DAY - Earnings call transcript Q4 2024

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Operator

Greetings, and welcome to Dayforce's Fourth Quarter and Full Year 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Niederman, VP of Investor Relations. Thank you.

You may begin.

David Niederman

Thank you for joining, and welcome to the Dayforce Fourth Quarter 2024 Earnings Call. President, Vice Niederman, David Investor Relations. I'm

reminder, opening remarks. a and a our follow will session question-and-answer As

Joining the CFO, Jeremy me Ossip; Johnson. David on call today CEO, are and

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

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

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

David Ossip

will on levels. proved be a who and to David, plan. cycles exceeding and Jeremy, start and above expectations guidance. January results XXXX. our outlook commentary Sales We sales more to had begin historical to coming financials thank year strong over before our high-level strong QX with and a to returned Thanks, you the in and some all I'll for detail us. with handing call on joining provide

revenue expect we to growth year. ahead, Looking growth throughout outpace the sales

with excluding coverage currency XX% free grew expanding constant $X.XX revenue, currency excellent revenue, We pipeline Total And Adjusted Xx coverage pipeline was million starting float, recurring a EBITDA flow in our points. to constant target. performance XXX on expanding us XX% or was billion, of approximately of a growing cash had $XXX basis. compared basis. sales Dayforce points. XX.X%, margin the was year XXXX. basis basis gives on confidence XXX X.X% Our revenue

during Day, in growth guided XXXX total our constant XX% float a expect XX%, we basis. excluding on As Investor and revenue to of currency

our while basis to Our segments. XX phasing business focus Dayforce is guidance areas revenue, float our reflects constant a excluding decision higher-margin during out on of legacy to to recurring currency expected XXXX. on grow XX%

terms year, to the in an basis, basis In flow we to over XX% are free basis exceed XXXX, Day margin. margin adjusted and our this increasing EBITDA guidance EBITDA points In operating margins by to XX% cash Investor by cash by guidance of our to points raising confident our another midterm. midterm adjusted XXX for from upward ability XXX are X.X%. free anticipate trend to continue Last On model, XX%. basis we the this we XXX we expanded flow increasing XX% points,

event sales key the XXX last and to to we and new both year. In In testament global distributor across employees XX profitability and coating employee over a the EBITDA a we revenue well. company will we XX,XXX a exploration to air that our has adjusted cooperative points employee and within while basis and outpace of growth. to the in to CRO, employee space several will well of a Dayforce a service flow cash QX close success anticipate role growth XXX including employee EBITDA XXXX, improvements, revenue business weeks XX,XXX free expand the midterm, closed deals XX,XXX Sam, member-owned of and exceptionally wins, continue as a From years, XX,XXX as XX,XXX retail our customers its adjusted including by Discover manufacturing in attending the expanding accelerating chain, event, coming remain countries. Many with provider grocery executed these deals, Beyond XX%, expect the per quarter, sales. global of perspective, impact paints total secured

On we continue in delivery. innovation the product side, to and lead

data Our is around compliance, IT built product road map experience. simplification, and

X,XXX On employees the for experience, Gartner machine than once a and updates learning-driven enhancements firms new and more compliance compliance recognized direct-to-bank workforce employees. Key forecasting more for for we than leader Dayforce front, Wallet. delivered XXX included more capabilities X,XXX with by a with again firms were compliance than labor and insight compliance as

increasing a tremendous it Wallet, million. revenue million Speaking to XXXX with $XX -- had from of over $XX

Wallet to momentum XXXX. expect continue in gaining We

IT efforts into a align Our This single and reduces HR consolidates operational XX:X while systems and strategy, improving integrations platform. which force efficiency decision manual multiple simplification complexity day workarounds making. with approach our

content HCM employees. Strengthening X,XXX as solutions more XX,XXX new leadership recognition value We with Quadrant a with Dayforce, for our enterprises and eloomi in learning training proposition. area fifth creating Our talent in models. year strong experience and tools experience than a acquisition creation this analytics best-in-class leader our store reinforced content a Gartner's replatformed Magic a by was into for launched cloud consecutive featuring for XX:X the over

client-based expect to in We and XXXX. sales management significant learning content drive

