look at the growth in employment levels over the last 90 days of loan we're seeing tremendous growth of 4.5% employment growth across inactive and active.

<unk> and our customers.

Got it thank you.

The next question comes from Michael churn at Wells Fargo. Michael. Please go ahead.

Hey, there. Thanks I appreciate the time of always on the international side I want to just spend some time on of Thunder was that the $23 million of reported just for level of setting inline with what you were expecting and then I think you've said the migration is expected to kick off here on the second half of the year can you just talk about the.

The expectations I know, it's the multiyear journey, but how we should think about the start there on the trajectory as you kick off of those effort. Thank you.

I'll start on all out of Tenotomy for a little bit more color on the ascending line of $22.9 million.

Broken down today for for recurring revenue, which came in at 5 million versus the $4.5 that we had expected staples professional services payment of $1.2 million versus the 1.5 that we had expected and bureau came in at $16.70 versus 15, but the.

Whereas some of the purchase accounting adjustments that were inside that particular number when you look at Q3 and Q4.

We would expect and included in our guidance of $4.5 million per quarter.

1 day force recurring revenue $1.5 million on day for professional services and $15 million on the actual bureau of site.

The migration begins as we mentioned in the second half of the year, but remember that it will take time to activate those accounts. So you aren't going to see the impact of that early on until 'twenty 'twenty 2.

1 of the data point that we did call out on slide the shareholders letter.

When we look at write checks, which we purchased about 2 years ago. The.

The day force revenue that we have sold to those accounts.

Now exceeds the total revenue of right Tech at the time of purchase so it's really a great data point about the strategy that we.

We can position day for and as we do that we get the up sell of the talent modules the workforce management modules.

Which obviously increase the revenue that we can expect from those customers.

I know of any anything you would add no I think that's the guard as well.

Just so the wallet of engagements that those are tremendous we keep seeing the bread crumbs of progress there.

Any color you can out of the types of transactions Youre seeing that average load metric also it looks like a pretty compelling value proposition. So can we just talk about the engagement level of youre seeing and the potential for monetization there as we think about potential impacts for the model going forward.

So the engagement numbers are great and you know as I mentioned in the top quartile of about 40% registration rates across the clients, which I would argue.

He is a bit ahead of what we had expected.

The second part is the loans that were seen have gone up slightly but they are effectively 6 times per month.

At over $120 per load.

And then on the spend time, we're seeing the caused the used almost daily the average usage of the quality of in excess of 24 times per month.

The typical types of transactions of what you would expect.

They are grocery purchases convenience store.

Our gas.

ATM withdrawals, which is the majority of the the.

The the transactions in terms of further ways of monetizing that.

We're going to launch a.

The cash back program with the particular partner.

Where there is a revenue share and we believe that could add about 9%.

Of the actual.

Our spend if you like into revenue.

They are other programs that we are looking at things like pay now.

For a buy now pay lately.

Grams of I think will further outage and then as we get into more of the financial wellness side, there's really a tremendous opportunity for us.

Thanks, a lot Mike Youre actually mutual on must shipyard away.

No that's great. Thank you very much I appreciate the color.

The deal. The next question comes from Greg Clark presented for Keith Bachman of BMO.

Hi, Thank you for taking my question I wanted to follow up on the international plans and specifically could you talk more broadly about the size of the opportunity of data just now and the.

On the greater.

Area with the extend beyond the installed base of non-GAAP.

Other than that.

Different kids and demand appetite for HCM deployment.

Queen of the international markets, including Europe.

The U S. Canada of any comments you could make on sort of more global plan of yours.

Thank you.

So Brad right of the Bath, we're seeing very strong growth on the global side.

If I look at the number of deals that we have in pipe 2 day for global deals versus last year. All if I look at from a deployment perspective. The number of countries. We currently are deploying and now versus where we were deploying in about a year ago. They are up in double digits. So.

So, we're talking really tremendous growth and tremendous opportunity coming through.

