Part I - FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Paycor HCM, Inc. for the quarterly period ended December 31, 2022, including Balance Sheets, Statements of Operations, Comprehensive Loss, Stockholders' Equity, and Cash Flows, along with accompanying notes [Unaudited Condensed Consolidated Balance Sheets](index=5&type=page&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2022, total assets were **$2.67 billion**, a decrease from **$3.13 billion** on June 30, 2022, primarily due to a reduction in funds held for clients, while total liabilities also decreased to **$1.40 billion** from **$1.85 billion**, driven by a corresponding decrease in client fund obligations, and total stockholders' equity remained relatively stable at **$1.27 billion** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 (Unaudited) | June 30, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $72,277 | $133,041 | | Funds held for clients | $1,183,474 | $1,715,916 | | Goodwill | $770,120 | $750,155 | | **Total Assets** | **$2,672,872** | **$3,131,317** | | **Liabilities & Equity** | | | | Client fund obligations | $1,187,532 | $1,719,047 | | **Total Liabilities** | **$1,404,876** | **$1,846,586** | | **Total Stockholders' Equity** | **$1,267,996** | **$1,284,731** | [Unaudited Condensed Consolidated Statements of Operations](index=6&type=page&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended December 31, 2022, total revenues increased **29%** year-over-year to **$132.9 million**, driven by a **22%** rise in recurring revenue and a significant increase in interest income on funds held for clients, resulting in a net loss of **$27.5 million**, or (**$0.16**) per share, compared to a net loss of **$25.5 million**, or (**$0.15**) per share, in the prior-year period, while for the six-month period, revenues grew **28%** to **$251.2 million**, and the net loss narrowed to **$56.5 million** from **$67.5 million** year-over-year Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2021 | Six Months Ended Dec 31, 2022 | Six Months Ended Dec 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $132,864 | $103,067 | $251,167 | $195,799 | | Gross Profit | $86,680 | $61,985 | $161,798 | $109,106 | | Loss from Operations | $(31,569) | $(33,764) | $(64,959) | $(86,033) | | Net Loss | $(27,463) | $(25,464) | $(56,515) | $(67,500) | | Net Loss Per Share | $(0.16) | $(0.15) | $(0.32) | $(0.46) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=page&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended December 31, 2022, **net cash used** in operating activities was **$18.5 million**, comparable to the **$18.7 million** used in the prior-year period, while **net cash used** in investing activities increased significantly to **$151.3 million** from **$16.0 million**, primarily due to the acquisition of Talenya Ltd. and changes in the client funds portfolio, and **net cash used** in financing activities was **$525.0 million**, a major shift from the **$413.3 million** provided by financing activities in the prior year, which had benefited from IPO proceeds Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended Dec 31, 2022 | Six Months Ended Dec 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(18,498) | $(18,724) | | Net cash used in investing activities | $(151,332) | $(16,035) | | Net cash (used in) provided by financing activities | $(524,960) | $413,341 | [Notes to the Unaudited Condensed Consolidated Statements](index=12&type=page&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Statements) The notes provide detailed explanations of the company's accounting policies and financial statement line items, including its business description as an HCM software provider for SMBs, revenue recognition policies, the acquisition of Talenya Ltd. for an initial **$20 million**, the adoption of the new lease accounting standard (ASC 842), and details on goodwill, intangible assets, and debt agreements - The company is a leading provider of HCM software solutions for small and medium-sized businesses (**10-1,000 employees**) in the U.S., delivered via a SaaS model[33](index=33&type=chunk) - On October 27, 2022, the company acquired Talenya Ltd., an AI-driven talent sourcing provider, for an initial cash price of **$20 million**, plus up to **$10 million** in potential earnouts, with the acquisition adding **$20.7 million** to goodwill[54](index=54&type=chunk)[56](index=56&type=chunk) - The company adopted the new lease accounting standard (ASC 842) on July 1, 2022, resulting in the recognition of **$17.5 million** in lease assets and **$24.6 million** in lease liabilities[44](index=44&type=chunk)[46](index=46&type=chunk) - In August 2022, the company entered into a **16-year** partnership with the Cincinnati Bengals for the exclusive naming rights to Paycor Stadium, recorded as a **$78.1 million** intangible asset[69](index=69&type=chunk)[72](index=72&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a **29%** year-over-year revenue increase for the quarter, driven by customer growth to approximately **30,000** and higher effective PEPM, covering key business strategies, including sales expansion and product innovation, analyzing the components of operating results, providing non-GAAP financial measures such as Adjusted Operating Income, which was **$17.6 million** for the quarter, and discussing