Paycor HCM, Inc.

Greetings, and welcome to the PACOR HCM Incorporated Fourth Quarter and Fiscal 2021 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Demue. Thank you, sir. You may begin.

Good afternoon, and welcome to PayCore HCM's earnings conference call for the fourth quarter of fiscal year 2021, which ended on June 30th. On the call for today are Raul Villar, PayCore HCM's chief executive officer, and Adam Ante, PayCore HCM's chief financial officer. Our full results can be found on our press release issued today, which is available on the investor relations section of our website. Today's call is being recorded, and a replay will be available following the conclusion of the call. Statements made in this call include forward-looking statements regarding our financial results, products, customer demand, operations, the impact of COVID-19 on our business, and other matters. These statements are subject to risks, uncertainties, and assumptions and are based on management's current expectations as of today and may not be updated in the future. Therefore, these statements should not be relied upon as representing our views of any subsequent date. We also refer to certain non-GAAP financial measures and key business metrics to provide additional information to investors. Definitions of non-GAAP measures and key business metrics and a reconciliation of non-GAAP to GAAP measures is provided in our press release available on our website. In terms of the agenda for today's call, Raul will provide a quick overview of our fourth quarter results, as well as review our market opportunity and growth strategy. Adam will provide an overview of our financial model, a detailed review of our fourth quarter results, provide our guidance for the first quarter and full year fiscal 2022. With that, let me turn the call over to Rahul.