users questions seeing frontline integrates relevant reference we more allowing to we executives. in for studio within to used and lit. November, engaging our indexed create Copilot experience launching of experience and receive at adoption team CHROs data and are immersive the units. our have ask with AI hub and side, responses is hub, XX and the Content workers, demonstrated contextual with managers my integration in than which enabling strong Since of Discover. On Copilot both Copilot and we products, experience Dayforce already sold

the automation, capabilities. AI sales will agents retention, Dayforce in us requesting recognition. such our innovation. XXXX as is or and is and what product significant commitment Innovation Copal of win facilitates workflow high add-on drives of market with area other industry this the our Additionally, in in strong customer planned core rates, new At This and differentiates to releases time continue

to with across our full provider XX,XXX active Turning over global service catering there on saw and a including We XXX countries. entertainment live. employees a have XX,XXXemployee was QX live, live customers impressive. XX% and provider. aviation live rolling and X.X employees, net XX,XXX customers service now go We a American million new suite U.K. both customers up support company Dayforce, X,XXX users talent, contract XX year-over-year. approximately

already increased adjusted a and Additionally, recurring improvement to revenue cost XXXX. rate EBITDA gross optimizations per cash XX%. From our sales. XX%, Dayforce of streamlining basis negative an we profitability XX.X% revenue, from standpoint, even customer in structure improved our free automation, in business a retention system strong higher and to and continue by a integrated. in and partnerships points, expanding by by the managed margin. lower cost and AI. Professional leveraging our driven investments gross from other in flow add-on expected will services improving cloud our margins XXX recurring is gains XXXX, in and milestone resulting organizations, we efficiency have jurisdictions, productivity, sales AI-driven greater made margin recurring organizational basis and was break optimizing Adjusted gross services support proportion largely This were automation reflects improvements historically automation our In and with XX.X%

to over call handing to themes. X Before I Jeremy, emphasize key the want

and to exceptional in lies products. our deliver innovate ability strength our First,

continue saw into QX momentum robust QX throughout performance and Second, and we are in sales XXXX. confident will this

to in all metrics, coming made profitability meaningful we continue and these improvements have expect across the we years. Third, trends

financial are Jeremy plus in we driving similar you. Dayforce more growth results to call positioning XX% now revenue our Finally, for while levels to cash flow discuss towards at to margin. I'll sustained XXXX, Jeremy, a to the detail, over free pass

Jeremy Johnson

Thanks, David.

line revenue was XX% XX.X% we We expand while a are pleased scale on Top million up margins. growth results. a the with revenue remained GAAP total quarter In quarter, continue business basis cash fourth $XXX.X and basis. and constant the the currency fourth on flow strong, to

currency Excluding currency on go-lives. float, strong basis up XX% constant GAAP a float And XX.X% recurring basis, basis increased XX.X% on excluding million, revenue underpinned revenue, constant was GAAP a and $XXX.X basis. Dayforce and by XX% on a on total a

currency but profit was expanding XX%, basis. XXX profit and and And XX.X%, a points. recurring while $XXX.X $XX.X revenue basis XXX on was expanding was XX% Operating and a million, XX.X% flat on basis. was Powerpay adjusted million, or margin million, was And excluding points. constant $XXX.X currency services basis, basis, non-GAAP professional recurring on cloud million, points $XX.X float margin million, GAAP up XXX X.X% basis other GAAP a revenue, a a margin, EBITDA $XX.X up basis was on a Gross constant XX.X% adjusted gross basis on XX.X%, up was gross XX.X% expanding up recurring

full our billion, and year revenue currency XX.X% basis. XX.X% up on constant a $X.XX a basis was on to Total Turning GAAP results.

a flow as $XXX.X flow XXX XX.X%, operating gross percent We XX.X% revenue amortization surpassed expanding perspective, the met revenue year on excluding healthy on was million, a basis solid basis. Gross was million, was million, and XX.X%. financial and XX.X% on excluding reflecting we adjusted revenue on year currency throughout on free services GAAP margin and perspective, was million increasing cash to And I Adjusted gross $XXX.X XX.X%, look flow currency margin retired scale a in on cash $XXX.X If targets up a performance cloud expanding or XX.X% original back constant basis basis GAAP expense $XX total issued X.X% basis a strong $XXX.X guidance a currency points $XXX.X with Cloud our profit float, Excluding including improvement a billion recurring increased the GAAP basis, profit XX.X%, related profit a full million Powerpay recurring was basis. XXX growth, up on professional a had XX.X% trade was and basis profitability float was gross with up a points. recurring million, million, February basis margins a points. metrics. these X.X% or basis flow a from up XX.X% in of constant adjusted XXX EBITDA expanding was revenue revenue, up basis points. XXX and XX.X% of recurring currency a XX.X% non-GAAP other on cash basis up our was Dayforce $X.XX flow X.X%, $XXX constant and at basis. year. XXXX XX.X% XXXX, and million, operating on and Ceridian GAAP continued name. expanding and was margin and constant cash $XX.X was XX% expanding a Free float up revenue cash and G&A. From

