Core Insights - Hubexo has selected Dayforce to consolidate its HR systems and provide a unified platform for its global workforce [1][2] - The implementation of Dayforce is part of Hubexo's broader digital transformation strategy, which includes restructuring under a unified brand [2][3] - Dayforce will support over 2,400 employees across 25 countries, enhancing decision-making and operational efficiency [3][4] Company Overview - Dayforce is a global leader in human capital management (HCM) technology, focused on improving work life for employees and organizations [5] - The platform offers a comprehensive suite of tools including Time and Attendance, Reporting and Analytics, Compensation Management, and Performance Management [2][5] - Dayforce aims to provide operational resiliency and simplicity at scale for organizations facing complex workforce challenges [4]

Group 1 - Stock markets are optimistic about new trade deals and have largely recovered from losses incurred after the announcement of tariffs on "Liberation Day" [1] - Current stock valuations appear high as the macroeconomic environment shows signs of improvement [1] - Gary Alexander has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, and advises startups [1]

Core Insights - Dayforce (DAY) reported revenue of $481.8 million for the quarter ended March 2025, marking an 11.7% year-over-year increase and exceeding the Zacks Consensus Estimate by 0.87% [1] - The earnings per share (EPS) for the same period was $0.58, up from $0.43 a year ago, representing a surprise of 3.57% over the consensus estimate of $0.56 [1] Revenue Breakdown - Recurring revenue was reported at $410.50 million, which is below the four-analyst average estimate of $421.40 million, reflecting a year-over-year increase of 7.3% [4] - Revenue from professional services and other was $71.30 million, surpassing the average estimate of $55.49 million, with a significant year-over-year change of 46.1% [4] - Other recurring revenue was reported at $13.10 million, which is below the two-analyst average estimate of $15.12 million, showing a year-over-year decline of 32.8% [4] Stock Performance - Dayforce shares have returned 18% over the past month, outperforming the Zacks S&P 500 composite's return of 10.6% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Company Performance - Dayforce reported quarterly earnings of $0.58 per share, exceeding the Zacks Consensus Estimate of $0.56 per share, and up from $0.43 per share a year ago, representing an earnings surprise of 3.57% [1] - The company posted revenues of $481.8 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.87%, and an increase from $431.5 million year-over-year [2] - Dayforce has surpassed consensus EPS estimates for the last four quarters and has also topped consensus revenue estimates four times during the same period [2] Stock Outlook - Dayforce shares have declined approximately 19.9% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.52 on revenues of $465.14 million, and for the current fiscal year, it is $2.30 on revenues of $1.93 billion [7] Industry Context - The Internet - Software industry, to which Dayforce belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Dayforce's stock performance [5]

Revenue and Customer Growth - Total revenue increased by $50.3 million, or 11.7%, to $481.8 million for Q1 2025 compared to $431.5 million for Q1 2024[124] - The number of live Dayforce customers increased by 5.4% to 6,929 at March 31, 2025, from 6,575 at March 31, 2024[124] - Dayforce recurring revenue per customer grew to $167,600 for the trailing twelve months ended March 31, 2025, compared to $150,362 for the same period in 2024[124] - Total revenue, excluding float, increased by 15.0% to $426.5 million for Q1 2025 compared to $370.8 million for Q1 2024[124] Profit and Income - Operating profit decreased by $9.7 million, or 23.8%, to $31.0 million for Q1 2025 compared to $40.7 million for Q1 2024[122] - Net income for Q1 2025 was $14.9 million, a 109.9% increase compared to $7.1 million for Q1 2024[122] - For the three months ended March 31, 2025, operating profit was $31.0 million, a decrease from $40.7 million for the same period in 2024[133] - Net income for the three months ended March 31, 2025, was $14.9 million, compared to $7.1 million for the same period in 2024, driven by increased revenue and lower interest expenses[138] - The net income for the same period was $14.9 million, resulting in a net income margin of 3.1%[157] - Adjusted net income for Q1 2025 was $46.0 million, with an adjusted net profit margin of 19.5%[157] Expenses and Costs - Costs of recurring services increased by $10.0 million, or 11.3%, for Q1 2025 compared to Q1 2024, primarily due to a $6.3 million increase in labor and employee benefit expenses[126] - Costs of professional services rose by $15.2 million, or 23.0%, for Q1 2025 compared to Q1 2024, mainly due to a $15.0 million increase in labor and benefit expenses[127] - General and administrative expenses increased by $15.1 million, or 27.0%, for the three months ended March 31, 2025, compared to the same period in 2024[131] - Selling and marketing expenses rose by $8.4 million, or 10.7%, for the three months ended March 31, 2025, compared to the same period in 2024[130] Cash Flow and Investments - Cash provided by operating activities was $49.6 million for the three months ended March 31, 2025, significantly up from $9.1 million in the same period of 2024[145] - Total cash, restricted cash, and equivalents at the end of the period was $3,473.0 million, down from $4,899.2 million at the end of March 31, 2024[144] - Investment in software development for the three months ended March 31, 2025, was $55.8 million, compared to $50.4 million in the same period of 2024[129] - Net cash used in investing activities was $120.1 million for the three months ended March 31, 2025, down from $290.7 million in the same period of 2024[146] - Net cash provided by financing activities was $288.6 million for the three months ended March 31, 2025, compared to $1,772.9 million in the same period of 2024[148] Margins and Ratios - For the three months ended March 31, 2025, the operating profit was $31.0 million with an operating profit margin of 6.4%[157] - Adjusted EBITDA for Q1 2025 was $80.9 million, with an adjusted EBITDA margin of 32.5%[157] - Free cash flow for Q1 2025 was $19.5 million, representing a free cash flow margin of 4.0%[160] - The company reported a diluted net income per share of $0.09 for Q1 2025, compared to $0.04 in Q1 2024[159] Future Expectations and Risks - The company expects to finalize the wind down of its pension plan in 2025, transferring associated liabilities to an insurance company[172] - A hypothetical 10% change in foreign currency exchange rates is not expected to materially affect the company's operational needs[164] - A 100 basis point decrease in market investment rates could result in approximately $27 million decrease in float revenue over the next twelve months[167] Performance Obligations - As of March 31, 2025, remaining performance obligations were approximately $1.28 billion, representing contracted revenue not yet recognized[150]

