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For the quarter, recurring revenues grew by 25.4% to $254.5 million. PeopleDoc accounted for 250 basis points of that recurring revenue growth. Total revenues grew 21.9% to $287.8 million for the quarter. PeopleDoc accounted for 240 basis points of that total revenues' growth. Recurring revenues on an organic basis was slightly better than we expected, including the impact of favorable improvements against modeling the assumptions around employment and some deals that went live earlier than projected.

Our recurring revenues' gross margin was 73.7%, which was slightly below our expectations and included the impact of certain one-time expenses that were incurred in the quarter. Revenue retention from our cloud customers was as expected, approximately 96%. Total revenues of $287.8 million were also in line with our expectations. The total gross margin rate was 63.4%. Our total expenses, which are made of our cost of revenues and operating expenses were $230.1 million for the quarter and were slightly less that we expected. Operating income was $57.7 million and the operating margin was 20.1%, which was ahead of our expectations for the quarter, mostly as a result of the lower total costs.

Our operating margin computed on the basis of expensing the capitalized R&D costs, with the related product amortization added back or as expensed was 17% and was also ahead of our expectations due to our lower costs. The inclusion of PeopleDoc for the two months out of the three months of the quarter post acquisition reduced both are -- as reported and as expensed non-GAAP operating margins by approximately 100 basis points. Our non-GAAP income tax rate for the quarter was 28%. Net income was $42.4 million and the related diluted net earnings per share were $1.33.

Turning to the balance sheet. Our cash and marketable securities' balance was $141 million and reflect a total of $55.7 million used for shares acquired to settle employees' tax withholding liabilities associated with their restricted stock that vested. The average daily float balance for our payment services business was approximately $1.3 billion for the nine-month period. Operating cash flows for the nine-month period grew 24% to $172.2 million as compared with $139.3 million for the same period of last year.

For comparability purposes in the free cash flows discussion, and excluding the impact of the $74.4 million paid in cash at closing for the PeopleDoc acquisition. Free cash flows for the 2018 year-to-date period were $113 million as compared with $77.3 million in 2017. Our free cash flow margin was 13.5% for the nine-month period through Q3 2018, as compared with 11.2% for the last -- for last year same period. As a reminder, we bill on a quarterly basis as opposed to annually.

As mentioned last quarter, if we bill it under more typical annual basis, we believe our free cash flow margin would be between 10 percentage points and 15 percentage points higher. Our capital expenditures for the nine-month period were $59.2 million, including capitalized R&D costs of approximately $37.1 million. This compares with 2017 year-to-date CapEx of $62 million, which also included $37.1 million of capitalized R&D costs.

Next, I'd like to discuss our financial guidance. We expect our financial goals for 2018 to be as follows. Grow recurring revenues by approximately 24% over 2017, inclusive of PeopleDoc, which is expected to contribute approximately 100 basis points of that growth. Grow total revenues by approximately 21% over 2017, inclusive of PeopleDoc, which is expected to contribute approximately 100 basis points of that growth and achieve an operating margin of approximately 21%, inclusive of PeopleDoc, which is expected to have an approximate 100 basis point reduction to our operating margin.

This full year guidance reflects an increase in our recurring revenues' expected growth, which has been revised since last quarter. For Q4 of this year, we expect recurring revenues to range between $262 million and $264 million, total revenues to be approximately $300 million and the operating margin to be approximately 21%. We have been as transparent as possible in isolating the impact of the PeopleDoc acquisition on our financial results for this year. However, because PeopleDoc will be integrated into our numbers, particularly from an operational and financial perspective. After this year, we are unable to segregate the impact it will have on future financial results.

For 2019, our preliminary guidance is to grow recurring revenues in excess of 21% and total revenues by approximately 20%. We have roughly 94% visibility into our 2019 recurring revenues' target, which assumes no new sales prospectively. We expect our operating margins to be approximately 20%. We are also expecting our as expensed operating margins to be approximately 17%. Our 2019 guidance includes the impact of the PeopleDoc acquisition and therefore, includes the combination of the full year operating results of PeopleDoc as well as expected integration costs, as it is folded into our Ultimate global operations.

