Paycor HCM, Inc.

Ladies and gentlemen, thank you for standing by and welcome to PACOR's third quarter fiscal year 2022 earnings call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question on today's call, you can do so by pressing star 1 on your telephone keypad. I'd now like to turn the call over to Rachel White, Vice President of Investor Relations.

Good afternoon and welcome to PayCourse Earnings Call for the third quarter of fiscal year 2022, which ended on March 31st. On the call with me today are Raul Villar, Jr., PayCourse Chief Executive Officer, and Adam Ante, PayCourse 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 may include forward-looking statements related to our financial results, products, customer demand, operations, and 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 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 PACOR's fiscal third quarter results. We delivered robust revenue growth of 23% year over year, driven by continued client growth. It was our highest recurring revenue growth quarter in more than five years. Total revenue was a record $123 million, exceeding the top end of our guidance by 4%. We have now demonstrated accelerated revenue growth and increased profitability for three consecutive quarters. This sustained momentum gives us confidence to once again raise our full-year revenue and profitability guidance, which Adam will describe in more detail. Labor market dynamics, such as the great resignation and increased regulatory complexity, continue to drive strong demand for modern cloud-based human capital management solutions. The $29 billion ATM industry is still in the early stages of shifting to modern cloud solutions with significant runway for sustainable growth. Small and medium-sized businesses are seeking innovative cloud tools designed to simplify the human capital management process for their industry and their leaders. Paycor's open, extensible platform is purpose-built for leaders and configured by industry, and that differentiation continues to win in the market. Our modern SAS HCM solution automates routine management tasks so frontline leaders can focus on the key elements that drive business performance and employee engagement, such as goal setting, coaching, and talent development. Furthermore, our vertical program resonates with clients as we align human capital management with their industry and provide industry-specific product differentiation, client experience, and community. During the quarter, we continue to make progress against all four strategic growth initiatives that we believe will enable us to deliver long-term sustainable growth. Our sales teams continue to successfully expand into Tier 1 markets, which we define as the 15 largest cities in America. We have significantly expanded our Tier 1 sales coverage from the end of fiscal year 21 with established sellers in all Tier 1 markets. We are on track to expand seller headcount by 20% plus this year, which we believe is impressive given the tight and competitive labor market. Tier 1 deal metrics remain strong with consistent win rates and higher deal sizes. Our Pac-12 partnership has already started delivering encouraging results that support our Tier 1 market expansion in the West. The Pac-12 is a great strategic fit as there are over 78,000 CEOs and over 34,000 HR and finance executives associated with the Pac-12 on LinkedIn. We are generating millions of views from Pac-12 marketing campaigns and are building our brand awareness in these large markets. Second, the broker channel continues to deliver outsized results. When we revamped our sales strategy in 2020, we focused our playbook on brokers and established partnerships with five national firms that account for about a quarter of our broker revenue today with significant expansion opportunity. Our broker strategy supports our tier one expansion by providing immediate access to a sales channel in new and expanding markets. We have supplemented our broker value proposition of benefits, administration, platform flexibility, and guided implementation with a portal that provides our partners with thought leadership and co-branded marketing designed to cultivate mutual business expansion. Third, our industry-specific approach is one of the top reasons clients choose Paycor. We configure solutions for four key industries, which represent about 50% of our TAM. Our unique value proposition is driving outsized win rates. By understanding the requirements of healthcare, manufacturing, food and beverage, and professional services, we have developed tailored solutions that help solve the most pressing human capital challenges for these industries. Our industry program empowers leaders to develop winning teams through product differentiation, client experience, and community. For example, in manufacturing, recruiting skilled labor is a big challenge. Through our product differentiation, we help manufacturing leaders modernize their career pages, increase visibility of job postings, and incentivize employee referrals. We also partner and integrate with third-party technologies that manufacturers need, such as ERP systems. Our manufacturing customer experience starts with industry-skilled implementation experts and targeted training content, such as how to set up shift differentials, how blended overtime works, and adding a union code, which further enhance our industry client experience. We also help industry leaders stay on top of the latest trends and compliance issues and facilitate knowledge sharing in our communities. Lastly, we continue to enhance our industry-leading functionality by expanding the breadth and depth of our ATM suite and have increased our PEPM to $42. Our modern software has a seamless user experience 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 and evolving needs of our clients. This quarter, we released an innovative developer portal to enhance our interoperability, making it even easier for clients and partners to seamlessly integrate and sync data between PAYCOR and critical third-party tools. The developer portal addresses over 50 points of integration and enables leaders to access real-time data and resources to support their teams. While the developer portal is beneficial to all clients, it is especially relevant for our four verticals since they tend to have greater integration needs. For example, in food and beverage, point-of-sale integrations are critical, whereas in healthcare, scheduling integration is essential. Since the launch in February, we have received outstanding feedback from both clients and partners. In addition, this quarter we partnered with Equifax to provide automated employment and income verification services to clients at no cost, further reducing leaders' administrative burden so they can focus on what matters, developing their associates. Companies often verify employment and income history for current or past employees who are applying for a loan or other financial services, and this partnership will simplify that process. We also worked with Fidelity to provide an extensive 360-degree integration between the company's 401k and HCM platforms to streamline administration for our mutual clients. Furthermore, we recently launched expense management, enabling leaders to easily reimburse employee expenses utilizing the same unified pay core platform used to pay, hire, onboard, manage, grow, and recognize talent. By streamlining time-consuming and manual tasks like expense management, we empower leaders to invest more time and resources into developing their teams. As a testament to our ongoing product development, we are proud that Nucleus Research highlighted PayCore's ability to deliver rapid time-to-value for its clients. Our platform stood out for its ease of deployment, cost efficiency, and strong customer support. This year, we improved significantly in usability, which reflects the investments we continue to make to enhance our platform. Calendar year-end is our busiest period, and I would like to thank all PACOR associates for their commitment to our client experience and delivering our strongest year-end on record. Over the last two years, we have made focused investments in technology and resources to enhance our client experience and we are starting to see the impact. This is the first full quarter our chat tool has been live and we handled about 10% of our support volume through this new channel. Customers prefer the quick response time of this communication method. And as a result of these enhancements, we had an 80% improvement year over year in client wait times during the second and third quarters. The best acknowledgement we get about these enhancements is directly from our clients, but we are also excited to share that our tax advanced support team was recognized for their outstanding customer service with a bronze Stevie Award this quarter. Congratulations to our tax support team. With that, I'll turn the call over to Adam to discuss our financial results and guidance.