DAY - Earnings call transcript Q2 2024

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David Niederman

Welcome to the Dayforce Second Quarter 2024 Earnings Call. I'm David Niederman, Vice President, Investor Relations. [Operator Instructions] Joining me on the call today are CEO, David Ossip; and CFO, Jeremy Johnson.

We also have Chief Product and Technology Officer, Joe Korngiebel; and our President, Steve Holdridge, available for Q&A.

call our David, statements. commentary the remind want hand that everyone may I over I to to Before include forward-looking statements materially risks Dayforce's to present are that These cause could expectations. and results historical from uncertainties differ experience or to subject of such and can A statements our as in the some be Securities the these file filings. we cautionary reports with of and found risks description uncertainties the Exchange Commission in

Dayforce's Please measures the our course GAAP like to non-GAAP this be call, to use call the of of turn release Investor of These and documents describe filings earnings review And non-GAAP the the a measures for and David. will for to performance. over with press Additionally, that, Relations our a SEC these to we'll over website. I'd our replay in addition to of this the call reconciliation on non-GAAP metrics. full reference behind available with rationale

David Ossip

float And XX%. XX.X%, in on an gross increased currency $XXX up XX%, was up $XXX exhibit of $XX.X million you was up us. margin the as provide updated more and of float our David, call to constant then million Jeremy adjusted all margin quarter Thanks, adjusted and free to financials for was turn second provide points, XX% up was a revenue thank XX.X%, Revenue I flow year million EBITDA excluding results. representing some details comments we our And basis Dayforce joining and to the including growth up was best-in-class with appeal recurring cash XXX on an recurring delivered of for XX total full continues basis XX%, strong quarter, points. high-level basis. QX, second EBITDA their Cloud employees. Dayforce customers million, XX%. will In outlook. $XXX to power revenue and strong experiences healthy HCM of

second pace. the our and achieved strong quarter encouraging across with operations significant remained momentum product momentum in and an business Our deal at progress continuing

remains industries where Dayforce have While among able and macro including we hospitality to backdrop others. been the fluid, enjoys traction, retail manufacturing, their pivot to

Looking of out to second the year. half the

XXXX. achievements encouraged Dayforce creating are complexity, by driving date our engagement at proposition ROI in employee the to scale, core simplicity platform of value The financial resonates of and improving We is continued very the market strength very expanding. and second large growth, a is pipeline continues and well to This with The durable through market quarter. customers. reducing and resilient be of HCM our

momentum full as will customers the conversations are and for half regions. in progressing all prospective We through are persist second segments this with the optimistic suite platform well

and balanced activation, Turning acquisition, In and expansion QX, growth across market highlights. to and consistent customer we retention. customers delivered

recurring quarter on Dayforce Our From revenue sales for enterprise ended go customer and basis. now sales XX%. on sustained momentum perspective, sustained X,XXX the strong have and live. a saw with We in both for and We strength Dayforce Dayforce customers a platform. demand year-over-year globally we live major per markets up kickoff the

solid sales our underscoring XX% intelligence talent attach of year-over-year partner government at in base new to coming in and add-on continued of of rates to success and platform Customers power SI-led contributed than compromising sales momentum sales Canadian XX% customer to growth Dayforce the sales more bookings, bookings the our total in to our with our suite capability positively add-on growth including suite. full growth, continue Year-to-date, the with with over healthy ecosystem. see expanding and

database AI. suite, on powered peer remains the from scale a a application a Dayforce people with that at platform global single differentiated group by delivers all-in-one HCM as our simplicity full single

evidenced and differentiation healthy growth. sales retention revenue Our best-in-class is win rates, strong by our

billion $X to hit expected double constant. pleased than project July revenue rates live of well. Dayforce had of X,XXX as use of Dayforce. Canada month were of remain nearly to Wallet. for Wallet registration per XX We Turning and June milestone at early is payroll and loaded We cumulatively. this the the to customers is the year transactions government The progressing modernization more fastest-growing and product in is

update As seen, Canadian time government provided the and you may have information planned this targets, lines about an month with earlier their investments.

to the Dayforce forecast. pay help to this Canada impact its is will only proud workers project Jeremy time to modern play to accurately engagement not this project as on well. and employee from provide government financial color our talent as a but of to part provide the a and platform in some

Canada, addition food full Government independent industry of and selected global company employees family wins in X,XXX the payroll employees and U.K. workforce XX,XXX solutions the than for and with benefits, QX the in its brands and employees. managed globe Dayforce U.K. population its across the be across In Dayforce to U.S. from a XX,XXX suite hospitality Wallet A Dayforce used selected of agri with more employee management business and the sales to some notable other Ireland. in more than Canadian based included

Dayforce its X,XXX employees. A U.S. Canadian on multinational time entertainment and for company pay selected