In terms of ANZ, which is actually a P. J as well they are 500 customers, we have between <unk> and between our center.

All of them, obviously will lead to day falls.

When we move to day falls, we havent see position the entire talent suite as well as the workforce management of barrel, which does give us a nice lift in revenue and as I mentioned within the gross write checks I think we've been able to prove that out that as we migrate.

On a single application liking write checks cases workforce management early so we sell payroll on the cell talents of the workforce management accounts in the case of <unk> in the case of the ascend is.

It is now setting workforce management core HR and talent components.

Now on to that now we see a nice lift in revenue.

We also are seeing tremendous benefit from having the AAP J assets on a on.

How attractive we are on a global basis T cell with companies that have operations around the world. So we're very optimistic about global and we also do believe it is the differentiation of us relative to both the ERP and the other.

On providers.

Well.

Great. Thank you everybody.

Our next question comes from Matthew Pfau.

Blair William Blair go ahead, Matt.

Yeah. Thanks, I just wanted to ask on the partner ecosystem. So you now have relationships with some very large partners. How do you go about building on and expanding these relationships specifically to get them to start influencing more deals and then the second 1 on the partner ecosystem is that you did mentioned on the shareholder of <unk>.

Or that you saw continued growth in partner Prime deals.

Are these of meaningful component of the pipeline yet.

So Matthew John for your first question I think there are 3 stages about discuss the beforehand. The proceeds you have to train the science so the have resources available.

The second is you have to allow them to prime the actual implementation. So that they can take the customers live and good references and wants to do that I think you do get the lifting pipeline.

So the majority of pipeline lift I think we're still probably a quarter or 2 away as we need to complete the implementations on the ESI subsequently at the implementations.

We are seeing some benefit already in terms of deals where we are seeing a positive impact of the ESI influence coming through.

But in other pointed I think I'd like to make as well and so we are operating in the pipe talent markets.

And the fact that we now have 19 science that have capability to implement.

<unk> is helping us because it does allow us to continue to grow and scale of the company.

Without having to hire.

People directly.

And I think that you know.

In retrospect gross of Antarctic moves.

To be able to build out a bunch of very capable people across a range of very accomplish organizations.

Okay.

Okay.

Thanks, that's all I have.

Thank you.

Alright. The next question comes from <unk> of Jefferies.

Hi, David good to see it. Thanks. Thanks for taking my question. So as you can see I'm no longer on my own Hum.

I would love to ask a couple of questions. Maybe first just the 0.9% Rev share that you mentioned for for wallet.

That when you start to rebate back or were you, saying zero point of 9% or sorry of 90 basis points about the take rate.

That youre getting on day of course wallet transactions today.

Curious what you are saying so we still are about to launch the actual partnership but generally the way. It works is that the.

On employee gets the cash back of about 45% the network gets about 4%, we get about 40% 50% of that revenue share.

And so that's where that 90 basis points comes from.

Okay, Okay, great and then.

Maybe just.

1 more housekeeping question the ideal acquisition I don't know of that contributed anything to revenue in the quarter I know closing of the April I'm curious if that contributed to <unk> and if so which revenue segment it falls into.

Sure I'll give that for lunch and array yeah of course, it's a small contribution for for the second quarter I think remember it was primarily on the Cui higher while we got a lot of talented individuals are an expert team that machine learning development capabilities as well as artificial intelligence. So that's the primary reason why we made some acquisition, but there was a slight.

Couple of hundred thousands of dollars in the kitchen number of too precise.

Great and then maybe zooming out a little bit David it sounded like the the bookings into view, where we're nicely up over the prior 2 years. The second quarters I'm curious when you think about the the new customers that you've been adding how many of those were in the pipeline prior to Covid and I guess.

As I think about the the current pipeline how many are just new to the 3 and even from a pipeline perspective, where they're just completely new leads and it has new pipeline generation on the game.