We are expecting that PeopleDoc acquisition and related integration costs will produce approximately a 200 basis point headwind in 2019 based on our estimations. We plan to continue investing in the infrastructure of our business to support our international growth and we believe our investment will create the right foundation to achieve our longer-term goals which Scott will discuss.

Our non-GAAP tax rate for 2018 should be approximately 28% and diluted weighted average shares outstanding should be approximately 32 million. We expect capitalized R&D cost to be around $50 million, plus or minus 5% in 2019. Other capital expenditures, including those related to increased leased space to accommodate our continued growth, including international expansion in 2019 are expected to be approximately $60 million to $65 million.

We expect depreciation and amortization to be approximately $67 million, including more than $12 million related to capitalized R&D cost. We will provide additional guidance on quarterly trends on our February 2019 call, along with our final 2019 guidance. However, we want to remind you that our Q1 operating margin rate is typically lower than that of our Q4 rate.

Turning to our upcoming conference schedule. During the next quarter, Mitch will be in the Scottsdale, Arizona on November 28th for the Credit Suisse TMT Conference and in Park City on December 4th, for the Wells Fargo Tech Summit and December 6th for the ROTH Capital Corporate Access Event. If you are available at those conferences to meet, please let Mitch know.

Now, I'll turn the call over to Scott.

Scott Scherr -- Founder, President & Chief Executive Officer

Thank you, Felicia and thank you, everyone for participating in our call this evening. Our year-to-date results guarantee that we'll achieve our 2018 objectives and Q3's performance laid the groundwork for a successful 2019. Recurring revenues were above the expectations of more than 25% versus 2017's Q3 to approximately $235 million on a consolidated basis, including PeopleDoc revenues.

Total revenues were consistent with a high side of our guidance of $288 million, up over Q3 2017 by approximately 22%. Our non-GAAP operating margin was on target, just ahead over 20% and our customer retention rate was once again approximately 96% on a year-over-year basis. We are pleased to have PeopleDoc now as an integral part of our ULTI family. Their talent, experience and infrastructure in global HR Services Delivery are a perfect fit for the value proposition we offer our customers and their culture align seamlessly with ours.

We are calling this division, international sales.

Last week, I met our sales people in Las Vegas and they're excited about their achievements and wrapping up the year in record fashion. They've generated serious momentum and they're inspired by the results they see our customers enjoying with UltiPro. The Chief Human Resources Officer or our Customer Telecare, Suzanne Rudnitzki, for example, recently said that in the year after launching UltiPro Onboarding, Telecare's 90 day turnover rate dropped by 50% and the combination of UltiPro Recruiting and Onboarding together saved them more than $750,000, while at the same time helped them find and retain the best local talent in healthcare. She gave UltiPro credit for enabling Telecare to communicate their branding and identity to prospective medical hires effectively and giving them a newfound significant edge in a highly competitive healthcare industry, where there are now severe shortages of licensed staff.

Looking at our Enterprise team's attach rates for new customers in the third quarter, recruiting 85%, time management 78%, performance management 63%, plus our Enterprise team had 100% attach rate for Onboarding. Some of our new Enterprise customers were a publicly traded television broadcasting company with 8,500 employees that at a Recruiting, Onboarding, Time and Scheduling to core UltiPro. The gaming and casino enterprise with 7,800 employees that at a Recruiting, Onboarding, Time Management Performance, Comp and Succession Management, plus 2 of our newer solutions, Learning and Benefits Prime. The Healthcare company with 6,000 employees had added Onboarding, Time Management, Scheduling and Benefits Prime and an aerospace company with 5,000 employees that had a Recruiting, Onboarding, Time Management Performance, Comp, Succession, plus all 3 of our newer solutions, Learning, Perception and Benefits Prime.