revenue XX.X% total XX.X% we our and and and constant float If adjusted XX.X% guidance and currency, for recurring XX% was to you for XX% between initial currency, XX.X%. Dayforce and grow XX% and to ex between was XX.X%. and grew our margin recall, constant XXXX grew we revenue between EBITDA grow XX% margin

XX% that saying revenue year, introduced We flow from expected the cash upper and year. we cash flat revenue, remained EBITDA for the conversion be our of free first this to adjusted and ended XX% range, also cash results to guidance we with to pleased X.X% with X.X% operating relatively to this and year-over-year, at of from between free mid- while financial performance operating with flow conversion cash time overall adjusted CapEx XX% in flow. We're margin EBITDA

to During go-lives constant Dayforce XX.X% or at in were excluding recurring we tax grew was employee while basis results on the float filing revenue few missed And customers guidance volumes, -- fourth and XX% headwind rates. contract $X while versus and these revenue. other contract currency. million quarter, and increasing our FX and expectations, Included customer solid, a a fees GAAP The that we PS and contract had amendments a reallocation changes amendments. fees impacts from isolated were caused revenue the recurring represented reducing of consideration, print to terms our

The $XXX,XXX. million $X from contract impact amendments million. and filing were tax fees the was fees and approximately employee each about print Specifically, approximately volumes were the $X

Dayforce the these been middle would range. our Excluding guidance items, revenue our have growth recurring of in

XXXX, issued into our previously for which A I'll about dive guidance. our changed more next. I on call-outs not have move few We guidance other XXXX to before revenue

in million and we of XXXX, and growth total have and During investment executed our points XXX that XXXX, and profitability the $XX basis revenue XXX flexibility lot we recurring $XXX of eloomi share return revenue the pleased our Dayforce revenue to our basis to dilution maintaining to repurchase our million ex business. share-based manage points from of capital growth compensation, to are added shareholders plan approximately during while

Now turning to guidance.

we growth excluding of XX% in of an XXXX, Dayforce to to grow revenue, projects, projects EBITDA digits, representing to at growth we Canada. full recurring some grow current float yield year, XX% revenue basis. mid- total rate and current margin and excluding to about a revenue, effective of GAAP XX% basis. the expect estimate revenue, to XX.X% free million, adjusted currency. be Float single we to slightly of Dayforce X.X% be At $X.XX the billion or rates, we rates, XX% XX.X% of continue flow or margin XX% For faster low XX.X% of At revenue this strong continue saw to a GAAP billion currency on than constant of XX%. spot we float on $XXX grow billion implement in to from we constant and of XXXX now on expect balanced during $X.XXX we demand government to larger to in billion revenue. XXXX float to as a recurring this And FX PS revenue, XX.X% FX work $X.XXX cash estimate excluding to $X.XX between spot and the including other to the as

For multiple adjusted spread digits X% expect based to XX% U.S. margin to we effective to X% XX% estimate be an grow to XX.X% spot XX% and and XX% XX%, to or growth rates, XXXX, dollar a pound FX basis. with of and this rest regard excluding on dollar-based, of total in based $XX XX% the Australian to X% to revenue revenue X.X% British With to float X% the million, XX% approximately representing first balanced of be million of constant quarter, At float of to rates, approximately EBITDA revenue, mid-single $XXX dollar-based, of currency to Canadian we across million growth current $XXX expect our yield currencies. we revenue. FX

will With the compared Australia currencies in the rates against currencies providing and these with U.S. begin and for these assumed of strengthening dollar our of we FX guidance to proportion the revenue of each U.K. dollar. the increasing, based each

