Paycom Software, Inc.

Good afternoon. Thank you for attending the Paycom Software first quarter 2023 quarterly results call. My name is Matt, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call for an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to our host, James Sanford, head of investor relations. James, please go ahead.

Thank you, and welcome to Paycom's earnings conference call for the first quarter 2023. 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. 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. We delivered strong results in the first quarter, and I'm very pleased with the progress we've made on a variety of initiatives. I'll start with highlights from the first quarter, then I'll discuss some of our plans for the remainder of the year. Following that, Craig will review our financials and our guidance and discuss our new dividend policy. Then we will take questions. With that, let's get started. Our 2023 first quarter revenue of approximately $452 million came in very strong, up 28% year over year, with strong recurring revenue growth from new clients. First quarter adjusted EBITDA also came in very strong at $221 million, representing an adjusted EBITDA margin of roughly 49%, up 70 basis points year over year. With our updated full year 2023 guidance, we are well positioned to exceed our initial outlook for a solid rule of 65. On the product front, Betty continues to be a key differentiator in the market with employee self-service payroll continuing to drive strong client additions. The industry transformation to more efficient HCM and payroll processes is accelerating and now with Betty, payroll processes can be automated to deliver perfect payroll. Using Betty, employees do their own payroll. Employee usage is a key differentiator, and new clients are coming to Paycom for exactly that. With 95% of database interactions being completed by the employees of our clients, as measured by the DDX, we are changing the way employees engage with HCM solutions. Our product and go-to-market strategy are working. I just returned from our annual President's Club meeting with our top salespeople, and I couldn't be more excited about the tone of the conversations and enthusiasm for our product, especially around employee usage and betting. We are having increasing success at market with continued rapid growth at the upper end of our target market range. Large organizations benefit tremendously from simplifying their HCM and payroll needs with our single database solutions. We have 5% of the TAM today. However, our TAM has increased now that we've laid the groundwork for our global platform, beginning with Global HCM, which further strengthens our value proposition with our largest clients. To sum up, we are executing well with a highly differentiated product and go-to-market strategy. Our addressable market opportunities continue to expand, and we are pleased to enhance our long-term commitment to stockholder return with the initiation of the quarterly dividend program. I'd like to thank our employees for helping lay the foundation for another record-breaking year. With that, I'll turn the call over to Craig for a review of our financials and guidance. Craig?