Our mid-market strategic team's attach rates were Onboarding 97%, Time Management 83%, Recruiting 78% and Performance 78%. Some new mid-market customers in the quarter were a leader in Polymer Manufactured products with 2,500 employees, that had a Recruiting, Onboarding and Time, a background screening company with more than 2,000 employees at a Recruiting, Onboarding, Time, Scheduling, Performance, Comp and Succession Management as well as our new Learning solution. An aerosol manufacturer with more than 1,700 employees that had a Recruiting, Onboarding, Time, Performance and the Comp Management and wine and spirits importer also with more than 1,700 employees that had a Recruiting, Onboarding, Time, Performance, Comp as well as Learning and Benefits Prime. Couple of our new strategic customers in the quarter were an online automobile wholesaler with 500 plus employees added at all of our key add-on solutions, Recruiting, Onboarding, Time, Performance, Comps and Succession and a healthcare organization with 500 employees that also added all of our key add-on solutions plus UltiPro Perception.

Our international sales team had a strong quarter. The Northern Europe team had its best quarter in the history of PeopleDoc and closed the Transport and Logistics Services organization with 17,500 employees. Central Europe also did very well, closing a manufacturer with more than 5,000 employees and one of the largest banks in Germany with 45,000 employees serving more than 18 million customers, while financing approximately 30% of Germany's foreign trade. PeopleDoc will make it easy for all the worldwide employees at these companies to get HR help independent of time, location or device.

Demand for our Ultipro Solutions remain strong. Q3 2018 was the second strongest quarter in our history for looking responders, that is, people from organizations with 300 or more employees who say they are looking to purchase a new HCM solution in 12 months or less. On a comparative basis, it was a 24% increase over Q3 2017. Q3 this year was the best third quarter ever for unique visitors to our company website. We had a 43% increase in the number of attendees to our HR workshops held across the country in Q3 2018 versus the same quarter 2017. And for seminars conducted by our sales people, we had a 225% increase in the number of leads generated for the quarter, year-over-year.

During the third quarter, we finalized a strategic alliance with Deloitte Canada, one of Canada's leading professional services firms and this collaboration will enable enterprise companies throughout North America to optimize UltiPro through Deloitte's business transformation and technology capabilities. Deloitte Consulting Services will help Ultimate customers maximize organizational performance by creating standardized methodologies around our employee experience. Our partnership strategy was formed with the objective to share with HR advisory firms throughout North America how Ultimate can best benefit prospective clients through our Ultipro Solutions.

Over the last 5 years, our partnership ecosystem has seen significant growth, increasing from 4 certified service partners to 43 certified service partners. We have built our partner relationships on trust and transparency, just as we have with our customers and employees, ensuring that the ecosystem is built to last. Our strong bonds with HR Consultants in our ecosystem have enabled us to have our valuable clients activated by trusted partners and at the same time, allowed us to increase our recurring revenues as a percentage of total revenue to approximately 90%.

Today, Fortune Magazine recognized Ultimate as the Number 1 on its 2018 100 Best Workplaces for Women List. The rankings were determined in coordination with Great Place to Work and based on its analysis of hundreds of companies practices and data as well as on surveys completed by 540,000 employees across the nation. Our Chief People Officer, says it best.

Ultimate recognizes the pivotal role women play every day as people and professionals, and how their pioneering work and achievements have impacted our lives throughout history. When we started Ultimate 28 years ago, there were 4 of us, including 2 women. Together, we set out to foster and protect a culture that cared for and respected all people, while providing opportunities for continued growth and innovation. Today, we're more than 5,000 strong committed to building the best HR technology and serving our colleagues, customers and communities across the globe.

Ultimate received other third-party recognition that we are proud of in the third quarter. Gartner named Ultimate a leader in its 2018 Magic Quadrant for HCM Suites for both mid-market and larger enterprises, based on its criteria for ability to execute and completeness of vision. Nucleus Research recognized Ultimate as a leader in its HCM Value Matrix for the 6th consecutive year. Ultimate earned the top rating for product functionality and was one of the two highest vendors for usability.

Our AI platform, Xander was selected by Human Resource Executive Magazine as one of the Top HR Products of 2018. The winners were selected based on the products level of innovation, its value to the HR function, how intuitive it is for user and whether the product delivers on its promises. PEOPLE Magazine ranked Ultimate Number 3 on its 2018 companies That Care list, Ultimate was also named the Canada's 2018 list of Best Workplaces in Technology and AnitaB.org's 2018 Top Companies for Women Technologists.