liquidity, capital resources, and cash flows - The company's business model is based on recurring revenue from SaaS subscriptions, typically on a per-employee-per-month (PEPM) basis, serving approximately **30,000 customers** as of December 31, 2022[98](index=98&type=chunk)[99](index=99&type=chunk) - Key growth strategies include expanding the sales footprint, increasing product penetration with existing customers through bundled offerings, and ongoing product innovation, such as the recent acquisition of Talenya's sourcing technology[105](index=105&type=chunk)[108](index=108&type=chunk)[113](index=113&type=chunk) Selected Financial Results (in thousands) | Metric | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2021 | Six Months Ended Dec 31, 2022 | Six Months Ended Dec 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $132,864 | $103,067 | $251,167 | $195,799 | | Loss from Operations | $(31,569) | $(33,764) | $(64,959) | $(86,033) | | Adjusted Operating Income* | $17,643 | $10,259 | $28,056 | $13,651 | [Results of Operations](index=34&type=section&id=Results%20of%20Operations) The analysis details the year-over-year changes for the three and six months ended December 31, 2022, showing that for the three-month period, total revenues grew **29%** to **$132.9 million**, while cost of revenues increased **12%** to **$46.2 million**, resulting in a **40%** increase in gross profit, and operating expenses rose **23%** to **$118.2 million**, driven by investments in sales, marketing, and R&D, and for the six-month period, revenues grew **28%** to **$251.2 million**, and gross profit increased **48%** to **$161.8 million** Revenue Comparison - Three Months Ended Dec 31 (in thousands) | Revenue Source | 2022 | 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Recurring and other revenue | $124,982 | $102,729 | $22,253 | 22% | | Interest income on funds held for clients | $7,882 | $338 | $7,544 | 2,232% | | **Total revenues** | **$132,864** | **$103,067** | **$29,797** | **29%** | Operating Expense Comparison - Three Months Ended Dec 31 (in thousands) | Expense Category | 2022 | 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Sales and marketing | $51,913 | $40,682 | $11,231 | 28% | | General and administrative | $52,461 | $44,462 | $7,999 | 18% | | Research and development | $13,875 | $10,605 | $3,270 | 31% | - For the six months ended Dec 31, 2022, total revenues increased **28%** to **$251.2 million** from **$195.8 million** in the prior year period, driven by a **23%** increase in recurring revenue and a **1,737%** increase in interest income on client funds[153](index=153&type=chunk) [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) The company provides several non-GAAP measures to supplement its GAAP results, including Adjusted Gross Profit, Adjusted Operating Income, and Adjusted Net Income, with Adjusted Operating Income for the three months ended December 31, 2022, at **$17.6 million** (**13.3%** margin), up from **$10.3 million** (**10.0%** margin) in the prior year, and Adjusted Net Income at **$13.6 million**, or **$0.08** per share, excluding items like amortization of intangibles and stock-based compensation Reconciliation of Loss from Operations to Adjusted Operating Income (in thousands) | Line Item | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2021 | | :--- | :--- | :--- | | Loss from Operations | $(31,569) | $(33,764) | | Amortization of intangible assets | 24,673 | 25,362 | | Stock-based compensation expense | 20,684 | 17,215 | | Loss on lease exit | 309 | — | | Corporate adjustments | 3,546 | 1,446 | | **Adjusted Operating Income** | **$17,643** | **$10,259** | Reconciliation to Adjusted Net Income (in thousands) | Line Item | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2021 | | :--- | :--- | :--- | | Net loss before benefit for income taxes | $(31,907) | $(33,548) | | Adjustments (Amortization, Stock Comp, etc.) | 49,633 | 44,023 | | Non-GAAP adjusted income before applicable income taxes | 17,726 | 10,475 | | Income tax effect on adjustments | (4,077) | (2,514) | | **Adjusted Net Income Attributable to Paycor HCM, Inc.** | **$13,649** | **$7,961** | [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2022, the company's **principal sources of liquidity** were **$72.3 million** in cash and cash equivalents and a **$200.0 million** undrawn revolving credit facility, with management believing existing resources are sufficient to meet working capital and capital expenditure needs for at least the next twelve months, and the discussion also details the cash flow activities for the six-month period, showing an **$18.5 million** **net cash used** from operations - **Principal sources of liquidity** as of December 31, 2022, include **$72.3 million** in cash and cash equivalents and an available **$200.0 million** senior secured revolving credit facility[192](index=192&type=chunk)[196](index=196&type=chunk) - For the six months ended December 31, 2022, **net cash used** in operating activities was **$18.5 million**, and **net cash used** in financing activities was **$525.0 million**, primarily due to a decrease in funds held to satisfy client fund obligations[200](index=200&type=chunk)[201](index=201&type=chunk)[203](index=203&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures relate to interest rate fluctuations and foreign currency exchange