The Ultimate Software Group, Inc. (NASDAQ:ULTI) Grows EBITDA 26%

The Ultimate Software Group, Inc.

Portfolio Manager Thomas Vandeventer of Tocqueville Asset Management says in the five to six years his firm has owned The Ultimate Software Group, Inc. (NASDAQ:ULTI), the company has grown very well, with a five-year sales CAGR of approximately 22% and EBITDA growing at 26%.

Ultimate is a Florida-based software company. It was founded in 1996, and has strong leadership and a very strong and loyal culture in terms of its employees. Ultimate Software is a SaaS-based provider of software. Its major competitors include Automatic Data Processing (NASDAQ:ADP) and Paychex (NASDAQ:PAYX), and two younger companies named Paylocity (NASDAQ:PCTY) and Paycom (NYSE:PAYC).

Ultimate is in the business of what we call HCM, or human capital management, and provides software for payroll and other employee-related records management and data management. Ultimate, as the company says, manages the employee work life cycle from recruiting through retirement. The company’s main app is called UltiPro. UltiPro has HR functions, payroll functions and talent management functions.

Thomas Vandeventer

He adds:

Last year, under the Affordable Care Act, there was a requirement for all companies to file forms on each one of its employees, which provided confirmation within ACA requirements. So that module is actually provided by Ultimate. And this year, there’s a new rule that will require mandatory overtime compensation for salaried workers who are basically making at or under $47,000, irrespective of whether they are entitled to bonuses and other forms of compensation. So for a large company, being able to track these kinds of employee information is very important.