On this page of StockholderLetter.com we present the 9/14/2023 shareholder letter from PAYCOR HCM, INC. — ticker symbol PYCR. Reading current and past PYCR letters to shareholders can bring important insights into the investment thesis.

 •  9/14/2023 Letter Continued (Full PDF)
 •  9/26/2024 PYCR Stockholder Letter

PYCR 9/14/2023 Shareholder/Stockholder Letter Transcript:

2023 Annual Report

About Paycor
Paycor   s human capital management (HCM)
platform modernizes every aspect of people
management, from recruiting, onboarding
and payroll to career development and
retention, but what really sets us apart is
our focus on leaders. For more than 30 years
we   ve been listening to and partnering
with leaders, so we know what they need:
a unified HR platform, easy integration
with third party apps, powerful analytics,
talent development tools, and configurable
technology that supports specific industry
needs. That   s why more than 30,000
customers trust Paycor to help them solve
problems and achieve their goals.
Award-winning Software and Culture

Fiscal 2023 Highlights
2,800 associates
30,400 customers
2.5 million employees on the platform
$553 million revenue
29%
revenue growth
100%
22%
net revenue retention
sales force growth
36%
11%
Paycor empowers us to drive
Tier 1 sales coverage
employee engagement and
excitement while automating
all of the paperwork.
    Jeanette Stahli
Vice President of HR,
Donaldson
effective PEPM expansion
We rely on Paycor to provide
the latest best practices and
insights
to support our people
Annual Meeting
Paycor will hold its 2023 Annual Meeting of Stockholders virtually on Tuesday, October 31,
2023, at 10:00 am ET. Stockholders may attend, vote, and ask questions virtually during the
meeting by logging in at www.virtualshareholdermeeting.com/PYCR2023 and providing
the 16-digit control number included in their proxy card.
Stock Transfer Agent
Equiniti Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
718-921-8300
Forward-Looking Statements
This Annual Report contains forward-looking statements that are subject to a number of
risks, uncertainties and assumptions, including those described in our 2023 Form 10-K, as
well as in our other filings with the Securities and Exchange Commission.
    Ashley Brooker
Vice President of HR,
Pure Dental Brands
I don   t have to worry about a
change in tax code or child
support garnishment. Paycor
takes care of it.
    Cathy Haener
Controller,
Unified Wire and Cable

Fellow Stockholders,
We did what we set out to do in fiscal 2023. We achieved our target of
20%+ recurring revenue growth for the second consecutive year while
expanding margins with greater free cash flow generation. Paycor delivered
strong annual revenue growth of 29%, driven by excellent execution against
our strategic growth initiatives, namely expanding our sales coverage and
increasing PEPM. We are proud of the operational performance across the
business, which delivered nearly 400 basis points of margin expansion yearover-year and positive adjusted free cash flow while continuing to invest in
innovative technologies that further differentiate Paycor in the market. We
are demonstrating the scalability of our business model and believe there is
significant opportunity to drive further leverage. I would like to thank each
of our associates for their role in contributing to these outstanding results.
In fiscal 2023, demand remained strong for our modern, innovative HCM
solution that empowers leaders to unlock the potential of their people and
business performance. According to a recent PwC survey, talent acquisition
and retention is one of the top issues facing business executives. We continue
to see excellent adoption of the talent solution we launched in fiscal 2021,
which is now our fastest growing revenue stream. Using our unrivaled
talent tools, frontline leaders are improving employee engagement, which
is increasing employee retention by an average of 10% and helping drive
better business outcomes. Building on this success, last fall we introduced
the COR Leadership Framework, empowering organizations to transform
frontline managers into effective leaders through the provision of technology
and expertise. Based on decades of research, the framework is built on the
understanding that the most effective leaders focus on coaching employees,
optimizing performance and retaining top talent.
Our team executed exceptionally well against our strategic growth initiatives,
increasing sales coverage and expanding PEPM. We expanded our sales
force by 22%, increasing our Tier 1 sales coverage in the 15 most populous
cities in America from 28% to 36% year-over-year. Brokers remained an
integral part of our go-to-market motion and influenced over 40% of our
field bookings this year. We continue to strategically shift up-market where
clients tend to purchase a more complete solution, and as a result, average
deal size continued to expand nicely this year. Our pipeline and win rates
remain strong. All these factors contributed to robust bookings growth of
23% year-over-year. Driven by gains from cross sales and pricing initiatives,
net revenue retention reached a record high of 100%.

We continued to expand our modern HCM suite by launching differentiated technology that powers
people and performance. In fiscal 2023, list PEPM increased $3 dollars, or 7%, to $45. In fiscal 2023,
we acquired Talenya, now Paycor Smart Sourcing, delivering an AI-driven recruiting platform that
automatically sources quality talent faster and at a significantly lower cost. In addition, the acquisition
of Verb, which will be incorporated into Paycor Paths, helps organizations inspire positive and sustainable
behavior change within their frontline leaders through a series of personalized micro-learning development
journeys. Further strengthening our suite of artificial intelligence solutions, we also launched an AI-enabled
Job Description generator that creates compelling job descriptions, empowering leaders to attract and
hire top talent faster than ever before.
The robust development of our interoperability engine is a key differentiator of our modern HCM
platform, providing flexibility for our clients to select the best applications for their industry. We continue
to lead the industry with the most extensive network of partners, deep two-way integrations and API
connectivity points to meet our clients    unique business needs. In the last year, we added over 130
marketplace partners and nearly doubled the number of API end points available in our system.
As a human capital management company, we know first-hand how important leaders and culture
are in driving business performance and employee engagement. Over the last year, we prioritized team
engagement and employee development, which has enabled our business to reach new heights. We are
extremely proud to receive a Top Workplaces USA award for the third consecutive year by Energage, an
organization with a 15-year history of surveying more than 20 million employees to help build and brand
Top Workplaces. Results are based on 15 cultural drivers that are proven to predict high performance
against industry benchmarks.
For fiscal 2024, we remain focused on execution, scaling the business and driving margin expansion.
For us that means continuing to increase sales coverage to capture share among small and mediumsized businesses and expand PEPM with innovative solutions that empower frontline leaders. Successful
execution of these strategic goals should position us well to achieve our target of 20%+ revenue growth
while expanding margins and generating greater free cash flow.
We are enthusiastic about the progress we   ve made transforming the organization. Demand remains
strong for our innovative HCM solution that empowers leaders to build winning teams. As a mission
critical application still early in its transition to the cloud, we believe there is significant runway for
sustainable growth and believe we have all the elements in place to win in the HCM market.
Raul Villar, Jr.
Chief Executive Officer

9/14/2023 Letter Continued (Full PDF)

 

Nothing in StockholderLetter.com is intended to be investment advice, nor does it represent the opinion of, counsel from, or recommendations by BNK Invest Inc. or any of its affiliates, subsidiaries or partners. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All viewers agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. By visiting, using or viewing this site, you agree to the following Full Disclaimer & Terms of Use and Privacy Policy.