A management HR some on time Dayforce firm X,XXX XX,XXX employees employees Arabia. Singapore Germany, U.S., its And the with a global U.K., QX gone key consulting multinational Dayforce population. Netherlands, customer e-commerce for over included U.S. workforce that for is live go-lives payroll, in now and company Saudi payroll and has on and government Canada, all live

than across went suite into A the its full Dayforce cars employees. XXXX implemented XXX U.K. Dayforce that live and U.S. employees America full used to seller for with the platform X,XXX of North flies a and cities airline new more regional

customer You in more go press lives earnings can release. notable our wins about read sales and

to some now Turning technology. and on our updates platform

to selecting help legacy results second goal navigate several technology. This our our and multiple that eliminate to capabilities at we innovations. workers on-demand combining a always, work quarter, from payroll We and the exciting In As that onboarding guides customers even ever-evolving simplicity background marketplace work gig work the solutions. launched give the of introduced retired, flexible is innovation more shifts of manages Flex checks, flex to [ helping mind their of we complexity as introduce and customers while and giving posting scale core employers experience. new often organizations workers. frontline Dayforce's augment seasonal our to allow from and HCM workforce our principle an alumni helps deliver a peace landscape ] by working

our to extend with introduced software of Partner partners job SI Dayforce AI that than and uses Dayforce Dayforce help Dayforce recently skills software on compliance end source XXX partners. Payroll in which operating upscale services updates then capabilities. workforces. platform, access more Singapore XXX the identify launched checklist Asia launched and observe Dayforce vetted will in Dayforce enabling which and requirements to released on the talent compliance is platform customer We customers to payroll which And in industry-leading performance. We We the engine, and region XXXX. committed the adhere on gaps, a document Exchange, skills, half marketplace the remain allow learning fully customers over and their launched managers helping We with impact across to we trading first discover access with with the customers to where connect the to can

customers. we extensive innovation map road This are and products pace provide that our to of have for truly future we excited is an impressive enhancements and

results, November our continued Investor of profitability and Discover $XXX ever Finally, multiyear Dayforce look our view we Directors share due alongside Vegas, plan many and and first present you Conference cash Las to that in to model. has in financial person there. our to We announced comprehensive a XX a vision, where improvements on our Day forward strategy repurchase seeing our we generation program, announced strong flow of approved Board million we of

over we the call in year. in growth detail. in and pass you. our in the Jeremy, of our to I'll second continued like I'd Jeremy results summary, partners passionate more the our everyone our thank are to the quarter, our financial customers, to second Dayforce In to now including in half team daymakers. momentum opportunity community, the and discuss confident of

Jeremy Johnson

revenue underpinned on currency on was strong on with adjusted excluding were revenue XX.X% Powerpay and currency and cash line and growing constant XX.X% a Dayforce basis underlying quarter trends. and basis, up customer flow was continued perform, a $XXX.X basis. enhancement X.X% Total GAAP was a revenue recurring allowing XX.X% We $XXX.X million, Dayforce improvement. by a to recurring XX.X% constant basis. results. margins, and float million, growth second David. EBITDA XX.X% revenue, a X.X% recurring currency GAAP $XX.X Thanks, go-lives constant and we up million, up us generate healthy experienced strong drive or our $XXX.X pleased million, on basis Top to to on up was

million, amortization was $XXX.X Ceridian XXX $XX.X was profit including profit was gross float, QX gross the related expense million, and retired Cloud to points. the cloud XX.X% by our adjusted reflecting not XX.X%, continued up million in points. basis, $XX.X basis a margin in financials. recurring cloud up GAAP a XX.X%, which name, And and operating $XXX.X our up margin On recurring comparison or On margin basis, improving expand was Adjusted recurring to and G&A. margin profit improvement gross in XX% was non-GAAP scale nicely, also points. margins points XX basis XXX basis adjusted EBITDA expanding gross up a basis gross of XXXX million, excluding was XX.X% continued trade XX

as over target frequently, Operating perspective, flow, growth $XX.X flow us cash to view cash enabled reconciliation new conversion focus cash cash and term, included SEC cash million, on to and profitability formally flow. continued flow operating like million, on when margin displays is a that In we'll up Expanding by a increasing from our introduce flow flows free simply capital for about expenditures. in that time. the begin our more a free cash to up a and were a from free flow consistent free EBITDA. From very metric was metrics I'd XX%. cash in cash basis cash filings, XX% long We $XX.X viewed by a flow we've speak simple that's and financial profitability cash free improvements operating reducing cash

last cash was operating full to XX% versus free adjusted cash million, remain dollar from up Year-to-date, confident EBITDA $XX.X flow on in flow expect our we and flow expenditures conversion a year. capital cash steady and of basis remain targets XX%, to upper year

eloomi of expected, of second a revenue float. in Dayforce represented XXX float approximately the recurring revenue approximately while the basis basis last year's ex tax points As ex quarter, to our Dayforce headwind growth of to XXX recurring revenue points added business movement quarter

