Paycor HCM, Inc.

Ladies and gentlemen, thank you for standing by and welcome to PACOR's first quarter fiscal year 2025 earnings call. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. And now I would like to turn the call over to Rachel White, Vice President of Investor Relations. Thank you, Rachel. You may begin.

Good afternoon and welcome to PACOR's earnings call for the first quarter fiscal year 2025, which ended on September 30th. 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 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 PACOR's fiscal first quarter results. The future of HCM is connected, and our unique value proposition of empowering leaders to drive business results by connecting them to people, data, and expertise is continues to win in the market and help drive 17% revenue growth this quarter. We continued to pragmatically invest in sales and product expansion to fuel future growth while demonstrating the scalability of our business model with significant adjusted operating income margin and free cash flow expansion. Our team executed against our strategic growth initiatives, increasing the average number of employees on our platform by 5% and expanding the amount we earn per employee per month, or PEPM, by 11%, resulting in 16% recurring revenue growth. The demand environment remains healthy. as most employers are struggling with outdated and inadequate HCM tools. Key indicators of demand, such as leads and prospect traffic to paycore.com, increase year over year, and our win rates remain strong. We continue to feel good about our go-to-market trajectory, and the average tenure of our field sellers continue to increase, which drives productivity. As we shift up market, clients tend to purchase a more complete solution, and average deal size and attach rates continued to expand nicely in the mid-market. Benefit brokers remain a key component of our go-to-market strategy to help us identify employers that are dissatisfied with their legacy HCM tools, and they influenced over 60% of our field bookings this quarter. Complementing our direct channel, our embedded HCM solution continued to gain momentum with both new and existing partners. We signed several new embedded partners since our last earnings call, achieving a milestone of double-digit partnerships. Our modern embedded HCM solution enables our strategic partners to not only increase their revenue per client, but also enhance customer retention. The upmarket velocity within the embedded channel continued as average employees per company are triple our current average. In response to customer demand, we expanded our embedded sales team and expanded the current payroll and HR offering to include workforce management. Our team continued to augment our award-winning HCM platform by introducing valuable new functionality for our customers that expands our PEPM opportunity. Our product roadmap continues to center around connecting people, data, and expertise. Last call, we described our new compensation management solution that connects leaders with tools that streamline the process of rewarding their team, which added $2 to our suite, bringing our list pepum to $55. Building on our industry-leading AI capabilities, this quarter, our team launched PayCore Assistant, connecting employees to expertise. The Assistant is a next step in our AI evolution as we continue to drive efficiency and effectiveness so customers can focus on higher value work. This AI-powered HR companion transforms the way employees and leaders interact with PayCore through a simple conversational interface. Our modern and intuitive solution is designed to boost productivity by enhancing the speed and effectiveness of responding to employees' HR-related questions, empowering leaders to focus on powering people and performance. This solution joins several existing AI innovations, including intelligent skills management, digital assistant, candidate sourcing, job description generation, and sentiment analysis in performance management and employee surveys. We also recently introduced the PayCore integration platform, enabling customers to seamlessly connect their preferred business solutions to our HCM suite. This platform provides pre-built connections to over 300 best-in-breed technology partners, along with robust developer tools and services to create custom connections, making it easier for customers to integrate their technology systems to enhance efficiency and accuracy. With this platform, we're giving mid-market companies the ability to connect systems at a level and scope historically reserved for larger enterprises. The innovation we have delivered in our HCM suite continues to earn industry accolades. We're extremely proud that Paycor was ranked among the top five vendors in Sapient Insights Group's 27th annual HR Systems Voice of the Customer Rankings in several categories, including mid-market user experience and vendor satisfaction for both payroll and HRMS. In addition, Paycor's Talent Acquisition Suite was recognized in Nucleus Research's Top Leader Quadrant. Our top fiscal 2025 priorities remain to drive sales efficiency and accelerate cash conversion while continuing to invest in our strategic growth initiatives, namely adding employees through sales expansion and increasing PEPM through product innovation. Now I'll turn the call over to Adam to discuss our financial results and guidance.