[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This report contains forward-looking statements subject to inherent risks and uncertainties that could cause actual results to differ materially - Forward-looking statements in this report are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, potentially causing actual results to differ materially[10](index=10&type=chunk) - Important factors that could cause actual results to differ include regional, national, or global political, economic, business, competitive, market, and regulatory conditions[10](index=10&type=chunk) - Specific risk factors include inability to manage growth, failure to provide new features, intense competition, inability to offer high-quality services, system breaches, non-compliance with laws, aging technical infrastructure, inability to maintain third-party relationships, challenges in attracting and retaining employees, impact of debt obligations, and the duration and scope of the COVID-19 pandemic[13](index=13&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's analysis of its financial condition and results of operations [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents the company's unaudited condensed consolidated financial statements and accompanying notes for the periods ended June 30, 2022 and December 31, 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show a significant increase in total assets and liabilities driven by customer funds, alongside a decrease in stockholders' equity Condensed Consolidated Balance Sheet Highlights (Dollars in millions) | Metric | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total Assets | $9,082.3 | $7,166.2 | | Customer Funds | $5,397.0 | $3,535.8 | | Total Liabilities | $6,988.0 | $4,938.7 | | Customer Funds Obligations | $5,487.8 | $3,519.9 | | Total Stockholders' Equity | $2,094.3 | $2,227.5 | - Total assets increased significantly, primarily driven by a **substantial increase in customer funds** and corresponding customer funds obligations[15](index=15&type=chunk) - **Total stockholders' equity decreased** from December 31, 2021, to June 30, 2022[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations reflect revenue growth for both three and six-month periods, with a reduced net loss in Q2 but an increased net loss year-to-date Three Months Ended June 30 (Dollars in millions) | Metric | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $301.2 | $250.4 | 20.3% | | Gross Profit | $116.0 | $92.1 | 26.0% | | Operating Loss | $(6.5) | $(19.7) | 67.0% (reduced loss) | | Net Loss | $(19.8) | $(25.8) | 23.3% (reduced loss) | Six Months Ended June 30 (Dollars in millions) | Metric | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $594.5 | $484.9 | 22.6% | | Gross Profit | $219.1 | $185.3 | 18.2% | | Operating Loss | $(25.4) | $(22.1) | -14.9% (increased loss) | | Net Loss | $(47.2) | $(45.0) | -4.9% (increased loss) | - **Recurring revenue** was the largest component of total revenue for both periods[18](index=18&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The statements show a significant increase in comprehensive loss for 2022, driven by foreign currency adjustments and unrealized investment losses Comprehensive Income (Loss) (Dollars in millions) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Loss | $(19.8) | $(25.8) | $(47.2) | $(45.0) | | Other comprehensive (loss) income before income taxes | $(82.0) | $11.4 | $(132.7) | $9.5 | | Comprehensive Loss | $(92.6) | $(14.0) | $(153.1) | $(31.7) | - The **significant increase in comprehensive loss** for 2022 was primarily driven by negative changes in foreign currency translation adjustments and increased unrealized losses from invested customer funds[21](index=21&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased due to net loss and an increase in accumulated other comprehensive loss Stockholders' Equity Highlights (Dollars in millions) | Metric | December 31, 2021 | June 30, 2022 | | :--- | :--- | :--- | | Total Stockholders' Equity | $2,227.5 | $2,094.3 | | Accumulated Deficit | $(309.2) | $(346.4) | | Accumulated Other Comprehensive Loss | $(324.8) | $(430.7) | - **Total stockholders' equity decreased** from December 31, 2021, to June 30, 2022, influenced by net loss and an increase in accumulated other comprehensive loss[25](index=25&type=chunk) - The adoption of ASU 2020-06 on January 1, 2022, resulted in cumulative-effect adjustments, including a **decrease of $77.7 million to additional paid-in capital** and a **decrease of $10.0 million to accumulated deficit**[25](index=25&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The statements of cash flows detail a significant net increase in cash driven by financing activities, primarily from customer funds obligations Cash Flow Summary (Six Months Ended June 30, Dollars in millions) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $38.7 | $23.1 | | Net cash used in investing activities | $(252.3) | $(409.5) | | Net cash provided by (used in) financing activities | $1,992.5 | $(17.6) | | Net increase (decrease) in cash, restricted cash, and equivalents | $1,774.0 | $(397.3) | | Cash, restricted cash, and equivalents at end of period | $3,726.9 | $1,831.2 | - A **significant net increase in cash, restricted cash, and equivalents** in 2022 was primarily driven by a **$1,983.4 million increase in customer funds obligations** under financing activities[28](index=28&type=chunk)[182](index=182&type=chunk) - Investing activities for the six months ended June 30, 2022, included **$450.5 million in purchases of customer funds marketable securities** and **$42.2 million in capital expenditures**[28](index=28&type=chunk)[180](index=180&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed explanations of significant accounting policies and specific financial statement items [Note 1. Organization](index=9&type=section&id=Note%201.%20Organization) This note describes the company's business, which focuses on providing human capital management services and software with a high level of recurring revenue - Ceridian HCM Holding Inc and its subsidiaries offer a broad range of human capital management (HCM) services and software, including payroll, tax filing, HR information systems, and talent management[31](index=31&type=chunk) - The company's technology-based services are typically provided through long-term customer relationships, resulting in a **high level of recurring revenue**[31](index=31&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=9&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the basis of preparation for the financial statements and details key accounting policies, including deferred costs and recent standard adoptions - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information, reflecting all necessary normal recurring adjustments[32](index=32&type=chunk)[33](index=33&type=chunk) - Deferred costs, primarily sales commissions, were **$141.6 million as of June 30, 2022**, and **$144.5 million as of December 31, 2021**[34](index=34&type=chunk) - The company adopted ASU 2020-06 as of January 1, 2022, simplifying the accounting for convertible instruments by eliminating the debt discount and related deferred tax liability for its Convertible Senior Notes[36](index=36&type=chunk) [Note 3. Business Combinations](index=10&type=section&id=Note%203.%20Business%20Combinations) This note details the acquisition of ADAM HCM, including the purchase price allocation and resulting goodwill and intangible assets - On December 3, 2021, Ceridian acquired ADAM HCM, a payroll and HCM company in Latin America, for **$34.5 million**[37](index=37&type=chunk) - The purchase accounting for ADAM HCM was finalized as of June 30, 2022, recording **$7.5 million in customer relationships**, **$2.9 million in developed technology**, and **$0.4 million in trade name** as intangible assets[38](index=38&type=chunk) - Goodwill associated with the ADAM HCM acquisition was **$24.0 million**, which is deductible for income tax purposes[38](index=38&type=chunk) [Note 4. Fair Value Measurements](index=11&type=section&id=Note%204.%20Fair%20Value%20Measurements) This note presents the fair value measurements of financial assets and liabilities, including customer funds and contingent consideration Financial Assets and Liabilities Measured at Fair Value (Dollars in millions) | Category | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Available for sale customer funds assets (Level 2) | $2,042.3 | $1,952.4 | | DataFuzion contingent consideration (Level 3) | $8.0 | $6.0 | - An expense of **$2.0 million** was recognized for the remeasurement of the DataFuzion contingent consideration during the six months ended June 30, 2022[41](index=41&type=chunk) [Note 5. Customer Funds](index=12&type=section&id=Note%205.