A guidance. I move before call-outs few to other on our

a layers primarily is functions. out adjusted optimizations we of in and and expense We each these of continue in the EBITDA. we inside approximately included the on at restructuring reduction to year a changes believe and in solid entered June, the was to our in business. planned will workforce, drive which spans reduction an performed of This end operating of result control up our when employment of global build First, model efficiencies foundation X% and $XX.X million was more Dayforce levels our set of

it and added investors outstanding arrears. we including trade to annually, income AR, amounts provide other disclosure to in believe Second, historical This by bank float release we on amounts XX-Q accounts and quarterly. accounts color previously breakout provide receivables interest is disclosed additional due was detail from on includes to This components, Wallet quarter receivable. and of the paid our incremental earnings receivable from but helpful

details provide to of of the financial more I the And the want payroll with government modernization clarity finally, Canada. project around

and If announced contract is HR that allocation and pay for additional the to XX now XX to contract expand government they in had budget to to approximately its allocated in April, CAD to solution. talent a or design in a explore capabilities, to XXX incremental million needs. CAD Dayforce continue licenses Included specific that testing the 'XX amend million Dayforce include the new formally provide million USD recall, with you XXXX, and

the funds -- doing we services and begin contemplated This be are deliver on to partners, more the realizing contract are expect of guidance. which to expect included about to and remainder XXXX in the of and software, continuation begin for These XXXX. project we been part a Dayforce of this of already services quarter services And our which second to as funds XXXX. we've we the bookings by throughout both work of delivered X/X for of the

turning our the full Now guidance year. to for

billion constant expected third the million Dayforce basis. constant a for growth $X.XXX XX% ex a currency billion, XX% recurring growth currency to Dayforce XX.X% or of or $XXX to a million million $XXX margin reported million million as or or float basis. Total a Adjusted quarter, as recurring revenue third XX% expect growth and billion growth XX.X% constant as a basis. We revenue to $X.XXX of of of to reported a now million ex XX% for margin. EBITDA for float And of a to million on EBITDA revenue year. million revenue to a $XXX on the XX% revenue currency to revenue expect million to the XX.X% $XXX Total XX.X% we is of XX% XX% million be to and is currency constant expected to to be $XX XX% to of XX.X% to quarter. XX% float on $X.XXX basis. Adjusted billion $X.XXX $XXX of $XXX $XXX full $XXX Float reported to $XXX on of or a

continues an year. are maintained us, ranges your year. full $X.XX raised I'd dollar we quarter revenue, QX driven you growing in the Assumed go-lives average for With our to rates and or for between accounting drivers Dayforce. exchange implies To like excluding float be our other in are and growth USD weakening for a in last Dayforce year. approximately year rates various constant the of for guidance QX by the $X.XX for between thank The basis. at to our full quarters for this guidance headwind clear, fourth the foreign and which be to or recurring Canadian currency revenue on fluctuating guidance Our interest a of Canadian timing XX% primarily differing

call. opportunity We our are XXXX. the of third our in excited can the remainder that, we continue executing quarter the begin against to portion and With Q&A of

David Ossip

for that. thank Jeremy, you

to year guidance. that headwinds Before rate this I you the to we into impact FX, and the FX our Q&A, provide since some one could moderate on item ended David you ask possibly as of how off

Jeremy Johnson

Yes. Thanks, David. point. a It's good

to with revenue then ranges. $X.XX of since we guidance total total our billion $X.XX For and our to revenue, we guidance guidance million $XX the started raised year billion, by current

that, we for rest And million. here, by of the we've by get while $X actually contemplated spot headwinds our USD the in our assumption $X $X.X to in $X.X about in to X.XX million FX to that And year total the quarter million has of second $X.XX $XX Canadian a guidance get million FX to original today. we've But beat the also million. almost dollar Now guidance Canadian another a rates, rate total quarter by also $XX original our about the revenue. weakened of guidance of absorbed first at because to versus our to guidance million total raised

headwind. revenue have our we've had guide essence, from absorb by in to million increased million but original $XX So our in in FX February, $XX guidance

by first dollar, ex million $X we $X this absorb billion, we of million float had Now and the in guidance Canadian recurring $X.XXX year happens revenue started as we've But quarter due and million weakening FX guidance of to We Dayforce to headwinds. beat $X well. almost well. by billion raised the to with our $X.XX as

So $XX our FX had increased but revenue ex headwind. in we've that float guidance million. $X about Dayforce million have recurring to absorb essence, by

expenses to although $X with our headwind $X get And EBITDA, original to million, muted there million, we guidance due impact beat adjusted the guidance here, year FX $X to million, guidance been our quarter to $X had now million second we've million of current And our it's with get somewhat $XXX ranges. our adjusted has the approximately ranges. regard quarter year by guidance $XX raised on to raised first by started And and a Canada, to million rest but the our versus of we and by we by $XXX offsetting in has of an EBITDA, million. our

$XX in $X million, essence, increased headwind. million with we've So our by EBITDA adjusted a but FX

to but and execute Canadian you beginning we having Niederman, ahead So do first the to our -- an results, do the open continue go impact these up the you year since want question? the weakening headwinds. to dollar Maybe of with on is well David outsized

David Niederman

Great. Yes.

joining. for everyone, thanks, So

to from from Mark is Our come first going Marcon question Baird.

