Paycor HCM, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to PACOR's second quarter fiscal year 2022 earnings call. At this time, all participants are in a listen-only mode. A 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. Please note this conference is being recorded. I would like to turn the call over to Rachel White, Vice President of Investor Relations.

Good afternoon and welcome to PayCore's earnings call for the second quarter of fiscal year 2022, which ended on December 31st. On the call with me today are Raul DeLar, Jr., PayCore's Chief Executive Officer, and Adam Ante, PayCore's Chief Financial Officer. Our financial results can be found in 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 on our website following the conclusion of the call. Statements made in this call include forward-looking statements related to our financial results, products, customer demand, operations, impact of COVID-19 on our business, and other matters. These statements are subject to risks, uncertainties, and assumptions and are based on our management's current expectations as of today and may not be updated in the future. Therefore, these statements should not be relied on upon as representing our views as of any subsequent date. We also will 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 on our website. With that, I'll turn the call over to Raul.

Thank you, Rachel, and thank you all for joining us to discuss PayCore's fiscal second quarter results. We delivered a strong second quarter as both revenue and profitability exceeded our guidance. Based on these robust results, we are once again raising our full year guidance, which Adam will discuss in more detail. The $28 billion human capital management market is still in the early stages of shifting to the cloud. which positions Paycor to accelerate revenue growth and increase profitability over time. We continue to experience strong demand for Paycor's modern SaaS HCM solutions for small and medium businesses, as demonstrated by our 20% revenue growth this quarter. Two years ago, we developed a strategy to differentiate Paycor in the market to our open, extensible platform a focus on leaders, and by tailoring solutions for key industries. PayCore has built a unique value proposition focused on empowering leaders, which drives employee engagement and business results. Our technology automates mundane leadership tasks so frontline leaders can focus on goal setting, coaching, talent development, and associate engagement. The key elements that drive business performance. The great resignation or re-evaluation labor market dynamics highlight the importance of talent acquisition and retention strategies. And we've seen that demand play through to our offerings. Our software is helping companies attract, onboard, coach, and engage employees in a virtual environment with increasing regulatory complexity. Our team is laser-focused on executing the strategy we've outlined, and we exceeded our internal expectations in Q2. As an outcome of our product investment in technology designed for leaders and industries, our win rates continue to increase. Our consistent bookings performance over the last six quarters is starting to deliver accelerated revenue growth. This is continued validation of our differentiated value proposition, solid execution against our growth levers, and the performance-driven changes we've made across our organization. We've made significant progress against each of our strategic growth initiatives during the quarter. First, our increased focus on Tier 1 markets is working. We continue to significantly increase bookings in Tier 1 markets which we define as the 15 largest cities in America. One of our biggest strategic focus areas has been aggressively expanding our sales coverage in Tier 1 markets. Today, we have seller coverage in all Tier 1 markets and are now focused on adding additional teams in these markets to drive greater coverage. We exceeded our internal sales staffing targets again this quarter while maintaining high productivity levels. We are also excited to be the newly named official HR software provider for the Pac-12 Conference, which supports our Tier 1 expansion in the West by increasing brand awareness among their enormous viewership and key business decision makers. The four-year partnership highlights PACOR and the Pac-12's commitment to developing leaders in and out of the classroom. Second, we continue to successfully partner with brokers. New business coming through our broker channel remains strong and continues to deliver outsized results. Brokers are trusted advisors for mid-market businesses, and they appreciate our flexible approach that enables them to select their benefits administration solution of choice while receiving a prioritized and guided implementation for their valuable clients. We are working with about 10% of the broker community today and we continue to be a significant expansion opportunity within this valuable referral channel. Third, our industry-specific approach is resonating. Our purpose-built offerings for our four key verticals, which represents 50% of our TAM, are driving higher win rates, including professional services that launched last quarter. By understanding the specific needs of companies in healthcare, manufacturing, food and beverage, and professional services, we've developed tailored solutions that help solve their most pressing human capital challenges. For instance, this quarter, we introduced a new payroll-based general reporting solution that automates complex staffing reporting requirements for nursing facilities. Lastly, we continue to expand our HCM suite and increase adoption of our bundles. Our team continues to expand our HCM platform by adding new functionality and expanding the breadth and depth of our product portfolio, increasing the total per employee per month, or PEPM, rate available to $40. We are seeing excellent adoption of the talent management bundle we launched in 2021, which not only provides leaders with the tools they need to recruit and onboard associates, but also includes deep functionality to develop, recognize, and engage them. Talent is top of mind for all business leaders today, and as a result, it's driving a considerable increase in attach rates for new and existing customers. Another differentiated aspect of our software is its open, unified, and extensible platform that enables us to rapidly add capabilities and integrate additional partners. It provides a time-to-market advantage to stay ahead of the dynamic evolving needs of our clients. In the last year, we have made significant investments to bolster our interoperability, including launching a new platform that enables customers and partners to do self-serve integrations, reducing the average time it takes to build an integration by 50%. And we quadrupled the total number of partners in our marketplace by We now have nearly 200 partners in our ecosystem, providing flexibility for our clients to select the best applications for their industry. This quarter, we also released new functionality within our PACOR analytics tool that provides predictive analysis on employee turnover. It provides leaders with actual insights to identify the top drivers of employee resignation and potential at-risk employees to help prevent turnover in today's challenging labor market. As leaders nationwide continue to work through the Great Resignation, it's more critical than ever to understand why employees leave and what an employer can do to prevent or better plan for that outcome. We are committed to providing intelligent analytics to help leaders uncover these valuable insights. I would also like to commend our team for their efforts over the last year, including through this year end, in providing comprehensive and customer-first implementation and support to our clients, both of which have been receiving excellent, best-in-class marks. Over the last few quarters, we launched a customer support portal with a highly efficient customer chat tool and a robust self-service knowledge base. As a result of these and other enhancements, we've seen an 80% improvement in client wait times during the second quarter. We're also extremely proud to be recognized as a top workplace for the second year in a row by Energage, an organization with a 15-year history of surveying more than 20 million employees to help build and brand top workplaces. Results are based on 15 cultural drivers that are proven to predict high performance against industry benchmarks. It demonstrates our commitment to live the cultural best practices we advocate to our clients that drive employee engagement and business performance. Lastly, we would like to congratulate our client, the Cincinnati Bengals and Houdet Nation on their amazing season and upcoming Super Bowl appearance. With that, I'll turn the call over to Adam to discuss our financial results and guidance.