%20Customer%20Funds) This note explains the management of customer funds, the generation of float revenue, and the composition of the investment portfolio - Ceridian collects and temporarily holds customer funds for payroll and taxes in segregated accounts, investing them to generate float revenue[44](index=44&type=chunk) Investment Income from Customer Funds (Float Revenue, Dollars in millions) | Period | 2022 | 2021 | | :--- | :--- | :--- | | Three Months Ended June 30 | $14.7 | $10.4 | | Six Months Ended June 30 | $26.1 | $21.1 | Invested Customer Funds (Amortized Cost, Dollars in millions) | Date | Amortized Cost | | :--- | :--- | | June 30, 2022 | $5,478.5 | | December 31, 2021 | $3,501.5 | - Gross unrealized losses on available-for-sale customer funds were **$93.4 million** at June 30, 2022, primarily due to changes in interest rates rather than credit deterioration[46](index=46&type=chunk)[49](index=49&type=chunk) [Note 6. Goodwill and Intangible Assets](index=13&type=section&id=Note%206.%20Goodwill%20and%20Intangible%20Assets) This note provides a summary of the changes in goodwill and other intangible assets, along with related amortization expenses Goodwill (Dollars in millions) | Date | Balance | | :--- | :--- | | December 31, 2021 | $2,323.6 | | June 30, 2022 | $2,302.2 | Net Other Intangible Assets (Dollars in millions) | Date | Net Amount | | :--- | :--- | | December 31, 2021 | $332.5 | | June 30, 2022 | $312.5 | Amortization Expense for Definite-Lived Intangible Assets (Dollars in millions) | Period | 2022 | 2021 | | :--- | :--- | :--- | | Three Months Ended June 30 | $7.6 | $9.8 | | Six Months Ended June 30 | $15.4 | $12.0 | [Note 7. Debt](index=15&type=section&id=Note%207.%20Debt) This note details the company's debt obligations, including term debt and convertible senior notes, and the impact of recent accounting standard adoption Debt Obligations (Dollars in millions) | Debt Type | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Term Debt | $654.5 | $657.9 | | Convertible Senior Notes | $575.0 | $575.0 | | Total Debt | $1,238.5 | $1,242.5 | - The adoption of ASU 2020-06 on January 1, 2022, led to the Convertible Senior Notes being accounted for as a single liability, **eliminating non-cash interest expense** related to debt discount amortization[64](index=64&type=chunk)[65](index=65&type=chunk) Interest Expense Related to Convertible Senior Notes (Dollars in millions) | Period | 2022 | 2021 | | :--- | :--- | :--- | | Three Months Ended June 30 | $1.0 | $5.3 | | Six Months Ended June 30 | $2.0 | $6.2 | - Future principal payments include **$637.5 million in 2025** and **$575.0 million in 2026**[68](index=68&type=chunk) [Note 8. Employee Benefit Plans](index=17&type=section&id=Note%208.%20Employee%20Benefit%20Plans) This note summarizes the net periodic costs associated with the company's pension and postretirement benefit plans Net Periodic Pension Cost (Dollars in millions) | Period | 2022 | 2021 | | :--- | :--- | :--- | | Three Months Ended June 30 | $1.6 | $2.7 | | Six Months Ended June 30 | $3.3 | $5.4 | Net Periodic Postretirement Benefit Gain (Dollars in millions) | Period | 2022 | 2021 | | :--- | :--- | :--- | | Three Months Ended June 30 | $(0.4) | $(0.5) | | Six Months Ended June 30 | $(0.9) | $(1.0) | [Note 9. Share-Based Compensation](index=17&type=section&id=Note%209.%20Share-Based%20Compensation) This note discloses the expense, outstanding awards, and unrecognized costs related to the company's share-based compensation plans - Total share-based compensation expense increased to **$38.8 million** for the three months ended June 30, 2022, from $31.4 million in the prior year, and to **$74.3 million** for the six months ended June 30, 2022, from $54.2 million in the prior year[76](index=76&type=chunk) - As of June 30, 2022, there were **12,426,311 stock options, RSUs, and PSUs outstanding** under the 2018 EIP, with 13,733,625 shares available for future grants[76](index=76&type=chunk) - Unrecognized share-based compensation expense as of June 30, 2022, includes **$6.4 million for performance-based stock options**, **$31.0 million for PSUs**, and **$131.2 million for RSUs**[77](index=77&type=chunk)[83](index=83&type=chunk)[85](index=85&type=chunk) [Note 10. Revenue](index=20&type=section&id=Note%2010.%20Revenue) This note provides a disaggregation of revenue by type and details the company's remaining performance obligations or backlog Total Revenue Disaggregation (Dollars in millions) | Revenue Type | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total Cloud Revenue | $262.9 | $209.4 | $514.9 | $412.1 | | Dayforce Recurring | $194.3 | $150.6 | $382.9 | $295.9 | | Powerpay Recurring | $22.3 | $20.5 | $43.9 | $40.8 | | Bureau Recurring | $34.5 | $37.0 | $72.2 | $67.4 | - Recurring revenue includes float revenue of **$14.7 million** for the three months ended June 30, 2022, and **$26.1 million** for the six months ended June 30, 2022[91](index=91&type=chunk) - As of June 30, 2022, approximately **$1,084.7 million of revenue is expected to be recognized** over the next three years from remaining performance obligations (backlog)[95](index=95&type=chunk) [Note 11. Accumulated Other Comprehensive Loss](index=21&type=section&id=Note%2011.%20Accumulated%20Other%20Comprehensive%20Loss) This note details the components and changes in accumulated other comprehensive loss, including foreign currency and investment impacts Accumulated Other Comprehensive Loss (Dollars in millions) | Component | December 31, 2021 | June 30, 2022 | | :--- | :--- | :--- | | Foreign Currency Translation Adjustment | $(177.3) | $(209.1) | | Unrealized Gain (Loss) from Invested Customer Funds | $2.8 | $(75.7) | | Pension Liability Adjustment | $(150.3) | $(145.9) | | Total | $(324.8) | $(430.7) | - The accumulated other comprehensive loss increased significantly, primarily due to **foreign currency translation adjustments** and **unrealized losses from invested customer funds**[96](index=96&type=chunk) [Note 12. Income Taxes](index=21&type=section&id=Note%2012.%20Income%20Taxes) This note outlines the income tax expense or benefit for the periods and discusses the status of deferred tax assets and valuation allowances Income Tax Expense (Benefit) (Dollars in millions) | Period | 2022 | 2021 | | :--- | :--- | :--- | | Three Months Ended June 30 | $0.8 | $(12.0) | | Six Months Ended June 30 | $3.8 | $(5.4) | - As of June 30, 2022, the company had a **valuation allowance of $46.0 million** against certain deferred tax assets[97](index=97&type=chunk) - There were **no unrecognized tax benefits** as of June 30, 2022, and December 31, 2021[100](index=100&type=chunk) [Note 13. Leases](index=22&type=section&id=Note%2013.%20Leases) This note provides information on the company's lease assets, liabilities, and associated costs Lease Information (Dollars in millions) | Metric | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total Lease Assets | $41.6 | $41.3 | | Total Lease Liabilities | $51.5 | $53.6 | Total Lease Cost, Net (Dollars in millions) | Period | 2022 | 2021 | | :--- | :--- | :--- | | Three Months Ended June 30 | $2.8 | $1.1 | | Six Months Ended June 30 | $5.6 | $2.1 | [Note 14. Commitments and Contingencies](index=22&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) This note discusses the company's exposure to legal proceedings and other contingencies arising in the ordinary course of business - The company is subject to various legal proceedings in the ordinary course of business, including employment, contract, intellectual property, and government audits[103](index=103&type=chunk) - Management believes that the final disposition of these proceedings **will not have a material adverse effect** on the company's financial position or results of operations[107](index=107&type=chunk) [Note 15. Net Loss per Share](index=23&type=section&id=Note%2015.%20Net%20Loss%20per%20Share) This note presents the calculation of basic and diluted net loss per share and explains the treatment of potentially dilutive securities Net Loss per Share | Metric | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Basic Net Loss per Share | $(0.13) | $(0.31) | | Diluted Net Loss per Share | $(0.13) | $(0.31) | - Potentially dilutive weighted-average shares, including stock options, restricted stock units, performance stock units, and Convertible Senior Notes, were **excluded from diluted net loss per share calculations** because their effect would have been anti-dilutive[108](index=108&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, business model, liquidity, and key performance indicators for the reported periods [Overview](index=24&type=section&id=Overview) This section provides an overview of the company's business as a global HCM software provider, highlighting its flagship Dayforce platform and Dayforce Wallet - Ceridian is a global human capital management (HCM) software company offering Cloud (Dayforce, Powerpay) and Bureau solutions[111](index=111&type=chunk) - **Dayforce**, the flagship cloud HCM platform, provides comprehensive HR, payroll, benefits, workforce management, and talent management functionality through a single application with continuous real-time calculations[112](index=112&type=chunk) - **Dayforce Wallet**, a digital wallet for employees, offers instant