At the close of this third quarter, we were 48 -- 142 strong. We are looking forward to becoming a $1 billion franchise this year. We now support more than 40 million people records in Ultimate's cloud environment and we continue to lead the HR cloud industry in numbers of customers using a unified HCM with human resources payroll talent compensation and time and labor management. We have completed the acquisition of PeopleDoc to extend our global reach and offer a comprehensive HR Services Solution that greatly enhances the employee experience with person-centric features like an online employee help center, HR case management and employee file management.

The confidence that our sales organization has in our future along with the added enthusiasm and assurance from our new PeopleDoc organization gives us confidence that we will now reach $2 billion in total revenues by 2021. That will be our 6th championship. We'll reach that goal by doing what we have done for 28 years. We'll continue to make the product better, make our services better and we will stick together always putting our people first. This is our 83rd conference call. We want to thank all of you for taking this journey with us and look forward to your continuing support.

Let's go to the Q&A.

Questions and Answers:

Operator

Well, thank you. (Operator Instructions) Our first question today comes from Scott Berg with Needham.

Scott Berg -- Needham -- Analyst

Thanks, Scott and Felicia. Thanks for taking my first question today. I guess my first question, Scott is, after you've had the PeopleDoc acquisition for 3 months now is, do you have any updated thoughts on how that product will impact your sales pipelines and your opportunities going forward?

Scott Scherr -- Founder, President & Chief Executive Officer

Well, I think it's going to be positive. We've decided to stand up as stand-alone PeopleDoc team in North America. I mean, they have had people there but we're going to invest in that and have themselves stand-alone along with perception of the products. They're working great with our strategic account managers here. So obviously in Europe, we have everything there is going to be just a total plus to what we have here, but it's been exceptionally good so far and that -- it's what gave me the confidence to move that fully into 2021.

Scott Berg -- Needham -- Analyst

Got it, helpful. And then a question, competitive environment in the customer segment, say that's a 1,000 customers to 5,000 customers. I ask question, because Paycom apparently today announced that they're moving up into that market, more advanced for the first time. Are you guys seeing anything different in that segment, whether it's around win rates or maybe how customers are buying solutions there and I guess, what gives you the confidence to continue your strong win rates that you've had there over several years?

Scott Scherr -- Founder, President & Chief Executive Officer

I mean, I haven't seen anything different. I mean, my confidence is in the sales team. It's in our past, it's in our performance, it's in our less than 10% or 90% plus retention in the sales organization in our products, in our services, in our culture. I'm more confident than I've ever been quite frankly.

Scott Berg -- Needham -- Analyst

Excellent. Thanks for taking my questions.

Operator

And next will be Justin Furby with William & Blair Company.

Justin Furby -- William & Blair Company -- Analyst

Hey guys. Thanks and congrats on the quarter. Scott, I guess, I just want to follow up on the revenue target, the $2 billion number. You obviously have a great track record with these and this feels like maybe one of your bolder targets I think it implies 21% or higher revenue growth in 2020 and 2021, which is actually a little bit faster than your guidance for next year and the numbers are starting to get pretty big at this point. I'm just wondering how you sort of describe the confidence around that time frame and that target versus some of these other championships you set out in the past. And can you do it organically, do you need to acquire things along the way and any sort of framework for sort of the sales rep growth in getting that $2 billion will be helpful. Thanks.

Scott Scherr -- Founder, President & Chief Executive Officer

Well I think, organically now with PeopleDoc part of us, I believe we could get there. I believe that international sales will get there, all that accounts for over 5% of our business. So I think, that we were going to be close to it before in 2021. It's just -- so I was -- I thought I was maybe been a little conservative, because our numbers didn't say we were going to get there, but once we looked at the numbers of PeopleDoc and got that confidence in the international sales organization and the team that we're standing up in North America and based on what we're going to quote it next year. I think, yeah I think it's very attainable. Obviously like the 5 championships we've had, we have to execute on more. But we're 5 for 5 and I bet even money or more of that we're going to be 6 for 6.