the the U.S. dollar rate dollar dollar exchange dollar rate British guidance, the to X.XX. is For U.S. foreign is and our U.S. foreign the X.XX, exchange to Canadian rate Australian used pound exchange current to as X.XX, foreign

are foreign doubling million XXXX shares the of in with plus our goal headwind ranges. A maturity are revenue to still the launching B to SOFR a existing plan with XXXX dilution call. reducing XXXX from outstanding current to out during shares compensation, is liquidity full basis of and few repurchases, before shares repurchase continuing to X March Our matures purchases. deal rates anticipate stock-based minimizing our than exchange debt current close effectively out year term Specifically, something On this our XXXX, about repricing $XXX of we we at lower. purchase convertible $XXX for rate XXXX XXXX, currently we today, estimate that our we of current the XXX driving of points to share Later XXX And to in more loan regard our to planning million goal levels with hand. from other things call growth the which our million in cash on retire we're with to interest

portion our we call. begin with Q&A that, Now the of can

Operator

Today's Panigrahi Mizuho coming is Siti of question first Instructions] from Securities. [Operator

Sitikantha Panigrahi

explored, for also, surprise? Dayforce miss? points QX, impacted that in year, is expect should we could onetime? something And the Or is the elaborate Jeremy, a that it it this And too? you

David Ossip

let think I'd Siti, like X it key. points hand to quite start Jeremy. me to I are before that I make over

on considerably both revenue a the record, sales the QX both at of were over growing Xx and year-over-year all, January were up of company. sales First basis, growth

quite on momentum. sales we're performance sales So optimistic and

going of is have and we a not As when year, do bit very this we generally, that QX, you strong a a QX, strong. headwind know, sales into expect we see

aspects, at Day increasing the we're the the profit the gross as XXX free for well Investor at EBITDA, the flow. time, company revenue strengthening and guide meaningful guidance EBITDA that company. seeing holding same gave guidance we're all and Second, adjusted we That's We're cash by basis the the for margin as points. so across

moving can adjusted XXX we basis, to basis, ex go up see expecting around can the were basis the into free detail In EBITDA EBITDA on aspects force fact, an it QX, levels positioning sustained go adjusted look finally, current if on those. you on an in inside points a growth that at are towards we're year. And Dayforce you by X float basis. there regards cash Jeremy XX% flow day recurring to In for that

I All items are the would not that onetime of say, the do them, of future impact company.

has Some do that? with are of some obviously of the amendments shipping give inside to was to types them well. there as And more there some Jeremy, to do on to digitization, There as you fees. details printing the people have contracts. impact some want FX been to moving and

Jeremy Johnson

Yes. Definitely

can So the the currency we and David roughly there's slightly talk put lower which ultimately, mentioned constant X to the weighted. equal all drivers aside and FX, numbers,

First, revenue recurring. tax third, fees and it's amendments and I'd these second, say into employee expected; from other than services volumes filing it's fees; print contract and away lower and shifted that professional

and contract customers that's services to us. filing to levels. And needs All our little a a dollar retention with year and revenue probably than with drives them when with constantly slightly that saw recurring are ensure employee on us a for reallocate around volumes, XX%. PS recurring And required used. in quarter, it's invoiced revenue. flexibility a our seasonal gross meaning, historically you consideration know, we the they're difficult of that's which volumes in see historical strong type quarter, the basis. as other to muted between to -- and typical customer see tailwinds spike holidays, PS is satisfied. forecast. some consumption and more that We in and example, services compared was printing frequently the we they large customers a as some bit print this less partially add of for amendments, and and were and of contract we good lower thing some products employee small more this added, seasonality a and and motion fee, this what customers past.-- business it's the grow that And HCM or their It's is the a QX working headwind on the grow therefore, other on saw honestly with We're the tax

Sitikantha Panigrahi

impressive level Yes. low I understand assumed the digit. in sustainable your think at your are this And driving to drive key more revenue who point fourth definitely confidence double And peers David, impressive. help of factors on level you growth the are That's of But compare growth? that's 'XX. themes to the what when in level that this us