access to earned wages; as of June 30, 2022, it had over **1,190 signed customers** and **640 live customers**, with an average registration rate of **41%**[113](index=113&type=chunk) [Our Business Model](index=25&type=section&id=Our%20Business%20Model) The business model is centered on growing the Dayforce platform through a subscription model that provides high revenue visibility - The business model focuses on **rapid growth of Dayforce** and maximizing the lifetime value of Dayforce customer relationships[115](index=115&type=chunk) - The subscription model, with ratable revenue recognition and high customer retention rates, provides **high visibility into future revenues**[115](index=115&type=chunk) - It takes **approximately two years to recover** implementation, customer acquisition, and other direct costs for a new Dayforce customer contract[115](index=115&type=chunk) [Global Events](index=25&type=section&id=Global%20Events) This section discusses the impact of global events, such as the COVID-19 pandemic and the Russia-Ukraine conflict, on the company's business - The COVID-19 pandemic adversely impacted revenue in 2020 and 2021 due to curtailed customer demand and lower float revenue, though customer employment levels returned to pre-pandemic levels by the end of 2021[117](index=117&type=chunk) - The company is monitoring the Russia-Ukraine conflict for broader economic impact, but its specific impact on financial condition, results of operations, and cash flows was **not material** as of June 30, 2022[118](index=118&type=chunk) [Recent Events](index=25&type=section&id=Recent%20Events) This section highlights recent strategic activities, including several acquisitions in 2021 and the issuance of convertible senior notes - In 2021, Ceridian completed several acquisitions: **Ascender HCM ($359.6 million)**, **Ideal ($41.4 million)**, **DataFuzion ($12.5 million)**, and **ADAM HCM ($34.5 million)**[119](index=119&type=chunk)[120](index=120&type=chunk) - In March 2021, the company issued **$575.0 million in 0.25% Convertible Senior Notes** due 2026 and entered into related capped call transactions[121](index=121&type=chunk) [How We Assess Our Performance](index=26&type=section&id=How%20We%20Assess%20Our%20Performance) Management assesses performance using key metrics like Dayforce customer count, recurring revenue per customer, and non-GAAP measures like Adjusted EBITDA - Key performance measures include the **number of live Dayforce customers** and **Dayforce recurring revenue per customer**, which indicate future revenue and business performance[123](index=123&type=chunk)[124](index=124&type=chunk) - **Constant currency revenue** is used to assess underlying business performance by excluding foreign currency rate fluctuations[125](index=125&type=chunk) - **EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin** are non-GAAP financial measures used by management and investors to evaluate overall operating performance and assess management incentives[126](index=126&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section provides a detailed comparative analysis of the company's operational results for the three and six-month periods ended June 30, 2022 and 2021 [Three Months Ended June 30, 2022 Compared With Three Months Ended June 30, 2021](index=27&type=section&id=Three%20Months%20Ended%20June%2030,%202022%20Compared%20With%20Three%20Months%20Ended%20June%2030,%202021) The company experienced strong revenue growth and improved profitability in the second quarter of 2022 compared to the prior year Financial Performance (Three Months Ended June 30, Dollars in millions) | Metric | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $301.2 | $250.4 | 20.3% | | Cloud Recurring Revenue | $216.6 | $171.1 | 26.6% | | Net Loss | $(19.8) | $(25.8) | 23.3% (reduced loss) | | Adjusted EBITDA | $61.8 | $39.9 | 54.9% | | Adjusted EBITDA Margin | 20.5% | 15.9% | 4.6 pp | | Total Gross Margin | 38.5% | 36.8% | 1.7 pp | - Total revenue increased primarily due to an **11% increase in live Dayforce customers** (excluding 2021 acquisitions) and growth in Dayforce recurring revenue per customer to **$114,630**[132](index=132&type=chunk) - Float revenue increased due to a **12.7% increase in average float balance** and a **28 basis point increase in average yield**[133](index=133&type=chunk) - Cloud recurring gross margin increased to **72.2% (76.4% adjusted)**, driven by an increase in Dayforce customers live for more than two years and higher float revenue[138](index=138&type=chunk) [Six Months Ended June 30, 2022 Compared With Six Months Ended June 30, 2021](index=31&type=section&id=Six%20Months%20Ended%20June%2030,%202022%20Compared%20With%20Six%20Months%20Ended%20June%2030,%202021) For the first half of 2022, the company saw significant revenue growth driven by Dayforce, though net loss slightly increased Financial Performance (Six Months Ended June 30, Dollars in millions) | Metric | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $594.5 | $484.9 | 22.6% | | Cloud Recurring Revenue | $426.8 | $336.7 | 26.8% | | Net Loss | $(47.2) | $(45.0) | -4.9% (increased loss) | | Adjusted EBITDA | $119.2 | $84.4 | 41.2% | | Adjusted EBITDA Margin | 20.1% | 17.4% | 2.7 pp | | Total Gross Margin | 36.9% | 38.2% | -1.3 pp | - Total revenue increased due to growth in live Dayforce customers, revenue from 2021 acquisitions, and higher float revenue[151](index=151&type=chunk) - Float revenue increased due to a **15.2% increase in average float balance** and a **7 basis point increase in average yield**[152](index=152&type=chunk) - Cloud recurring gross margin decreased to **70.8% (75.9% adjusted)**, primarily due to integration costs from APJ acquisitions and resource re-balancing[158](index=158&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section outlines the company's primary sources and uses of liquidity, including cash from operations and its credit facility - Primary liquidity sources include existing cash and equivalents (**$371.2 million** at June 30, 2022), cash from operating activities, and availability under the Revolving Credit Facility[167](index=167&type=chunk) - Primary liquidity needs are for general business requirements, debt payments, capital expenditures, product development, and funding Dayforce Wallet on-demand pay requests[168](index=168&type=chunk) - Customer funds are held in segregated accounts and invested with primary objectives of principal protection and adequate liquidity, maintaining **45-55% in liquidity portfolios** and **45-55% in fixed income portfolios**[175](index=175&type=chunk) [Statements of Cash Flows](index=36&type=section&id=Statements%20of%20Cash%20Flows) This section analyzes the cash flows from operating, investing, and financing activities for the six months ended June 30, 2022 Cash Flow Summary (Six Months Ended June 30, Dollars in millions) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $38.7 | $23.1 | | Net cash used in investing activities | $(252.3) | $(409.5) | | Net cash provided by (used in) financing activities | $1,992.5 | $(17.6) | | Net increase (decrease) in cash, restricted cash, and equivalents | $1,774.0 | $(397.3) | | Cash, restricted cash, and equivalents at end of period | $3,726.9 | $1,831.2 | - Net cash provided by operating activities in 2022 was primarily due to **non-cash adjustments of $130.1 million**, including share-based compensation and depreciation/amortization, offset by net loss and working capital reductions[178](index=178&type=chunk) - Net cash provided by financing activities in 2022 was largely driven by a **$1,983.4 million increase in net customer fund obligations**[182](index=182&type=chunk) [Backlog](index=37&type=section&id=Backlog) This section quantifies the company's backlog of remaining performance obligations, representing future contracted revenue - As of June 30, 2022, backlog (remaining performance obligations) was approximately **$1,084.7 million**, representing contracted revenue for recurring and fixed-price professional services not yet recognized[184](index=184&type=chunk) [Off-Balance Sheet Arrangements](index=37&type=section&id=Off-Balance%20Sheet%20Arrangements) The company confirms it had no off-balance sheet arrangements as of the reporting date - As of June 30, 2022, the company **did not have any off-balance sheet arrangements**[185](index=185&type=chunk) [Critical Accounting Policies and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms no significant changes to critical accounting policies and estimates from the prior annual report - There were **no significant changes** to the company's critical accounting policies and estimates during the six months ended June 30, 2022, from those described in its 2021 Form 10-K[186](index=186&type=chunk) [Non-GAAP Measures](index=37&type=section&id=Non-GAAP%20Measures) This section defines and reconciles non-GAAP financial measures, such as Adjusted EBITDA, used by management to evaluate performance - The company uses non-GAAP financial measures, including **EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Cloud recurring gross margin**, to evaluate operating performance and management incentives[187](index=187&type=chunk)[188](index=188&type=chunk) - Adjusted EBITDA excludes foreign exchange gains/losses, share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, and certain other non-recurring items[188](index=188&type=chunk) Adjusted EBITDA (Dollars in millions) | Period | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $61.8 | $39.9 | $119.2 | $84.4 | | Adjusted EBITDA Margin | 20.5% | 15.9% | 20.1% | 17.4% | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks related to foreign currency exchange rates, interest rates, and pension obligations, which it manages through normal operating and financing activities - The company is exposed to market risks from **foreign currency exchange rates** (primarily Canadian Dollar), **interest rates** (affecting float revenue, debt interest, and cash interest income), and **pension obligations**[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[216](index=216&type=chunk) - A hypothetical **100 basis point increase in market investment rates** would result in approximately **$24 million increase in float revenue** over the ensuing twelve-month period[212](index=212&type=chunk) - A **100 basis point increase in LIBOR rates** would result in approximately **$7 million increase in interest expense, net**, over the ensuing twelve-month period[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal controls during the quarter - Disclosure controls and procedures were evaluated and concluded to be **effective** as of June 30, 2022[218](index=218&type=chunk) - There were **no material changes** to internal controls over financial reporting during the three months ended June 30, 2022[219](index=219&type=chunk) [PART II. OTHER INFORMATION](index=44&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides supplementary information, including legal proceedings, risk factors, and exhibits filed with the report [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including a proposed class action lawsuit, but management believes a material loss is remote - The company is subject to claims and judicial/administrative proceedings normal in the course of business, including employment-related, contract, intellectual property, and government audits[103](index=103&type=chunk)[221](index=221&type=chunk) - A proposed class action lawsuit was filed in October 2021 alleging misrepresentations related to the company's 2018 disclosure concerning the distribution of its interest in LifeWorks Corporation Ltd[222](index=222&type=chunk) - Management believes the final disposition of current legal proceedings, including the class action, **will not have a material adverse effect** on the company's financial position or results of operations, with the likelihood of a material loss from the class action being **remote**[107](index=107&type=chunk)[223](index=223&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors from those disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - **No material changes** in risk factors from those disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021[224](index=224&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report during the period - None[225](index=225&type=chunk) [Item 3. Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report during the period - None[226](index=226&type=chunk) [Item 4. Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[227](index=227&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - None[228](index=228&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or furnished as part of the report, including organizational documents, debt instruments, and various certifications - Exhibits include the Fourth Amended and Restated Certificate of Incorporation, Second Amended and Restated Bylaws, Indenture for Convertible Senior Notes, 2018 Equity Incentive Plan, and certifications from executive officers[230](index=230&type=chunk) [SIGNATURES](index=46&type=section&id=SIGNATURES) This section contains the official signatures of the company's executive officers, certifying the report - The report was duly signed on August 3, 2022, by David D Ossip (Co-Chief Executive Officer), Leagh E Turner (Co-Chief Executive Officer), and Noémie C Heuland (Executive Vice President and Chief Financial Officer)[235](index=235&type=chunk)

| --- | --- | |----------|------------------------| | | | | CERIDIAN | Stockholder Letter | | | 2022 | David Ossip Chair and Co-CEO Leagh Turner Co-CEO Dear Fellow Stockholders, We delivered strong performance in the first quarter of 2022 in terms of both revenue growth and profitability. Dayforce recurring revenue, excluding float revenue, grew by 31% and total revenue grew by 25%. Adjusted EBITDA of $57.4 million exceeded expectations and drove Adjusted EBITDA margin 347 basis points ahead of the high end ...

Ceridian HCM Holding Inc. (CDAY) Q1 2022 Earnings Conference Call May 4, 2022 5:00 PM ET Company Participants David Ossip – Chairman & Co-Chief Executive Officer Leagh Turner – Co-Chief Executive Officer Noemie Heuland – Chief Financial Officer Conference Call Participants Siti Panigrahi – Mizuho Jared Levine – Cowen Matthew Pfau – William Blair Kevin D. McVeigh – Credit Suisse Mark Marcon – Baird Robert Simmons – D. A. Davidson Pinjalim Bora – JP Morgan Daniel Jester – BMO Capital Market Josh Reilly – Need ...

[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements](index=3&type=section&id=3.1.%20Forward-Looking%20Statements) This section outlines the nature of forward-looking statements within the Form 10-Q, emphasizing that they are based on current expectations and assumptions, and are subject to inherent uncertainties, risks, and changes that could cause actual results to differ materially - Forward-looking statements relate to future conditions and are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, potentially causing actual results to differ materially[9](index=9&type=chunk) - Key risk factors include inability to manage growth, failure to provide new features, competitive pressures, inability to offer high-quality support, system breaches, non-compliance with laws, failure to update solutions, aging infrastructure, inability to maintain third-party relationships, inability to attract/retain employees, impact of debt obligations, and the duration/scope of the COVID-19 pandemic[12](index=12&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents Ceridian HCM Holding Inc.'s unaudited condensed consolidated financial statements for the three months ended March 31, 2022, including the balance sheets, statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, business combinations, fair value measurements, customer funds, goodwill, intangible assets, debt, employee benefit plans, share-based compensation, revenue disaggregation, accumulated other comprehensive loss, income taxes, leases, and net loss per share Condensed Consolidated Balance Sheets (March 31, 2022 vs. December 31, 2021) | (Dollars in millions) | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | **ASSETS** | | | | Cash and equivalents | $354.8 | $367.5 | | Customer funds | 7,364.2 | 3,535.8 | | Total assets | $11,059.5 | $7,166.2 | | **LIABILITIES AND EQUITY** | | | | Customer funds obligations | 7,418.5 | 3,519.9 | | Total liabilities | 8,918.7 | 4,938.7 | | Total stockholders' equity | 2,140.8 | 2,227.5 | | Total liabilities and equity | $11,059.5 | $7,166.2 | Condensed Consolidated Statements of Operations (Three Months Ended March 31, 2022 vs. 2021) | (Dollars in millions, except share and per share data) | 2022 | 2021 | | :----------------------------------------------------- | :--- | :--- | | Total revenue | $293.3 | $234.5 | | Total cost of revenue | 190.2 | 141.3 | | Gross profit | 103.1 | 93.2 | | Selling, general, and administrative | 122.0 | 95.6 | | Operating loss | (18.9) | (2.4) | | Loss before income taxes | (24.4) | (12.6) | | Net loss | $(27.4) | $(19.2) | | Net loss per share: Basic | $(0.18) | $(0.13) | | Net loss per share: Diluted | $(0.18) | $(0.13) | Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31, 2022 vs. 2021) | (Dollars in millions) | 2022 | 2021 | | :----------------------------------------------------- | :--- | :--- | | Net cash provided by (used in) operating activities | $5.5 | $(4.5) | | Net cash used in investing activities | (184.7) | (404.7) | | Net cash provided by financing activities | 3,883.7 | 1,040.0 | | Net increase in cash, restricted cash, and equivalents | 3,706.2 | 634.2 | | Cash, restricted cash, and equivalents at end of period | $5,659.1 | $2,862.7 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) [1. Organization](index=9&type=section&id=1.