All right. Well, good afternoon, everybody. Dan Jester, BMO Software Research, with our next session today, where we have Paylocity. We have Toby Williams, who's the CEO. So, Toby, thank you so much for joining with us today. Appreciate it.
Yep. Happy to be here. Thanks for having us.
A pleasure. A pleasure. So, in terms of logistics for the folks who are listening in, if you have a question for Toby, shoot me an email, and I'll do my best to get an answer for you. And with that, Toby, why don't I turn it over to you, and you can just give us an introduction of Paylocity to the group of folks on the line.
Sure. Thanks, Dan. So, Paylocity is a software company that provides payroll, HCM, and finance applications for mid-market clients. So, our average client size is around 150 employees, but our target market is businesses that have between 10 and 5,000 employees. We have over 40,000 clients on our platform. And I think we have been delivering a pretty balanced mix of growth and profitability over time. We'll end up being. We're just in the last month of our fiscal year. So, we're in the middle of closing the year strong and haven't provided our Fiscal 26 guidance yet, but we'll end up this year somewhere in the mid-teens from a growth perspective and have certainly focused on driving user adoption free cash flow leverage over time. So, I think you've seen a mix of high growth from us balanced with strong profitability.
But that's the place where we've been focused in the market from a payroll and HCM standpoint, broad set of applications across both of those areas. And then we've, in the last about eight months ago, acquired a business called Airbase that has given us a full set of finance applications really focused on spend management. So, I think for us, a big part of the growth algorithm has not just been acquiring new clients or new logos to the business year in and year out, which we've done, but also continuing to broaden the application set to be able to drive our footprint both in terms of new client demand and back into the client base sales. So, that's really been the—that's the broad strokes of where we've been focused over time.
That's fantastic. And it gets me right to my first question. So, thank you for foreshadowing it perfectly. So, fiscal year-end is going to end at the end of June. If you go back a year ago, you had suggested to investors that you were going to grow recurring cash flow by 10%. And at the midpoint of your guidance, you're going to grow 14%, and you take Airbase away, maybe it's 13%. So, you've definitely outperformed your guidance. So, I guess I want to start with what went well for you this year. What played out better than you'd expected?
I guess I would start by just giving maybe a quick overview of the guidance philosophy because I think that is, A, consistent over time, and B, is impactful to where you start the guidance for the year. Yeah, I think our guidance philosophy over time has been very consistent. It has been grounded in a desire to beat and raise over the course of the year and to overperform where we start. I think for any given year, we start, I think, in a more prudent place as we come into the year in Q1. Part of that is because you just have limited visibility and our deal cycles are still relatively short time-wise. You start in a more prudent place with a view towards being able to overperform during the course of the fiscal year all things equal.
I think that's really what we saw in this fiscal year so far. So, the demand environment has been fairly stable. Employees on the platform have been fairly stable. We assumed that that would be flattish through the course of this year, and that's exactly what we've seen. I think the execution of the business has been really strong, both from a go-to-market and from an operations perspective through the course of the first three quarters of the year, and looking to close strong right now as we're already in June. I think that's really the perspective on 2025. I think the FY for 2026, while we haven't finalized the plan, we certainly haven't provided guidance yet. I think that's what we see in front of us is hopefully a continued stability in the demand environment, and certainly all the focus is on how we execute.
So, that's, I think, where we sit today. The things that have gone right have really been execution-oriented in Fiscal 2025. I think the demand environment has been stable. I don't think it's gotten better, but I also don't think it's gotten worse. And I think throughout that, it's been just really, really good, strong execution from the teams.
Okay. So, you don't give midterm growth targets. You have this $2 billion aspiration that you're driving the business towards. But when I listen to your answer for sort of what happened last year, it seems pretty replicatable. The macro is stable, retention is stable. You added sort of 8% growth in sellers, and you gave them a lot of new products to sell. So, I guess as I think about the business, is this past fiscal year, is this the playbook that we should be expecting Paylocity to deploy? And if not, what are some of the variables that we should be considering that may be different in the future versus today?