risk, with interest rate risk affecting income earned on **$1.18 billion** in funds held for clients and the cost of potential borrowings, while foreign currency risk is **not considered significant** as most sales are in U.S. dollars, and a hypothetical **10%** change in foreign exchange rates or a **100-basis point** change in interest rates would not have a **material impact** on its financial statements - The company is exposed to interest rate risk on its **$1.18 billion** of funds held for clients, and a **100-basis point** change in interest rates would have an **immaterial effect** on the market value of its available-for-sale securities[216](index=216&type=chunk)[217](index=217&type=chunk) - Foreign currency exchange risk is **not considered significant** as most sales are denominated in U.S. dollars, and a hypothetical **10%** change in exchange rates would not have a **material impact**[214](index=214&type=chunk)[215](index=215&type=chunk) - While inflation could impact costs, the company believes it has not had a direct, material impact to date, and continued interest rate hikes by the Federal Reserve could benefit interest income on client funds but would increase the cost of future borrowings[220](index=220&type=chunk)[221](index=221&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, with the participation of the CEO and CFO, evaluated the company's disclosure controls and procedures as of December 31, 2022, and concluded that they were **effective**, with no material changes to the company's internal control over financial reporting during the quarter - Based on an evaluation as of December 31, 2022, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective**[225](index=225&type=chunk) - There were **no material changes** to the company's internal control over financial reporting during the three months ended December 31, 2022[226](index=226&type=chunk) Part II - OTHER INFORMATION [Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is **not presently a party** to any legal proceedings that it believes would have a material adverse effect on its business, financial condition, or liquidity - The company is **not presently a party** to any legal proceedings that would individually or in aggregate have a **material adverse effect** on its business[229](index=229&type=chunk) [Risk Factors](index=54&type=page&id=Item%201A.%20Risk%20Factors) The company states that there have been **no material changes** from the risk factors disclosed in its Annual Report on Form 10-K filed with the SEC on August 24, 2022 - There have been **no material changes** from the risk factors set forth in the company's Annual Report on Form 10-K[229](index=229&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[230](index=230&type=chunk) [Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, and Inline XBRL documents

Financial Data and Key Metrics Changes - Revenue growth reached 28%, the highest level in over 5 years, with total revenue for the quarter at $118 million, increasing 28% year-over-year [8][23] - Adjusted gross profit margin improved to 66.3% compared to 65.2% a year ago, with adjusted gross margin excluding depreciation and amortization at 76.8%, an increase of nearly 2 points year-over-year [26] - Operating income increased to $10.4 million, representing an 8.8% profit margin, more than double the 3.7% from the previous year [30] - Free cash flow was a negative $30 million, compared to a negative $24 million last year, with expectations to be free cash flow positive for the full fiscal year [31] Business Line Data and Key Metrics Changes - The number of employees on the platform increased to over 2.3 million, up 10% year-over-year, with the average customer size increasing to 78 employees from 73 a year ago [25] - Sales and marketing expense was $40 million, or 34% of revenue, slightly below 35% a year ago, indicating continued investment in sales expansion [27] Market Data and Key Metrics Changes - Competitive dynamics remain consistent with strong demand, and the company had its best Q1 on record [10] - The labor market remains tight, with nonfarm payrolls slowly rising to pre-COVID levels and job openings at elevated levels [19] Company Strategy and Development Direction - The company is focused on expanding its sales coverage and growing its platform, targeting a 20% increase in sales headcount for the fiscal year [10] - Recent acquisitions, such as Talenya's candidate sourcing technology, are aimed at enhancing the talent solution and expanding the company's PEPM opportunity [13][14] - The company is committed to sustainable business practices, as evidenced by its first ESG report and improvements in diversity metrics [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business momentum and strong demand environment, with no material impact from macroeconomic changes observed [33] - The company expects interest income to increase further in the second quarter, anticipating $20 million to $24 million for the full year [34][35] Other Important Information - The company plans to reinvest about half of its interest income to accelerate its product roadmap or expand marketing programs [35] - The company has a significant runway for growth, with less than 2% share of its $29 billion total addressable market [37] Q&A Session Summary Question: What are the early trends in ramping