Financial Performance - Dayforce's total revenue for Q1 2025 was $481.8 million, an increase of 11.7% year-over-year, or 13.6% on a constant currency basis[7]. - Recurring revenue, excluding float, reached $323.1 million, up 14.4% year-over-year, or 15.9% on a constant currency basis[7]. - Net income for the quarter was $14.9 million, compared to $7.1 million in the previous year, resulting in a net profit margin of 3.1%[7]. - Adjusted EBITDA was $156.7 million, with an adjusted EBITDA margin of 32.5%, compared to 30.1% in the prior year[7]. - Operating cash flow was $49.6 million, significantly up from $9.1 million, leading to an operating cash flow margin of 10.3%[7]. - Total revenue for Q1 2025 was $481.8 million, representing an 11.7% increase compared to $431.5 million in Q1 2024[27]. - Net income for Q1 2025 was $14.9 million, compared to $7.1 million in Q1 2024, marking a significant increase[27]. - 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 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]. - The adjusted net income for Q1 2025 was $28.7 million, with an adjusted net profit margin of 19.5%, while in Q1 2024, adjusted net income was $68.0 million, reflecting a margin of 15.8%[36]. Customer Metrics - Dayforce had 6,929 customers live on its platform as of March 31, 2025, reflecting a 5.4% year-over-year increase[7]. - Recurring services revenue increased to $410.5 million, up 7.3% from $382.7 million year-over-year[30]. - Dayforce's recurring revenue per customer is a key metric, although specific figures were not disclosed in the provided content[44]. Cash Flow and Guidance - Dayforce's free cash flow margin is projected to be 12% for FY 2025[14]. - 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 a free cash flow margin expected between 11.9% and 12.1%[38]. - Free cash flow for the three months ended March 31, 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[38]. - The company reported a net cash provided by operating activities of $49.6 million for Q1 2025, compared to $9.1 million in Q1 2024[29]. - Dayforce's net cash provided by operating activities for Q1 2025 was $49.6 million, significantly higher than $9.1 million in Q1 2024[38]. Expenses and Liabilities - The company incurred $26.6 million in restructuring expenses for Q1 2025, impacting adjusted operating profit and net income[36]. - Share-based compensation expense increased to $46.0 million in Q1 2025 from $38.0 million in Q1 2024[34]. - Total assets increased to $9,499.5 million as of March 31, 2025, up from $9,117.0 million at the end of 2024[25]. - Total liabilities rose to $6,907.4 million in Q1 2025, compared to $6,570.7 million in Q4 2024[25]. - Cash and equivalents at the end of Q1 2025 were $557.3 million, a decrease from $579.7 million at the end of 2024[25]. Partnerships and Future Outlook - Dayforce announced an expanded partnership with Microsoft, making its platform available in the Microsoft Azure Marketplace[13]. - The company expects continued growth in recurring services and professional services, with a focus on expanding market presence and product development[30]. - The company plans to achieve total revenue guidance of $1,929 million to $1,944 million for FY 2025, representing a 12.1% to 13.1% increase on a GAAP basis[11]. Interest Expense - Dayforce's interest expense for Q1 2025 was $7.9 million, compared to $13.3 million in Q1 2024[36].

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].

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Earnings Announcement - Dayforce, Inc. will release its first quarter 2025 financial results before the market opens on May 7, 2025 [2] - A live webcast and conference call will be held at 8:00 a.m. Eastern Time on the same day to discuss the financial results [3] Investor Conferences - Dayforce management will participate in several upcoming investor conferences, including: - J.P. Morgan Global Technology, Media and Communications Conference on May 13, 2025 [7] - Baird Global Consumer, Technology and Services Conference on June 3, 2025 [7] - BMO Virtual Software Conference on June 9, 2025 [7] - Mizuho Technology Conference on June 10, 2025 [7] Company Overview - Dayforce is a global leader in human capital management (HCM) technology, focused on improving work life for customers and employees [5] - The company offers a single, global people platform for HR, Pay, Time, Talent, and Analytics, aimed at unlocking workforce potential [5]

Core Insights - Dayforce, Inc. has expanded its partnership with the Tampa Bay Buccaneers to enhance employee experience and modernize HR processes in professional sports [1][2][4] Company Overview - Dayforce is a global leader in human capital management (HCM) technology, focused on improving work for customers and employees worldwide [5] - The company offers a comprehensive, all-in-one HCM solution that unifies HR, payroll, benefits, recruiting, and workforce management [3] Partnership Details - The Buccaneers will integrate Dayforce Performance Management and Compensation Management into their existing Dayforce suite, demonstrating their commitment to leveraging advanced technology [2] - Since implementing Dayforce in 2019, the Buccaneers have achieved significant efficiencies, including optimized workforce scheduling and streamlined operations [3] Employee Experience - The Dayforce platform has empowered over 850 full-time and seasonal employees with HR self-service tools available on a mobile app, enhancing the overall employee experience [3] - The platform's automation, reporting capabilities, and self-service features have been described as game-changers for the Buccaneers [3] Industry Context - Professional sports teams face challenges such as compliance and workforce management, necessitating efficient and innovative solutions [4] - Leading franchises like the Buccaneers rely on Dayforce to simplify operations and maximize workforce potential [4]