Revenue Performance - Dayforce's recurring revenue, excluding float, reached $323 million, an increase of 14%, or 16% on a constant currency basis[2] - Total revenue was $482 million, up 12%, and excluding float, it increased by 15%, or 17% on a constant currency basis[2] - Total revenue for Q1 2025 was $481.8 million, representing an 11.7% increase compared to $431.5 million in Q1 2024[27] - Recurring services revenue increased to $410.5 million, up 7.3% from $382.7 million in the same period last year[30] - The company plans to achieve total revenue of $1,929 million to $1,944 million for the full year 2025, representing an increase of approximately 12.1% to 13.1% on a GAAP basis[11] Customer Metrics - The number of customers live on the Dayforce platform increased by 5.4% year-over-year to 6,929[7] - Dayforce recurring revenue per customer was $167,600 for the trailing twelve months, an increase of 11.5%[7] Profitability and Cash Flow - Net income for Q1 2025 was $14.9 million, compared to $7.1 million in Q1 2024, reflecting a significant increase[27] - Operating profit decreased to $31.0 million from $40.7 million year-over-year, indicating a decline in operational efficiency[27] - Cash flows from operating activities improved to $49.6 million, up from $9.1 million in Q1 2024[29] - Free cash flow for Q1 2025 was $19.5 million, with a free cash flow margin of 4.0%, while in Q1 2024, free cash flow was negative at $(18.8) million, reflecting a margin of (4.4)%[38] - The guidance for free cash flow for the twelve months ending December 31, 2025, is projected to be between $229 million and $234 million, with free cash flow margins expected to be between 11.9% and 12.1%[38] Balance Sheet Highlights - Total assets increased to $9,499.5 million as of March 31, 2025, compared to $9,117.0 million at the end of 2024[25] - Total liabilities rose to $6,907.4 million, up from $6,570.7 million at the end of 2024[25] - Customer funds obligations increased to $5,361.8 million, compared to $5,024.2 million at the end of 2024[25] - Total stockholders' equity rose to $2,592.1 million, up from $2,546.3 million at the end of 2024[25] Operational Efficiency - For the three months ended March 31, 2025, Dayforce reported an operating profit of $31.0 million, representing a margin of 6.4%, compared to an operating profit of $40.7 million and a margin of 9.4% for the same period in 2024[36] - Dayforce's adjusted operating profit for Q1 2025 was $132.3 million, with an adjusted operating profit margin of 27.5%, compared to $109.1 million and 25.3% in Q1 2024[36] - Dayforce's EBITDA for Q1 2025 was $80.9 million, with an EBITDA margin of 32.5%, compared to $80.5 million and a margin of 30.1% in Q1 2024[36] Strategic Initiatives - Dayforce announced an expanded partnership with Microsoft, making the Dayforce platform available in the Microsoft Azure Marketplace[13] - The company introduced several new features, including Dayforce AI Assistant and enhanced mobile capabilities for talent management[13] Restructuring and Expenses - The company incurred $26.6 million in restructuring expenses in Q1 2025, impacting adjusted operating profit and net income[36]