I think if you go back over the last decade, the playbook that we've run has been focused on. Think about the growth algorithm. The growth algorithm has really been focused on driving new unit growth in the business, which we continue to do. It is developing and delivering more products on the platform so that it has been measured in PEPY. But as we've moved into the Office of the CFO, I think we're talking about this more from an RPU growth perspective over time. So, you think about new unit growth being one, RPU growth being two.
And then I think providing a really good client experience and driving retention to world-class levels, which we have, has been. Those are sort of, I think, the key parts of the growth algorithm and continuing to grow sales rep headcount as part of driving new unit growth and selling back into the base to drive RPU growth over time. So, I think that's been the playbook that we've run very consistently and fairly successfully over the last decade or so. And I think as we've come into 2025, it was the focus on those same fundamentals. And I think it will be the same focus on those fundamentals as we go into 2026 and beyond. I think the reason I say it that way is there's a ton of consistency in the play that gets run.
And I think while this business is much bigger now than it was. I mean, I've been here for eight years now. We had $300 million in revenue when I got here, and we'll do close to a $1.6 billion this year. So, it's a much, much bigger business. And so the growth rate may vary over time, and certainly there's macro impacts in any given year that will affect that too. But I think the focus is on continuing to run that playbook, delivering a really compelling balance of revenue growth with profitability that I think compares really favorably to both our industry and software more broadly, and continuing to deliver consistently over time.
And whatever the growth rate is that ends up being in any given fiscal year, our focus is on that execution and beating the competition every single day and being the highest growth in our space, which we have been. So, that's really the formula that we're focused on delivering.
Okay. So, I want to come back to some more financial stuff maybe towards the end of the conversation, but maybe for now, I think it would be helpful for people to kind of break down the growth story a little bit more, and so maybe we just start with sort of the new logo opportunity and where you've been capturing new customers for, so one of the things that I've found interesting looking at Paylocity over the years is that some years you kind of hit your numbers because you can move down market. Some years you hit your numbers because you've got a lot of big wins sort of in the upper market. There's been a lot of flexibility in terms of being able to navigate the target market in which you've set out.
I guess my question is, as I think about the go-forward opportunity for Paylocity, as you get bigger, you mentioned at $1.6 billion of revenue, does that flexibility to be able to hit new logos, does that flexibility go away? Are you inherently to drive sort of growth at scale naturally being pulled more up market, or do you think you can continue to manage in that diverse set of new logo opportunity?
I mean, over time, so our average client size hasn't changed that dramatically over time. I mean, it's around 150 employees, and it's been between 100 and 150 for a long time. So, it hasn't moved. It hasn't made huge swings. I think the reference, though, to targeting different parts of the market. I think if you go back by a handful of years, we were seeing traction in the lower end of the market, and that was both in terms of the units and clients in the sub-50 employee segment of the market buying more product. And so we had put some incremental go-to-market resource there because we were seeing the traction. And I think that's worked really well for us. And then, as you referenced, over the last kind of three and a half years or so, we've seen traction in the upper end of the market.
That's largely been the sales team being successful there. Part of that is as the product has been built out, comparing and competing really favorably there from a larger client perspective. As that has happened, we have periodically increased the higher end of our target market. That was at 1,000 and then 1,500, and we've ultimately taken that up to 5,000. We certainly have clients that are larger than that, but it's more been an approach that's been thoughtful based on where we were seeing opportunity, where we were seeing success, and then building on those initial elements of traction or initial elements of success in a thoughtful and methodical way that has broadened us out both at the bottom end and at the top end. I think that's helped drive new logo, new unit growth.
And I think that's given us the ability to also take full advantage of the expanded platform to drive RPU growth over time too. So, that's really been the strategy. And I think as we look forward, that same opportunity exists. I think we have the opportunity to fully serve the market that we're in that may expand a little bit around the edges over time and certainly have the opportunity to continue to expand the product set that we're bringing to market to be able to drive RPU over time as well.