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’s ability to grow revenue from existing customers and penetrate new markets is uncertain, which could adversely affect its financial performance [62]. 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 financial condition and operations [65]. - International expansion poses risks, including costs of establishing market presence and compliance with local laws, which could adversely affect operations [73]. - The company is exposed to risks from reliance on third-party vendors for payroll processing, which could disrupt fund movement and lead to financial consequences [63]. - The company faces risks related to the inability to maintain software licenses from third parties, which could lead to increased costs or reduced service levels [81]. - The company is exposed to credit risk from option counterparties related to its hedging activities, which could impact stock value [132]. - The company faces significant cybersecurity risks, including potential breaches that could adversely affect its business and financial condition [95]. - The company is subject to audits and tax proceedings in multiple jurisdictions, which could materially affect its financial condition [158]. Strategic Growth Initiatives - The company is focused on an aggressive growth strategy, which requires consistent enhancements to systems and operational procedures to meet global demands [66]. - The company may pursue growth through acquisitions, which requires effective integration of acquired technologies and customer transition to new platforms [75]. - The company may pursue acquisitions to enhance growth, but such activities could divert management attention and lead to increased debt or dilution of stockholder equity [91]. - The company is focused on developing new products and enhancing existing functionalities, particularly incorporating AI and machine learning technologies [61]. Financial Management and Capital Structure - The company does not intend to pay cash dividends in the foreseeable future, focusing instead on reinvestment for growth [64]. - 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’s outstanding indebtedness may limit its operational flexibility and increase vulnerability to economic changes, potentially affecting its financial condition [126]. - A downgrade in the company's debt ratings could negatively impact its access to capital markets and increase borrowing costs, adversely affecting its financial condition [129]. - The company may face challenges in generating sufficient cash flows to meet its debt service obligations, which could adversely impact its business [126]. Compliance and Regulatory Environment - The company faces increasing regulatory scrutiny regarding privacy and data protection laws, which could lead to significant costs and operational burdens [109]. - Compliance with evolving laws and regulations is critical, as failure to do so could adversely affect the company's financial condition and customer relationships [114]. - The company is subject to evolving legal frameworks around AI, which could adversely affect its business and financial condition if compliance is not met [123]. - The company has implemented policies to monitor compliance with anti-corruption and anti-money laundering laws, which may impact sales processes due to the need for additional information gathering [118]. Operational Risks - The company relies on third-party service providers for critical operations, and any disruption or decline in service quality from these providers could adversely affect business performance [80]. - 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 faces risks related to the performance of its applications, with potential material defects or errors that could harm its reputation and financial condition [77]. Cybersecurity and Data Protection - Cybersecurity risks pose a threat to the integrity and availability of the company's IT systems, potentially impacting business operations and financial reporting [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, and requiring significant resources for mitigation [98]. - The evolving landscape of privacy laws, including the EU General Data Protection Regulation and California Consumer Protection Act, imposes additional compliance costs and operational burdens [109]. Economic and Market Conditions - Economic conditions, including potential recessions and increased interest rates, could adversely affect the company's business and revenue [149]. - Disruptions in financial markets could affect credit availability and liquidity, making it difficult for the company to execute its business strategy [130]. - Catastrophic events, such as pandemics or natural disasters, could disrupt operations and adversely affect financial results [155]. - Tariffs and export controls may impact the company's ability to operate and monetize products like Dayforce [151].