Mark Marcon

well the progress on cash the particularly couple see encouraging of solid Canadian observations to the Congratulations the as as on A a question. and flow free government. results,

Your of American at to a opportunities? a a we and when then margins lot think are we about business highlights, the I'm take from the bit wins the longer-term just should look how nicely. or wondering highlights perspective, about opportunities global can increasing the North of if you And profitability a companies relative the little sales are talk international international companies.

David Ossip

fact successful you Mark, that that thank quite we've global for the And thanks basis. very also highlighting for much a question. on been

this seen And know, of by part be it's allowed still year you into where honestly, strategy. purchase markets is successful we've growth it. our to pivotal to robust this As durable quite us

know, and In features of are the that our had base. terms overall sales We pointed profitability, we've are also XX% products, suite of of you sales new density full that the is our probability, successful very about buying. out to as customers driven back by

If you included. the NRRs see

we back from go changing obviously revenue basis we or to cost When a perspective. add from base, additional without support the hosting the really

So basis. line. directly of true a the a flows global bottom The same it to down on lot is

on products geos our costs and we customers of ] a [ basis. North you global those normalize slightly But customers, as those see enter our American comparison global as reach we be higher. the to terms would and as costs and see would some sales between same P&T Obviously, In expect will well. of maturity, margins marketing new

Mark Marcon

some that going anything Is are of to well and you in see with That's size second government -- 'XX with we the we quarter get there. Obviously, for can that software to through Jeremy, regards how greater that additional then think time the there thanks else should color the into regards extent. great. we magnitude come about highlighted a 'XX, of the you things going about to as by to project. And we Canadian might the think tell layering us 'XX. and revenue the

Jeremy Johnson

and Yes. excited about modernize partnership and think build Look, Canada of we're foremost, their help them Government first I continuing payroll. to the that with

a specifically, software the about was and million confidence of their we for said Canada have USD April X/X beginning to of which on assuming to testing XXXX. expect what expand about government call, contract design be, to execute, needs, signed I can we we with XX in specific subscription the As that of for we

So that of the across be services we partners, that throughout well. we'll type more professional our work already that remainder but been continuing for as would work. both our us That's have do the ongoing in term with largely contemplated to and continue guidance, government

David Niederman

Our next Samana from Samad from come question Jefferies. will

Samad Samana

I'll first, Jeremy, a comments quarter. echo great Maybe for Mark's you. it's

fourth Just dollar It quarter fourth as years. I in ramp XQ, really XQ implies would that adds the think of bigger of the in the is had quarter guidance the against growth you've several about in the tougher comp impressive, one for accelerating and implied it the kind right? be

what's can of any have the the supposed how So in cadence confidence visibility business? that you help the underpinning particular us And Or deals just it is live? understand just you that is natural to large it go much ramp? that? are into And

Jeremy Johnson

got required year-end to in of to IPO. revenue frequently. between Yes. the have of obviously, I have into of them lives, we quarterly from around level QX. our ranges, to the differences performed rates and can many bit. And point year bounce do year consistently around Thanks, numbers. we other timing confidence It's go Factors include But you. We've Samad. well. visibility cause we our accounting got good performing do can fees a we're made last guidance I'll that our this Wallet and back revenue. the that among And go to services in things. all Look, And since we're We've against little amount hear the it's growth to

that out. to are to and confidence that and Our into we and have that guidance strong, visibility able achieve results both QX a the in be amount great expect we have set we've of QX

Samad Samana

then And maybe you, for David. a Great. follow-up

I across look landscape. the as Just

right in getting you to One stronger. of appear of maybe do other far curious, you force. from your had is as your reduction that companies a taking incumbents just I'm curious as what and guys you're large wins really just change think now about and to I'm the be think some a that are from? the doing, are in you space what just as inflection competitors in seeing where you're leading And the coming that share you

David Ossip

prospect the up XX:X is in differentiation again as very of Look, fees work organizations. how or I rates quite stack. our it's weak difficult messaging, terms is well we make gets being different the paying We out, weaker. different XX:X go a licensing those in simplification stronger seen of of the in is which refers each that strong performance and much as see that the the What across Samad. in we We've clearly And applications get for heard with to you times, think that subscription market. you XX terms where they're systems. pointed and organizations up quantify considerably Thanks, find the out largely our their map year-over-year overall win we approach to then HR

increases subscription FTEs and different number integration, versus support also the to the FTEs integration the for systems. of fees cost do and We quantify have integration, cost many their we And they show how other quite XX reduces We a automation, of have dramatically of also to the that eliminates they move supporting those for Dayforce, reporting. the systems. to the data each aggregation Dayforce which required the then platform, system pay of same reduces

particular or a we us design It's of to talent product that That That differentiated our IRR our the to time, technology very single perspective, And and are to a clean From well allows deliver the very very very it in whether same our capabilities, single show at a product a breeds with differentiates our competitive modules cash is led for actual message against received. and compliance application. modules customers. even the best and well in in think macro this and database irrespective I us market, areas. the has the are success. be

David Niederman

Scott Needham. Our next from from Berg question comes

Scott Berg

guess, David, about or don't maybe know Nice got solid spoke talent Joe. coming better quarter. that I you I bookings from if David this I X, for is intelligence functionality suited the you or the all have last Is to the that year the AI has rhetoric these platform business brought helping two knowing certainly that underpinnings tailwind within now. that, market that current technologies.

