Martin Mucci
President and Chief Executive Officer at Paychex
Thank you, and thank you for joining us for our discussion of the Paychex's first quarter fiscal year 2022 earnings release. Joining me today is Efrain Rivera, our Chief Financial Officer. This morning before the market opened, we released our financial results for the first quarter ended August 31, 2021. You can access our earnings release on our Investor Relations website, and our Form 10-Q will be filed with the SEC within the next few days.
This teleconference is being broadcast over the Internet and will be archived and available on our website for approximately 90 days. I will start today's call with an update on the business highlights for the first quarter and Efrain will review the financial results for the quarter and provide an update on fiscal '22 guidance. We will then open it up for questions.
Fiscal '22 is off to a very strong start with Q1 results above our expectations. Total revenue increased 16% with double-digit growth in both Management Solutions and PEO and Insurance Solutions, while total expenses declined by 1%. Adjusted diluted earnings per share increased 41%. While results benefited from the compared to a pandemic impacted first quarter last year and improvements in the economy, our internal execution has been strong with continued momentum in sales, marketing and client retention.
During the first quarter, positive macroeconomic trends continued. This was evident in the growth in checks per payroll and net increase in worksite employees within our existing base of HR Outsourcing clients, particularly with our ASO offering. Our client retention remains near record levels reflective of both the resilience of small businesses and the value provided by our unique blend of software solutions and HR expertise.
Our sales momentum continued with strong first quarter sales performance as measured by new annualized revenue reflecting solid performance in digital sales, our mid-market sales and our HR Outsourcing divisions. Our unique value proposition of combining the most comprehensive Human Capital Management software platform with our deep HR expertise, continues to resonate with prospective clients.
We continue to invest in our sales force and support them through increased digital marketing and lead generation initiatives. We are well positioned for the upcoming selling season. We continue to leverage our investments in research and development to expand the capabilities of our industry leading software, Paychex Flex.
Our investments in self service, artificial intelligence and machine learning in analytics, payments, wearables and voice recognition allow us to offer cutting-edge technology, specifically designed to deliver automation and efficiency to both administrators and their employees. Our recent Pulse of HR reported -- survey, reported identified a hiring retention in software automation to gain efficiencies as the top industry trends facing businesses of all sizes. Our fall release introduces a series of software enhancements to further strengthen the power of Paychex Flex.
We currently offer two options for clients in their search for talent, a fully integrated connection, API connection with Indeed, the world's largest job board for clients who are looking for a pool of applicants, and a comprehensive recruiting and applicant tracking offering called Flex hiring, for businesses looking for integrated technology to manage the entire recruiting processes.
We made enhancements to board [Phonetic] to provide clients with tools they need to post jobs, attract candidates and allow new hires to digitally self on-board via our Flex mobile application. With employee retention being a significant issue in this challenging environment, we've introduced several enhancements to provide our clients with insights and offerings designed to help them in making informed decisions and retain their workforce.
The introduction of retention insights, our first client facing predictive analytic was designed to identify employees who may be at risk of leaving for example. Second is Pay Benchmarking which allows employers to compare performance ratings and compensation details by position to ensure top performers are paid equitably. With our advanced technology, employers can easily compare individual employee compensation against national averages provided by the Bureau of Labor Statistics to confirm the impact of compensation and retention.
We're excited also to announce a new offering called Paychex Pre-Check to fully -- to further automate the payroll process for employers and provide their employees an opportunity to review their gross to net calculation before payrolls are officially processed. With Paychex Pre-Check, employees are notified through their channel of choice, their phone, their tablet, their smartwatch or their smart speakers, that they have a pending pay period to review.
The employee leverages Paychex Flex to either confirm the amount of their check or report an issue. Issues are routed electronically to allow clients to focus on exceptions and proactively address issues prior to pay day. Paychex Pre-Check leverages our industry-leading Flex payroll and time and attendance offerings, HR Connect offering, our digital employee case management tool, our advanced analytics module, our five-star rated mobile app and expands our conversational UI capabilities, including our integration with Amazon Alexa, Google Assistant and Siri Shortcuts.