up sellers hired last fiscal year? - Management noted that they are tracking sellers on a cohort basis and have seen good performance from the larger cohorts being hired recently [39] Question: What are the levers for gross margin expansion going forward? - Management indicated that adding additional products helps drive gross margin increases, as clients using more products require less service [40][41] Question: Can you provide an update on the micro segment? - The micro segment represents about 5% of total revenue and has seen slowed growth, but revenue growth continues in that segment [45] Question: Is the momentum in the restaurant and food services segments continuing? - Management confirmed that the trend has continued, with hiring remaining tight in the broader labor market [47] Question: What is the focus of the Talenya acquisition? - The acquisition is primarily focused on professional services, with plans to identify more use cases for hourly employees over time [53] Question: How is the hiring environment for sales associates? - Management reported no issues in identifying, recruiting, and hiring sales associates, with most hiring planned for the first half of the fiscal year [56] Question: How are recent sponsorships impacting customer acquisition? - Sponsorships have significantly increased brand awareness, with over 1 trillion digital impressions, and are expected to drive bookings growth [57][59]

[Part I - FINANCIAL INFORMATION](index=5&type=section&id=Part%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements for Q1 FY2023, showing 28% revenue growth, a reduced net loss, and key balance sheet figures [Unaudited Condensed Consolidated Balance Sheets](index=5&type=page&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 (in thousands) | Jun 30, 2022 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $98,161 | $133,041 | | Funds held for clients | $933,307 | $1,715,916 | | Goodwill | $749,221 | $750,155 | | Intangible assets, net | $322,645 | $263,069 | | **Total Assets** | **$2,413,232** | **$3,131,317** | | **Liabilities & Equity** | | | | Client fund obligations | $938,836 | $1,719,047 | | **Total Liabilities** | **$1,139,373** | **$1,846,586** | | **Total Stockholders' Equity** | **$1,273,859** | **$1,284,731** | - The decrease in 'Funds held for clients' and 'Client fund obligations' from June 30, 2022, to September 30, 2022, reflects typical quarterly fluctuations in client payroll cycles[16](index=16&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=6&type=page&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q1 FY2023 (Ended Sep 30, 2022) (in thousands) | Q1 FY2022 (Ended Sep 30, 2021) (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $118,303 | $92,732 | +27.6% | | Gross Profit | $75,118 | $47,121 | +59.4% | | Loss from Operations | ($33,390) | ($52,269) | +36.1% (Improvement) | | Net Loss | ($29,052) | ($42,036) | +30.9% (Improvement) | | Net Loss per Share (Basic & Diluted) | ($0.17) | ($0.32) | +46.9% (Improvement) | - Interest income on funds held for clients increased dramatically to **$4.1 million** from **$0.3 million** in the prior-year quarter, driven by higher interest rates[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=page&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($24,101) | ($17,245) | | Net cash used in investing activities | ($118,960) | ($5,258) | | Net cash (used in) provided by financing activities | ($772,641) | $1,052,127 | - The significant swing in financing cash flows from positive in 2021 to negative in 2022 is primarily due to the 2021 period including **$455 million** in net proceeds from the IPO, while the 2022 period reflects a net decrease in cash held to satisfy client fund obligations[27](index=27&type=chunk) [Notes to the Unaudited Condensed Consolidated Statements](index=12&type=page&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Statements) - The company provides a comprehensive suite of HCM solutions, including payroll, HR, talent management, and benefits administration, primarily targeting small and medium-sized businesses (10-1,000 employees) in the U.S. via a SaaS model[30](index=30&type=chunk) - On August 7, 2022, the company entered into a 16-year partnership with the Cincinnati Bengals for the exclusive naming rights to Paycor Stadium, which has been recorded as an intangible asset[62](index=62&type=chunk)[63](index=63&type=chunk) - Subsequent to the quarter end, on October 27, 2022, the company acquired 100% of Talenya Ltd., an AI-driven talent sourcing solution, for an initial purchase price of **$20 million**, with potential earnouts up to an additional **$30 million**[85](index=85&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses 28% revenue growth driven by customer expansion and product penetration, improved gross margin, and increased Non-GAAP Adjusted Operating Income [Overview and Key Factors Affecting Performance](index=23&type=page&id=Overview%20and%20Key%20Factors%20Affecting%20Performance) - The company's business model is based on recurring revenue from SaaS subscriptions, typically on a per-employee-per-month (PEPM) basis, providing significant visibility into future results[89](index=89&type=chunk) - Key growth drivers include expanding the sales footprint to add new customers, increasing product penetration with existing customers through bundled