David Ossip

the the allow each with So really suited to experiences AI from content and the of can that breeds, customers designed that that and very we we've AI into remember across to questions customers. management some that's it system, they copilot platform. believe shows web documents team from, whether and create the you'll Dayforce actual the to CHR for and type it well, be hub able actually inside is the we're we and us question we When or make the U.S. the very reference uploaded customers render available on very AI is underlying mobile. The is essentially got ChatGPT in content that within models as format. And beautiful Scott, the a is going of whether for very, powerful and we best person formed already, system the both where respond develop index is well do benefit nicely. the and the audience where At provide data of reflected by to of ore Joe system of hub of the and an their when the AI from a the their our content from through that source have advantage as Because is inside overall our design management them through an allows we're to already been for are available a exciting. perspective, the ERPs benefit. compare to the see hub highlight able to be the the actually respective that a in to get of competitors, our experience we year, this experience is strong experience and Discovery, our I well, platform document it actual perspective that

Scott Berg

And then your Jeremy, EBITDA my of Excellent. on how flow. expectations Very comments, free helpful. follow-up, adjusted about cash cash free wanted or and you touch I flow kind to think

recently How had a do and of move a that debt? ago. that that conversion this in couple strategy move conversation conversion your changing months Or up? on contemplated You I that is of you to without level metric potentially

Jeremy Johnson

to that think years, the Yes. made we room the Look, Scott. first still I free foremost, in I want and really flow acknowledge improvement Thanks, to cash have over fact we few some have strides go. significant and last

heading I towards around you with year-over-year. dollar into couple conversion capital EBITDA our points, on our and now will If you actually upper we're constant of free something back kind from ago, go a only to at free anyways if do rate XX% math out, laying XX% expectations years which to X I our remaining we're adjusted the kind going kind think cash that was of relatively of flow margin on then get is flow. a And you of operating XX% flow margin plus basis around cash expenditures cash percentage

So in improvement it's margin. pretty significant

a from into And rest is we and Now of will think the overall running adjusted lead we of excited EBITDA driven to been improve that on to cash do truly lot here kind and on profitability. charge you're Dayforce, operate as with cash us Scott. an flow that conversion really muscle things But a this building focus if as is like balance we're I should improvements is something metric see operating which DSO, has I'm of free continue, think basis, a to sheet there. say, cash it out I optimization continue we're push some business and can in and at by that on to that our going the

and see flow going really really free So SEC and flow, perspective. area be to QX And got an free cash some can a was from you in things quarter change. going that happening. our and us nice a for we've reflected in cash to that's I operating filings future focus that it's the nice flow think cash of an not

David Niederman

comes next Siti question from Mizuho. Panigrahi Our from

Sitikantha Panigrahi

Congratulations to and cash Samad's But just QX good want on focus. question to free a and to I this ask your about a question guidance. good see follow-up quarter QX flow

to about I do this for want on So you delay any to bookings any rest for your you second risk they is second terms will on about And incentive cost half there kind of to Also, but customers year environment, go-live of a in of talked their just any there in any in the talk macro thing, Jeremy, is achieve kind employment. number? assumption clarify, the rely visibility, for expedite, go the lives or you the them. could of saving

David Ossip

the Siti, actually QX and of going in nice QX built year, came up in for to is the forecast. are half ahead speak with you. by first we The the that of of accounts largely the our process forecast work implementation. currently In through

actually of the And we Typically, forecast will confidence that exceed go-live got go-live so degree we've and the hit usually a planned. it. high go as

of the from go-live. So we aren't perspective in of terms about concerned a any macro delays

fact, remain on confident In very we that.

Jeremy Johnson

some of have some success that of segments a maybe fluid just to in here in. question right second it's strength answer employment on more industries macro things seeing pockets And really, Yes. we with your picture now and levels, we're the

in I but line is is overall Dayforce that have on flat ultimately with of think, in and right our of but from view which also seeing risk, kind resulting weakness, expectations, where optimistic year-over-year. picture things numbers remain Collectively, employment levels an our We pockets we're some and in it limited economy, we definitely seeing not today. the the we're on it's believe should we're kind what of downside given now, overall steady

David Ossip

had Siti, largely years, what we've our I for the COVID, growing. a a where is the deals. Obviously, quite a a would where go doing think be a also benefit back And there's to we well. where I success in public over overall of of the and macro lot And or as of in of very, durable of that's particular been quite we've is it particular still to ability over very see lot to macro over invested quite the on been of by like quite to a lot the times, not company time. economy, types strong built overall say Government navigate I even Year-to-date, suppose, market yield requirements we with from I robustly the challenges, to is that last able and et in a asked by seeing pivot number company organizations number add as years, the we've industries we've where jurisdictions, have you strong. we're particular the come and to as X us last is in hospitality, growing of would with quite continue It lot whether needed if driven because and quite very that at sector that like, cetera, growth of are COVID, allows you profile, tune also industries. global period on earlier, the remain consistent the been Canada are economies pivot on which basis market the