Okay. Okay. So if you go back and we'll do this sort of the time series again, if you go back a few years, a big chunk of your customer takeaways were from ADP and Paychex, and if you look at that mix today, it's still the predominant mix, but it's gotten a little bit smaller in terms of the overall share, and so I guess I wonder, as the mix changes and maybe you go head-to-head with more modern solution providers, does the sales pitch switch? Do you have to focus on different parts of the market? I guess so maybe just from who you're taking customers away from, as that changes, do you have to change your go-to-market motion significantly as a result?
So, well, if I start with the core of your question on the mix and what that looks like today. So, the biggest bucket of source of business for us today is the mix of ADP and Paychex, which has been the case for a long, long time, going back probably a decade. So, that is still true today. That percentage of the overall total has swung downward a little bit, but I think that's the natural sort of evolution of us broadening out from a go-to-market perspective. So, as you do that, you start to take more business away from local and regional providers.
And then the point you made is also impactful, which is there's other companies out there that are now bigger, and so you see them more frequently, and you have an opportunity to take clients from them as well, which I think is exactly how that has unfolded for us. I think we still have the biggest source of business is the mix of ADP and Paychex. And dimensionally, that's probably a third or so, maybe a little bit more. And then you have 15%-20% that is in-house, 15%-20% that's local and regionals. And then you have the rest is the other probably larger players and then the long tail of other providers that are out there. But that's really how that's trended over time.
I don't think that there's not a sort of a hard pivot in the go-to-market motion or the value prop that we're communicating. I think a big part of the value prop for us over time has been that we have a differentiated product set and better service. I think those are the two reasons why people tend to switch in our industry is either because of product or service. We've tried to differentiate the product set and the product strategy, provide a broader and deeper portfolio of payroll and HCM and now finance products than anybody else in the market. I think that's been a big part of our success story. I think the service piece is really important too. Our clients depend on us for great service. I think we've been able to differentiate on the service we provide as well.
So, that's really been the recipe for us, I think.
Okay. And as I think about the different ways you build pipeline, one of them is your direct sellers, but you also have great relationships with brokers.
Yep.
As I think about sort of the go-forward, what are the different variables you're considering? Maybe broker channel, maybe there's some evolution there, maybe put some more resource to drive inbounds from there. How are you thinking about those dynamics?
Yeah. I mean, I think. So the broker channel has been an important part of our go-to-market motion for a long time, going back more than a decade. And that continues to be really important for us today. So, we have gotten consistently over the course of time as the business has continued to grow and scale, more than 25% of our new business comes referred to us from the broker channel, which is primarily insurance brokers. The deals are still sold directly by our sales team, but they're partnering with brokers in their local community for leads. And that's been a really important and higher closing percentage source of business for us. So, we've put a lot of focus on that with our sales team, a lot of focus on that from a technology investment perspective. So, our value prop to brokers is it's really threefold.
One is we build the relationships with them in the field, in their communities. That's the first part. We have a broader and deeper coverage set there than anybody else in our industry. Second piece is actually delivering them value from a technology perspective and there's two parts to that. One is making sure that we have the easiest integration possible to our product, to our solutions so that there is free-flowing data into those benefit systems that the brokers care about and that they need to actually deliver their benefits with carriers to their clients. We also give brokers the ability to see their books of business in our platform and be able to look at the benefit utilization and engagement with the employees of their clients. It gives them a sense of the stability of their revenue base.
So, there's a significant, I think, technology differentiation that we offer brokers versus anybody else in the industry. And then the third part is we don't compete with them for their insurance business. And that's meaningful because we're a partner to them to help deliver a great experience to their clients. But by partnering with us, they're not putting at risk the commissions that they rely on. And I think I mentioned that because they're some of the largest competitors in the industry. ADP and Paychex both have PEO businesses. Paychex is one of the largest insurance brokers in the U.S. And I think that presents a certain level of channel conflict for broker referrals.