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $465.2 million, up 16.4% on a GAAP basis and 17% on a constant currency basis [28] - Full-year total revenue was $1.76 billion, up 16.3% on a GAAP basis and 16.7% on a constant currency basis [30] - Adjusted EBITDA margin for Q4 was 27.8%, expanding 300 basis points, while full-year adjusted EBITDA margin was 28.5%, expanding 140 basis points [29][32] - Free cash flow for the full year was $171.5 million, up 63.2%, representing 9.7% of revenue, expanding 280 basis points [33] Business Line Data and Key Metrics Changes - Dayforce recurring revenue excluding float for Q4 was $307.6 million, up 20% on a GAAP basis [28] - Professional services and other revenue for Q4 was $71.5 million, up 18% on a GAAP basis [29] - Adjusted cloud recurring gross margin was 80.4%, expanding 230 basis points [29] Market Data and Key Metrics Changes - Dayforce recurring revenue per customer increased by 11% [22] - Gross retention rate improved from 97.1% to 98% [22] - The company secured several key new business wins, including a 60,000 employee grocery chain and an 18,000 employee space exploration company [13] Company Strategy and Development Direction - The company is focusing on higher margin areas while phasing out legacy segments, expecting recurring revenue growth of 15% to 17% in 2025 [10] - The product roadmap emphasizes compliance, IT simplification, data, and experience, with significant innovations in AI and automation [15][20] - The company aims for sustained revenue growth at levels similar to 2025 while targeting a free cash flow margin above 20% [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sales momentum, with Q4 and January sales both showing strong growth [50] - The company anticipates total revenue growth in 2025 of 14% to 15% excluding float and on a constant currency basis [40] - Management noted that the impacts from contract amendments and lower employee volumes in Q4 were one-time items and do not affect future performance [53] Other Important Information - The company plans to repurchase more than a million shares in 2025, effectively doubling its 2024 purchases [46] - The company is launching a repricing deal for its existing $650 million term loan B to reduce interest rates [47] Q&A Session Summary Question: Could you elaborate on the points that impacted the miss in Dayforce recurring revenue? - Management noted three main factors: lower employee volumes, reduced printing and tax filing fees, and contract amendments that shifted revenue to professional services [55] Question: What factors are assumed in the confidence for sustained revenue growth? - Management highlighted strong sales momentum and a record month in December, with continued strength into January [60] Question: How do you view the impact of recent M&A activity in the industry? - Management stated that they do not compete with Paychex or Paycor, and expect consolidation in the down market, but do not foresee any impact on Dayforce [70] Question: Can you discuss the assumptions for 2025 regarding employment and rate cuts? - Management expects low single-digit growth in employment levels and anticipates several rate cuts in Canada and the US throughout the year [128] Question: What are the expectations for professional services revenue growth? - Management expects professional services revenue to grow slightly faster than Dayforce recurring revenue excluding float in 2025 [41]

Revenue Performance - Dayforce's recurring revenue for Q4 2024 reached $347.9 million, a 19% increase year-over-year[1] - Total revenue for Q4 2024 was $465.2 million, up 16% year-over-year, with a constant currency increase of 17%[4] - For the full year 2024, Dayforce's total revenue was $1,760.0 million, reflecting a 16.3% increase year-over-year[8] - Total revenue for the year ended December 31, 2024, was $1,760.0 million, representing a 16.3% increase from $1,513.7 million in 2023[39] - Dayforce recurring revenue, excluding float, increased by 20.4% to $1,159.7 million in 2024 from $962.9 million in 2023[39] - Total revenue, excluding float, is projected to be between $421 million and $427 million, representing an increase of approximately 13.5% to 15% on a GAAP basis[22] - Dayforce recurring revenue, excluding float, is expected to be between $1,315 million and $1,340 million, reflecting an increase of approximately 13.4% to 15.5% on a GAAP basis[22] Profitability Metrics - Adjusted EBITDA for Q4 2024 was $129.2 million, with an adjusted EBITDA margin of 27.8%, up 3 percentage points year-over-year[4] - The EBITDA for Q4 2024 was reported at $66.6 million, reflecting a margin of 27.8%[46] - The EBITDA for the year ended December 31, 2024, was $288.0 million, with a margin of 28.5%[53] - The net income for Q4 2024 is reported at $10.8 million, down from $45.6 million in Q4 2023[31] - The net income for the year ended December 31, 2024, was $18.1 million, a decrease of 67.0% compared to $54.8 million in 2023[33] - The company reported a diluted net income per share of $0.07 for Q4 2024, compared to $0.29 for Q4 2023[49] Cash Flow and Liquidity - Dayforce's net cash provided by operating activities for the full year 2024 was $281.1 million, a 28% increase from the previous year[8] - Total cash provided by operating activities for the year ended December 31, 2024, was $281.1 million, up from $219.5 million in 2023[33] - For Q4 2024, Dayforce reported net cash provided by operating activities of $81.0 million, down from $89.9 million in Q4 2023[59] - Dayforce's free cash flow margin for Q4 2024 was 11.7%, down from 16.0% in the same quarter last year, reflecting reduced cash generation relative to revenue[59] - For the year ended December 31, 2024, Dayforce's free cash flow was $171.5 million, significantly higher than $105.1 million in 2023, showing a strong improvement in cash generation[59] - The company projects free cash flow for the year ending December 31, 2025, to be between $229 million and $234 million, indicating expected growth in cash generation[59] Operational Efficiency - The operating cash flow margin for Q4 2024 was 17.4%, compared to 22.5% in Q4 2023, indicating a decline in operational efficiency[59] - The operating profit was $28.5 million for Q4 2024, representing a margin of 6.1%[46] - For the year ended December 31, 2024, the operating profit was $104.1 million, with a margin of 5.9%[53] - The cost of Cloud recurring revenue for Q4 2024 was $75.2 million, resulting in a gross margin of 80.0%[46] - The cost of Cloud recurring revenue for the year 2024 was $303.7 million, leading to a gross margin of 78.9%[53] Strategic Initiatives - Dayforce launched its first mass advertising campaign and established the Dayforce Partner Network to enhance customer experience[13] - Dayforce introduced several new AI capabilities and product enhancements to improve operational efficiency and customer experience[15] - The company continues to focus on strategic opportunities and investments to enhance its business operations and market position[62] - Dayforce anticipates maintaining its high Cloud solutions growth rate and expanding its market presence despite potential risks and uncertainties[24] Assets and Liabilities - The company has a total of $9,117 million in assets as of December 31, 2024, compared to $9,010.9 million in 2023[29] - Total liabilities amount to $6,570.7 million, a slight decrease from $6,612.7 million in the previous year[29] - The company’s goodwill increased to $2,336.7 million from $2,293.9 million year-over-year[29] Employee Metrics - The number of global employees on the Dayforce platform increased by 11.4% to 7.62 million as of December 31, 2024[8] Shareholder Returns - Share-based compensation expense for the year ended December 31, 2024, was $156.6 million, compared to $137.1 million in 2023, reflecting a 14.5% increase[44] - Cash paid for interest in 2024 was $45.3 million, down from $52.4 million in 2023[33] - Capital expenditures for Q4 2024 were $26.8 million, slightly up from $26.1 million in Q4 2023, indicating ongoing investment in growth[59] Non-GAAP Measures - The company emphasizes the importance of non-GAAP financial measures, such as free cash flow, to assess liquidity and operational performance[62] - Dayforce's annualized retention rate and recurring revenue per customer metrics are critical for understanding customer loyalty and revenue stability, although specific figures were not provided[63]