So I don't actually have the number of of how many were in the prior 2.

For the pre Covid.

Largely I would think it actually depends on the actual segment so.

If you're talking about the large enterprise then it's likely that they were on before because it takes a while to go through those.

If I'm talking about enterprise major market to a major market 1 so because large enterprise enterprise and <unk> on a sort of a M M..1 and on the chairs.

<unk>.

The major market deals typically move much quicker.

Most of what we are seeing on with the argue is relatively new as you know we've done a tremendous number of virtual events.

Really have led to the build out of the pipeline assets in since the last number of quarters of the pipeline is strong.

As I mentioned in the very opening scene on increasing volume of deals as well.

So if I look at major market share and I look at the enterprise space.

Those particular markets seem to be moving very very quickly relative to last year, and we've seen really really healthy growth in other segments.

Great very helpful. On then I apologize for all of the housekeeping questions, but maybe just.

1 last 1 I know that.

Historically the company has invoice on go live and I think that you know the goal is to get more customers' day to start invoicing of activation I was just wondering maybe no Amy how about the trend is going and if how should we think about that flowing through the day for us recurring line overtime.

We've seen a significant the attach rate on on what we call up on the provisioning for new sales is actually in line with what we had expected and modeled I had all of the.

Which is great because it was the new a new business model for Us and I think we're pleased with what we're seeing in terms of execution and customer appetite to all of 2 to go on find those contracts was talking about provisioning.

Expect that number to be significantly higher next year, so it's still ramping up.

And the new program.

And the benefit of it is it's actually what we've observed the customers with.

Thanks, Rick.

The recurring revenue before go live of actually getting more passionate about getting like on time as you would expect will actually palkar professional services delivery team as well. So that's the 2 answered the question. It's really been a program. That's in line with what we expect then the attach rate is strong and we expect that revenue to be more material next.

Karen will start disclosing more of that.

Alright, Thank you as always great to see all in Mexico strong numbers again.

Thanks, Mark next question comes from Alex Zukin at Wolf.

Hey, guys. Thanks for taking the question.

So the <unk>.

David first maybe for you. If you think about the bookings mix you just talked about bookings growth being doing pretty solid in Q2 I want to ask the question around if you think if you take the demand environment that youre seeing in the market right now and you look at the proportion of bookings first half versus second half and compare that to.

Kind of traditional pre COVID-19 periods is there any more or less.

The concentration of bookings like I said of more backend loaded year this year than usual kind of coming out from the pandemic seeing some of these normalization to take Todd I want to start there.

Generally the linearity of our business is that you are more sway tools, HG and particularly in Q4.

So I think you'll see something similar again in this particular year.

In terms of the day recovery, it's happening quicker in certain segments, particularly on the enterprise segment any of the major market segment.

That's where we're seeing the the highest volume of actual deals coming through.

I looked at the pipeline is strong across the board.

Got it.

And then for for for Nuomi, If I think about the the numbers themselves. If I look at day force recurring ex float constant currency ex the sender ex employee.

The tailwind, what's the right way to think about the.

That growth both not on just the second half guide that you're putting up but the durability given the bookings strength the durability of like what's the right way for us to think about that net new normal now that the base was roughly started to normalize.

I think if you start to I mean, there's different ways, you can slice and dice. The number I would argue the offender contribution is actually true we've acquired those customers on there was a plan to start.

Cross selling to those customers on upselling of migrating them to be for us. So I think that's the real I wouldn't necessarily back of those numbers out of the the normalized growth going forward I think.

We continue to see employment levels coming up we expect to end the year pretty close to what we were pre COVID-19 on Powerplay also has been significantly improving over the past few months and we expect that to continue as well.

So I think we'll communicate guidance for next year unexpected growth rates for the day force retiring in due course, but I wouldn't necessarily back out of Thunder and the like that's really part of our overall strategy and we start to see customers of the.

Existing of some debate actually buying some other modules and we expect that to continue going forward.

