Dayforce, Inc. (NYSE:DAY) (TSX:DAY), a global leader in human capital management (“HCM”) technology, today announced its financial results for the second quarter ended June 30, 2024.
“Our business momentum continued in the second quarter of 2024, with Dayforce recurring revenue up 20%, and year-to-date cash flows from operating activities up 16%. Our success is rooted in the simplicity that organizations around the world are seeing with the Dayforce platform, enabling them to create significant efficiencies in their businesses while delivering a best-in-class HCM experience for their employees,” said David Ossip, Chair and CEO of Dayforce.
“Our strong results are translating into improved cash flow generation, prompting our Board of Directors to approve a $500 million share repurchase program,” said Jeremy Johnson, CFO of Dayforce. “I’m also pleased to announce our first ever Investor Day on November 12, 2024, in Las Vegas, alongside our Dayforce Discover conference where we plan to present a comprehensive view of our vision, strategy, and multi-year financial model.”
Financial Highlights for the Second Quarter 20241
- Total revenue was $423.3 million, an increase of 15.7%, or 16.3% on a constant currency basis.
- Dayforce recurring revenue was $321.6 million, an increase of 19.9%, or 20.4% on a constant currency basis. Excluding float revenue, Dayforce recurring revenue was $277.7 million, an increase of 20.1%, or 20.5% on a constant currency basis.
- Cloud recurring gross margin was 77.7%, compared to 76.7%. Adjusted cloud recurring gross margin was 78.8%, compared to 78.1%.
- Operating profit was $14.1 million compared to $29.4 million. Adjusted operating profit was $94.9 million compared to $83.0 million.
- Net loss was $1.8 million, compared to net income $3.1 million. Adjusted net income was $76.2 million, compared to $50.8 million.
- Adjusted EBITDA was $116.3 million, compared to $98.4 million.
- Diluted net loss per share was $0.01, compared to diluted net income per share of $0.02. Adjusted diluted net income per share was $0.48, compared to $0.32.
- Net cash provided by operating activities for the six months ended June 30, 2024 was $108.3 million, compared to $93.0 million for the six months ended June 30, 2023. Free cash flow for the six months ended June 30, 2024 was $53.9 million, compared to $36.5 million for the six months ended June 30, 2023.
Supplemental Detail
- 6,657 customers were live on the Dayforce platform as of June 30, 2024, an increase of 82 customers since March 31, 2024 and an increase of 385 customers since June 30, 2023, or 6.1% year-over-year.2
- Dayforce recurring revenue per customer was $154,998 for the trailing twelve months ended June 30, 2024, an increase of 17.7%.3
- The average float balance for Dayforce’s customer funds during the quarter was $4.74 billion and the average yield on Dayforce’s float balance was 4.1%, an increase of 45 basis points year-over-year. Float revenue from invested customer funds was $48.9 million for the three months ended June 30, 2024.
- The average U.S. dollar to Canadian dollar foreign exchange rate was $1.37 for the three months ended June 30, 2024, compared to $1.34 for the three months ended June 30, 2023. Dayforce presents percentage change in revenue on a constant currency basis in order to exclude the effect of foreign currency rate fluctuations, which it believes is useful to management and investors. Percentage change in revenue was calculated on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period.
1 The financial highlights are on a year-over-year basis, unless otherwise stated. All financial results are reported in United States (“U.S.”) dollars and in accordance with accounting principles generally accepted in the U.S. (“GAAP”), unless otherwise stated.
2 Excluding Ascender, ADAM HCM, and eloomi.
3 Excluding float revenue, Ascender, ADAM HCM, and eloomi revenue, and on a constant currency basis. Please refer to the “Non-GAAP Financial Measures” section for discussion of percentage change in revenue on a constant currency basis.
Business Highlights
In the second quarter, Dayforce:
- Placed highest on the value realization axis within The Hackett Group’s inaugural Digital World Class Matrix™, and was named a Leader in both the PEAK Matrix® Assessment 2024 for People Analytics, and the Nucleus Research WFM Technology Value Matrix 2024.
- Ranked #1 on USA TODAY’s list of America’s Climate Leaders 2024, recognized on TIME’s list of World’s Most Sustainable Companies, and named a LinkedIn Top Company in Technology and Information.
- Launched the Dayforce 2024 ESG Report, Impact through Innovation, highlighting company performance across five sustainability pillars: Our People, Governance and Trust, Tech for Good, Our Communities, and the Environment.
- Expanded our global advisory partner ecosystem significantly by adding 11 new partners.
- Hosted two Summits, in Dallas in April and Chicago in June, and announced its next Summit in New York City on August 21.
- Celebrated global volunteer month where Daymakers from five continents contributed nearly 10,000+ hours of volunteer time.
Sales Highlights
- The Government of Canada is expanding the scope of its Dayforce usage to include an additional 30,000 users for Dayforce HR, Payroll, Workforce Management, Talent, and more.
- A global agribusiness and food company with more than 20,000 employees selected Dayforce Managed Payroll and Benefits, Workforce Management, Wallet, and Dayforce Industry Solutions, for its 5,000 U.S. and Canadian employees.
- A family of independent hospitality brands based in the United Kingdom (“U.K.”) with more than 20,000 employees chose the full Dayforce suite to be used across its employee population in the U.K. and Ireland.
- A multi-national entertainment company purchased Dayforce Pay and Time for its 9,000 U.S. and Canadian employees.
- A global food supplier selected Dayforce Workforce Management and Advanced Scheduling for 7,300 employees, and Dayforce Global Payroll, Workforce Management, and Advanced Scheduling for an additional 2,500 employees.
- An Australian utilities organization chose the full Dayforce suite to support its 7,000 employees.
- A diverse portfolio of world-class fashion brands purchased the full Dayforce suite to support its 6,100 global employees across 28 countries.