I think we want to be really well-positioned and have built a substantial partnership across the US with brokers that if there is any disruption to that, we want to be the ones that are positioned to help them with their clients and with their referrals. That's really, I think, been a key part of our focus over time with respect to that channel. I think otherwise, from a go-to-market perspective, we've continued to grow rep head count year over year. We grew sales rep heads by 8% coming into Fiscal 25. I think we've been able to be successful with bringing those reps on and drive a significant level of productivity and go-to-market through the course of 25. We haven't closed this fiscal year, but I think that's really generally where our mindset would be as we start to think about 26.
Okay. So, can we talk a little bit about the product portfolio? Because I think it's been very clear that over the last 18 months, you've had a lot of new product out there. So, I can go down the list, like Recognition & Rewards, Employee Voice, Scheduling Plus, Learning Plus, Headcount Planning. It kind of goes on and on, which one, I think, indicates sort of the velocity of innovation on the Paylocity platform is very impressive. And so, I guess I'd want to know kind of what have you built internally that has allowed you to drive that pace of innovation? And then secondly, what's customer adoption been like for this latest set of tools you've brought to market?
Yeah. So, you're right. I think it's been a rapid delivery cycle over the last 18 months or so, which I'm really proud of. I think the team's done a great job of bringing those solutions to market. It's also early days. So, I think those solutions are all ramping. I'm really happy with the ramp we're seeing in those solutions, but still early days. I think the lens that we would typically apply to if we're going to invest in a solution, it would be, can we get that solution to drive 10%-20% penetration over a handful of years? And that's really been the benchmark that we've used over the course of time, continues to be. And I think all of those solutions are tracking well on that sort of glide path.
So, really happy with what the team's been able to deliver and the adoption that we've seen so far. Airbase is, so headcount planning is one that falls into, I would categorize as office of the CFO, starting to get into the domain of finance-oriented solutions. Airbase acquisition, obviously, is a big push into that from our standpoint. That will take a little bit longer from an integration perspective because I think the goal is to be able to fully integrate that solution set onto the Paylocity platform, deliver seamless integration, seamless user experience, and that'll take us well into fiscal 26. But that's another big opportunity I see in front of us.
Okay. Yeah. So, I mean, maybe this is the appropriate time to talk about Airbase then. So, you still have some integrations left you just acknowledged. So, as you go into this fiscal year, though, are your reps going to have specific Airbase-based quota? How are you thinking about selling Airbase while you're still on the back end integrating all the pieces?
Yeah. So, we have continued to sell Airbase on a standalone basis. I think that's continued well since the closing. We're only, I think, eight or so months into the close, but I think that's continued to go well. I think as you develop the tighter and tighter integration onto our platform, that gives you the ability to deliver the value prop that clients really want. And when you can do that, you have the ability to lean in even more from a go-to-market standpoint. So, I think as we get into first half of 26, we'll be in a better position from an actual platform integration perspective. And I think that's when we will get to the place that will allow us to lean in harder from a go-to-market standpoint.
But I think the goal is as quickly as we can, but I would say broadly in the first half of 26, to put that in the hands of all of our sellers so that we can potentially attach to new business and also sell back into the customer base. And the way that we would do that is very similar to what we have done with other solutions that we've brought to market. You would have our field reps having the ability to sell that at the point of sale from a new client standpoint. But you also have a group that has inside sellers that have a higher degree of subject matter expertise, and they can support the new logo and back-to-base teams with a higher degree of subject matter knowledge on the spend management platform and applications.
That's very similar to what we've done with other applications that we've brought into the business. I think the strategy there is to pursue the same execution that we have with other things. I think we're on the glide path to be able to do that.
Okay. And as you think about the year ahead, can you, will you consider sort of flexing investments, maybe more inside sellers, maybe less hunters because you have so much more product to sell? And maybe it's an uncertain macro, and so you want to sort of drive that part of the motion, or should we expect continued balance between how you divide resource between the two target ways to go to market?