Justin Furby -- William & Blair Company -- Analyst

Yeah, got it, Scott. And then maybe just quickly for you, Felicia on services revenue in the -- in this quarter and for Q4 guidance, it was a little bit lower than where we were. Is there anything to call out around that for the back half of this year? Thanks.

Felicia Alvaro -- Chief Financial Officer

Sure. Actually our services full year are pretty much in line with what we originally expected. It does include a little bit of PeopleDoc, but one other things that also includes is, we're starting to see the impact of moving some of our business off our papers. So we do have that and we have some additional costs in the back half and particularly in Q4 that you wouldn't have seen entirely before the things that were added toward the end of last year with regards to some of our consultant cost.

Justin Furby -- William & Blair Company -- Analyst

Got it. Thanks very much.

Felicia Alvaro -- Chief Financial Officer

Okay.

Scott Scherr -- Founder, President & Chief Executive Officer

Thanks, Justin.

Operator

Next will be Rich Baldry with ROTH Capital.

Richard Baldry -- ROTH Capital -- Analyst

Can you talk about how the stand-alone team for PeopleDoc in North America will work with your existing reps. Will it be sort of lead generation type of thing, handoffs like that. Sort of curious how that will work? Thanks.

Scott Scherr -- Founder, President & Chief Executive Officer

Yeah, they'll have their own book of business to go after. They'll work in concert with the team, but they'll be in concert where they can get into an opportunity and they want payroll or the other HR products that we have. They will be lead generator to our people, but they'll be selling stand-alone in North America with companies over 2,500 employees. And yeah, they've been doing that and they've been successful in doing that. And we're going to grow there.

Richard Baldry -- ROTH Capital -- Analyst

Then looking longer-term, you still stayed at the 96% retention rate. If you think about adding PeopleDoc, which is a bit of a different services oriented business, the strength you're having in the under 1,500 employee space, do you think that's still a good goal, either a long intermediate term or do you think just for the nature of the business will pull that down slowly over time? Thanks.

Scott Scherr -- Founder, President & Chief Executive Officer

Yeah. Well just so one of the things we loved about PeopleDoc was their retention rate was 100%. So yeah I mean, I think 97% will be a better goal, but I think we can maintain 96%.

Richard Baldry -- ROTH Capital -- Analyst

Great, thanks.

Operator

Moving on to Mark Murphy with JPMorgan.

Mark Murphy -- JPMorgan -- Analyst

Yeah, thank you, and I'll add my congrats. So Felicia does the $3 billion target move forward a year and you're going to stand with the $2 billion target or do you think we're better off keeping that out at 2025 since that is still pretty far off on the horizon for you?

Scott Scherr -- Founder, President & Chief Executive Officer

I'll leave it off.

Felicia Alvaro -- Chief Financial Officer

Yeah I think --

Scott Scherr -- Founder, President & Chief Executive Officer

When we get close like we've always done, we'll adjust it. Right now everyone here already is focused on attaining our 6th championship in hitting that number $2 billion in 2021. I think if we come out of that with a momentum like hope we do and I believe we would. Then yeah, obviously it would move up. But we'll tell you then.

Mark Murphy -- JPMorgan -- Analyst

Okay. All right, yeah, appreciate it. I was wondering as well, if you could, Scott maybe comment on or Felicia on your services capacity to get deployments live and just relative to the pace of the new bookings which seems to be pretty healthy. I noticed you had said in the script that some of the deals went live earlier than expected, I think at the same time that couple of people in the ecosystem that think that it's -- that there's not a lot of slack there or it's a little bit stretched. So just what is your overall assessment of your go-live capabilities currently?

Felicia Alvaro -- Chief Financial Officer

First of all, when talking about the early go-lives, they really just pull forward one quarter. We do look at our current and our expected future time to live which would include what the service team could deliver, and they're pretty much in line with what we have now. So in terms of our ability to service the sales as they occur, I believe we're in the same shape as we always have and we'll be able to do that.

