Ceridian(US:DAY)2025-05-07 13:02Financial Data and Key Metrics Changes - Total revenue for the first quarter was $482 million, growing 14% on a constant currency basis, and 17% excluding float [8][18] - Dayforce recurring revenue, excluding float, was $323.1 million, up 14.4% on a GAAP basis and 15.9% on a constant currency basis [18] - Adjusted EBITDA margin was 32.5%, up 240 basis points year over year [8][18] - Free cash flow was $19.5 million, significantly up from negative $18.8 million last year, representing a free cash flow margin of 4% [18][20] Business Line Data and Key Metrics Changes - Professional services and other revenue was $71.3 million, up 46.1% on a GAAP basis and 49.8% on a constant currency basis [18] - Live customers on the Dayforce platform grew 5.4% to 6,029, and Dayforce recurring revenue per customer grew 11.5% to $167,600 [11] Market Data and Key Metrics Changes - The sales to existing customers grew 30% in the first quarter [10] - Bookings in Q1 were strong, expected to be up approximately 40% year over year [31] Company Strategy and Development Direction - The company continues to focus on simplifying HCM software stacks for clients, allowing them to reduce the number of applications from an average of 12 to a single Dayforce application [9] - A partnership with Microsoft was announced, placing Dayforce on the Azure marketplace, enhancing adoption for enterprise customers [11] - The company is seeing strong demand for its full suite solutions, with 50% of new deals including the complete Dayforce suite [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sales pipeline and project kickoffs, indicating a strong outlook for 2025 and 2026 [6][8] - Employment levels were in line with expectations, and customer retention rates are expected to remain stable [21] - The company anticipates three interest rate cuts in the U.S. in the latter half of the year, but maintains its full-year float revenue guidance [22][23] Other Important Information - The company announced a workforce reduction of approximately 5%, expecting $65 million in savings for 2025 and $80 million annualized [19] - A nonrecurring restructuring charge of $29.2 million was incurred in Q1, including severance and related costs [19][64] Q&A Session Summary Question: What are you hearing from your customers regarding HR and payroll projects? - Management reported strong bookings in Q1, with expectations for continued strength in April, indicating no impact from macroeconomic conditions [31] Question: How has demand strength in HRMS and payroll deals played out? - Management confirmed continued strong performance in the enterprise segment, including signing the largest deal ever with a government agency [37] Question: Can you discuss the cadence of total revenue growth? - Management noted expected deceleration in Q2 but anticipated a pickup in the second half due to seasonality and strong demand [40][42] Question: How are you seeing trends in industries affected by tariffs? - Management stated no impact from tariffs has been observed in the pipeline or employment levels [48] Question: Can you clarify the Government of Canada contract? - Management confirmed the extension of the contract with a dollar amount of $72 million for services over the next 15 months [50] Question: What factors could lead to achieving the high end of guidance? - Management indicated that strong bookings and go-lives earlier than expected could drive revenue higher [54] Question: How is the utilization of the Wallet product? - Management reported high utilization rates among unbanked employees, with an average of 25 uses per month [87] Question: How is the migration of customers from the APJ legacy business going? - Management noted aggressive migration efforts, with an average uplift of about 50% as customers transition to Dayforce [95] Question: What is the competitive landscape like? - Management highlighted improved win rates and market share growth, emphasizing the unique value proposition of their single database model [98]