David Ossip

look January. are I it you a quarter And color record a I into seeing strong how sales a know, bit give Again, we a of was strength and going. this then typically if continue towards We as the momentum. December, saw month is current to as

to XXXX, if year, were very was start the at point at it is guide of The look I which gave Dayforce of recurring across you of very remember, Cloud the points that XX is this If up XX.X%. quite at we other predictable. scale. within ARR look we basis I I'll number a remarkable for the the growth think XXXX, And in business the is business our

Operator

Mark is question Murphy next Chase. from of coming JPMorgan The

Mark Murphy

the year-end. questions. at strong sales have performance That's quick to great hear. Jeremy, Congratulations I X on

that below said the expectations. you slightly volumes all, of Jeremy, First in came regarding employee

muted. both of where QX timing other Wednesday. might you and holiday QX? was other were into do blip? the type falling to Do words, you Christmas effect linger holidays years that temporary Or of the midweek that mentioned on the attribute some You In see a spike the

Jeremy Johnson

-- I linger level see that was that anything into to that detail would didn't point QX. I No, at of said

seasonal around we I QX spike do historically, As that the see holidays. said,

have we look, were slightly But Southeast and that slightly also, I some below the And did still unfortunately. guide. in our And think extreme thing very it's for pretty then weather accurate. a And year I was during It tough this forecast think we've historically, we muted. expectations, events to just been accurate. us to QX.

Mark Murphy

And with willingness or some intent we've safe to Ceridian to down M&A. much is to affect you on seen And just any isn't too as fall, as you paychecks going opportunities shed had consider David, its in or since mentioned then, you organizations. landscape merge then, Understood. time more Okay. the seen could announcing you acquire much spend for didn't to whether to overlap it thinking transformative that back therefore, considering Paycor it. try light they up market. might interested the open assume And would the any that Paycor, And have X perhaps acquisition

David Ossip

the in We of that Mark, I what you there's us. down the don't I don't from compete market innovate is It And and product. differentiates gains don't much Dayforce strength side, paychecks compete wins we because would deliver of be in Paycor. market in competitive against January having is and our against the that there it. think and differentiation ability of expect should the to terms QX down consolidation market, sales the we're product. see across in

So impact Dayforce. no, to there'll answer to don't your question, be think I any

Operator

coming from is Lenschow of next Barclays. question The Raimo

Raimo Lenschow

that Congrats on quarter. into -- about kind Dayforce, great you of strong was contract cetera? How do look a impact sales by might you for signed, the but Is should kind of like an at the next feeding where missed obviously, kind I slightly below a that the have think If revenue consider? with maybe quarter. sales contracts guidance that consensus, like we model of go-lives, year? they et from us, it longer

David Ossip

segments. we across had strong Raimo, performance

also for to which as enterprise, XX,XXX the emerging business, which have Australian large goes we well. We very is us saw The very, we APJ markets well. And up well. about saw is perform major even above performed employees very also strength nicely. X,XXX do So saw considerable our

really concentration So there any X segment. in a wasn't

at of you out it's of when revenue, specific we say, over typically and look or each plan know, scale, we out X,XXX as have go-live model projects. implementations milestone customer individual our well our we -- those Given ongoing from it our an

was very, was, Jeremy? very number the it, go-live [indiscernible] Something? think, number the the what . By I strong. well quarter as The was in way,

Jeremy Johnson

during quarter. customers Yes. XX new added net We the

David Ossip

Which total very was great. actually

recurring. a bit the up with So we revenue go mentioned Dayforce XX.X%. earlier, of by in cloud strong really went recurring a I annual

So flows the system. just it throughout

Raimo Lenschow

Okay. you And on is which so didn't the well done the one. for will a the you Can but investors about little EBITDA little the to raise saw on. maybe of X kind takes higher, a Jeremy, talk lot you, puts talk that a cash Perfect. number, where focus of and then bit cash I flow, not EBITDA -- rate, the that getting But flow bit.

