Paychex, Inc.

Good morning and welcome to Paycheck's first quarter fiscal 2026 earnings call. Participating on the call today are John Gibson and Bob Schrader. Following the speaker's prepared remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star two on your telephone keypad. As a reminder, this conference is being recorded and your participation implies consent to our recording of this call. I would now like to turn the call over to Mr. Bob Schrader, Paycheck's Chief Financial Officer. Please go ahead, sir.

Thank you for joining us to discuss Paycheck's first quarter fiscal 2026 results. This morning we released our financial results for the quarter ended August 31st, 2025. You can access our earnings release and presentation on our investor relations website. We plan to file our Form 10-Q with the SEC within the next couple of days. This conference call is being webcast live and will be available for replay on our investor relations portal. Today's call includes forward-looking statements that refer to future events and involve some risk. We encourage you to review our filing with the SEC for additional information on factors that could cause actual results to differ from our current expectations. We will also reference non-GAAP financial measures. A description of these items along with the reconciliation of non-GAAP measures can be found in our earnings release. I would now like to turn the call over to John Gibson, Paychex President and CEO. Thanks, Bob.

I will start by sharing our first quarter business highlights and then Bob will come back and discuss our financial results and outlook. And then, of course, we'll open it up for your questions. We are off to a strong start in fiscal year 26, delivering robust 17% revenue growth and solid adjusted diluted earnings per share growth of 5% in the first quarter. This performance reflects continued progress integrating PACOR and sustained demand for our HCM solutions amid a resilient small business environment. We remain pleased with the progress of the PACOR integration. We are on track to achieve targeted PACOR revenue synergies and exceed our initial cost synergy expectations. Our fiscal year 26 cost synergy target remains approximately $90 million. We are pursuing additional synergies beyond this target while retaining our flexibility to reinvest those gains for additional growth and innovation investments. Bringing the two companies together provides us a broader set of technology solutions and service models to both win and retain business. We have already enabled several notable client retention wins in the quarter across our purpose-built platforms. Additionally, we are encouraged by the speed at which we have completed the back-end technology integrations to enable the full breadth of revenue and cost energy opportunities for fiscal year 26. We remain optimistic about the revenue synergies, particularly cross-selling paychecks retirement, ASO, and PO solutions to PACOR's approximately 50,000 clients. More than half of PAYCOR's clients fall right in our sweet spot for ASO and PO, while retirement solutions has a broad relevance across the entire client base. We recently developed a propensity model to target which PAYCOR clients are more likely to purchase Paycheck's broad range of solutions, and we are building a strong pipeline. Among this quarter's cross-sale successes was an ASO sale to a Paycor client with several thousand employees, among the largest in Paycheck's history. This initial progress is promising, and early wins reinforce our confidence in the path forward. Beyond Paycor, we continue to see a long runway to further monetize our entire client base, where we believe penetration rates still remain low. Building on the momentum from Paycor, another cornerstone of our growth strategy is our long-standing relationships with channel partners. Brokers, CPAs, and banks are important referral sources for new business for us and have been for decades. The Partner Plus program for brokers continues to be received well, with broker enrollment nearly doubling since our last earnings call in June. We believe this momentum provides a strong foundation to retain and expand this vital referral channel. The program centers on helping brokers maximize client impact, grow their book of business, and deliver exceptional service and advisory support. We remain confident our partner program is the best in the industry, and we recently launched new marketing campaigns to further expand awareness and growth. Building on our long-standing partnership with the CPA community, we launched our new CPA Partner Pro portal in the quarter. We recently introduced another powerful Paychex Flex solution supporting small and mid-sized businesses and their CPAs. BillPay, powered by Bill, is our new financial management solution designed to simplify payments for SMBs. BillPay integrates payroll, HR, and accounts payable into a seamless experience, providing small business owners real-time financial clarity to make smarter and faster decisions. Additionally, BillPay will enhance CPA's ability to support their clients by integrating critical payment and HR functions to deliver even more valuable insights. We plan to expand BillPay to include accounts receivable and roll that out in our additional platforms in the future. Continuing our track record of innovations, Paychex leads the digital and AI-driven transformation of the human capital management. We deliver pragmatic AI solutions that drive measurable value for our clients and our business. I'm excited to share several recent advancements that demonstrate how we are harnessing AI internally and externally to enhance client experiences, boost operational efficiency, and we believe position Paychex for sustained growth. We recently expanded AI Insights, our generative AI assistant for workforce questions to serve our PO clients in addition to our HCM clients. This AI-powered tool provides instant natural language insights on pay, equity, turnover, hiring trends, and labor costs. Through an intuitive chat interface, users can query complex HR metrics, drill down into detailed analytics, and follow-up questions to uncover deep insights and predictive trends. In June, we launched our generative AI-powered HR guidance tool, developed using HR insights drawn from our nearly 40 million client interactions each year. This internal AI-enabled tool empowers our HR experts to deliver efficient, effective responses to client queries and provide enhanced client support. In addition, we have deployed AI tools across our organization, empowering our teams to focus on higher value work while enhancing quality, efficiency, and innovation. For example, AI is augmenting our software engineering group by automating tasks, improving code quality, and allowing us to accelerate our development. We are also piloting agentic AI solutions this quarter to transform some of our higher volume inbound client tasks across multiple channels. These AI agents autonomously manage routine client interaction, enhancing operational efficiency, and elevating the client experience, all while freeing up our service providers to focus on high value advisory and support to our customers. Our PO business continues to also perform well with another strong quarter of strong demand and retention performance, leading to mid-single-digit worksite employee growth. We remain bullish on PO due to our scale, capabilities, and the growth opportunities we see. The PO model empowers small businesses to offer benefits comparable to Fortune 500 companies addressing one of the top challenges of attracting and retaining talent. Turning to the macro environment, small businesses remain resilient. Our small business employment watch shows stable employment and moderating wage inflation and has over the past year with no signs of recession. Since our last call, we've seen greater clarity on key issues such as tariffs, taxes and inflation. With the tax bill in place and Fed rate cuts done, we believe this will support renewed business confidence. This clarity should encourage business owners, particularly those previously adopting a wait and see approach, to make more informed strategic decisions, potentially boosting investment and hiring. Lastly, I'm proud of the hard work demonstrated by our employees. Despite an ever evolving external environment and the integration of our largest acquisition in the company's history, the team has remained focused on our clients and our purpose. Their dedication and efforts have been recognized once again, this time by Newsweek, which named Paychex one of America's greatest companies and most admired workplaces. Our people and our culture remain a key differentiator underscoring the vital role our employees play in driving our sustained success. I will now turn it over to Bob to provide an update on our financial results and outlook. Bob?