Core Insights - Dayforce, Inc. reported a total revenue of $465.2 million for Q4 2024, reflecting a 16% year-over-year increase, while recurring revenue reached $347.9 million, up 19% year-over-year [1][6][11] - The company achieved a full-year net cash provided by operating activities of $281.1 million, marking a 28% increase compared to the previous year [1][11] - Dayforce maintained a strong annual gross revenue retention rate of 98% for 2024, indicating robust customer loyalty and satisfaction [1][11] Financial Highlights for Q4 2024 - Total revenue was $465.2 million, an increase of 16.4% year-over-year, or 17.0% on a constant currency basis [6] - Dayforce recurring revenue was $347.9 million, up 19.1% year-over-year, or 19.5% on a constant currency basis [6] - Operating profit for the quarter was $28.5 million, down from $38.8 million in the previous year, while adjusted operating profit rose to $103.3 million from $78.9 million [6][11] - Net income for Q4 was $10.8 million, compared to $45.6 million in the same quarter last year [6][11] Financial Highlights for Full Year 2024 - Total revenue for the year was $1,760.0 million, a 16.3% increase year-over-year [11] - Dayforce recurring revenue reached $1,339.9 million, up 20.6% year-over-year [11] - Adjusted EBITDA for the year was $501.5 million, with an adjusted EBITDA margin of 28.5%, an increase from 27.1% [11] - Free cash flow for the year was $171.5 million, compared to $105.1 million in the previous year [11] Business Highlights - Dayforce launched its first mass advertising campaign in the U.S. and introduced the Dayforce Partner Network to enhance customer experience [12] - The company received multiple accolades, including being named a Leader in various HCM technology assessments and recognized as one of the Top 100 Most Loved Workplaces in America [12] - Dayforce achieved record attendance at its annual customer conference, Dayforce Discover 2024, showcasing its commitment to customer engagement [13] Product and Innovation Highlights - Dayforce introduced several new product capabilities, including AI-enhanced features to streamline workflows and improve decision-making [23] - The company launched Dayforce Wallet updates, providing new functionalities for direct-to-bank payments and on-demand pay access [23] - New intelligence capabilities were added to the Dayforce suite, enhancing customer experience and operational efficiency [23] Customer and Sales Highlights - Dayforce reported a significant increase in the number of global employees using its platform, reaching 7.62 million, up 11.4% year-over-year [11] - The company expanded its customer base, with 6,876 customers live on the Dayforce platform, an increase of 7.6% year-over-year [11] - Notable new partnerships included large organizations across various sectors, such as retail, manufacturing, and public services, adopting the full Dayforce suite [17]