David Niederman

Our question from Citi. from Enders next Steve comes

Steven Enders

kind the there or Okay. supporting start, drove maybe coming right from this on bit Great. add-on that what's prepared that new think better net understanding slowing if more something the you would the down that little come get I and I sales quarter. bookings what call called in get of a I half guess of And this like maybe remarks to to quarter new out guess bit out just for little kind the I maybe Or on detail now. strength to anything in, may just on of side? a there's over

David Ossip

last Steve, where, had best-in-class. the by you fact about we the spoke group of as XX.X% you could sales consulting last back to retention analysis We that far lift Yes, felt year, we end that quarter, rates up if an know, recall is we clients at gross a on at the by our the base.

an point from that However, we they perspective did could out up. NRR lift

programs we up We've quite brought built are. team basically base actual very to at aware client sure product they're leader last made make capabilities strong of we of go moves the for that some to end in So back motion substantially. what base sales. in that to year, the actual put We of the a purposeful the the

[ to We've to we targets. have It's message been we to as XXXX sales XX-XX sell back longer cost to a between that's higher us much important traction. sales sales. with back net as you towards we If sales look the taken new so base, the XX:X do is base is productivity, of lower, look the think and that the profitability And very is Obviously, we're net beginning also, the simplification well, important. ] sales a quite see that I we we believe too. heard When for quite to take towards well, get what base. different to which than between new profile blend the back and see

Typically, we and already is already teams customer live around net. margin the the than do on have the on recurring a have the add-on you client. on higher and we because environment, Second, you get the sales gross get support cloud

Second, costs add-on look they're client And obviously if profile good. the even client LTV very, net new basis, our from I where of from acquisition a an fantastic. sales, very is or LTV numbers acquisition basis at sales cost

our allow our So it's and which targets. us cash and very purposeful, profitability much kind flow growth of longer-term will to longer-term hit

Steven Enders

quarter? coming kind opportunities just, guess I to there. deal in the net I about and to you shake in And close on door, net of maybe -- of context helpful of with the that's the kind coming and are guess, where environment to door? how No, like are kind feeling the Okay. guess, new the that pipeline the I regards does you the is how new today how ability out

David Ossip

pipeline typically say, of the I in opportunities Our look strong. open levels. at When I'll next at healthy a look at very which targets. Xx that historical they're X say helpful number at and we're XXX quarters, days, remains coverage, very is above operating I and about very the record we'll If next the are closed,

So exercise that investments help. some are marketing hold. done We've we've us had we've The market seeing the take tailwinds does XX:X some the for in other to That well. of still side message made begin branding and we robust really on also a simplification as general.

that your think industry research, our field I and reputation you do is you'll very in find differentiated. the product

our client at, you the at look industry. retention rates, by our you far if again, best-in-class in they're NPS schools, If look

we're of proud that as look having, experience customers services our very that well. at If you our are

to in quite I us future. well into do think And actual go continue see well the we'll think I we So the execute marketplace. continue to will you as

David Niederman

Our next question comes Bank. from Bhavin Shah Deutsche from

Bhavin Shah

kind able ramp us SI an just the give partnerships? are the relationships deals much of new channel led you is how of by it on David, in Kind maybe they be sell terms prime in the or today? your the themselves? year of where over update next can of and And to goes think you And where two. bookings of kind to do

David Ossip

prime and deal. the as I the my nice obviously we SI the Bhavin, year-over-year of of Yes, saw growth script, terms SIs involvement actual a deals in mentioned in in

We as Steve have with here well. us

more maybe provide a So color. let's Steve bit

Stephen Holdridge

our we've goes. Yes. for leading mean years, talking of think number of we I we our as the was had X in actually Toronto execute. yesterday, XX What it's about I a partners office in I to continue she past been just steady and days.

as SIs. same beginning as to well and marketplace. want across to acceleration the specialize and focused their on SI-led X both So create own We with of continue on growth, talked focused see the them. we we're We're SIs there helping strong them target regional things. on XX% right? around enabling Our in sell be focused industries about. on really And in We're demand the deals We're to regions all markets. is out global as we'll

an to creation on invest successful and it's giving return we both continue the customers in So in see choice. area demand and been

Bhavin Shah

Super helpful.

one Jeremy. follow-up Just quick for maybe

of the on the don't Does at or cash Just free philosophy that flow. to see look great change M&A buyback types all at? and on you even focus your deals

