Paycor HCM, Inc.

Ladies and gentlemen, thank you for standing by and welcome to PACOR's second quarter fiscal year 2024 earnings call. If anyone to require operator assistance during the conference, please press star zero on your telephone keypad. I would now like to turn the call over to Rachel White, Vice President of Investor Relations. Please go ahead.

Good afternoon and welcome to PayCore's earnings call for the second quarter of fiscal year 2024, which ended on December 31st. On the call with me today are Raul Velar Jr., PayCore's Chief Executive Officer, and Adam Yante, 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, 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 are 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 pay course fiscal second quarter results. We had another strong quarter with revenue growth of 20% year over year. Margins expanded 130 basis points over the prior year, while we continued to invest in sales expansion and in our innovative HCM suite. HCM demand is healthy. Our deal pipeline is up significantly year over year, and our win rates remain strong. We continue to excel upmarket, especially among the higher end of SMB and enterprise customers with thousands of employees. who tend to purchase a more holistic solution and are driving higher tax rates and higher average deal sizes. Our results demonstrate our consistent execution against our two primary growth drivers, increasing the number of employees on our platform and expanding the amount we charge per employee per month or PEPM. First, we are expanding employees on the platform through a combination of direct, and indirect sales efforts. We remain on track to grow our direct sales force approximately 20% this fiscal year to strategically increase our sales coverage in the largest U.S. metropolitan areas. As we expand our sales coverage, we are also increasing our broker coverage. We increased the number of active referring brokers by over 25% from the prior year, and 50% of our field bookings in the quarter were broker-influenced. We are also experiencing great traction with our embedded HCM solution, the indirect go-to-market channel we announced in August. Leveraging our industry-leading interoperability engine, We enable software partners to embed our HCM solution within their platform for a seamless client experience. In Q2, we had robust new sales among existing partners and expanded our pipeline of interested partners. Second, we continue to enhance our award-winning HCM suite with new capabilities that increase the value to our customers and expand our future PEPM opportunity. In the second quarter, our list pepum was $51, which equates to 16% growth year over year. This month, we introduced two powerful data-driven analytical tools that empower frontline leaders to unlock the potential of their people in business performance. Pay benchmarking enables leaders to optimize compensation strategies and pay decisions based on industry standards, and market data. We also launched labor forecasting within workforce management to help customers plan optimal staffing schedules for their businesses based on key demand drivers such as revenue, sales volume, or customer foot traffic. These innovative modules will contribute to future PEPFAR expansions. PayCore recently received five Brandon Hall Technology Awards, which honor HR technology trailblazers. While we were acknowledged across our HCM suite, the core leadership framework that we launched a year ago won gold for the best advanced and online coaching tools. The framework enables customers to evaluate the efficacy of their leaders, reinforce leadership best practices, and to trigger development paths based on areas of growth identified. These tools are already making an impact in helping educate customers on how to transform their managers into effective leaders. Since joining Paycor in 2018, Ryan Bergstrom has been vital in driving the company's growth and shaping our HCM suite into the market leader it is today. Under his leadership, Liz Peplum has increased more than 75% since fiscal 2019, and I am thrilled he will now oversee our product and technology groups. Combining these functions will enable greater synergies and strengthen our capabilities to seamlessly power people and performance for our clients. I would also like to acknowledge our product and engineering teams for their unwavering dedication to building our award-winning platform and enabling its rapid expansion. We continue to strategically incorporate AI to add value to customers within our HCM suite, elevate our customer experience, and improve our efficiency. And our customer experience organization We deployed AI agent assist technology, which empowers advocates to resolve customer inquiries faster and ensure consistent, high-quality experiences as we scale. I would like to thank all PayCore associates, especially our implementation, service, and success teams, for their contributions during our busiest time of year. Year over year, we improved execution, truly making it the most efficient and best year-end experience for our customers. With that, I'll turn the call over to Adam to discuss our financial results and guidance.