%20Organization) - Ceridian HCM Holding Inc. offers a broad range of human capital management (HCM) services and software, including payroll, tax filing, HR information systems, and time and labor management, primarily through long-term customer relationships that generate high recurring revenue[30](index=30&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information, reflecting all necessary adjustments[31](index=31&type=chunk)[32](index=32&type=chunk) - The company adopted ASU 2020-06 on January 1, 2022, using the modified retrospective method, which eliminated the debt discount for convertible debt and resulted in a **$92.9 million** increase to long-term debt, a **$77.7 million** decrease to additional paid-in capital, and a **$10.0 million** decrease to accumulated deficit[35](index=35&type=chunk) [3. Business Combinations](index=10&type=section&id=3.%20Business%20Combinations) - On December 3, 2021, Ceridian acquired ADAM HCM, a payroll and HCM company in Latin America, for **$34.5 million**[36](index=36&type=chunk) ADAM HCM Preliminary Purchase Price Allocation | (Dollars in millions) | Amount | | :-------------------- | :----- | | Goodwill | $24.0 | | Other intangible assets | 10.8 | | Total purchase price | $34.5 | [4. Fair Value Measurements](index=11&type=section&id=4.%20Fair%20Value%20Measurements) Financial Assets and Liabilities Measured at Fair Value (March 31, 2022) | (Dollars in millions) | Level 1 | Level 2 | Level 3 | Total | | :-------------------------------- | :------ | :------ | :------ | :---- | | Available for sale customer funds assets | $— | $2,062.0 | $— | $2,062.0 | | DataFuzion contingent consideration | $— | $— | $6.8 | $6.8 | - The company recognized an expense of **$0.8 million** in Q1 2022 due to the remeasurement of the DataFuzion contingent consideration, which is classified as Level 3 due to unobservable inputs[40](index=40&type=chunk) [5. Customer Funds](index=12&type=section&id=5.%20Customer%20Funds) - Ceridian collects and temporarily holds customer funds for payroll and taxes, investing these funds to generate 'float revenue,' which are held in segregated accounts and are not available for general business use[43](index=43&type=chunk)[161](index=161&type=chunk) Investment Income from Invested Customer Funds (Float Revenue) | Period | Amount (Millions USD) | | :-------------------------- | :-------------------- | | Three Months Ended Mar 31, 2022 | $11.4 | | Three Months Ended Mar 31, 2021 | $10.7 | Invested Customer Funds (Amortized Cost and Fair Value) | (Dollars in millions) | March 31, 2022 | December 31, 2021 | | :-------------------- | :------------- | :---------------- | | Amortized Cost | $7,406.3 | $3,501.5 | | Fair Value | $7,350.2 | $3,514.8 | - Gross unrealized losses on available-for-sale customer funds investments totaled **$60.4 million** as of March 31, 2022, primarily due to changes in interest rates rather than credit deterioration[47](index=47&type=chunk) [6. Goodwill and Intangible Assets](index=14&type=section&id=6.%20Goodwill%20and%20Intangible%20Assets) Goodwill Balance | (Dollars in millions) | Amount | | :-------------------- | :----- | | Balance at December 31, 2021 | $2,323.6 | | Acquisition (a) | 0.5 | | Translation | 12.7 | | Balance at March 31, 2022 | $2,336.8 | (a) Relates to the ADAM HCM acquisition, with purchase accounting not yet finalized Other Intangible Assets, Net (March 31, 2022) | (Dollars in millions) | Net Amount | | :-------------------- | :--------- | | Customer lists and relationships | $87.7 | | Trade name | 179.3 | | Technology | 63.1 | | Total other intangible assets | $330.1 | Amortization Expense for Definite-Lived Intangible Assets | Period | Amount (Millions USD) | | :-------------------------- | :-------------------- | | Three Months Ended Mar 31, 2022 | $7.8 | | Three Months Ended Mar 31, 2021 | $2.2 | [7. Debt](index=15&type=section&id=7.%20Debt) Debt Obligations (March 31, 2022 vs. December 31, 2021) | (Dollars in millions) | March 31, 2022 | December 31, 2021 | | :-------------------- | :------------- | :---------------- | | Term Debt | $656.2 | $657.9 | | Convertible Senior Notes | 575.0 | 575.0 | | Total debt | $1,240.5 | $1,242.5 | - In March 2021, Ceridian issued **$575.0 million** in 0.25% Convertible Senior Notes due 2026, and following the adoption of ASU 2020-06 on January 1, 2022, the notes are accounted for as a single liability with a carrying amount of **$563.3 million** as of March 31, 2022[58](index=58&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) Interest Expense Related to Convertible Senior Notes | (Dollars in millions) | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :-------------------- | :------------------------------ | :------------------------------ | | Contractual interest expense | $0.3 | $0.1 | | Amortization of debt discount | — | 0.7 | | Amortization of debt issuance costs | 0.7 | 0.1 | | Total | $1.0 | $0.9 | - The fair value of the company's debt was estimated at **$1,149.0 million** as of March 31, 2022, and **$1,248.9 million** as of December 31, 2021, classified as a Level 2 measurement[68](index=68&type=chunk) [8. Employee Benefit Plans](index=17&type=section&id=8.%20Employee%20Benefit%20Plans) Net Periodic Pension Cost | (Dollars in millions) | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :-------------------- | :------------------------------ | :------------------------------ | | Interest cost | $2.2 | $1.7 | | Actuarial loss amortization | 3.4 | 4.3 | | Less: Expected return on plan assets | (3.9) | (3.3) | | Net periodic pension cost | $1.7 | $2.7 | Net Periodic Postretirement Benefit Gain | (Dollars in millions) | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :-------------------- | :------------------------------ | :------------------------------ | | Net periodic postretirement benefit gain | $(0.5) | $(0.5) | [9. Share-Based Compensation](index=17&type=section&id=9.%20Share-Based%20Compensation) Total Share-Based Compensation Expense | Period | Amount (Millions USD) | | :-------------------------- | :-------------------- | | Three Months Ended Mar 31, 2022 | $35.5 | | Three Months Ended Mar 31, 2021 | $22.8 | - As of March 31, 2022, there was **$9.2 million** of unrecognized share-based compensation expense for unvested performance-based stock options, expected to be recognized over 0.9 years[77](index=77&type=chunk) - As of March 31, 2022, there was **$56.7 million** of unrecognized share-based compensation expense for unvested term-based stock options, expected to be recognized over 1.2 years[79](index=79&type=chunk) - As of March 31, 2022, there was **$157.2 million** of unrecognized share-based compensation expense for unvested Restricted Stock Units (RSUs), expected to be recognized over 1.9 years[81](index=81&type=chunk) - As of March 31, 2022, there was **$78.5 million** of unrecognized share-based compensation expense for unvested Performance Stock Units (PSUs)[87](index=87&type=chunk) Global Employee Stock Purchase Plan (GESPP) Activity | Period Ended | Shares Issued | Purchase Price (per share) | | :------------- | :------------ | :------------------------- | | March 31, 2022 | 56,208 | $58.11 | [10. Revenue](index=21&type=section&id=10.%20Revenue) Disaggregation of Revenue (Three Months Ended March 31, 2022 vs. 2021) | (Dollars in millions) | 2022 | 2021 | | :-------------------- | :--- | :--- | | Dayforce Recurring | $188.6 | $145.3 | | Powerpay Recurring | 21.6 | 20.3 | | Total Cloud Revenue | $252.0 | $202.7 | | Bureau Recurring | $37.7 | $30.4 | | Total Revenue | $293.3 | $234.5 | - Recurring revenue included float revenue of **$11.4 million** for Q1 2022, up from **$10.7 million** for Q1 2021[91](index=91&type=chunk) - As of March 31, 2022, approximately **$1,130.6 million** of revenue is expected to be recognized over the next three years from remaining performance obligations, representing contracted recurring and fixed-price professional services[95](index=95&type=chunk) [11. Accumulated Other Comprehensive Loss](index=22&type=section&id=11.%20Accumulated%20Other%20Comprehensive%20Loss) Components of Accumulated Other Comprehensive Loss (March 31, 2022) | (Dollars in millions) | Amount | | :-------------------------------- | :----- | | Foreign Currency Translation Adjustment | $(161.7) | | Unrealized Gain (Loss) from Invested Customer Funds | (48.2) | | Pension Liability Adjustment | (148.0) | | Total Accumulated Other Comprehensive Loss | $(357.9) | - Other comprehensive loss before income taxes and reclassifications was **$(53.6) million** for Q1 2022, primarily driven by a **$(69.4) million** change in unrealized loss from invested customer funds[96](index=96&type=chunk) [12. Income Taxes](index=22&type=section&id=12.%20Income%20Taxes) Income Tax Expense | Period | Amount (Millions USD) | | :-------------------------- | :-------------------- | | Three Months Ended Mar 31, 2022 | $3.0 | | Three Months Ended Mar 31, 2021 | $6.6 | - The income tax expense for Q1 2022 included **$4.3 million** attributable to GILTI and **$4.4 million** attributable to share-based compensation, partially offset by a **$4.7 million** tax benefit from current operations[98](index=98&type=chunk) - As of March 31, 2022, the company had a valuation allowance of **$46.2 million** against certain deferred tax assets[97](index=97&type=chunk) [13. Leases](index=23&type=section&id=13.