It's always balanced, and I think that will be the case as we go into 26 as well. I mean, I think ultimately, you have to be able to do both things. You have to be able to drive new logo acquisition, and you have to be able to sell effectively back into the customer base, and we've been, I think, fairly balanced in making investments in both of those parts of the business over time, and I think that'll be the same thing in 26. We'll figure out what the right balance is to be able to both grow rep headcount overall, but to be able to go after effectively new unit growth, new logo growth, and grow our capability to sell back into the customer base, so I think you have to do both.
Okay. And when you're selling into a customer that has 100, 150, 250 employees, is the buyer for an Airbase-type product similar to a sort of a core Paylocity buyer? I guess, how do you envision navigating the fact that you're selling into maybe a slightly different part of the back office function as you historically have been?
Yeah. I mean, when we're selling, so put the finance applications aside, typically when we're selling payroll and HCM solutions, a part of the finance team is involved in that buying cycle. It could be that the CFO is directly involved and is the buyer. It could be that the HR team works for the CFO organization. It could be that it's a CHRO buyer, but the VP of finance is at the table as well because it's an investment that they're making, and the finance team, the CFO team often is either involved or has visibility into it. So, certainly, I think our perspective would be highly relatable from a persona that we're dealing with perspective, meaning somebody in the finance team, and so, I mean, no doubt, it's a different application set.
But at the same time, a lot of the value prop that you're delivering in terms of automating manual tasks, providing greater visibility, delivering a full solution set on a single platform, a lot of the value prop is very similar that we would be describing. And we have a significant amount of experience dealing with that persona set. So, there's definitely some difference to it, but I think there's more probably commonality that we would see than we would see net new difference in the motion.
Okay. And you and others have very much talked about AI as an opportunity to impact your customers' workflows and bring new products that are powered by AI to the market. For your potential customers or current customers looking to expand, what's their perception of AI? Are they pulling you for new things? Are you pushing it to them? Just give us the lay of the land in terms of how you think buyers are approaching the AI-centric buy here in 2025.
Yeah. I think buyers of all sizes, but certainly in our market with an average customer size of 150 employees or so, I mean, everyone is looking for efficiency, and they're looking for ways that they can leverage technology to make their jobs easier, to create a better experience for their workforces. And that is no different for us. I think that's consistently what we see across the full application set that we offer across all the buyer personas. And I think that's what people are really focused on. And I think there's a mix of ways that we think we can deliver a better experience for clients leveraging AI technology. One is incremental functionality that leverages AI that makes jobs easier.
A very easy example of that is if you are a hiring manager and you are going to create a new job spec, being able to leverage the Gen AI capabilities in our platform to not start with a blank sheet of paper, but to start with something that you can react to, that makes your job easier, and I think that's functionality that is value-added to people from an efficiency standpoint, that's sort of one bucket, and I think that's very real, and we're in the early days of all of these things, but we're in the early days of this one, so there's also, I think, how do we make jobs more efficient or processes more efficient, so the extent to which we can look at workflows and say, "Hey, there's 10 steps in a workflow.
I think we can take three of those out because they're largely exception-based. I think that is a way that you can streamline process, streamline workflows, and therefore thereby generate efficiency for users. I think that's a very real opportunity that, again, I think we're all in the early days of, but there's a potential to differentiate the more we can do that. And the last part is, I think there's an element of being able to understand customer experience and understand where in the application they would have questions, what those questions are, and what's the seasonal element, if there is one, for those questions to come up and be able to foresee those questions coming up, address those, and deliver those answers in the application before someone has to pick up the phone or send you an email or chat you with whatever that question might be.
I think that will fundamentally create a better customer experience. I think that will also take load over time off of our service teams, and so, I think that's another bucket of opportunity, but those are all the things that I think we're focused on delivering, which will add real value to clients and create a better client experience over time.
Internal use of AI, how is it progressing relative to what you had thought, and any sort of areas of interesting wins or efficiencies that have emerged?
