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].

Revenue Growth and Market Position - Revenue from Cloud solutions has grown substantially, with a significant portion of market capitalization depending on sustaining this growth trajectory [60]. - The company has experienced significant growth in user numbers, transactions, and data transmission volume, necessitating the maintenance of sufficient operational infrastructure capacity [79]. - The company has experienced substantial revenue growth from its Cloud solutions, which is critical for sustaining its market capitalization [60]. - The company is focused on an aggressive growth strategy, which requires significant investments to enhance and scale systems and internal controls [66]. - The company’s growth strategy includes international expansion, which may require additional investment and could expose it to various risks [76]. - The company plans to expand its operations into new international markets, which may increase costs and regulatory compliance risks [73]. Risks and Challenges - The company faces risks related to disruptions in payroll-related transactions, which could lead to significant losses and reputational harm [63]. - The aging software infrastructure and technology may lead to increased costs and vulnerabilities to cyber-attacks, impacting profitability and operational efficiency [65]. - Competitive pressures in the market are intensifying, with larger competitors having greater resources and established customer bases [69]. - The company must effectively manage growth to avoid operational challenges, declines in customer satisfaction, and increased costs [67]. - The company faces significant costs and operational burdens due to evolving privacy and data protection laws as it expands into new markets [109]. - The company faces risks related to the performance of its applications, with potential material defects or errors that could harm its reputation and financial results [77]. - The company is at risk of significant losses if customers fail to repay advanced funds related to payroll services, which could adversely affect financial stability [88]. - The company faces challenges in attracting and retaining skilled employees, which could impact its operational quality and financial performance [85]. Cybersecurity and Compliance - Cybersecurity risks pose a threat to the integrity and availability of the company's IT systems, potentially leading to financial loss and regulatory issues [95]. - The company operates under a shared responsibility model for data security, which may expose it to cybersecurity risks if customers do not implement sufficient security controls [97]. - The company has acquired firms with cybersecurity vulnerabilities, increasing operational and financial risks, requiring significant resources for mitigation [98]. - The company relies heavily on third-party suppliers for IT systems, making it vulnerable to cyberattacks that could materially impact operations and financial results [103]. - The company is subject to a 20-year consent order with the U.S. Federal Trade Commission due to past security breaches, which requires ongoing compliance efforts [100]. - Regulatory investigations and enforcement actions related to data security incidents are on the rise, potentially leading to significant costs and reputational damage [113]. - The evolving landscape of privacy legislation may impose operational burdens and increase costs for the company [113]. - The company must continuously monitor and update its solutions to comply with applicable laws, which requires substantial investment of time and resources [114]. Financial Management and Debt - The company has authorized a share repurchase program of up to $500 million for its common stock, which may increase stock price volatility and affect liquidity [138]. - The company has never declared or paid cash dividends and intends to retain future earnings for business operations and expansion [141]. - The company’s outstanding indebtedness may limit its operational flexibility and ability to generate sufficient cash flows to meet debt service obligations [126]. - A downgrade in the company's debt ratings could negatively impact its access to capital markets and increase borrowing costs [129]. - The company may face challenges in repurchasing Convertible Senior Notes if required, which could lead to defaults under its debt agreements [128]. - The company is exposed to credit risk from option counterparties related to its Convertible Senior Notes, which could affect stock value [132]. Legal and Regulatory Risks - The company faces risks from litigation and regulatory investigations that could result in significant financial losses and harm to its reputation, particularly related to wage compliance and data privacy claims [119]. - The company is subject to audits and tax proceedings in multiple jurisdictions, which could materially affect its financial condition [158]. - The company is subject to evolving legal frameworks around AI, which could adversely affect its business and financial condition if compliance is not maintained [123]. - The company has signed the Ottawa Statement on Generative AI and the Government of Canada's AI Code of Conduct, indicating its commitment to responsible AI development [124]. - The implementation of compliance programs for anti-corruption and anti-money laundering laws is costly and may impact sales processes [118]. Operational Efficiency and Customer Satisfaction - High-quality support services are essential for customer retention, and any failure in this area could result in lost recurring revenue and damage to the company's reputation [82]. - Customer dissatisfaction with implementation services could lead to revenue loss and negative publicity, impacting future business opportunities [83]. - The company must manage its technical operations infrastructure effectively to avoid service outages and delays for customers, which could have a material adverse effect on its operations [79]. - The company relies on third-party service providers for critical operations, and any disruption or decline in service quality from these partners could adversely affect business performance [80]. - The company identified a material weakness in internal controls over financial reporting as of December 31, 2023, which was remediated by December 31, 2024 [148].

I give a buy rating for Dayforce (NYSE: DAY ) as its accelerating enterprise expansion and AI innovations position it well to continue growing. So long as DAY can continue its current pace of execution, I think it canI am an individual investor that is now fully focus on managing my own capital that I have saved up over the years. My investing background spreads across a wide spectrum as I believe there are merits to each approach, for instance: Fundamental investing [Bottoms-up etc.], Technical investing [ ...

Group 1 - The core theme during the Q4 earnings season is that investors are expecting high performance from stocks to justify their elevated valuations, with any indication of a weaker-than-expected outlook for 2025 leading to significant declines [1] Group 2 - Gary Alexander has extensive experience in covering technology companies and has been involved with several seed-round startups, contributing to discussions on industry trends since 2017 [2]

Dayforce (DAY) reported fourth-quarter 2024 earnings of 60 cents per share, which beat the Zacks Consensus Estimate by 30.43% and rose 20% year over year.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Revenues of $465.2 million beat the Zacks Consensus Estimate by 2.19% and increased 16.4% on a constant currency basis.DAY raised its first-quarter 2025 guidance following the robust fourth-quarter performance, which bodes well for investors. DAY shares have appreciated 36.7% over the t ...