Core Insights - Dayforce, Inc. reported strong financial results for Q1 2025, with total revenue of $481.8 million, representing an increase of 11.7% year-over-year, or 13.6% on a constant currency basis [6][9] - The company's recurring revenue, excluding float, was $323.1 million, up 14.4% year-over-year, or 15.9% on a constant currency basis [6][29] - Dayforce's net income for the quarter was $14.9 million, compared to $7.1 million in the previous year, reflecting a net profit margin increase to 3.1% from 1.6% [6][23] Financial Performance - Total revenue of $481.8 million, up 11.7%, or 13.6% on a constant currency basis [6][29] - Recurring revenue, excluding float, was $323.1 million, an increase of 14.4%, or 15.9% on a constant currency basis [6][29] - Operating profit was $31.0 million, down from $40.7 million, while adjusted operating profit rose to $132.3 million from $109.1 million [6][23] - Adjusted EBITDA was $156.7 million, compared to $129.9 million, with an adjusted EBITDA margin of 32.5% [6][23] Cash Flow and Shareholder Returns - Net cash provided by operating activities was $49.6 million, significantly up from $9.1 million in the prior year [6][25] - Free cash flow for the quarter was $19.5 million, compared to a negative $18.8 million in the previous year [6][39] - The company repurchased approximately $30 million worth of shares during the quarter under its $500 million repurchase program, returning over $66 million of capital to stockholders to date [3][6] Customer Growth and Market Position - As of March 31, 2025, Dayforce had 6,929 customers live on its platform, a 5.4% increase year-over-year [6][29] - Dayforce recurring revenue per customer was $167,600 for the trailing twelve months, an increase of 11.5% [6][29] - The company announced an expanded partnership with Microsoft, making its platform available in the Microsoft Azure Marketplace [12] Business Outlook - Dayforce provided guidance for Q2 2025, projecting total revenue of $454 million to $460 million, and full-year revenue of $1,929 million to $1,944 million [13][14] - The company anticipates continued growth in recurring revenue, with expectations of an increase of approximately 12.1% to 13.1% on a GAAP basis for the full year [13][14]

Group 1 - Analysts forecast that Dayforce (DAY) will report quarterly earnings of $0.56 per share, reflecting a year-over-year increase of 30.2% [1] - Expected revenues for Dayforce are projected to be $477.63 million, indicating a 10.7% increase compared to the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, indicating that analysts have not revised their initial projections [2] Group 2 - Revisions to earnings estimates are crucial for predicting investor actions regarding the stock, as there is a strong correlation between earnings estimate trends and short-term price performance [3] - Analysts expect 'Revenue- Recurring' to be $421.40 million, showing a year-over-year change of +10.1% [5] - 'Revenue- Professional services and other' is anticipated to reach $55.49 million, reflecting a year-over-year increase of +13.7% [5] - 'Other recurring' revenue is forecasted to be $15.12 million, indicating a year-over-year decline of -22.5% [5] Group 3 - The total cloud recurring revenue is expected to reach $410.24 million, suggesting a year-over-year increase of +13% [6] - Dayforce shares have returned +14% over the past month, outperforming the Zacks S&P 500 composite's +11.5% change [6] - With a Zacks Rank 2 (Buy), Dayforce is anticipated to outperform the overall market in the near future [6]

Core Viewpoint - Dayforce (DAY) is expected to report first-quarter 2025 results on May 7, with projected revenues indicating growth despite potential foreign currency headwinds [1][7]. Revenue Expectations - DAY anticipates first-quarter 2025 revenues between $421 million and $427 million, reflecting a growth of 13.5-15% on a GAAP basis and 15.5-17% on a constant-currency basis [1]. - The consensus estimate for DAY's first-quarter revenues is $477.63 million, representing a year-over-year increase of 10.69% [1]. Earnings Projections - The Zacks Consensus Estimate for DAY's first-quarter earnings is set at 56 cents per share, indicating a year-over-year growth of 30.23% [2]. - DAY has beaten the Zacks Consensus Estimate for earnings in three of the last four quarters, with an average surprise of 21.50% [2]. Sales Pipeline and Growth Factors - Dayforce entered 2025 with a sales pipeline nearly four times its quarterly sales target, indicating strong demand and customer engagement [3]. - January sales growth outpaced revenue growth, suggesting healthy momentum in deal activity and client acquisition [3]. Profitability and Margin Enhancement - The company projects an adjusted EBITDA increase to 32% in the first quarter of 2025, supporting margin enhancement and overall performance [4]. AI and Product Development - Dayforce is enhancing its AI capabilities and regulatory support through tools like Dayforce Co-Pilot, which is expected to boost platform adoption and contribute to revenue growth [5]. Recurring Revenue and Client Retention - The ability to grow recurring revenue per customer by 11% and achieve a gross retention rate of 98% in Q4 2024 indicates strong product value and client confidence [6]. Currency Impact - Unfavorable foreign currency fluctuations, particularly with Canadian dollar-denominated revenues, are expected to reduce 2025 revenues by 200 basis points, impacting top-line growth in Q1 [7].

Core Viewpoint - Dayforce (DAY) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - For Dayforce, the rising earnings estimates and the rating upgrade suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Dayforce is expected to earn $2.30 per share, representing a 16.8% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Dayforce has increased by 6.9%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimate revisions, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, suggesting a strong potential for market-beating returns [9][10]. - Dayforce's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a favorable position for potential price increases in the near term [10].