- A global manufacturer of highly engineered equipment selected Dayforce Payroll to support its global workforce of over 5,000 employees across more than 30 countries.
- A 5,000 person U.S. government services contractor chose the full Dayforce suite for its employees in the U.S., U.K., Germany, and the United Arab Emirates.
- A U.S. dairy cooperative has purchased the full Dayforce suite, including Dayforce Learning, for its 1,400 employees.
Customer Highlights
- A multi-national government consulting firm is now live on Dayforce Payroll, HR, and Time for all 39,000 employees in the U.S., U.K., Canada, Netherlands, Germany, Singapore, and Saudi Arabia.
- A global e-commerce company with over 7,000 employees has gone live on Dayforce Payroll and Workforce Management for its U.S. employee population.
- A U.K. seller of new and used cars went live with the full Dayforce platform to its 6,000 employees.
- A U.S. regional airline that flies into more than 100 cities across North America implemented the full Dayforce suite for its 5,000 employees.
- A U.S. based transportation services company went live on Dayforce HR, Recruiting, and Onboarding for 4,500 employees as phase one of its two-phased deployment.
- A health-conscious restaurant chain with more than 3,500 U.S. employees went live with the full Dayforce suite.
- A large U.S. healthcare system deployed the full Dayforce suite to 2,000 of its U.S. employees.
- A North American engineering and manufacturing company has gone live with Dayforce HR, Payroll, Benefits, Time and Attendance, and Wallet for more than 1,500 active employees and retirees.
- A U.S. based manufacturer and retailer of home furnishings has implemented Dayforce HR, Benefits, and Time and Attendance for its 1,500 employees.
Product Roadmap Highlights
In the second quarter, Dayforce released new capabilities and platform updates to help Dayforce customers across the globe conquer the workplace complexity crisis and unlock value for the boundless workforce.
- Dayforce Co-Pilot updates include enhancements to Dayforce’s proprietary generative Artificial Intelligence model, including Retrieval-Augmented Generation document capabilities, to fuel trusted answers and foster a productive user experience.
- 200+ compliance updates in the first half of 2024, covering topics including unemployment taxes, workers’ compensation, garnishments, dependent care, and multiple state and city rate changes, enable Dayforce customers to operate with security, scalability, and transparency.
- Dayforce Talent updates include improved candidate and recruiter experiences, which enable candidates to save progress on, retrieve, and complete an application later and empower new talent to discover additional roles during their recruitment journey.
- On-the-job learning checklists allow managers to see how training impacts their employees’ performance and can automatically update Dayforce Workforce Management with job step rate and pay increases.
- Attendance management improvements include customizations of application logic and rule-based policy configurations to help track incidents and violations.
- Dayforce Flex Work, an on-demand marketplace for the contingent workforce, connects customers with skilled and flexible talent, while managing background checks, onboarding, and payroll to reduce employers’ administrative burden – all through a single system.
- Dayforce Partner Exchange, a curated ecosystem of software and service providers, facilitates access to fully vetted system integrators and technology providers within the Dayforce platform.
- Dayforce Payroll launched in Singapore, enabling customers operating in the region and across Asia with access to Dayforce’s industry-leading payroll capabilities.
- Dayforce Wallet reached the milestone of delivering more than $4 billion in payroll to users across the U.S., Canada, and the U.K., reflecting the growing demand for on-demand pay and the value it brings to both employers and employees. As of June 30, 2024, over 1,270 customers were live on Dayforce Wallet.
- Dayforce Integration Studio enhancements enable customers to prepare and import external data into the platform, as well as deploy new, pre-built connectors for benefits providers and strategic employee resource planning solutions and benefits providers.
Business Outlook
Based on information available as of July 31, 2024, Dayforce is issuing the following guidance for the third quarter and full year of 2024 as indicated below. Comparisons are on a year-over-year basis, unless stated otherwise.
| Guided Metrics | Full Year 2024 | Third Quarter 2024 | |
| Total revenue | $1,736 million to $1,746 million, an increase of 15% on a GAAP basis or 15% to 15.5% on a constant currency basis. | $425 million to $430 million, an increase of 13% to 14% on a GAAP and on a constant currency basis. | |
| Dayforce recurring revenue, excluding float | $1,163 million to $1,168 million, an increase of 21% on a GAAP basis or 21% to 21.5% on a constant currency basis. | $289 million to $294 million, an increase of 18% to 20% on a GAAP and on a constant currency basis. | |
| Float revenue | $187 million | $40 million | |
| Adjusted EBITDA | $490 million to $505 million | $115 million to $125 million |
Dayforce has not reconciled the Adjusted EBITDA ranges for the third quarter or full year of 2024 to the directly comparable GAAP financial measures because applicable information for the future period, on which these reconciliations would be based, is not available without unreasonable efforts due to uncertainty regarding, and the potential variability of, depreciation and amortization, share-based compensation expense and related employer taxes, changes in foreign currency exchange rates, and other items.
Foreign Exchange
For the third quarter and fourth quarter of 2024, Dayforce’s guidance assumes an average U.S. dollar to Canadian dollar foreign exchange rate of $1.38, which results in an average rate of $1.37 for the full year of 2024, compared to an average rate of $1.34 and $1.35 for the third quarter and full year of 2023, respectively.
Conference Call Details
Dayforce will host a live webcast to discuss the second quarter 2024 earnings at 8:00 a.m. Eastern Time on July 31, 2024. The event can be accessed via direct registration link at https://dayforce.zoom.us/webinar/register/WN_swoeFGDzRNGacRi3JC0bgg#/registration or through the Investor Relations section of the Company’s website at https://investors.dayforce.com. A recording of the event will be made available on the Investor Relations section of Dayforce’s website following the call.