Understood and then David maybe 1 for you I mean, we've seen.

Both some commentary around competition, you'll pay comes moving upmarket increasingly on their call yesterday.

On a new IPO.

And the.

There's the U K G is still on the market, what's the right way to think about the competitive dynamics of the market right now other different similar and where you're either seeing incremental opportunity for share gains or the sales cycles are taking longer.

We didn't really see a lot of pain from inside the market and I think we rarely if ever the see the guys have painful.

On anything we've seen any particular change obviously as we have gone upmarket, we do see the ERP is more than we have beforehand theyre probably up the most.

In terms of competitive win rates sales still very healthy the hasnt changed and I think when you look at the actual product of quite differentiated in so many different ways.

But the value prop that we can also of the market.

Of course, the C win rates.

Perfect. Thank you guys best of luck.

Thank you next question comes from Arvind <unk> from Piper Sandler. Please go ahead.

Okay.

Hi.

Thanks, Scott Thanks for.

I think of my question I had a broader number of the question.

Were they expected the stimulus.

Sort of looking to expire in September.

Same thing on our hiring is kind of a ramp up quite aggressively but I see a lot more.

Kind of opening for jobs as opposed to crowd of people willing to.

For the back to work.

Do you expect the revenue to go really kind of accelerated as the exiting this year and into next year, assuming assuming that some of the basically expires.

Look we've given guidance for the remainder of the year on you can see the the pattern is so Q3 goes up and then Q4 gross up from Q3 as well.

We havent completed all of SRP, yet for 2022, but I would argue they are still tailwind when it comes to employment.

When we look for across our customer base and we can almost the monitor the number of open job postings that they have on the time to close those persons we definitely are seeing that go up.

1 other data point that I'll, probably refer you to if you look at the average float balance of our customers.

The average float balance is up 27% year.

Year over year.

Which is usually indicative of the size of the payrolls across our customers.

Other good kind of data point.

The economy is coming back for a strong.

Perfect and then.

Just kind of float balance last year are you able to share kind of ballpark.

Okay.

How much of it is done on the up 27%, Brazil was the last 1 on last year with some of the other forward sure. So if I'm if I actually look at the flow balances. If I go to Q2 of 2019, it was $3.4 billion.

In Q2, it obviously came down to 2 and $2.98.

In this year is 3.8 so it is still quite significantly ahead of the volumes that we saw in Q2 of 19 and you confirm the go back a year before if you look at Q2 of <unk>. It was 335335 so day.

It's definitely the seeking to the can increase in the flow of talents in Q2, and we also saw if you remember an increase in the float balance in Q1.

So it's a very good sign of the economy is coming back from.

Thank you very much.

Yeah.

The next question comes from Stephanie price of CIBC Stefan you go ahead.

Hi, good evening.

Selling virtually for about 18 months sounds like Youre moving back for a little bit in person just curious about how you're thinking about sales and marketing.

Looking at any changes in the sales structure, just given the remote work over the last sort of a lot of flow back.

So the Stephanie I.

<unk> actually traveling quite a bit.

We did a client event in New York for a few weeks ago kind of give me an idea of normally when you do these client and as they go from like 6 o'clock to 839. This.

Of this went from 6 o'clock to 12.30 a M.

So I would say the it's just a huge pent up.

Demand for people to get out of them to interact again.

I did too Tom holds I did 1 in Tampa and on day, 1 in Minneapolis.

And the energy inside the town of course was just.

Just wonderful to see just people smiling and happy to be together.

The next week on in Chicago on another kind of departmental town Hall, and then I'm going off to visit to clients as well and kind of of the Midwest West area, and obviously very eager for that and then a week or so after that I'm in on the West coast.

The adventure San Fran on L. A and L. A we have a nice client.

The event.

I also participated in a recent use of group and so the use of group is the group that's run outside of Ceridian.

They run the from base camp.