pricing, and ongoing product innovation[95](index=95&type=chunk)[98](index=98&type=chunk)[101](index=101&type=chunk) Customer Growth | Metric | Sep 30, 2022 | Sep 30, 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Customer Count | ~29,900 | ~28,700 | +4.2% | [Results of Operations](index=28&type=page&id=Results%20of%20Operations) Revenue Breakdown (in thousands) | Revenue Source | Q1 FY2023 (in thousands) | Q1 FY2022 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Recurring and other revenue | $114,169 | $92,416 | +24% | | Interest income on funds held for clients | $4,134 | $316 | +1,208% | | **Total Revenues** | **$118,303** | **$92,732** | **+28%** | - Cost of revenues decreased by **5% YoY** to **$43.2 million**, primarily due to a **$10.6 million** decrease in amortization expense from fully amortized software acquired in 2018[132](index=132&type=chunk) - Sales and marketing expenses increased **5%** to **$48.2 million**, driven by amortization from the new stadium naming rights agreement and increased travel, partially offset by lower share-based compensation[133](index=133&type=chunk) - Research and development expenses grew **22%** to **$12.4 million**, reflecting increased investment in employee-related costs and licensing fees to enhance product offerings[135](index=135&type=chunk) [Non-GAAP Financial Measures](index=31&type=page&id=Non-GAAP%20Financial%20Measures) Reconciliation of GAAP Loss from Operations to Non-GAAP Adjusted Operating Income (in thousands) | Metric | Q1 FY2023 (in thousands) | Q1 FY2022 (in thousands) | | :--- | :--- | :--- | | Loss from Operations (GAAP) | ($33,390) | ($52,269) | | Amortization of intangible assets | $23,270 | $32,050 | | Stock-based compensation expense | $16,951 | $21,812 | | Other adjustments | $3,582 | $1,799 | | **Adjusted Operating Income (Non-GAAP)** | **$10,413** | **$3,392** | Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net Income (in thousands) | Metric | Q1 FY2023 (in thousands) | Q1 FY2022 (in thousands) | | :--- | :--- | :--- | | Net loss before benefit for income taxes (GAAP) | ($34,032) | ($51,280) | | Non-GAAP Adjustments | $44,226 | $54,337 | | Non-GAAP adjusted income before taxes | $10,664 | $3,057 | | Income tax effect on adjustments | ($2,453) | ($734) | | **Adjusted Net Income (Non-GAAP)** | **$8,211** | **$2,323** | [Liquidity and Capital Resources](index=36&type=page&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2022, principal sources of liquidity were **$98.2 million** in cash and cash equivalents and **$200.0 million** of available borrowing capacity under a revolving credit facility[170](index=170&type=chunk) - The company believes existing cash, available credit, and cash from operations will be sufficient to meet working capital and capital expenditure needs for at least the next twelve months[171](index=171&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details primary market risk from interest rate fluctuations on client funds and debt securities, while foreign currency and inflation risks are minimal - The main market risk is from interest rate changes on the **$933.3 million** in funds held for clients, where a decline in rates would decrease interest income[192](index=192&type=chunk)[193](index=193&type=chunk) - The company had no outstanding debt under its Revolving Credit Facility as of September 30, 2022, thus market interest rate changes would not impact interest expense[195](index=195&type=chunk) - Foreign currency risk is minimal as most sales are denominated in U.S. dollars, and inflation's impact has not been significant to date[191](index=191&type=chunk)[196](index=196&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal controls - Based on an evaluation as of September 30, 2022, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[200](index=200&type=chunk) - No material changes were made to the internal control over financial reporting during the three months ended September 30, 2022[201](index=201&type=chunk) [Part II - OTHER INFORMATION](index=43&type=section&id=Part%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any legal proceedings expected to materially adversely affect its business or financial condition - The company is not presently a party to any legal proceedings that would be expected to have a material adverse effect on its business, financial condition, or liquidity[204](index=204&type=chunk) [Risk Factors](index=43&type=page&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the Form 10-K filed on August 24, 2022 - No material changes have occurred from the risk factors set forth in the Form 10-K filed with the SEC on August 24, 2022[204](index=204&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the reporting period - There were no unregistered sales of equity securities during the period[205](index=205&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including corporate documents and officer certifications required by Sarbanes-Oxley Act - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by Section 302 of the Sarbanes-Oxley Act of 2002[210](index=210&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ———————— Form 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2022 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 001-40640 PAYCOR HCM, INC. (Exact name of registrant as specified in its charter) (State or other jur ...