With these additions, Paychex Flex is the first HCM application to offer integration with three of the major voice assistant platforms. Paychex Pre-Check was recently recognized by HR Executive Magazine in the HR Tech Conference and Exposition with the Top HR Product of the Year Award, an award that spotlights innovation driving the HR Technology market. This is a three-peat for us, marks the third consecutive year that Paychex has been recognized as a top HR product innovator by HR Tech.
In addition to our innovative technology, the expertise and advice we're able to provide clients on HR matters really sets us apart. Our HR professionals have been very important in helping ASO and PEO clients to navigate through the pandemic and in handling the current uncertainty around COVID with the recent uptick in transmission rates, return to office plans and potential vaccine mandates.
We are very proud of the work our HR professionals do, and we're honored to be recognized by winning a gold Human Capital Management Excellence Award from the Brandon Hall Group in the category of Best Use of a Blended Learning Program for our HR Services Excellence Academy training program. This training program prepares our new HR professionals to provide exemplary consulting services to the Company's HR outsourcing clients, and was recognized for combining instructor-led training with technology-based activities.
The expertise we offer our clients also expands to providing resources to assist clients for their [Phonetic] many compliance obligations. Our COVID response continues near real-time updates to our COVID-19 help center where businesses can access key information regarding changing regulations, including the recent Biden administration proposal on vaccine mandates. We assisted our clients in receiving over $65 billion in Paycheck Protection loans, that's 9% of the total PPP loans provided.
And our industry-leading PPP forgiveness tools and reports have been accessed over 500,000 times since its release with over 90% of businesses now reporting their initial loan has been forgiven. We have also been instrumental in helping clients secure over $4 billion in stimulus funds available through the employee retention and paid leave credits. We recently launched an enhanced offering, the Paychex Employee Retention Tax Credit service to help businesses retroactively identify tax credit eligibility based on wages already paid and file amended returns to claim the credit.
On average, Paychex's clients are claiming over $150,000 in tax credits, a substantial amount for a smaller mid-sized business that is helping them survive and thrive in this pandemic. The pandemic has only exacerbated the retirement crisis in America. In response, a growing number of states have introduced state mandated retirement programs and our Pooled Employer Plan or PEP offering, as well as, traditional plans have helped our clients handle new state mandates in ways that make financial sense for the employer and employees.
For the eleventh consecutive year, Paychex has earned the distinction as the largest 401(k) record keeper by total number of 401(k) plans serving more than 96,000 plans. We have seen continued success in helping clients find retirement plans that suit their employees needs and help them to attract and retain clients. We are very proud of our performance during the first quarter, but remain vigilant about the rest of the fiscal year given the uncertainty around the macroeconomic environment and the COVID-19 variants.
Our very strong start in sales, continued client base growth, best-in-class operating margin and increased investment in marketing lead generation and product development have us well positioned for continued financial and operating success during the remainder of fiscal year '22 and beyond.
I'd like to close my comments by recognizing again the Company's 50th anniversary. From our founder start with $3,000 and a few clients, we have transformed into a comprehensive, technology-driven human capital management software company with over 710,000 clients across the US and Europe.
In addition to paying one in every 12 American private-sector employees, we are the country's largest 401(k) record keeper, a top 30 US Insurance Agency, and among the largest providers of HR outsourcing in the US, supporting over 1.7 million worksite employees. While the size and the breadth of the Company has changed, we remain true to our original mission of serving the unique needs of small and mid-sized businesses. That mission was all the more important during the challenges faced over the past 18 months.
I'd like to thank and commend our employees for their tireless dedication to innovation and commitment to serving our clients. They have driven our growth over these 50 years. And our shareholders, we thank them for their investment with us along the way.
I will now turn the call over to Efrain Rivera to review our financial results for the first quarter. Efrain?