Jeremy Johnson

Yes. It's a represents the expansion EBITDA actually $XX great if efficiency. by points basis guide from We're previous to raising million. through doing it's But points of call, headwind, and Raimo. the guidance XXX float our cost that expansion. million year-over-year. basis We're $XX points XXX adjusted you basis control exclude XXX That of

and and by last optimizations the investments into We're we think about We're AI-driven you leaning leaning organizational of cost optimizing automation. heavily productivity in greater jurisdictions. benefits and we're base reaping leveraging into across the year, marketing, cost in and streamlining organization, invested we're If the sales lower our from those our XXXX. structure

this at cash of providing full but have it of is to where first This the year guidance at And of we're I now. number, kind for just optimism a wanted that year beginning we're kind our free I here. really the flow at hold in

Operator

coming is Mark question next The Marcon of Baird. from

Mark Marcon

that the strong. very at beginning, very January you was David, mentioned

January. mean strong assume have the really a in you of lengthening. it how to Typically, And is a I lot You going cycles to sales also levels. the they mentioned aren't come quarter. that towards of end that unusual historic sales -- were back

much wondering really that that you So bodes an how of of was Vegas? successful meetings had that the in after what and basically effect

David Ossip

acceleration able our X insight had were X over where of event, would event. They complete to saw to just That's and event actual I contracts. examples actually there, Discover actual weeks Mark. to are come of within, following following the quite an we say, good the sales We numerous organizations the we

I just this way that year was the the product Discover showed and showed the at spectacular. think organization

a Generally, normally it's strong of if pleased reach would bit have. very it. QX very December a kind we tough typically go with the January in you you with to because that of So we're have people following a into QX, craziness headwind

So sales call I as us that is see strong the on to out. you momentum on lot want It following gives exceptional sales did an in something it. a of performance confidence December January

Mark Marcon

specific general we the to this, that a as sales you? tonal just Or as to shortened, occurred do that's have change regards that the with election. to that's clarity well being is cycles interest some think now With rates you regards

David Ossip

I new impact do think there of is the administration. an

I our And not we're what decisions buyers I'm year. What quicker an think they but last seeing the [indiscernible] talk is our can than I about making again, purchasing in business. economist. we in business, are seeing did

Mark Marcon

up. is contract well can Is from either from through that's the with not tariff in headquarters, got the any with you impact to Canadian schedule with elections a going Great. regards just any some the elections. And you Canada? or Canada on talk the have And country little U.S. sort do coming coming in line bit then how regards there of impact? Obviously, of any change We're you regards the to only that's elections to potential about as elections. as joint of given and you've Canada processes to -- do think just that sort operations procurement thoughts early any having

Stephen Holdridge

is Steve this Holdridge. Mark,

then Let broader may first of to me Canada part talk David and about environment. want that, take the the

level. anything recent the contract Prime don't of -- expect targeting our April Government track any at is most impact. We're the towards don't work the expect announced to the XXXX order to Minister No. from The achieve don't with of terms short see deadlines continuing on we those In and we answer Canada, milestones. We changes

we've make properly years. of We and not continue leaders choice are to government have does politicized. at the this to payroll to support. people I sure all want X frankly, been for at mean, levels and get paid

confident to continue So as business in be usual. the we

David Ossip

revenue Regarding of rate it's the on of between between FX suppose tariffs potential U.S. I About impact between Canada. in the our the Canada, that. biggest and is be impact the Canada. U.S. would the project and difficult to XX%

a So U.S. do -- impact terms dollars there in be have of would reporting. a we revenue

the probably We on side about are against cost hedged that. XX%

adjusted any an from So EBITDA would think be don't percentage, impact. there I

Mark Marcon

wins last Great. And of ended these nice really talk up you then one. you here. capturing number from? little Can bit folks just X about a where

David Ossip

from against attended competitor mentioned always We competing mostly you we away majority seem of would time look would Yes. the and cover, most as the I share X I typically we ERPs. against compete that to of of the ERP from competed if for the we be who that against those nowadays historically. QX, -- I at them take taking the to and were away have say wins last

Mark Marcon

on a terrific sales quarter. Congratulations .

Operator

next The of Jefferies. coming from Samad is question Samana

Samad Samana

philosophy? I Jeremy, first quarter, I -- change year any we we of outlook guidance apologize about didn't guide. expect if . first, an as on have I just annual float I just didn't the think the I as And is comments growth appreciate a always. the in a it. float going ex recurring missed only see guess forward? may Should this Maybe recurring I XQ it Dayforce did. cadence ex I on Dayforce But