%20Leases) Total Lease Assets and Liabilities (March 31, 2022 vs. December 31, 2021) | (Dollars in millions) | March 31, 2022 | December 31, 2021 | | :-------------------- | :------------- | :---------------- | | Total lease assets | $40.5 | $41.3 | | Total lease liabilities | $51.6 | $53.6 | Total Lease Cost, Net | (Dollars in millions) | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :-------------------- | :------------------------------ | :------------------------------ | | Total lease cost, net | $2.8 | $1.0 | [14. Commitments and Contingencies](index=23&type=section&id=14.%20Commitments%20and%20Contingencies) - Ceridian is subject to various legal claims and proceedings in the ordinary course of business, including employment, contract, intellectual property disputes, and government audits[103](index=103&type=chunk) - Management believes that the final disposition of these proceedings will not have a material adverse effect on the company's financial position or results of operations, considering the merits of the claims and available resources[106](index=106&type=chunk) [15. Net Loss per Share](index=24&type=section&id=15.%20Net%20Loss%20per%20Share) Net Loss Per Share (Basic and Diluted) | (Dollars in millions, except share and per share data) | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :----------------------------------------------------- | :------------------------------ | :------------------------------ | | Net loss per share - basic | $(0.18) | $(0.13) | | Net loss per share - diluted | $(0.18) | $(0.13) | - Potentially dilutive weighted-average shares, including stock options, restricted stock units, and performance stock units, were excluded from diluted net loss per share calculation because their effect would have been anti-dilutive[108](index=108&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed discussion and analysis of Ceridian's financial condition and results of operations for the three months ended March 31, 2022, compared to the prior year, highlighting significant revenue growth driven by Cloud solutions, particularly Dayforce, alongside increased operating expenses leading to a higher net loss, and covering the company's business model, the impact of global events, recent acquisitions and financing activities, key performance indicators, liquidity, and capital resources Key Financial Highlights (Three Months Ended March 31, 2022 vs. 2021) | Metric | 2022 (Millions USD) | 2021 (Millions USD) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Total Revenue | $293.3 | $234.5 | 25.1% | | Cloud Revenue | $252.0 | $202.7 | 24.3% | | Net Loss | $(27.4) | $(19.2) | (42.7)% | | Adjusted EBITDA | $57.4 | $44.5 | 29.0% | | Adjusted EBITDA Margin | 19.6% | 19.0% | 0.6 pp | | Net cash provided by (used in) operating activities | $5.5 | $(4.5) | N/A | - Total revenue increased by **25.1%** to **$293.3 million**, primarily driven by a **24.3%** increase in Cloud revenue, which includes Dayforce and Powerpay solutions[135](index=135&type=chunk) - Net loss increased to **$27.4 million**, primarily due to higher share-based compensation, increased investments in product development and selling capabilities, and costs associated with the integration of APJ acquisitions[151](index=151&type=chunk) [2.1. Overview](index=25&type=section&id=2.1.%20Overview) - Ceridian is a global human capital management (HCM) software company, offering Cloud solutions (Dayforce, Powerpay) and supporting legacy Bureau solutions[111](index=111&type=chunk) - Dayforce is the flagship cloud HCM platform, providing HR, payroll, benefits, workforce management, and talent management functionality with a single employee record and real-time calculations[112](index=112&type=chunk) - Dayforce Wallet, a digital wallet for employees, provides instant access to earned wages, with over **1,100** customers signed, more than **510** live, and an average registration rate of **34%** as of March 31, 2022[113](index=113&type=chunk)[114](index=114&type=chunk) - The company had **5,609** live Dayforce customers as of March 31, 2022, adding **175** net new customers in Q1 2022[116](index=116&type=chunk) [2.2. Our Business Model](index=26&type=section&id=2.2.%20Our%20Business%20Model) - Ceridian's business model focuses on rapid growth of Dayforce and maximizing customer lifetime value through a subscription model with high customer retention[117](index=117&type=chunk) - The company estimates it takes approximately **two years** to recover implementation, customer acquisition, and other direct costs for a new Dayforce customer contract[117](index=117&type=chunk) - Additional revenue opportunities come from customer growth, expanding Dayforce solutions to more employees, and selling additional functionality to existing customers[118](index=118&type=chunk) [2.3. Global Events](index=26&type=section&id=2.3.%20Global%20Events) - The COVID-19 pandemic led to curtailed customer demand, lower professional services utilization, and negative impacts on float revenue due to interest rate cuts, though customer employment levels returned to pre-pandemic levels by the end of 2021[119](index=119&type=chunk) - The Russia-Ukraine conflict is being monitored for broader economic impacts and increased cybersecurity risks; as of the reporting date, the specific impact on Ceridian's financial condition is not material[120](index=120&type=chunk) [2.4. Recent Events](index=26&type=section&id=2.4.%20Recent%20Events) - In 2021, Ceridian completed several acquisitions: Ascender HCM (**$359.6 million**) in Asia Pacific Japan, Ideal (**$41.4 million**) for talent intelligence, DataFuzion HCM (**$12.5 million**) for data solutions, and ADAM HCM (**$34.5 million**) in Latin America[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) - In March 2021, the company issued **$575.0 million** in 0.25% Convertible Senior Notes due 2026, with net proceeds of **$561.8 million** used to repay debt and for general corporate purposes[124](index=124&type=chunk)[158](index=158&type=chunk) [2.5. How We Assess Our Performance](index=27&type=section&id=2.5.%20How%20We%20Assess%20Our%20Performance) - Live Dayforce customers increased to **5,609** as of March 31, 2022, up from **5,039** in the prior year, serving as an indicator of future revenue and implementation service performance[126](index=126&type=chunk) - Dayforce recurring revenue per customer for the trailing twelve months ended March 31, 2022, was **$110,947**, an increase from **$101,230** in the comparable prior period, indicating growth in average customer size[126](index=126&type=chunk) - The company uses non-GAAP measures such as Constant Currency Revenue, EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin to evaluate underlying business performance and management effectiveness, excluding foreign currency fluctuations and non-operating decisions[128](index=128&type=chunk)[129](index=129&type=chunk) [2.6. Results of Operations](index=29&type=section&id=2.6.%20Results%20of%20Operations) Revenue Performance (Three Months Ended March 31, 2022 vs. 2021) | Revenue Category | 2022 (Millions USD) | 2021 (Millions USD) | Change (Millions USD) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Total revenue | $293.3 | $234.5 | $58.8 | 25.1% | | Cloud recurring | $210.2 | $165.6 | $44.6 | 26.9% | | Dayforce recurring, excluding float | $180.3 | $137.6 | $42.7 | 31.0% | | Bureau recurring | $37.7 | $30.4 | $7.3 | 24.0% | | Float revenue | $11.4 | $10.7 | $0.7 | 6.5% | - On a constant currency basis and excluding float revenue, total revenue grew **26.0%**, with Cloud revenue growing **24.9%** and Bureau revenue growing **32.6%**[137](index=137&type=chunk) - The average float balance for customer funds increased **17.5%** to **$5,088.9 million** in Q1 2022, while the average yield declined by **11 basis points** to **0.91%**[139](index=139&type=chunk) Cost of Revenue and Gross Profit Performance (Three Months Ended March 31, 2022 vs. 2021) | Metric | 2022 (Millions USD) | 2021 (Millions USD) | Change (Millions USD) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Total cost of revenue | $190.2 | $141.3 | $48.9 | 34.6% | | Product development and management | $40.4 | $25.8 | $14.6 | 56.6% | | Gross profit | $103.1 | $93.2 | $9.9 | 10.6% | | Total gross margin | 35.2% | 39.7% | (4.5) pp | (11.3)% | | Cloud recurring gross margin | 69.3% | 72.2% | (2.9) pp | (4.0)% | - Selling, general, and administrative expense increased by **$26.4 million**, driven by employee-related costs, recent acquisitions, and investment in the sales force[147](index=147&type=chunk) Net Loss and Adjusted EBITDA (Three Months Ended March 31, 2022 vs. 2021) | Metric | 2022 (Millions USD) | 2021 (Millions USD) | Change (Millions USD) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Net loss | $(27.4) | $(19.2) | $(8.2) | (42.7)% | | Adjusted EBITDA | $57.4 | $44.5 | $12.9 | 29.0% | | Adjusted EBITDA margin | 19.6% | 19.0% | 0.6 pp | 3.2% | [2.7. Liquidity and Capital Resources](index=33&type=section&id=2.7.