Scott Scherr -- Founder, President & Chief Executive Officer

Yeah, I've heard some of those things and I checked, and there is just nothing out of the norm here, obviously is always a seasonal workload, we had a monster Q2, but getting more and more partners involved, it's up to about kind of like 20% now partners involved and growing. Yeah, I heard that too and I just tell you that, I talked to Julie, our Chief Services Officer and just nothing out of the norm. And we feel we're in good shape.

Felicia Alvaro -- Chief Financial Officer

Right. We use our consultants and we leverage with the partners and which just Scott said, I mean, we are roughly around 20% and expected to maintain that vision.

Mark Murphy -- JPMorgan -- Analyst

Okay. Great to hear that. One last quick one. Scott, if I understood what you're saying, I think you said PeopleDoc closed the European bank with over 45,000 employees which is an interesting headline. Just any sense of the relative size of a transaction like that for PoepleDoc compared to if you close 45,000 employees as a payroll or HCM deal?

Scott Scherr -- Founder, President & Chief Executive Officer

Yeah, it's hard to give, but it would have been a really nice -- it would have been equivalent to about a 5,000 employee all in HR payroll deal with higher attach rates with everything else.

Mark Murphy -- JPMorgan -- Analyst

Wow.

Scott Scherr -- Founder, President & Chief Executive Officer

Equivalent -- did you get, equivalent to a 5,000 all in high attach rates payroll then everything else here. So a really good deal.

Mark Murphy -- JPMorgan -- Analyst

Yeah, OK. That's impressive, that's impressive. Thank you very much.

Scott Scherr -- Founder, President & Chief Executive Officer

Thank you.

Felicia Alvaro -- Chief Financial Officer

Thanks.

Operator

And next is Brad Zelnick with Credit Suisse.

Brad Zelnick -- Credit Suisse -- Analyst

Thanks very much. Scott, you mentioned the award that you have won for Xander in the quarter and now it's been in the market for a while. I was hoping you could talk a little bit about the used cases in adoption and differentiation you're seeing out there and how pervasive you think it can ultimately become?

Scott Scherr -- Founder, President & Chief Executive Officer

Well, it's in the perception product right now and I think our attach rates on that are about 25%. But I believe it's going to be pervasive throughout the whole product line. It's going to be in our new performance module, that's going to be a stand-alone and a integrated module going forward and anything we do with the product in the future is going to have Xander as part of it. So I think it's our future.

Brad Zelnick -- Credit Suisse -- Analyst

Awesome. And Felicia, if I could just ask how much of the strength in recurring revenue is driven by new logos versus better attach this quarter, and how should we think about the trend there? Thank you.

Scott Scherr -- Founder, President & Chief Executive Officer

It's always new logos. About 90% of our bookings are in new logos, about 10% comes from our client base. Our attach rates have been always high consistently. So we run on new units and that's how we grow.

Brad Zelnick -- Credit Suisse -- Analyst

Okay. Thank you.

Felicia Alvaro -- Chief Financial Officer

Thanks.

Operator

And next will be Samad Samana with Jefferies.

Samad Samana -- Jefferies -- Analyst

Hi, thanks for taking my question. Felicia, if I could, just on the margin guidance through the initial outlook for 2019. Could you give us an idea of how much of that -- how much of an impact PeopleDoc had and what the core businesses margin would have looked like if you hadn't acquired PeopleDoc next year in terms of margin expansion?

Felicia Alvaro -- Chief Financial Officer

I can tell you that we're at the point of estimation now, because as I mentioned at the beginning of my script, we are incorporating PeopleDoc into our operations both from our financials as well as an operational perspective. So it would be a pure guess at this point. As mentioned they are expected to have a 200 basis point headwind impact on this next year on our bottom line. I would say that their composition is similar to ours, and we're looking more in terms of their bottom line impact for next year as opposed to their impact on our gross margin.

Samad Samana -- Jefferies -- Analyst

Got you. Maybe just a follow up to that. What would your forecast is for Ultimate stand-alone business, if not for the acquisition for 2019, maybe 50 basis points, 100 basis points. I'm just trying to understand what the expansion --

Felicia Alvaro -- Chief Financial Officer

Okay, sure. We would have expected that, if you back out the 200 basis point, we would have grown our operating margin on -- in as expensed basis as well as and as reported basis. So yeah, we would have seen some expansion you know close to 50 basis points next year around, a little more.