Jeremy Johnson

time this it's Bhavin. Thanks, about talked first And here. look, we the

did $XXX I announce do program. share want million that highlight So this to fact the we repurchase

you'll we're share stock of a impact dilution to in currently the what We is share this execute us over be behind goals reducing And free front. to from cash undervalued that seeing to on that of opportunistic issuances. there's capitalize market transactions. plan those on think I couple increasing ultimately, market believe And And future we a One repurchases through second the of see lot this. flow is the are shares. employee this. obviously is

pipeline about deals to we global remain markets. you capital of kind of of past deploy and where when like platform to M&A expand or in the sense kind future, plan will think the that either see business. be -- in more how our I to still it to we've opportunistic think to more we global our that's and expand in done or adjacent our kind make our TAM go

us kind allocation. to I to this you'll of shareholders. way and that, nice is see return doing other obviously, start capital capital to in really And balance is think shares our of The to our a those option, all

David Niederman

Brad next Reback from comes from Our Stifel. question

Brad Reback

us going are account a to the that underneath new there can moderate. there? in shift David, on customer remind continues the you covers go-to-market? dynamics Or Great. Is other

David Ossip

market. up move a It's

base It's average actually blend a year-over-year. very years revenue between at long-term that XX% number from that sales If the reflects amount the back It over very new net to quite about also deep up you clients Remember, sales. tremendous towards are spent last on is think important. talent P&T we robust our now I look and and a the we modules. -- building of looking

in see space lot client base. our we do existing white of so And a

relative overall look share to still at that very What I out we're would the our point low. market we TAM, is if

that get is Our depth kind overall higher probably it of And so customers. tons across we our just white have X%, still And spread. reputation our a market brand operating word quite very new and of in as to acquire now as proud under of. we're client market density of module does well, we in the base, we're space I up converges share think good does market with go

Brad Reback

That's great.

Or level? this quick XXX expect bit stabilize one moderate could at here Should finds of it more sort to before bottom? a it And that. its it just from on so little we follow-up

David Ossip

of the I'm to you referring XXX? sorry, what terms are in

Brad Reback

The sequential adds customers? in

David Ossip

of that If X,XXX don't if employees, from as large employees organization and And major the counts with a with a one. and counts of perspective. we company add We as hundreds remember, very account one. run market thousands we add

So at not look purposes, honestly, a any from quite number I look wouldn't that at we that internally. number

David Niederman

Our from comes from Daniel BMO. next Jester question

Daniel Jester

Great.

the from in what About you're that they've that different direction. organization So about generative David, maybe to the talked doing Maybe like. in to update some field of efforts little you're efforts boost bit now a a the take internally you year the of customer conversation deploy had ago, there to inside the those been a any seeing support for terms while? and around efficiency is AI

David Ossip

department, focused which saw departments allow the documents. those perspective Copilot we the and gains It's our We've is about learned in that about delivery support spoken seen terms experience hub great. query area HR in that AI allowed the documents load what of calls efficiency our in out product. XX%, of efficiency us capabilities Yes. the particular this organization. to the and to into Gen is and had the of copilot previous index to a allow we on XX% with the build we through in then I been line documents from be that to The customer support those Dayforce on used a that customer lot capabilities

job a of get actually questions having I with back, the then I How sharing and So could the I'm How come I you as, and client, ask take load type if links. nicely very reference a when can an baby, could policy, product policy, up such you're a maternity answers do "Hey, a do thing paid? off? employee

their customers drastically overall the the really experience handling of across the HR see the executives. queries our business same gain from employees, terms time, for while improving for in that the managers frontline efficiency similar should is expectation and actual the frontline partners Our a workers, at

So it was actually a very, good experience. very

we tool or the overall have By incorporated product. that the actually into way, AI same now

admin implementation that those audience and for. are support the the an if part guides of user, you're document So you're in guides

questions to ability the configuration about have you as well. ask Copilot actual So to the

will lot handle those will so we further that our believe also support a organization And that of the in questions. AI

Daniel Jester

there the as on wage then Consumer Great. implications. around are the I as guess, going there think any Protection Bureau a some Wallet, And access, announced in follow-up, earned Recently, what's rules Financial about U.S. you

David Ossip

So from Daniel, XXX%. a go year very revenue a first than of we've good will by perspective. We believe Wallet more up year had Wallet this all, that

industry In generate levels. market construct. that type off-cycle that legislation, that we do not hours a players payday a payday a other is the and loan terms of we the and state in of a typically do is you pay technology different loan. the at slip do EWA We're the remittances do payroll. very it federal kind And than any within in the XX to where use bolt-on of that We quite remember the an unique we add time money Wallet

for we years Dayforce it employee. were several to this that the would true a in constructed Wallet be about that particular spoken so way payroll that the We've the quite we very

situation. very the And When [ And so you employer is they an XX employee mechanism fact from in is the look employee funding a actual we money the where as loan unique. to when perspective, remittances that at do employers payroll ] the unique lastly, on-demand an never the can lend the pay again, very effectively do well. we the hours, it's

your engine is in all of continuous that in compliant earnings. record, to net covered the can of taxes it any employee and you period, Wallet. that a that change non-payday I we're on why that's record, whereby and to we all necessary my predicated only then, shift have, record, the take does that I the industry one earnings. benefit the loan we calculate of that a mechanism. can the limits net there's to pay we out hours Beginning If a time a only And at Again, and I've that, X time the do actually able end and this add garnishments provided am work nothing