%20Liquidity%20and%20Capital%20Resources) - Primary liquidity sources include existing cash and equivalents (**$354.8 million** as of March 31, 2022), cash from operating activities, availability under the Revolving Credit Facility, and proceeds from debt/equity issuances[154](index=154&type=chunk) - Customer funds are held in segregated accounts and invested with primary objectives of principal protection and adequate liquidity, with approximately **45%-55%** in liquidity portfolios and **45%-55%** in fixed income portfolios[161](index=161&type=chunk) Cash Flow Summary (Three Months Ended March 31, 2022 vs. 2021) | (Dollars in millions) | 2022 | 2021 | | :----------------------------------------------------- | :--- | :--- | | Net cash provided by (used in) operating activities | $5.5 | $(4.5) | | Net cash used in investing activities | (184.7) | (404.7) | | Net cash provided by financing activities | 3,883.7 | 1,040.0 | | Net increase in cash, restricted cash, and equivalents | 3,706.2 | 634.2 | - Net cash provided by financing activities significantly increased to **$3,883.7 million** in Q1 2022, primarily due to a **$3,879.8 million** increase in net customer fund obligations[168](index=168&type=chunk) - Remaining performance obligations (backlog) totaled approximately **$1,130.6 million** as of March 31, 2022, representing contracted revenue for recurring and fixed-price professional services expected over the next three years[170](index=170&type=chunk) [2.8. Critical Accounting Policies and Estimates](index=35&type=section&id=2.8.%20Critical%20Accounting%20Policies%20and%20Estimates) - There were no significant changes to the company's critical accounting policies and estimates during the three months ended March 31, 2022[172](index=172&type=chunk) [2.9. Non-GAAP Measures](index=35&type=section&id=2.9.%20Non-GAAP%20Measures) - EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin are non-GAAP financial measures used by management and investors to evaluate overall operating performance, excluding items like foreign exchange gains/losses, share-based compensation, severance, restructuring fees, and other non-recurring items[173](index=173&type=chunk)[174](index=174&type=chunk) Reconciliation of Net Loss to Adjusted EBITDA (Three Months Ended March 31, 2022 vs. 2021) | Metric | 2022 (Millions USD) | 2021 (Millions USD) | | :-------------------------------- | :------------------ | :------------------ | | Net loss | $(27.4) | $(19.2) | | Interest expense, net | 5.8 | 5.6 | | Income tax expense | 3.0 | 6.6 | | Depreciation and amortization | 20.9 | 15.0 | | **EBITDA** | **2.3** | **8.0** | | Foreign exchange (gain) loss | (0.8) | 1.9 | | Share-based compensation | 35.5 | 23.0 | | Severance charges | 17.3 | 2.1 | | Restructuring consulting fees | 1.9 | 7.8 | | Other non-recurring items | 1.2 | 1.7 | | **Adjusted EBITDA** | **57.4** | **44.5** | | Adjusted EBITDA margin | 19.6% | 19.0% | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details Ceridian's exposure to market risks, including foreign currency exchange rates, interest rates, and pension obligations, explaining how these risks are managed and quantifying potential impacts, such as the sensitivity of float revenue and interest expense to changes in interest rates - Ceridian is exposed to foreign currency risk, particularly with the Canadian Dollar, but historically, foreign currency inflows have provided a natural hedge against expenses, and no active hedging program is currently in place[191](index=191&type=chunk) - Interest rate risk affects float revenue from invested customer funds; a hypothetical **100 basis point** increase in market investment rates would result in approximately a **$24 million** increase in float revenue over the ensuing twelve-month period[193](index=193&type=chunk) - Interest rate risk also impacts debt; a **100 basis point** increase in LIBOR rates would result in approximately a **$6 million** increase in interest expense, net, over the ensuing twelve-month period, as the company pays floating rates on its Term Debt and Revolving Credit Facility[196](index=196&type=chunk) - Pension obligation risk is managed through a frozen defined benefit plan, with future costs dependent on actual returns on plan assets, actuarial assumptions, contributions, and benefit experience[197](index=197&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, under the supervision of the Co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2022, concluding they were effective, with no material changes in internal control over financial reporting reported during the quarter - Management, with the participation of Co-Chief Executive Officers and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of **March 31, 2022**[200](index=200&type=chunk) - There were no changes in internal control over financial reporting during the three months ended March 31, 2022, that materially affected, or are reasonably likely to materially affect, these controls[201](index=201&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) Ceridian is involved in various legal proceedings in the ordinary course of business, none of which are expected to have a material adverse effect, and a proposed class action lawsuit in Ontario, Canada, alleging misrepresentations related to a pre-IPO distribution, is in its early stages, with management believing the likelihood of a material loss is remote - The company is a party to legal proceedings arising in the ordinary course of business, but none are currently believed to have a material adverse effect on its business, financial condition, or liquidity[106](index=106&type=chunk)[203](index=203&type=chunk) - A proposed class action lawsuit was filed in Ontario, Canada, alleging misrepresentations in pre-IPO disclosures regarding the distribution of the company's interest in LifeWorks Corporation Ltd., with the Ontario court rejecting the plaintiff's Norwich Application for discovery[204](index=204&type=chunk) - At this early stage, the ultimate disposition of the class action is not determinable, but management believes the likelihood of a material loss arising from this claim is **remote**[205](index=205&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - There have been no material changes in the company's risk factors from those disclosed in Part I, Item 1A, of its Annual Report on Form 10-K for the fiscal year ended December 31, 2021[206](index=206&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&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 for the period - No unregistered sales of equity securities and use of proceeds to report[207](index=207&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities for the period - No defaults upon senior securities to report[208](index=208&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Mine Safety Disclosures are not applicable to the registrant[209](index=209&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) The company reported no other information for the period - No other information to report[210](index=210&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or furnished as part of the Form 10-Q, including corporate organizational documents, employment agreements, equity incentive plans, and various certifications required by SEC regulations - Exhibits include the Fourth Amended and Restated Certificate of Incorporation, Second Amended and Restated Bylaws, various employment agreements, the 2018 Equity Incentive Plan, the 2022 Management Incentive Plan, and certifications from executive officers[212](index=212&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) Ceridian HCM Holding Inc. (Exact name of Registrant as specified in its Charter) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 46-3231686 (State or other jurisdiction of incorporation or organization) For the fiscal year ended December 31, 2021 (I.R.S. Employer Identification No.) OR 3311 East Old Shakopee Road Minneapolis, Minnesota 55425 (952) 853-8100 (Address, In ...

Ceridian HCM Holding Inc. (CDAY) Q4 2021 Results Conference Call February 9, 2022 5:00 PM ET Company Participants Erik Zimmer - Executive Vice President, Head of Mergers & Acquisitions David Ossip - Chairman & Co-Chief Executive Officer Leagh Turner - Co-Chief Executive Officer Noemie Heuland - Chief Financial Officer Conference Call Participants Mark Marcon - Baird Bryan Bergin - Cowen Siti Panigrahi - Mizuho Samad Samana - Jefferies Matt Pfau - William Blair Michael Turrin - Wells Fargo Arvind Ramnani - P ...

Q3 2021 Stockholder letter Intelligence at work David Ossip Chair and CEO, Ceridian From the CEO Dear Fellow Stockholders, I am pleased to report that our business continues to perform well, and in the third quarter, we made strong progress against our growth objectives and financial guidance for the year. We exceeded our guidance in the third quarter with Dayforce recurring revenue, excluding float revenue, growing by 33%. We remain focused on driving strong execution, investing in our growth, and generati ...

