Paycom Software, Inc.

Good afternoon. My name is Ciara and I will be your conference operator today. At this time, I would like to welcome everyone to PACOM's fourth quarter and full year 2023 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a Q&A session. If you would like to ask a question, simply press star followed by one on your telephone keypad. If you would like to withdraw your question, press the star key followed by two. I will now turn the call over to James Sanford, Head of Investor Relations. You may begin.

Thank you, and welcome to PACOM's earnings conference call for the fourth quarter and full year 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 and 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, Paycom's president and co-CEO. Chad?

Thanks, James, and thank you. to everyone joining our call today. We ended 2023 with better than expected results, thanks to the considerable coordinated efforts of our team across the organization. Before digging into the quarterly results and achievements in 2023, I'd like to discuss today's announcements about the promotion of Chris Thomas to co-CEO. Following that, I will briefly introduce Chris, who previously served as our COO. Craig will then review our financials and our guidance before taking questions. With that, let's get started. As founder and CEO of Paycom, my position has provided me the opportunity to work with great leaders who have built Paycom into a world-class HR and payroll software company. One such leader is Chris Thomas. He is someone I have extreme confidence in and a leader I can share responsibilities with at Paycom. I've been preparing this opportunity for Chris and myself to work even more closely together for some time now. Today's announcement further illustrates the trust I have in our leadership. Personally, this is very exciting because it allows me to invest further in the areas that I'm passionate about, which are the ones where I can have the largest impact for our clients. In this new role for Chris, Paycom will be even stronger than ever before. A key area of my continued focus will be product innovation and strategy, and Chris will continue to focus on operating other aspects of the business. Our collaboration has strengthened Paycom and I'm excited for what we will do going forward. In the last several months, we continued to strengthen our leadership team with the addition of Jason Clark as Chief Administrative Officer and Steve Sturgis as Chief Marketing Officer. Jason was the CEO of one of the region's largest workers' comp insurance companies. Having worked with Jason in various capacities for about 12 years, I officially brought him into the organization last year knowing this was an ideal fit for him and for Paycom. Steve formerly owned and operated a very successful marketing agency, and I've had the privilege of working with him for about 15 years. I'm excited to see him continue to elevate our brand, engage our clients, and drive further demand generation for Salesforce. This evolution of our organization is exciting, and I believe it will bring significant value to our clients, employees, and investors. now i want to discuss our vision for 2024 and then look back on some highlights of 2023 following a better than expected end to 2023 in 2024 we are primarily focused on three key areas world-class service solution automation and client roi achievement our continued focus is being the leading provider of comprehensive payroll and human capital management solutions in every market we serve We are bringing the power of Paycom to more employers and employees and showing more organizations the ROI they experience by using our single database software. On the product front, Betty has been one of the products at the leading edge of our AI and automation strategy, delivering tremendous ROI to our clients. A recently commissioned third-party study on Betty highlighted three benefit areas. On average, a greater than 80% reduction in errors a 90% reduction in time spent processing payroll, and improved employee engagement. A leader within the restaurant industry noted that the automation from Betty took days off payroll processing time, and that as employee check errors went down, employee engagement went up. Additionally, certain organizations using Betty experienced up to 100% of their end users regularly engaging with our easy-to-use system. Solutions like Paycom's Gone tool are expanding automation to other areas of our product suite, namely our time off application. The rollout of Gone towards the end of 2023 has been going very well. This new product uses AI and decisioning logic to automate all decisions for time off requests, which further enhances both the employee and the manager experience by eliminating conflicts and resolving time sensitive decisions. Today, clients may make between 20 and 30 decisions or more per year per employee concerning PTO, vacation requests, and the denials or approvals that go into staffing decisions. GON eliminates those unnecessary interaction points by providing a consistent and fully automated experience for employees, managers, HR administrators, and the business as a whole. With GON, an employee in any industry can request time off at midnight on a Friday and know immediately if it is approved or denied because GON has automated all time off request decisions. It's another example of a product that's a win for our clients and a win for their employees. We delivered a lot of innovation on the international front in 2023. We launched our global HCM product and now companies of all sizes use this product across 180 countries and in 15 languages and dialects. We developed and launched Native Payroll in Canada and Mexico. Now we've developed and are launching our Native Payroll solution in the United Kingdom. Our international strategy complements our product strategy and adds to the momentum we are seeing with U.S.-based companies that have an international presence. While still early, we are very excited about the potential impact this initiative will have on our expanded TAN. While I'm proud of our product developments and international expansion in 2023, I'm even more excited about where we are headed with the product department. As a company, we all know and feel the excitement that is happening within our walls. Since 1998, Paycom has changed the way businesses operate through innovation and automation. Our revolutionary product roadmap will continue to bring new levels of value to our clients. I'm glad to see both growth in our product and in the people we are elevating and bringing back into the organization. The buzz about the future of product innovation across the organization is exciting and encouraging. The client experiences everything to us, and that all starts with our product. We are excited to release more product enhancements and innovations than ever before. To sum up in 2024, we will continue to be hyper-focused on world-class service, solution automation, and the client ROI achievement strategies. This means we will continue our emphasis on client ROI and the user experience. I'm confident that the size of our opportunity and our track record for execution will bolster our growth trajectory. I'd like to thank our employees for their important contributions in 2023 and commitment to Paycom. In fact, because of them, Paycom earned many top workplace accolades in 2023 Most notably, Gallup's Exceptional Workplace Award. Additionally, Newsweek recognized us as one of the most trustworthy organizations and as a top workplace for diversity for parents and families. These accolades mean a lot because it's a reflection of our leadership and the culture we have built. Before turning the call over to Craig, I'd like Chris to briefly introduce himself and discuss his vision for the role. Chris?