David Niederman

next from comes from Barclays. Lenschow Raimo Our question

Raimo Lenschow

not is I you, look their not If that that but well. struggling, the their Jeremy, as expanding are me customers problem one everyone and else seems employees. David from be Congrats at the to everyone industry,

to guys So Like helping per as upmarket kind Or for you? obviously different talking payroll more in. from are expansion on you upmarket well? guys the coming the paycheck you us better about cycle, there's offset of lot guys? seeing How it? help Are coming charge a much it more in that that And are how you seeing not guys immediately. is are started not moving you doing than that of new playing you through. just kind you're it of that even situation a terms guys other true-ups But can see so the is that

David Ossip

are X that, speak Raimo, nice you. reasons for Yes. to There and with

the our leader we're of in to remember, global market, our large again, mid compliance. is in in the The of first, as customers know, terms which you the And target are all enterprise space, global almost in nature.

a when to that geos. of players in into than the of talk is different the So we back that's about lot new other And expansion most sales base, actually market. the quite

Again, our organization, And probably X,XXX seeing are capability lifting the about we're talent HCM, now for up Gartner The the second a we're more being Joe than components. remember, employees ago in with on organizations best-in-class. is, so the focus really talent capabilities. talent X-plus that for Magic for joined our Quadrant years that

actual so to go base to And or strategy base. and that's motion that client really a space bringing X,XXX that marketing We leader allowed for around a having a have to us start back And are again, us. the customers in a lot very selling our of has and branding live. product in strong white new back to the

in So cycle. on that early an we are regard,

about what talk ERPs actual a the when I of sold have think lot is is market the ERPs, shelfware. think happening Now I I in

hitting renewals, be it don't are they And is they that. so rates. lower because may seeing seeing we are not think lowering accounts employee renewal their when I

Raimo Lenschow

that's how Is the Okay. Perfect. announcement, are And indication you that? think then have any you one buyback deploying really for like Jeremy. -- there a little share Is kind you have helpful. of your of about level you're mind opportunistic? quarter? you that Congrats valuation on having Is kind bit that Do quarter a there thinking Like in you're per about? a the each what's it there? of that cadence like doing

Jeremy Johnson

continue Yes. and right? we Look, think Maybe with and we -- Thanks, a about undervalued, be opportunistic make debt monitor we'll obviously back. us well, with Raimo. point the debt obligations. how have comfortable are to we we today, that as buy And being shares

gross business and any We leverage debt manage levered have maintained against targets. And that a been in our continue net opportunities to to to company. both see. fund inorganic us of we and ability and kind M&A We've organic financing in general you'll see use this

to at growth utilize nice capital -- think utilize look we we're I are you're financing we M&A, us a our going So be think approach, And undervalued, take share debt they overall kind continue to in going today. and opportunistic buybacks, balanced when allocation. but to see shares organic of our which are believe

David Niederman

Cowen. TD from Jared Levine Our next question from comes

Jared Levine

inform that signings, go compare that does XXXX you year-to-date what January regarding lives? to does on Based January? how this past And

Jeremy Johnson

We I'm sorry, a repeat question? you can little that Jared, you lost bit.

Jared Levine

Yes.

that what So January you in signings, And compare inform does January? this to past go lives? of of year-to-date how XXXX regarding terms does that

David Ossip

to 'XX, I'm I'm you January Jared, missing reference sorry, the could maybe...

Jared Levine

it does this year-to-date Yes, go based on signings what live? January you inform about upcoming

David Niederman

early right, 'XX. for January, for It's

Jeremy Johnson

success think, look, Yes. lives year. visibility into And to and do the maybe our go in year-to-date, -- I'd good I what we the great expect of rest we're we're really say, having, for

next rest contemplate this we're think look year, we the in and see those would as And our we as head year out, guidance and solid, think I with comfortable I strength strength we year. into the year. are into go-lives heading nice the of our bookings throughout

So ability confident our about growth continue on your question answers go execute to we're feeling think and if to that pretty is, I lives.

David Ossip

see of you Jared, I the you half look obviously and especially of at the the QX, setup for guide say a remainder for year, if that's half, strength the QX. would second in in the

Jared Levine

year-to-date? year sales sales And you update your targets an are how then fiscal of and provide side can count Perfect. in on headcount, trending those terms Okay.

David Ossip

I build-out the So with actually actual obviously happy we're the of of number sellers. very sales can to numbers provide we is team. say what the But as don't

well. We with continue the sales well. to that as happy themselves strengthen speak inside quite has We're for good been Obviously, the the as productivity results Sales sales leadership with team. year-to-date.

call, the too. has of during QX comment quite often I earnings also come the first well, As in month

David Niederman

So we're of out time.

closing conclude to the David for So at call turn this I'll we're to going point. it remarks. over

David Ossip

many for speaking of Just thank rest look the us forward joining you, the Thanks to again. few -- with next I everyone, you hours. with today. over

Dayforce (DAY) 31 Jul 242024 Q2 Earnings call transcript