00:00Given all the global uncertainty that we're seeing right now, whether it's the war in the Middle East or the
00:05AI disruption, how much demand are you seeing from that from that client base at this point?
00:10Yeah, it's actually been extremely robust.
00:12We grew over 60 percent last year and actually reaccelerated in Q4.
00:17So we're seeing even more customer adoption.
00:20We're finding that it's actually a tailwind for our business because the way to think about our business is actually
00:27managing for kind of supply and demand across labor pools.
00:31And our job is to connect the best talent with the best companies.
00:35And especially now, that's extremely relevant.
00:37So uncertainty in itself, global uncertainty is a tailwind as companies and your clients have to adjust or the changes
00:45in terms of the labor market?
00:46I would say the changes in terms of the labor market.
00:49I don't think uncertainty necessarily hurts us, but the changes in the labor market are really profoundly helping our business.
00:58We just released a global work report yesterday.
01:03We have an economist on staff that was looking at labor pools around the world.
01:08And, of course, like AI software engineers is a big area.
01:12That's an opportunity for us.
01:14If you think about the vast majority of SMB mid-market and some enterprise clients, it's very hard for them
01:20to compete for AI talent with the whales in the room.
01:24Yet there's great AI talent all over the world.
01:27And we're able to connect those best software developers to the best companies in ways that are flexible.
01:33And then there's all the other areas around AI developers.
01:37So AI trainers, for example, is a huge area of growth in our business.
01:42And then there are areas that I think of as more resilient, like tech sales or business development, those areas
01:49where there's less disruption from AI.
01:52And it becomes even more important to have local people who know the local culture in the local geography that
01:58are speaking as well.
01:59So in this report, it talks about some of our fastest growing job profiles across, you know, as you mentioned,
02:0640,000 customers, you know, 1.5 million employees.
02:11So we have a pretty good sample size across those 120 different countries.
02:14And these are areas that are growing for us.
02:16So that's what I meant by tailwind.
02:18Okay.
02:18There's a lot of concern right now about the disruption of legacy software names, enterprise names, SaaS as a result
02:25of AI.
02:27How defensible is deal given some of the AI innovations?
02:31How deep is that moat?
02:32Yeah, we believe it's really deep.
02:35We started in an area called the employer of record business, which is essentially if you're looking for global talent
02:43to fill one of these roles that I was talking about, you don't necessarily have boots on the ground in
02:47a location where you found talent.
02:49Let's use Estonia as an example.
02:50We have legal entities, over 300 legal entities across 120 countries, and our role is to get that employee paid
03:00compliantly within the jurisdiction without your having to go through all of the hassle of setting up legal entities and
03:08all of those kind of things.
03:09So if you think about that business, it's extremely defensible.
03:12Is it that complexity that stops your clients just vibe coding your solutions?
03:18I mean, what does stop your clients just using a lovable or a cursor to vibe code these platforms?
03:23Yeah, I mean, up till now, and we'll see.
03:25But I feel like, you know, in order to have statutory compliance of entities in these local jurisdictions, it's still
03:32people on the ground getting wet signatures from local authorities, the red stamp in certain areas.
03:38Like, AI agents are going to have trouble doing that for the foreseeable future.
03:42Even robots, I think, will have trouble doing that in the foreseeable future.
03:45So that aspect of the business, I think, is incredibly defensible.
03:49And then we have this other aspect of the business around, you know, as people move from that to payroll
03:56generally, which you mentioned, there's a lot of infrastructure in the payroll rails themselves.
04:01And then we actually will allow people to get paid in whatever currency, whatever jurisdiction they want.
04:06So if they're working in this example of Estonia, but they want to get paid in Stablecoin, we'll allow that.
04:12If they want to be paid in a bank, we'll allow that.
04:15So all of that is, in my view, defensible.
04:17To the question around vibe coding, we actually see that as a plus of our model.
04:21So we're very modular in our approach.
04:24We don't try to sell you the whole package all in one.
04:27If you have an existing HRIS that you really enjoy, but you want to use us for payroll, great.
04:34We can plug and play that.
04:35If you like your HRIS and payroll, but you want to use us for IT services, great.
04:40So on the vibe coding point, if you actually don't like your HRIS, you don't want to use us, but
04:47you want to vibe code your own HRIS and put it into our platform, great.
04:51That does sound like it could constrain margins going forward.
04:56Actually, I'm trying to get a sense for why you might think that.
05:01From my lens, you know, margins, we're a high gross margin business.
05:07We don't actually see that.
05:10So it's actually, from a customer adoption perspective, it's actually margin accretive.
05:17Because once I acquire that customer, as I cross-sell all these other products, I don't have to go through
05:23that initial, you know, go-to-market motion.
05:25So I think maybe where you're going is if I acquire a customer and then they end up vibe coding
05:30some stuff, I don't get that cross-sell.
05:32But actually what we're seeing is a 5X increase in customers that are taking out three or more of our
05:37products, 12X increase in customers that are taking 4X or more of our products.
05:42So we actually find that our flexibility in terms of our land and expand motion allows us to kind of
05:49scale that initial setup cost across multiple products.
05:52You raised $300 million in October of last year.
05:56You're valued, as I said, north of $17 billion.
05:58Is an IPO in the cards for 2026?
06:02What are the IPO ambitions at this point?
06:04Yeah, we're really lucky in that not only have we raised recently, but we've been able to raise over time
06:11from a lot of really credible investors.
06:13So we have a good amount of money on the balance sheet.
06:18And, you know, not only are we growing top line north of 60%, but we're highly profitable.
06:23So have a good amount of free cash flow going back into the business as well.
06:28You know, as I think about it, there's no, like, forcing function in terms of IPO.
06:34And I'm one of those CFOs that I want to do it right.
06:38I think everybody does, but I'm even more oriented towards that.
06:43So the kinds of exercises that we're going through now is like, okay, how do we do four quarters plus
06:50of mock earnings with our board when there's not these high stakes and make sure that we have the beat
06:56and raise model in place, et cetera?
06:58So I'm thinking about it as an option that's definitely in the future, but not something that I have a
07:06forcing function around now because of cash flow needs or shareholder needs, et cetera.
07:10So we're much more oriented, especially given the strength of the business, and making sure that all those other components
07:17of getting it right in public markets, especially now, given the volatility, we have it right so that when we
07:22do go out, it'll be a generational IPO to reflect the generational company.
07:28A generational IPO.
07:28There we go.
07:29Joe Kaufman, CFO and president of Deal.
07:32Thank you very much indeed.
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