Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $544 million, up 10% year-over-year, while full-year revenue reached $2.05 billion, exceeding initial expectations with a 10% growth in recurring and other revenue to $1.94 billion [10][11] - Adjusted EBITDA margin for Q4 was 43.4%, with full-year adjusted EBITDA growing 14% year-over-year to $882 million, representing a margin expansion of 180 basis points to 43% [11][12] - GAAP net income for Q4 was $114 million, or $2.07 per diluted share, while full-year GAAP net income was $453 million, or $8.08 per diluted share [11][12] - Operating cash flow increased 27% year-over-year to $679 million, with a margin of 33%, up 470 basis points [13] - Free cash flow for 2025 was $404 million, up 20% year-over-year, with a free cash flow margin expanding to approximately 20% [14] Business Line Data and Key Metrics Changes - The company achieved a record revenue retention rate of 91% in 2025, up from 90% in 2024, attributed to investments in automation and service [17] - The average daily balance on funds held for clients was approximately $2.8 billion in Q4 2025, up 11% year-over-year [16] - Client count grew to approximately 39,200, representing a 4% increase compared to 2024, with significant growth in clients over 1,000 employees [16] Market Data and Key Metrics Changes - The company maintains approximately 5% of the total addressable market, indicating substantial growth opportunities ahead [7][18] - The company is focused on expanding its market share and enhancing its technological lead in automation solutions [10][18] Company Strategy and Development Direction - The company is committed to full solution automation and enhancing client ROI through innovative products like IWant, Beti, and GONE [6][8] - The strategy includes a focus on new logo acquisition and expanding sales capacity, particularly in larger client segments [31][76] - The company plans to continue investing in technology and automation to drive long-term sustainable growth [10][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory despite a conservative revenue guidance for 2026, expecting total revenue growth of 6% to 7% [17][18] - The management noted that client demand remains strong, with no observed reluctance from prospects to adopt their products [34] - The company anticipates stabilization in the employment environment, which is crucial for its business model [40] Other Important Information - The company repurchased over 1.7 million shares for $370 million in 2025, with a remaining buyback authorization of approximately $1.1 billion [15] - The board approved a quarterly dividend of $0.375 per share, payable in mid-March [15] Q&A Session Summary Question: Can you reconcile the positive product developments with the guidance that suggests a slowdown? - Management acknowledged the positive client retention and product automation but indicated that sales opportunities remain a focus area for improvement [20][22] Question: Will changes in sales leadership lead to significant go-to-market changes? - Management indicated that the focus is on effectively communicating the value of full solution automation to clients, with ongoing training for sales personnel [24][25] Question: What are the expectations for recurring revenue growth compared to last year? - Management guided for 6%-7% total revenue growth, with a focus on sales and client service to drive retention and satisfaction [27][29] Question: Are there any changes in client behavior or decision-making processes? - Management reported no changes in client willingness to purchase, emphasizing the importance of effective training and communication of product value [34] Question: How is AI impacting internal productivity and efficiencies? - Management highlighted that AI is enhancing processing speed and overall productivity, allowing for quicker development and integration of new solutions [49][50] Question: What is the outlook for new sales office openings? - Management confirmed plans to expand sales teams and open new offices, aiming to capture more market opportunities [60][61] Question: How is the competitive landscape affecting win rates and pricing? - Management remains optimistic about win rates, citing product differentiation and improved sales processes as key factors [86]