Yeah. Well, I think we're in the early days. So, I think there's more of this to come over time. But the example that I just gave was being able to create efficiencies for users in the application and address questions that you know that you're going to get in the application in an automated fashion. That definitely takes load off service providers. And I think that is one of the things that we're seeing in the early days. And I think that will be the case over the course of time as well. I think we'll see more of that in the future.
Okay. So, I want to ask a few kind of big picture questions, but I'd be certainly remiss if I didn't ask you. We touched a little bit about sort of Fiscal 26 and your philosophy. Are there any other variables investors should be considering with regards to either sort of the new business or float or margin that you're considering as you're putting the guidance together to deliver in August?
I don't think there's any standout in any of those areas. I think this is a, if you think about where we were coming into Fiscal 25, I think we were, our commentary was that we thought the demand environment was fairly stable. I think that's been the case through the course of the first three quarters of the fiscal year. I think that is, so I think we were coming into Q4, which is really the core of the planning time for next fiscal year. I think we're coming in with a similar viewpoint of it's a fairly stable demand environment, which is a great baseline to have coming into a new fiscal year. I think that's one piece that's really important. I think another piece is workforce level. So, employees in the platform. We guided Fiscal 25 to be flattish.
I think that's the experience that we've seen over the course of the year. It's slightly positive, but basically flattish through the course of the year. That is probably the starting point for how we would start to think about Fiscal 26. Relative consistency there. Then I think you start to get into other investment areas like the sales headcount investments that we would typically make going into a fiscal year. We grew sales headcount by 8% coming into Fiscal 25. Haven't finalized the plan yet, but I think we'd be in probably of a similar mindset going into at least similar zip code of mindset going into Fiscal 26 with a view that we'll invest in sales heads and we'll also try to drive productivity levels. I think there's a strong consistency with where we sit today with where we would have entered Fiscal 25.
Work left to do, still have to close the year, looking for a strong close and need to finalize the plan. But I think that's how I would describe our thought around those things, which are certainly relevant to the Fiscal 2026 planning as we sit here today in Q4.
Okay. So, I think dates kind of all blend together, but relatively recently, you reset some of the midterm margin profile of the business. So, you had $2 billion revenue target, and you've set some midterm margin targets on EBITDA and free cash flow. And we're already there, which is great, right? But we're already there. So, as investors sort of think about the medium-term algorithm here, are we compounding along at sort of this level of margin, or are there things, either AI, efficiency scale, in which there's the opportunity to drive more EBITDA or more free cash flow margin on the pathway to the $2 billion revenue target?
Yeah. I think so, a couple of different thoughts. I mean, one is I don't think those targets were meant to represent ceilings in any way, shape, or form. And while we are in most of the ranges, we're not yet at the top end of the ranges. And so, I think there's some notion of, "Hey, we've still got room." Very happy with our performance. So, I should start there. I mean, I think we've driven a ton of leverage from the adjusted EBITDA and from a free cash flow perspective while still delivering market-leading growth. So, I'm very happy with what we've been able to deliver from a financial perspective. We're not at the top end of the targets yet. I think that's the effort that we have in front of us, but there's no ceiling that those represent.
This is a business that should be able to continue to drive leverage over time. Tying this question to the last question you asked about 26, I mean, we've delivered, haven't closed the year yet, but we'll end up somewhere in the zip code of 200 basis points of adjusted EBITDA leverage for Fiscal 2025. I think the comment that we made on the last earnings call was that the business over time, we believe will continue to drive leverage on a multi-year basis. That's what we have done, and that's what we believe we can do looking forward. Not every year is going to be 200 basis points of adjusted EBITDA leverage.
As we look at 26, again, plan's not finalized and we haven't provided guidance, but as we look at 26, feel more like that's a year where there are investments that we would like to make across the business that probably moderate that same margin expansion. So, it's not that we think differently about the multi-year opportunity there or that we won't deliver margin expansion in 26. It just probably doesn't look the same as 25. And that's just because we see areas that we want to invest in in 26 that we think will help drive both growth and scale over time.
