Revenue and Customer Growth - Total revenue increased by $50.3 million, or 11.7%, to $481.8 million for the three months ended March 31, 2025, compared to $431.5 million for the same period in 2024[124] - The number of live Dayforce customers increased by 5.4% to 6,929 at March 31, 2025, from 6,575 at March 31, 2024[124] - Dayforce recurring revenue per customer grew to $167,600 for the trailing twelve months ended March 31, 2025, compared to $150,362 for the comparable period in 2024[124] Expenses and Profitability - Costs of recurring services increased by $10.0 million, or 11.3%, primarily due to a $6.3 million increase in labor and employee benefit expenses[126] - Costs of professional services increased by $15.2 million, or 23.0%, primarily due to a $15.0 million increase in labor and benefit expenses[127] - Operating profit decreased by $9.7 million, or 23.8%, to $31.0 million for the three months ended March 31, 2025[122] - Operating profit for the three months ended March 31, 2025, was $31.0 million, down from $40.7 million in the prior year, as revenue growth was offset by higher labor and benefits expenses[133] - General and administrative expenses increased by $15.1 million, or 27.0%, for the three months ended March 31, 2025, compared to the same period in 2024[131] - Selling and marketing expenses rose by $8.4 million, or 10.7%, for the three months ended March 31, 2025, primarily due to increased labor and benefit expenses[130] Net Income and Cash Flow - Net income increased by $7.8 million, or 109.9%, to $14.9 million for the three months ended March 31, 2025[122] - For the three months ended March 31, 2025, net income was $14.9 million, an increase from $7.1 million for the same period in 2024, primarily due to increased revenue and lower interest expenses[138] - The net income for the same period was $14.9 million, resulting in a net income margin of 3.1%[157] - Net cash provided by operating activities increased to $49.6 million for the three months ended March 31, 2025, compared to $9.1 million for the same period in 2024[145] - Free cash flow for Q1 2025 was $19.5 million, representing a free cash flow margin of 4.0%[160] Debt and Cash Position - The company had total debt of $1,226.4 million as of March 31, 2025[139] - Total cash, restricted cash, and equivalents at the end of the period was $3,473.0 million, down from $4,899.2 million at the end of March 31, 2024[144] - Net cash used in investing activities was $120.1 million for the three months ended March 31, 2025, compared to $290.7 million in the same period of 2024[146] Adjusted Metrics - Adjusted EBITDA for Q1 2025 was $80.9 million, with an adjusted EBITDA margin of 32.5%[157] - The company reported a diluted net income per share of $0.09 for Q1 2025, compared to $0.04 in Q1 2024[159] - Adjustments to operating profit for Q1 2025 included $26.6 million in restructuring expenses[161] Performance Obligations and Pension - Remaining performance obligations as of March 31, 2025, were approximately $1.28 billion, representing contracted revenue not yet recognized[150] - The effective discount rate for pension obligations in 2024 ranged from 5.06% to 5.35%[172] - The expected rate of return on plan assets for qualified pension benefits in 2025 is 5.10%[172] Foreign Currency Impact - The company does not anticipate a material impact from a hypothetical 10% change in foreign currency exchange rates[164]

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].

Core Insights - Dayforce, Inc. has announced the availability of its Dayforce platform on the Microsoft Azure Marketplace, enhancing accessibility for customers [1][4] - The integration allows for seamless unification of enterprise resource planning (ERP) and human capital management (HCM) on a single platform, promoting operational excellence [2][3] - The collaboration aims to help organizations streamline procurement and deployment, maximizing value and efficiency in operations [4] Company Overview - Dayforce is a global leader in human capital management technology, focusing on improving work life for customers and employees [6] - The Dayforce platform integrates HR, payroll, workforce management, talent, and analytics into a single user-friendly experience [3][6] - The platform is designed to deliver quantifiable value across various regions, including North America, Europe, the Middle East and Africa, and Asia-Pacific and Japan [3] Market Context - The Azure Marketplace serves as an online platform for buying and selling cloud solutions, facilitating connections between companies and innovative cloud-based solutions [4] - The partnership with Microsoft Azure is expected to enhance operational efficiency and economic value for customers, allowing them to spend smarter [4]

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]

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

Revenue Growth and Market Position - Revenue from Cloud solutions has grown substantially, with a significant portion of market capitalization depending on sustaining this growth trajectory [60]. - The company has experienced significant growth in user numbers, transactions, and data transmission volume, necessitating the maintenance of sufficient operational infrastructure capacity [79]. - The company has experienced substantial revenue growth from its Cloud solutions, which is critical for sustaining its market capitalization [60]. - The company’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]