I was asked to kind of just join in the Q&A section and at the end of that I asked the question I asked at the user group, we'd like to get together in person. If we were to help sponsor interest part of the World Tour and we had 141 customers respond that they would like to attend in person.

So the.

The the world is definitely moving to.

Getting out in front of people.

Developing relationships building on interactions, but I would say that we are still going to be operating in a hybrid world, where we can get kind of the best of virtual types of events virtual types of sell in so a lot of digital types of programs and such mixed together with the right experiences for in person events and such.

Yeah.

That's helpful color and then maybe a bit of.

The international strategy in EMEA on how we should think about the build out there and how that should translate into electric global wins.

So it's going really tremendously as I did mention 2 metrics. Some of you track internally is just the bookings year over year and also just the number of active projects for the number of countries that we're active in and they both are up really consider of the year over year.

In EMEA of we've got a very good sales team.

In terms of nature of countries as you know we have the U K and we of Ireland and we are also about to launch in Germany. We have resources on the ground now in Germany, both from a product and technology side of the services side and the sales side. So we're making quite a lot of traction out of that.

We're actually very encouraged not only by the sales were by the go live traction on the quarter. We had 2 nice go lives of very large global accounts headquartered out of EMEA as well.

Great. Thank you very much.

Great.

The next question comes from Ryan Lynch hour of Barclays. Raimo go ahead Pete.

Thanks for squeezing me in and congrats from me as well.

2 quick questions for us.

On the if I look at the client wins do you have this quarter and as discussed.

It looks really impressive it looks like you're moving upmarket and can you talk a little bit of biology.

Mike.

And the pandemic almost helps you a little bit because it gives you more time to build out on kind of gaps get kind of more visibility higher up and it's kind of I'm, sorry for saying it but I see that in the accounts of just sitting here with Cooper et cetera can you talk a little bit of what the C. In terms of pipeline building, there and and how.

The vendors of seating you against the competitors and then I had 1 follow up on the policies.

Right.

It is not by chance.

Put in place a strategy to go up market starting in 2018.

We made changes to the way that we actually so as you know we vertical lives.

We brought in value advisory of people, who are able to kind of communicate the ROI on get ahead of the on.

RFID RFP process, we have invest in equity each of us very heavily in the Si channel to do in terms of those particular types of deals and we bought him great people into the organization, particularly in sales leadership.

That know how to communicate with ESI, the know how to communicate well and as well with the large enterprises.

1 of the areas that's driving the wins, we're seeing upmarket as our global capabilities.

If you compare us with the B poor HR workforce management payroll on a global basis, we have a lot more to offer and the solution is much better architected than others in market and so that does help us when I look at the enterprise segment and the upper end of a major market. We're also seeing tremendous success in the talent side.

So when we brought in Joe and reporting the number of other people also very very strong in talent and in data on in AI. That's now beginning to show through the actual product and show the true the product roadmap.

Further has allowed us to move upmarket and to also.

The selling to the base.

And do you see the second question of do you see an increased priority now post pandemic. The people realize okay. The front office was probably kind of.

Already a lot more cloud native more modernized for the back office, we're still sitting in kind of old processes. All payroll do you think that now postponed damage of you will see an extra push of people starting to modernize the little bit more.

Well you know the there.

There are a couple of things.

A partially modernize the system doesn't work.

If I have 5 different talent components in each of us on a different cloud platform.

On the chances are of icon have the correct experiences or get access to data, which our nature on the business. So the fact that we now have very strong talent and you see that reflected through some of the acquisitions lifestyle deal that we've done.

Sure the allow us to do things in a very I don't like using the word modern anymore, because I think modern is overplayed.

But it's already making use of data on and user experience to do it correctly.

And so that is driving a lot of it.

On the compliance side, that's still a it drives a lot of business day.

Theres not so much as whether it is back office of front office. It's really can you do the calculations correctly can you pay people correctly are you off side from a regulatory perspective.