Okay. So, I think it's an interesting perspective because Paylocity has had such stability in terms of sort of the leadership, at least the Wall Street-facing leadership. It's like you and Steve and Ryan have been talking to us for many years. And so, I guess I'd love your perspective about the maturity of the business. You've taken a business, as you said, when you came, it was $200 million of revenue. Now it's going to be $1.6 billion plus. What are the things that you're working on now to sort of mature the business for the next leg of growth? Are you thinking about offshore development? Are you thinking about shared services centers? What do you need to do in order to get the business ready for $2 billion, $3 billion, $4 billion of revenue and beyond?
Yeah. I mean, to the first point, I think just on the consistency. I mean, I've been here for eight years now, and for that entire time, it's been Steve and I and Ryan that have been in the roles that have, I think, certainly leading the business, but also engaged with you and both our investors and coverage analysts. So, I think there's a tremendous amount of consistency there, not just in terms of the people, but in the way the business gets run. And I think that adds a ton of value over time. And I think part of what you get when that's the case is there's not. You get consistency in how the business is driven over time, and there's not this step function change that you then need to go drive that's totally different than what it was last year.
So, from a year-to-year perspective, one of the things that we've been really focused on is setting the business up for scale so that you're prepared well ahead of time for, think of the thresholds that we've crossed just, I mean, Steve's been here for almost 19, almost 20 years, so an even broader spectrum of time. But even in the time that I've been here, we've crossed the $500 million mark. Then we crossed the billion-dollar mark. Then we crossed the billion-and-a-half-dollar mark. And now we've got our eyes on two billion and beyond.
I think one of the things that we've done well has been to set ourselves up for the scalability that we need well ahead of time so you don't get to this cliff stage or step function stage that you need to do all these things in a fundamentally different way in a given fiscal year. I think we've been pretty thoughtful on a forward basis about how to do that. I think some of the things you asked about, though, go to some of the investments that I think we'll be focused on in 26. It'll be putting even more focus on what we're doing from an Airbase platform integration standpoint. It'll be investments in AI that will cut across internal and external usage across the business in every single area.
And continue to invest in our operations and service and implementation teams so that they can operate as effectively and more efficiently at scale. So, those are all the things that I think we're focused on, and I think we're doing that in a fairly consistent and linear fashion.
Okay. To focus on integrating Airbase, does that limit you in terms of what you're willing to do in terms of inorganic opportunities in 2026?
I don't think so. I mean, I think our focus is certainly on making sure that that goes well. So, there's no doubt that that is a primary focus in terms of continuing to integrate the platform. So, the business itself is well integrated at this point, but the product and platform integration work is continuing and will continue through 26. And we need to be able to make that successful. So, that's definitely a primary area of focus. But I don't think that cuts off any opportunity to do anything else from an inorganic standpoint, but it's a pretty high bar for us.
I mean, yes, we have done some acquisitions, but they tend to be situations where there's a product or technology in the market that's a great fit for our segment of the market and that would accelerate time to market for our product roadmaps where we also think we have an opportunity to deliver an integration experience that is second to none and that it's very seamless from a user perspective. So, I think it has always been a fairly high bar. It continues to be a high bar, and we have to make sure Airbase is successful, but I don't think that cuts off any opportunity that we might see to do something else in 26.
We certainly have the financial capability to do it, and we have the desire from a strategy standpoint to continue to grow the capabilities of our platform and to be able to continue to drive expanded our footprint and deliver incremental value to clients. So, I think it's a matter of do we find things that cross the high threshold.
Great. All right. Well, we are out of time. So, Toby, it was wonderful talking to you. Thank you so much for joining our event this year. And for all the folks in line, if you have any follow-ups, please let me know, and I'll get them over to the Paylocity team as soon as I can. So, thank you so much, Toby. It was great talking to you.
Thank you so much. All right. Thanks. Have a good day, everybody. Appreciate the time.
Thanks, everybody.