• Paycor. ■ Investor Presentation Q4 FY'22 Disclaimer Paycor HCM, Inc.'s (together with its subsidiaries, "Paycor" or the "Company") fiscal year ends on June 30. References to "fiscal 2022" or "FY'22" refer to the fiscal year ended June 30, 2022. References to "fiscal 2021" or "FY'21" refer to the fiscal year ended June 30, 2021. References to "fiscal 2020" or "FY'20" refer to the fiscal year ended June 30, 2020. References to "fiscal 2019" or "FY'19" refer to the arithmetic sum of the results of (i) Paycor ...

Paycor HCM, Inc. (NASDAQ:PYCR) Q4 2022 Earnings Conference Call August 23, 2022 5:00 PM ET Company Participants Rachel White - Vice President, Investor Relations Raul Villar - Chief Executive Officer Adam Ante - Chief Financial Officer Conference Call Participants Mark Murphy - JPMorgan Samad Samana - Jefferies Bhavin Shah - Deutsche Bank Terry Tillman - Truist Securities Jared Levine - Cowen Michael Rackers - Needham Brad Reback - Stifel Mark Marcon - Baird Patrick Walravens - JMP Securities Daniel Jester ...

▪ Paycor. ■ | nvestor Presentation Q3 FY'22 Disclaimer Paycor HCM, Inc.'s (together with its subsidiaries, "Paycor" or the "Company") fiscal year ends on June 30. References to "fiscal 2022" or "FY'22" refer to the fiscal year ended June 30, 2022. References to "fiscal 2021" or "FY'21" refer to the fiscal year ended June 30, 2021. References to "fiscal 2020" or "FY'20" refer to the fiscal year ended June 30, 2020. References to "fiscal 2019" or "FY'19" refer to the arithmetic sum of the results of (i) Payco ...

Paycor HCM, Inc. (NASDAQ:PYCR) Q3 2022 Earnings Conference Call May 5, 2022 5:00 PM ET Company Participants Rachel White – Vice President of Investor Relations Raul Villar, Jr. – Chief Executive Officer Adam Ante – Chief Financial Officer Conference Call Participants Jeremy Sahler – Jefferies Brad Reback – Stifel Terry Tillman – Truist Securities Bhavin Shah – Deutsche Bank Kevin McVeigh – Credit Suisse Jared Levine – Cowen Michael Rackers – Needham Mark Marcon – Baird Mark Murphy – JPMorgan Robert Simmons ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ———————— Form 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 001-40640 PAYCOR HCM, INC. (Exact name of registrant as specified in its charter) (State or ...

