Ceridian(US:DAY)2024-10-30 11:44Financial Performance - Total revenue for Q3 2024 was $440.0 million, representing a 16.6% increase from $377.5 million in Q3 2023[101] - Cloud recurring revenue increased to $357.6 million, up 17.8% from $303.6 million in the same period last year[101] - Total recurring revenue reached $375.9 million, a 15.5% increase compared to $325.4 million in Q3 2023[101] - Professional services and other revenue grew by 23.0% to $64.1 million from $52.1 million year-over-year[101] - Gross profit for Q3 2024 was $201.3 million, reflecting a 25.4% increase from $160.5 million in Q3 2023[101] - Net income for Q3 2024 was $2.0 million, a significant improvement from a net loss of $3.8 million in Q3 2023, marking a 152.6% increase[101] - Total revenue increased by $62.5 million, or 16.6%, to $440.0 million for the three months ended September 30, 2024, compared to $377.5 million for the same period in 2023[103] - Total revenue increased by $180.8 million, or 16.2%, to $1,294.8 million for the nine months ended September 30, 2024, compared to $1,114.0 million for the same period in 2023[121] - Net income was $7.3 million for the nine months ended September 30, 2024, compared to $9.2 million for the same period in 2023[137] Customer Metrics - The number of live Dayforce customers increased by 6.1% to 6,730 at September 30, 2024, from 6,346 at September 30, 2023[103] - Dayforce recurring revenue per customer grew to $159,496 for the trailing twelve months ended September 30, 2024, compared to $138,838 for the comparable period in 2023[103] - The company estimates it takes approximately two years to recover implementation and customer acquisition costs for new Dayforce customer contracts[94] - Dayforce recurring revenue per customer is monitored quarterly, reflecting the average size of the customer base and potential for future revenue growth[98] Expenses and Costs - Total cost of revenue for the three months ended September 30, 2024, was $238.7 million, an increase of $21.7 million, or 10.0%, compared to the same period in 2023[105] - Selling and marketing expense increased by $24.6 million, or 39.8%, for the three months ended September 30, 2024, compared to the same period in 2023[112] - General and administrative expense increased by $21.9 million, or 30.3%, for the three months ended September 30, 2024, compared to the same period in 2023[113] - Professional services and other cost of revenue increased by $9.0 million, or 13.6%, for the three months ended September 30, 2024, compared to the same period in 2023[106] - Total cost of revenue for the nine months ended September 30, 2024, was $701.3 million, an increase of $64.0 million, or 10.0%, compared to the same period in 2023[123] - Selling and marketing expenses increased by $71.0 million, or 40.0%, for the nine months ended September 30, 2024, compared to the same period in 2023[130] - General and administrative expenses rose by $64.5 million, or 31.5%, for the nine months ended September 30, 2024, primarily due to higher amortization of intangible assets[131] Profitability Metrics - Operating profit was $20.8 million for the three months ended September 30, 2024, compared to $26.5 million for the same period in 2023[114] - Operating profit decreased to $75.6 million for the nine months ended September 30, 2024, down from $94.3 million in the same period of 2023[132] - Operating profit for Q3 2024 was $103.2 million, reflecting an operating profit margin of 23.5%[156] - The net income for the nine months ended September 30, 2024, was $218.7 million, with an Adjusted net profit margin of 16.9%[158] Cash Flow and Investments - Net cash provided by operating activities was $200.1 million for the nine months ended September 30, 2024, compared to $129.6 million for the same period in 2023[144] - Net cash provided by operating activities for Q3 2024 was $91.8 million, compared to $36.6 million in Q3 2023, representing a significant increase[161] - Free cash flow for Q3 2024 was $63.4 million, up from $4.8 million in the same period last year, indicating improved cash generation[161] - Net cash used in investing activities was $458.1 million for the nine months ended September 30, 2024, significantly higher than $14.9 million in the same period of 2023[145][146] - Net cash used in financing activities was $1,067.6 million for the nine months ended September 30, 2024, compared to a net cash provided of $345.3 million in the same period in 2023[147][148] Shareholder Actions - The company announced a share repurchase program authorized to purchase up to $500 million of common stock, with $30 million spent to repurchase 0.5 million shares in Q3 2024[91] Market and Economic Factors - The average U.S. dollar to Canadian dollar exchange rate was $1.36 for Q3 2024, compared to $1.34 in Q3 2023, impacting revenue on a constant currency basis[99] - The company expects a 100 basis point decrease in market investment rates to result in approximately $26 million decrease in float revenue over the next twelve months[166] - A 100 basis point decrease in applicable reference rates would lead to an estimated $6 million decrease in interest expense over the next twelve months[167] Pension and Benefits - The pension plan for certain U.S. employees was terminated effective September 30, 2024[170] - The effective discount rate used for pension obligations in 2023 ranged from 4.52% to 4.65%[170] - The expected rate of return on plan assets for qualified pension benefits in 2024 is projected to be 4.80%[170]