Paycom Software, Inc.

Thank you for standing by, and welcome to the PACOM Software Second Quarter 2021 Quarterly Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to Mr. James Sanford. Thank you. Please go ahead.

Thank you, and welcome to PACOM's second quarter 2021 earnings conference call. Certain statements made on this call that are not historical facts, including those related to our future plans, objectives, and expected performance, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this conference call. While we believe any forward-looking statements made on this call are reasonable, Actual results may differ materially because the statements are based on our current expectations and subject to risks and uncertainties. These risks and uncertainties are discussed in our filings with the SEC, including our most recent annual report on Form 10-K and our most recent quarterly report on Form 10-Q. You should refer to and consider these factors when relying on such forward-looking information. Any forward-looking statement made speaks only as of the date on which it is made, and we do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Also, during today's call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, adjusted gross profit, adjusted gross margin, and certain adjusted expenses. We use these non-GAAP financial measures to review and assess our performance and for planning purposes. A reconciliation schedule showing GAAP versus non-GAAP results is included in the press release that we issued after the close of the market today and is available on our website at investors.paycom.com. I will now turn the call over to Chad Richardson, PACOM's President and Chief Executive Officer. Chad?

Thanks, James, and thank you to everyone joining our call today. I'll spend a few minutes on the highlights of our second quarter 2021 results and the opportunities we are pursuing as we look ahead. Following that, Craig will review our financials and our guidance, and then we will take questions. We delivered very strong second quarter 2021 results with revenue of $242 million that grew 33.3%, our fastest quarterly growth rate compared to the prior year period since Q4 of 2016 and well above the top end of our guidance range. The upside from the quarter was primarily a result of broad-based demand strength from new client ads and consistent cross-selling to existing clients. Our second quarter adjusted EBITDA was $87 million, representing an increase of 42% over the prior year period. With these strong results, we are once again raising our full-year guidance, which Craig will discuss in more detail. The investments we make in our products generate tremendous value for our clients and drive our differentiated employee strategies. Our newest employee innovation is Betty, the industry's first self-service payroll technology, allowing employees to do their own payroll, which we officially rolled out to the market in early July. Betty, which stands for Better Employee Transaction Interface, is an employee-driven payroll experience and represents one of the most important advances we've made to date. With Betty, employees do their own payroll, which allows our clients to benefit from increased payroll accuracy, while employees gain full insight to their paycheck, including advanced knowledge of take-home pay and how it's calculated. Employees have a direct connection to their paycheck to resolve errors well before payday, so they don't have to wait on or contact anyone for assistance. The additional clarity on how their pay changes and is calculated, combined with automatic alerts when items require their action, gives employees and clients confidence in the accuracy of their payroll. I'm very pleased with the launch so far. We are receiving tremendous feedback, including a VP of HR who said Betty's the most revolutionary payroll product I've ever seen. Another comment from a chief HR officer noted that Betty is giving ownership of payroll to employees and managers, which is great because they know better than anyone what their paychecks should be. As we said during our Q1 earnings call, we are planning to have 100 pilot clients on Betty in the second quarter, and we easily achieved that goal. On July 6th, we opened up Betty to all clients, and through the end of July, we've already sold Betty to over 1,000 new and existing clients. I continue to expect that all Paycom clients will eventually deploy Betty. It's the only way payroll should be done. Our marketing plan continues to deliver strong demo leads, and we intend to spend aggressively in the coming quarters to fuel future revenue growth and further expand our market share in a large and expanding HCM TAM. Our messaging continues to resonate with prospects as we contrast the shortcomings of disparate HCM systems with the value proposition of Paycom's single database solution and self-service capabilities that are stronger than ever. Employees expect their HR software to be efficient and easy to use. And once again, we had record high employee usage rates in Q2 as measured by our direct data exchange or DDX. We continue to enjoy increasing traction with both smaller and larger companies. As a reminder, we added multiple inside sales teams as we've continued to have success below our target range. Due to the technological advances we've made and the demand that's building around our employee self-service initiatives, we've continued to be pulled further upmarket as well. As a result, we are pleased to announce that we are expanding our proactive outside sales efforts from targeting firms with 50 to 5,000 employees to targeting firms with 50 to 10,000 employees. We've had success selling to organizations above our historic range, driven by larger company demands. This change we are announcing today empowers our sales representatives to proactively target in this expanded segment, and we are excited by this incremental opportunity. We have clients in this segment already, so we're confident that our solution will compete and serve these clients effectively. On the Paycom branding front, we recently signed a 15-year naming rights partnership with the Oklahoma City Thunder that will transform their downtown home into the Paycom Center. Oklahoma City is home to thousands of our employees, and I'm happy that the Paycom Center will be home of the Thunder. We have now lapped a tough pre-pandemic year-over-year comparison, and Q2 is more reflective of our historical growth profile. Record new client additions over this past year are driving our growth. While we saw a very small headcount improvement in our pre-pandemic client revenue base, our guidance in future growth initiatives are not reliant on any employment improvements. In summary, Q2 was a very strong quarter that reflects the strength of our execution throughout the pandemic and the investments we've made to further distance ourselves from the competition. Innovation, customer service, and new client growth represent the foundation of our long-term revenue growth strategy. And with only approximately 5% market share of a growing TAM, we continue to have a long runway ahead of us. I want to thank all of our hardworking and dedicated employees for their resilience and commitment to winning. With that, I'll turn the call over to Craig for review of our financials and guidance.