Dayforce to Report Q1 Earnings: Buy Now or Wait for Results?

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].