Part I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Paycor HCM's unaudited condensed consolidated financial statements as of December 31, 2021, including Balance Sheets, Statements of Operations, and Cash Flows, with comparative prior periods Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2021 | June 30, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$2,372,352** | **$2,010,953** | | Cash and cash equivalents | $111,087 | $2,634 | | Funds held for clients | $940,157 | $670,315 | | Goodwill | $750,397 | $750,802 | | **Total Liabilities** | **$1,080,282** | **$883,891** | | Client fund obligations | $940,387 | $669,960 | | Long-term debt, net | $0 | $49,100 | | **Total Stockholders' Equity** | **$1,292,070** | **$878,639** | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2021 | Six Months Ended Dec 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$103,067** | **$85,864** | **$195,799** | **$164,925** | | Gross Profit | $61,985 | $49,031 | $109,106 | $93,608 | | Loss from Operations | $(33,764) | $(20,892) | $(86,033) | $(42,359) | | **Net Loss** | **$(25,464)** | **$(16,817)** | **$(67,500)** | **$(34,149)** | | Net Loss per Share | $(0.15) | $(0.15) | $(0.46) | $(0.30) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended Dec 31, 2021 | Six Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(18,724) | $6,848 | | Net cash used in investing activities | $(16,035) | $(27,996) | | Net cash provided by financing activities | $413,341 | $214,327 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, noting a **20% revenue increase** driven by customer growth and higher per-employee revenue, with widened operating losses due to post-IPO stock-based compensation and strategic investments - The company's business model is a **recurring revenue SaaS model**, primarily based on a **per-employee-per-month (PEPM) fee structure**, which provides significant visibility into future operating results, with recurring and other revenues representing **over 99% of total revenue** for the periods ended December 31, 2021[125](index=125&type=chunk) - As of December 31, 2021, customer employee counts had **fully recovered** to pre-pandemic levels for the cohort of customers active in March 2020, and the company's customer base grew **3.9% year-over-year** to approximately **29,000**[129](index=129&type=chunk)[133](index=133&type=chunk) - Key growth strategies include **expanding the sales footprint** to add new customers, **increasing product penetration** with existing customers through bundled offerings, and **ongoing product innovation**[132](index=132&type=chunk)[135](index=135&type=chunk)[139](index=139&type=chunk) Key Financial Metrics (in thousands) | Metric | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2021 | Six Months Ended Dec 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $103,067 | $85,864 | $195,799 | $164,925 | | Loss from Operations | $(33,764) | $(20,892) | $(86,033) | $(42,359) | | Adjusted Operating Income* | $10,259 | $13,495 | $13,651 | $26,171 | [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate fluctuations affecting client funds and investment portfolio value, with minor exposure to foreign currency and inflation, and no use of derivatives - The company's primary market risk is **interest rate risk**, which impacts interest income from **$940.2 million** in funds held for clients and the value of its available-for-sale securities portfolio, with a 100-basis point change in interest rates having an **immaterial effect** on the portfolio's market value as of December 31, 2021[239](index=239&type=chunk)[240](index=240&type=chunk) - Foreign currency exchange risk is **not considered significant** as most sales are denominated in U.S. dollars[238](index=238&type=chunk) - The company had **no outstanding debt** under its 2021 Credit Facility as of December 31, 2021, mitigating exposure to variable interest rate risk on borrowings[242](index=242&type=chunk) - While inflation has **not had a significant historical impact**, the company notes that if the Federal Reserve raises interest rates to combat inflation, it could **benefit from increased interest income** on funds held for clients[243](index=243&type=chunk)[244](index=244&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of December 31, 2021, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of December 31, 2021, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective**[246](index=246&type=chunk) - **No changes** were made to the internal control over financial reporting during the three months ended December 31, 2021, that have materially affected, or are reasonably likely to materially affect, these controls[247](index=247&type=chunk) Part II - OTHER INFORMATION [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business, financial condition, or liquidity - Paycor is **not presently a party** to any legal proceedings that it believes would have a **material adverse effect** on its business[249](index=249&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section highlights risks from evolving data privacy laws like CCPA and IBIPA, including three lawsuits related to IBIPA, with potential for significant costs and reputational harm from non-compliance - The company faces risks from a **complex and evolving regulatory framework** for **data security and privacy**, including laws like the California Consumer Privacy Act (CCPA) and the Illinois Biometric Information Privacy Act (IBIPA)[250](index=250&type=chunk)[251](index=251&type=chunk) - Paycor is currently a defendant in **three lawsuits** (two in Illinois state court, one in federal court) alleging **violations of the IBIPA** related to the use of handprint/fingerprint scanning for employee timekeeping[252](index=252&type=chunk) - Potential consequences of non-compliance with privacy laws include **regulatory scrutiny, litigation, fines**, and the need to modify business practices, which could **adversely affect financial results and reputation**[254](index=254&type=chunk)[255](index=255&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the use of approximately **$458.7 million** in net IPO proceeds from July 2021, with **$260.0 million** used to redeem Series A Redeemable Preferred Stock - The company's IPO in July 2021 generated approximately **$458.7 million** in net proceeds after underwriting discounts[260](index=260&type=chunk) - Approximately **$260.0 million** of the IPO proceeds were used to fund the redemption of the Series A Redeemable Preferred Stock on July 23, 2021[260](index=260&type=chunk) [Defaults Upon Senior Securities](index=51&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults on senior securities [Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company [Other Information](index=51&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this period [Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate documents and Sarbanes-Oxley Act officer certifications