And there we remain very very strong and especially when you start to work with global Workforces to get even more complicated than the weekend simplify that for customers.

Okay for the congratulations thank you.

On the next question comes from Scott Berg with Needham Scott go ahead.

Hi, everyone. Congrats on the good quarter and thanks for taking my questions.

Of 2 here I guess first of all.

David on the call up with the question for follow up on the question Raimo, just asked about Europe market activities and the success.

Our industry work over the last quarter is pretty consistently talked about how the down market activity is really robust in line with pre pandemic levels, but kind of that mid market customers. What's the I don't know of couple of thousands of employees of the larger to the enterprise is a little bit more sluggish than that down market opportunity.

Help us understand maybe what youre seeing there as your increased deal flow maybe as a result of you're just getting involved with more deals with some of the partners.

Other areas like you just mentioned on <unk> question or do you think the actual volume of deals is truly are higher today than maybe it was a year ago.

Sure.

Rock necessarily of scrubbers, we actually haven't seen the.

I think we've actually senior of books and now we don't really play in the small business in the U S. So I can speak about the small business income during we have seen robust growth is of that.

In fact, if I look at the power of pay numbers are up quite significantly versus what we had expected.

When I look at.

The global which includes the obviously the U S and candor of swell as Europe in AP, Jay we've seen tremendous sales growth and major market too and in the enterprise segment.

And so that's both on a dollar basis and on a volume of deal basis.

Aren't you know, it's a little bit different I think what we're seeing I think versus where I think what youll research of Shannon.

Got it that's helpful. And then kind of a housekeeping question for the Ob. Your guidance has the center revenues of $4.5 million as you mentioned in Q3 Q for the in the day of force line item, maybe you can help us understand why you're guiding of those revenues to be a little bit lower than what you actually realize the Q2 I know, it's only half of million dollars, obviously, which is a bit.

Material number, but just trying to understand the dynamic why that and then I guess the bureau of revenue as you also guided a little bit less voice on the quarter. Yeah. It's it's it's really pretty consistent I mean, we said for 5 per quarter on we had in Q2 of a little bit of uptick due to purchase accounting adjustments.

Talked about before so that's really I think the the message is consistent with what we said before but on the on the cloud recurring and on zero as well. So what happened in Q2, we had a bit of a purchase accounting adjustments, but the rest of it is consistent with what we said before.

Scott 1 thing I would add is that the center also had a good sales quarter mhm. So they came in really really nicely with the ascend the products that we are still selling in market.

It's kind of helpful. Thanks for taking my questions.

Yeah.

Alright, well that all of our final question for the evening, but before the close up the call I'll hand, it over to David for some final remarks, great well.

Thanks, everyone really really appreciate it.

It's with mixed emotion that I'm sharing with you that after nearly 10 years of Jeremy is leaving Ceridian.

He has taken the CFO role at a very fast growing company, that's Ikea balance.

From my perspective of bit mix, but what I would say, it's a great opportunity for a really really great Guy and I really want to thank Jeremy.

As you know have really enjoyed working with Jeremy over the last number of years.

Jeremy his last day is August 6 and so over the past month, we've transitioned these IR responsibilities to Eric summer.

Some of that I know most of you are very familiar with.

Eric and I have worked together for at least 10 years of very very closely.

The our EVP of corporate development.

Eric do you want to say a few words to maybe introduce yourself.

Yeah sure Thanks, David I'll be shorten the suite, but.

Looking forward to working with all the folks that I already know that are out there and definitely looking forward to making new acquaintances and relationships and are.

Working on the new challenge. So thanks, David I appreciate that Eric and the Jeremy just the huge thanks, and obviously wishing you the tremendous success, which I'm sure you'll be very very successful on.

Any organization is.

<unk> really lucky to get you.

So just hang in the back to Jeremy any final words before we move on to the end of the school information.

No. Thank you very much on the great work for everyone.

Thanks for everyone.