Samad Samana -- Jefferies -- Analyst

Great. That's helpful.

Felicia Alvaro -- Chief Financial Officer

It's a estimate at this point, because like I mentioned, organic right now is hard to break out.

Operator

And moving on to Pat Walravens with JMP Securities.

Joe Goodwin -- JMP Securities -- Analyst

Hi, this is Joe Goodwin on for Pat. Just a quick question around how you guys are thinking about M&A moving forward?

Scott Scherr -- Founder, President & Chief Executive Officer

I mean, the same as we always have, I mean PeopleDoc was the 6th deal we've done a deal we did before that was Kanjoya which I believe was 3 years ago. So, I think if the opportunity presents itself and if someone either through technology or through product that can make us stronger and they have a good culture, then, we would look at it.

And I think we're in the envious position that because of our culture that when people do are growing companies and they do think or the time comes where they're thinking about maybe -- do they try and partner with someone else or they keep moving forward with more investment dollars that both Kanjoya and PeopleDoc, they really came to us because of our culture, and they felt that it was a place that is they were going to be with someone else and be part of someone else's family that we would take care of their families. So I imagine that could happen more in the future, but we're not an inquisitive company, and -- but we're also not going to turn something down that makes us stronger.

Joe Goodwin -- JMP Securities -- Analyst

Thank you.

Operator

And next is Brian Peterson with Raymond James.

Alexander Sklar -- Raymond James -- Analyst

Thanks. This is Alex Sklar on for Brian. Following up on the impressive wins in Europe and now that we're few months past the PeopleDoc acquisition. Can you just talk a little bit more about your international expansion ambitions and whether that's changed at all as part of -- as far as a result of the deal and then maybe with that just an update on the integration process as far -- progress as far as getting PeopleDoc offerings into your unified suite? Thanks.

Scott Scherr -- Founder, President & Chief Executive Officer

Well, as far as the international, I believe that our goal now is at $2 billion. They'll represent about 5% and we want to grow it, so that at $3 billion that they'll represent 10% of that. And what was the second question on the integration?

Alexander Sklar -- Raymond James -- Analyst

Yeah. As far as --

Scott Scherr -- Founder, President & Chief Executive Officer

We've already -- I got it, I remember. So we -- in our third quarter, all team sales meetings, we've already started training all our sales people on it and we've been training our executive relations managers on it whose sell back to our base. And the plan is to roll it out in our January all team sales meetings. So coming out of the January sales meeting, the whole sales force and the whole executive relationship management team will be selling it.

Alexander Sklar -- Raymond James -- Analyst

All right. Great, thank you.

Operator

And moving on to Steve Koenig with Wedbush Securities.

Steve Koenig -- Wedbush Securities -- Analyst

Hi, Scott and Felicia. Thanks for taking my question. I'll turn my couple of one here. So I realize PeopleDoc has some impact on your margin. You guys have been really good at trying to break it out for us and kind of estimate what it would be with and without. I'm just wondering, that if we kind of look at the broader arc of your margin, your operating margin in the last couple of years, it's -- it'll end up being pretty flat, pretty good guide for next year. And I realize part of PeopleDoc, but I guess the question here is, kind of what you're thinking about longer-term margin expansion? Do you have -- how much operating leverage do you have and when can we start seeing it?

Felicia Alvaro -- Chief Financial Officer

Okay. With our margin expansion, we do expect that we will be growing it. Hold on, just one second. We're going to be growing our recurring revenues. If we grow our recurring revenues at about 20% a year, as we would expect, operating margins will expand by roughly -- 100 basis points a year. However, if there is an opportunity in the future that will allow us to maintain that 20% recurring revenue growth for a longer period of time, we'll certainly consider it, but we do expect that we will grow our operating margin on the long-term.

Steve Koenig -- Wedbush Securities -- Analyst

Got it. Okay, great. Thanks, Felicia.

Felicia Alvaro -- Chief Financial Officer

Okay.