Thank you, Brian. I would like to welcome all of you to Paycor ATM's fiscal fourth quarter earnings call, which is our first since completing our successful IPO in July. We are thrilled to be a public company with new stakeholders as we execute on our strategy to be the leading SaaS-based cloud provider of human capital management solutions for small and medium businesses. I would like to congratulate everyone at PACOR for all of their hard work getting us to this milestone and positioning us for even greater success in the future. We'll start by providing a quick overview of our fourth quarter and fiscal 2021 results, which were very strong on both the top and bottom line reflecting the great momentum we have in our business. For the fourth quarter, we delivered total revenue of $88 million, up 20% year over year, total bookings of $31.2 million, up 79% year over year, and adjusted operating income of $200,000. For the full year, we reported Total revenue of $352.8 million, up 8% year over year. Total bookings of $115.1 million, up 43% year over year. And adjusted operating income of $48 million. And we ended the year with over 28,000 total customers and more than 2 million customer employees. Overall, our fourth quarter performance was the culmination of a very strong year for Paycor. We successfully navigated the challenges associated with the COVID-19 pandemic and are seeing great momentum across all aspects of the business. Since this is our first earnings call as a public company, I would like to start by providing an overview of Paycor's mission, our large addressable market opportunity, and our proven strategy to accelerate growth. Our mission is to provide HCM solutions that empower leaders to develop winning teams. We know from experience that high performing companies are successful because of their engaged employees. And we believe the single most important driving force of employee engagement is effective leadership. Our tools are built to enable C-suite executives, HR and finance professionals, and frontline leaders to streamline administrative tasks and shift their focus to building winning teams. As we look at the market, we believe we have a tremendous opportunity for three reasons. First, the HCM market is massive. with an estimated TAM of 29 billion. The market can support multiple next-generation winners, and the incumbent providers are underserving this market with outdated technology and an overly complex user experience. Conversely, Paycor has built a disruptive, high-performance cloud platform that is intuitively designed and purpose-built for all leaders. Our platform offers unrivaled depth in recruiting, scheduling, talent management, talent development, and workforce analytics. Finally, we are executing on a proven growth strategy of expanding our market coverage, increasing sales productivity, and innovating new products. Our 43% bookings growth in FY21 demonstrated that our strategy is in flight and yielding great outcomes. To provide additional insight into our core product offering, our comprehensive cloud platform includes onboarding, HR, payroll, tax filing, ACA, analytics, reporting, and mobility for both the leader and the employee. We also extend our value proposition with three additional bundles that empower leaders in critical focus areas while providing incremental per employee per month, or PEPM, revenue opportunities for PAYCOR. Our talent management bundle provides leaders with the tools to create a workplace culture of continuous development by doing three things. Finding and hiring the best people for their teams, coaching and developing their teams, and rewarding top performers. Our Workforce Management Suite gives frontline leaders the ability to match the right employees with the right skills in the right job and ensure they can accurately schedule and record their time and attendance. These are critical requirements that legacy solutions are ill-equipped to handle in today's dynamic business environment. Finally, our benefits administration bundle offers a robust set of tools that make it easy for a customer to unify the benefits administration platform of their choice with PAYCOR. Providing an open platform is a key pillar of our strategy and providing choice to our customers and broker partners is a differentiated component of our value proposition. We understand that in order to maximize our platform strengths, we also need a powerful go-to-market effort that empowers our sellers to win. We have developed a comprehensive sales methodology that is focused on attracting and developing high performing sellers, providing them with a specific and repeatable selling motion, and leveraging technology to increase their productivity. Our go-to-market strategy is straightforward and actionable. First, we are aggressively hiring to expand our seller footprint with a clear focus on Tier 1 cities, which are the 15 most populous markets in the U.S. Given our Midwestern heritage, we have historically had stronger sales coverage in smaller Tier 3 cities, such as Kansas City, Raleigh, and Louisville. Conversely, we've had an enormous opportunity to expand in Tier 1 cities such as New York, LA, and San Francisco, where we currently have only 20% of our potential seller coverage. We experienced fantastic success competing in Tier 1 markets and FY21, and these markets delivered our highest win rates. Over 50% of our FY21 bookings growth came from Tier 1 markets and we are confident in our ability to expand our presence in these large, dense markets. Secondly, our strategy of delivering technology and expertise for key industries is resonating in the market. The needs of a manufacturer are different than a restaurant, and we are delivering a solution designed for these industries. Over 40% of our bookings growth in FY21 was generated by our industry strategy. Finally, engaging with brokers is an essential part of our growth strategy. We have positioned Paycor as the HCM vendor of choice for the broker community by combining a prioritized client implementation with the benefit admin platform that the broker prefers. This empowers the broker to select the appropriate platform for their client while providing the insights, tools, and competitive differentiation they need to grow and retain their book of business. We've seen great success with brokers who referred more than 40% of our bookings in fiscal 2021. Looking at our fourth quarter performance, We saw fantastic results from our go-to-market strategy. Our booking success was broad-based with strong new customer signings and great upsell activity across our installed base. The success of our bundle strategy drove meaningful peplum expansion. We ended the year with more than 370 sellers, an increase of 6%. A primary focus for us in fiscal 2021 was enhancing seller productivity, and we were notably successful in this area. In FY22, we are forecasting to grow our sellers by 20% to 25%, with the majority of our new sellers deployed in Tier 1 markets. We increased the number of brokers engaging with Paycor more than 40% year-over-year, and now have more than 1,300 active broker partners. In this quarter, we launched a number of new product features, including Recognition, which is offered with our core product offering. This feature allows leaders and peers to recognize the efforts of their teams directly through the platform and providing leaders with another method of celebrating, motivating, and engaging their teams. Our success in the fourth quarter provides a great foundation for even better performance in fiscal 22 and beyond. We enter 2022 with a proven strategy and strong momentum across all aspects of our business. Our focus this year will be to build upon our success by continuing to invest in our go-to-market team by adding sellers and increasing productivity across our existing team. further expanding our engagement with broker partners and making it even easier for them to do business with PayCore, and executing on our product development roadmap to increase the value we deliver to customers and make additional progress towards our three-year goal of a $50 PEPM product portfolio. We have never felt better about our business and our ability to accelerate revenue growth. We are in the early stages of SMBs replacing legacy HCM solutions with modern cloud-based solutions. This multi-billion dollar market opportunity gives Paycor a long runway to generate high levels of growth and profitability for the foreseeable future. We believe we are in a great position to deliver significant value to our customers and shareholders over the long term. With that, Let me turn the call over to our CFO, Adam Ante, to walk you through our financial results. Adam?