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The unaudited financial statements detail the company's financial position, operations, and cash flows as of September 30, 2021 [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The financial statements show significant growth in assets and liabilities, primarily due to acquisitions and debt issuance Condensed Consolidated Balance Sheet Highlights (in millions) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$9,001.5** | **$6,701.3** | | Cash and equivalents | $378.8 | $188.2 | | Customer funds | $5,380.3 | $3,759.4 | | Goodwill | $2,318.1 | $2,031.8 | | **Total Liabilities** | **$6,779.7** | **$4,603.1** | | Customer funds obligations | $5,345.5 | $3,697.8 | | Long-term debt, less current portion | $1,121.8 | $660.6 | | **Total Stockholders' Equity** | **$2,221.8** | **$2,098.2** | Condensed Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $257.2 | $204.4 | $742.1 | $619.7 | | Gross profit | $93.1 | $76.7 | $278.4 | $255.8 | | Operating (loss) profit | $(16.0) | $(0.6) | $(38.1) | $29.7 | | Net (loss) income | $(20.9) | $(0.8) | $(65.9) | $13.3 | | Diluted EPS | $(0.14) | $(0.01) | $(0.44) | $0.09 | Condensed Consolidated Statements of Cash Flows Highlights (Nine Months Ended, in millions) | Cash Flow Activity | Sep 30, 2021 | Sep 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $48.9 | $47.3 | | Net cash (used in) provided by investing activities | $(510.5) | $176.3 | | Net cash provided by (used in) financing activities | $2,214.4 | $(244.1) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail key events including a major debt issuance, two acquisitions, revenue disaggregation, and share-based compensation - In March 2021, the company issued **$575.0 million** in 0.25% Convertible Senior Notes due 2026, with net proceeds of **$561.8 million** after costs[32](index=32&type=chunk)[64](index=64&type=chunk) - The company completed two key acquisitions in 2021: Ascender HCM Pty Ltd for **$359.6 million** on March 1, and O5 Systems, Inc (Ideal) for **$41.4 million** on April 30[39](index=39&type=chunk)[42](index=42&type=chunk) - As of September 30, 2021, the company had approximately **$1,026.4 million** in remaining performance obligations, representing contracted revenue expected to be recognized over the next three years[103](index=103&type=chunk) Disaggregation of Revenue (Nine Months Ended Sep 30, in millions) | Revenue Source | 2021 | 2020 | | :--- | :--- | :--- | | **Total Cloud Revenue** | **$631.7** | **$535.5** | | - Dayforce | $569.4 | $478.1 | | - Powerpay | $62.3 | $57.4 | | **Total Bureau Revenue** | **$110.4** | **$84.2** | | **Total Revenue** | **$742.1** | **$619.7** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses company performance, focusing on Dayforce platform growth, COVID-19 impacts, operational results, and liquidity [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Revenue grew 25.8% in Q3 2021, driven by Cloud services, though operating loss widened due to higher growth-related expenses - The COVID-19 pandemic's impact from lower employment levels at customers was estimated to be a **$3.5 million revenue reduction** in Q3 2021[144](index=144&type=chunk) - Float revenue decreased to **$9.9 million** in Q3 2021 from $10.6 million in Q3 2020, as the average yield declined by 36 basis points to 1.16%, despite a 25.0% increase in the average float balance[148](index=148&type=chunk) - Cloud recurring gross margin improved to **72.7%** in Q3 2021 from 70.4% in Q3 2020, driven by economies of scale as the proportion of Dayforce customers live for more than two years increased to 80% from 74%[155](index=155&type=chunk) Q3 2021 vs. Q3 2020 Performance (in millions) | Metric | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $257.2 | $204.4 | 25.8% | | Cloud Revenue | $219.6 | $176.7 | 24.3% | | Gross Profit | $93.1 | $76.7 | 21.4% | | Operating Loss | $(16.0) | $(0.6) | (2566.7)% | | Net Loss | $(20.9) | $(0.8) | (2512.5)% | | Adjusted EBITDA | $39.4 | $33.2 | 18.7% | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity was significantly bolstered by a $575.0 million convertible notes issuance, ensuring sufficient capital - As of September 30, 2021, the company had cash and equivalents of **$378.8 million** and total debt of **$1,244.5 million**[185](index=185&type=chunk) - In March 2021, the company raised **$561.8 million** in net proceeds from a convertible senior notes offering, using part of the funds to repay $295.0 million under its Revolving Credit Facility[186](index=186&type=chunk) - For the nine months ended September 30, 2021, net cash from operating activities (excluding customer funds) was **$48.9 million**, while net cash used in investing activities was **$438.1 million**, primarily for acquisitions ($392.4 million) and capital expenditures ($45.7 million)[195](index=195&type=chunk)[198](index=198&type=chunk) [Non-GAAP Measures](index=41&type=section&id=Non-GAAP%20Measures) This section reconciles GAAP net loss to the non-GAAP measure of Adjusted EBITDA, which was $39.4 million for Q3 2021 Reconciliation of Net (Loss) Income to Adjusted EBITDA (in millions) | Line Item | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net (loss) income** | **$(20.9)** | **$(0.8)** | **$(65.9)** | **$13.3** | | Interest expense, net | $10.0 | $5.9 | $25.5 | $19.4 | | Income tax benefit | $(8.5) | $(5.5) | $(13.9) | $(5.7) | | Depreciation and amortization | $21.0 | $13.0 | $59.3 | $36.9 | | Share-based compensation | $31.0 | $19.3 | $85.9 | $48.5 | | Other adjustments | $5.8 | $1.3 | $24.9 | $13.5 | | **Adjusted EBITDA** | **$39.4** | **$33.2** | **$123.8** | **$125.9** | | **Adjusted EBITDA Margin** | **15.3%** | **16.2%** | **16.7%** | **20.3%** | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks include foreign currency exchange rates, interest rate fluctuations, and pension obligations - The company's primary market risks are related to foreign currency exchange rates (especially Canadian Dollar), interest rates, and pension obligations[219](index=219&type=chunk) - A **100 basis point increase** in market investment rates would increase annual float revenue by approximately **$22 million**[222](index=222&type=chunk) - A **100 basis point increase** in LIBOR rates would increase annual interest expense by approximately **$7 million**[225](index=225&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2021[228](index=228&type=chunk) - **No material changes** were made to the company's internal controls over financial reporting during the third quarter of 2021[229](index=229&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company faces a proposed class action lawsuit in Canada, but management believes the likelihood of a material loss is remote - A proposed class action lawsuit was filed against the company and certain officers and directors in Ontario, Canada, on October 21, 2021, concerning disclosures made in 2018[231](index=231&type=chunk) - Management believes that the likelihood of a material loss arising from this new legal claim is **remote**[232](index=232&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) New risk factors relate to the March 2021 issuance of Convertible Senior Notes, including accounting impacts and potential dilution - There are no material changes to risk factors from the 2020 Form 10-K, except for new risks related to the **Convertible Senior Notes** and Capped Calls issued in March 2021[233](index=233&type=chunk) - The accounting method for the Convertible Notes could **adversely affect reported financial results** by increasing non-cash interest expense, though a future accounting standard update (ASU 2020-06) is expected to mitigate this[234](index=234&type=chunk)[235](index=235&type=chunk) - The company is subject to **counterparty risk**, meaning the financial institutions for the Capped Call transactions could default on their obligations, potentially leading to greater stock dilution[244](index=244&type=chunk) [Other Items (Items 2, 3, 4, 5, 6)](index=49&type=section&id=Other%20Items) This section confirms no unregistered equity sales, defaults, or other material events occurred during the quarter - The company reported **no unregistered sales** of equity securities, defaults upon senior securities, or other material information for the period[250](index=250&type=chunk)[251](index=251&type=chunk)[253](index=253&type=chunk) - Mine safety disclosures are **not applicable** to the company[252](index=252&type=chunk)

Ceridian HCM Holding, Inc. (CDAY) Q2 2021 Results Earnings Conference Call August 4, 2021 5:00 PM ET Company Participants Jeremy Johnson - VP, Finance & IR David Ossip - Chairman & CEO Noemie Heuland - EVP & CFO Erik Zimmer - EVP, Head of Mergers & Acquisitions Conference Call Participants Siti Panigrahi - Mizuho Jared Levine - Cowen Daniel Jester - Citi Mark Marcon - Baird Matt Coss - JPMorgan Michael Turrin - Wells Fargo Brad Clark - BMO Matthew Pfau - William Blair Samad Samana - Jefferies Alex Zukin - W ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly reporting period ended June 30, 2021 ☐ 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 001-38467 Ceridian HCM Holding Inc. (Exact name of registrant as specified in its charter) Delaware 46-3231686 (State or Other Jurisdicti ...