Operator

Next will be Kirk Materne with Evercore ISI.

Peter Levine -- Evercore ISI -- Analyst

Felicia, my question -- it's Peter Levine in for Kirk. So I'll just want to hear it out. The piggyback off of the prior question on Xander. That work during the quarter would say customer seem more enthusiastic about AI, especially Xander. So curious to know how the conversation with customers change, entering the year with Xander and how it's kind of changed exiting the year going into 2019 and kind of how does that help you competitively as you look long-term? Thanks.

Scott Scherr -- Founder, President & Chief Executive Officer

Well, I think it's a story of our product and our technology moving forward. And they could see it firsthand in our perception product. So it gives them a sense of what the present is and what the future looks like. So it's obviously talked about on every call with new prospects and our existing client base. So we believe we're in the best place for human capital management and from a product standpoint, from a -- and a service standpoint. So I think it, yeah it's everything to us.

Operator

And we'll take one more question from Mark Marcon with RW Baird.

Mark Marcon -- Robert W. Baird -- Analyst

Good evening and thanks for squeezing me in. With regards to the recurring gross margin, was that all PeopleDoc? Or was there anything else that was impacting that? And then I've got a couple of follow-ups.

Felicia Alvaro -- Chief Financial Officer

In terms of Q3 or within the --

Mark Marcon -- Robert W. Baird -- Analyst

Yeah, Q3 relative to a year ago.

Felicia Alvaro -- Chief Financial Officer

Okay. Well with Q3, it was actually pretty close to our expectations just a little bit less than what we expected. Keep in mind that a year ago, we had a less amortization of tech software than we do this year and we did have a couple of one-time expenses that came in during Q3 of this year, an example of which would be a team meeting for one of our groups that impact that particular gross margin.

Mark Marcon -- Robert W. Baird -- Analyst

Okay, so that -- and then obviously PeopleDoc and Xander would also have a little bit of impact, right?

Felicia Alvaro -- Chief Financial Officer

Yes, it does. It -- given the size of PeopleDoc to Ulimate is it's not quite a significant but it does have an impact.

Mark Marcon -- Robert W. Baird -- Analyst

Okay great. And then for Scott, are you seeing any difference at all in terms of with all of your new capabilities. When we think about the new logos that have come on and the ones that are in the pipeline. Are you seeing any difference in terms of who you're getting them from? You know one old competitor longtime ago a partner, their bureau business is becoming smaller, so I imagine it's less of a fertile hunting ground. So I'm just wondering how we should think about that?

Scott Scherr -- Founder, President & Chief Executive Officer

Pretty much the same, we get about 65% of our business from service bureaus and the other 35% from in-house and ERPs that really hasn't changed.

Mark Marcon -- Robert W. Baird -- Analyst

Okay. Great, thank you.

Scott Berg -- Needham -- Analyst

Thank you.

Felicia Alvaro -- Chief Financial Officer

Thank you.

Operator

And that does conclude the question-and-answer session. I'll now turn the conference back over to you for any additional or closing remarks.

Scott Scherr -- Founder, President & Chief Executive Officer

Thanks for your support, everyone and look forward to our February call, where we'll be celebrating our 5th championship. So all the best. Good night.

Felicia Alvaro -- Chief Financial Officer

Thank you. Bye-bye.

Operator

Thank you. That does conclude today's conference. We do thank you for your participation today.

Duration: 46 minutes

Call participants:

Felicia Alvaro -- Chief Financial Officer

Scott Scherr -- Founder, President & Chief Executive Officer

Scott Berg -- Needham -- Analyst

Justin Furby -- William & Blair Company -- Analyst

Richard Baldry -- ROTH Capital -- Analyst

Mark Murphy -- JPMorgan -- Analyst

Brad Zelnick -- Credit Suisse -- Analyst

Samad Samana -- Jefferies -- Analyst

Joe Goodwin -- JMP Securities -- Analyst

Alexander Sklar -- Raymond James -- Analyst

Steve Koenig -- Wedbush Securities -- Analyst

Peter Levine -- Evercore ISI -- Analyst

Mark Marcon -- Robert W. Baird -- Analyst

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