Jeremy Johnson

year. flow along year that recurring low guidance Dayforce full giving the with for we're guidance full look, free for ex yes, revenue the the addition cash of Samad,

free success. free flow we're As really it's the our we measure internally top on to cash also dollars. running established cash adjusted the total and years focus very how strong own grown larger it line generation, in sense how internally margin EBITDA we've on over a flow and business And focus and made

is ultimately, the communications appropriate numbers with We'll of So reflect lot felt to makes and this we a go forward it the sense we're and to obviously in investors. here. on still we report our like. how managing those business But this think

Samad Samana

Understood. to we -- remain at the on on growth expectations you're David, gave for maybe just comments commentary is I sense. what expected Dayforce float we on some makes levels recurring about wanted of gave targets is? specific Analyst thinking XXXX have you I the expect 'XX. long-term the how and where midterm of just obviously, should there coming sure is a Any midterm assumed? think you've recurring And this these the forward or lot on off as Dayforce clarity ex view heels going That what I for I to how then, Day make beyond what and of targets. you guess the maybe

David Ossip

Yes.

$XX the basis, the revenue we able move that I at rate we would if towards be ex we look today plus sustain million, XX% to to flow. about On I a -- looking If I around the you all recurring look somewhere hold recurring, business free float growth expect cash that business at the is there cloud. expect midterm the year. the total remember as I As mentioned, should total into Dayforce XX% other full about for call, really them a are at almost

here can of revenue goal that those and of same -- total of kind by reach time decline you'll types a we platforms level we profitability year-over-year to report to end above currency. the life over we we of line the and focus have the that quite that that, simplify see that of on that to the Dayforce about as growing XX% allows We're time XX% we be do flow free market this cash to So really constant as at -- around of how And the get to we and scale. keep kind basis. do us migration believe that in confident driving actual it's would on XX%

Samad Samana

the to you we and first in should for compare And about should year? fourth comments is coverage quarter that last maybe the then just And Great. sales fairly we me. X time current activity, some the How organization I holding us X year. around month levels? how sales know gave constant doing well. of last both the X entering the at this think does that this so that How XXXX, that think you to mentioned? X time about Clearly,

David Ossip

try sales pipeline model coverage Xx about actually a and investments put summits business in marketing of early level. that We ties the to at we and types the It the et sales activities, cetera. development

-- sales go your the up. again, to sales is the the high, If expense. number improve trying cost is constraining the factor and And too profitability, X as actual of One would fact marketing of your we're

from productivity. higher we're sales efficiencies, you marketing the sales you numbers, more at level, driving a can If productivity so look that and see actual

last about best would The expected for at XX% I now, pipeline drives very the guide conversion. to enterprise we're software. around really are versus guiding year, If XX% that you and of sales year. look productivity that the your size to close the we're And for numbers the seeing say, class in

So we're very force. happy from the productivity of the actual sales

Operator

from & is Company. The coming Needham next of question Berg Scott

Scott Berg

effectively. your I that. strategy customers I for newly enabling the you me space everything how to conference. just benefiting start talked guess that this the sales the But wanted to of that just things. I how you be just from crazy with wanted as that? might and to know I at about from year. X see Congrats for in our it's respond are announced the software agents guys each want to with see well. kind David, quarter strong probably early, force

David Ossip

sales in Copilot as So think I my we December. after So November, Scott, XX in saw we've it, mentioned our at call of script, unit basically -- Discover about announced we

uptake AI in because product. front in nice do product. talking us about a I generally others differentiate capability, that's seeing position the the and believe we're of we available So inside actual already does It's about talking we're becoming it and our products not way we're central the to relative actually that functionality future market,

others. the terms like In agents from had in the work for workflows market agents, away of time. and we've of initiation typically some that time around

a the but color agents. see add that we're some call, on think bit more you'll not of you're I I'm sure if doing you'd like Joe, So if the continue. to the around about enhancements

Joseph Korngiebel

in the down Dayforce our and AI, with to Like customers instant the entire for are AI HR through really suite and your delivered agents the what and time we're reports of the we that X.X need you promise XX our you modules, realizing David energy. company automatically is just working talent customers question, seeing can ahead came promise. The even just will differentiation but across value innovation. of year the of for writer from will build we the go saving you in deliver next that analytics, us, reports. Report where insight. realize I the appreciate said, in And months. -- that value how the help sales Yes.thank new

we So big look big, more . It's for for as ahead. innovation hit XXXX move a as us at we speed. differentiator

Scott Berg

of then, been like break How into your at viewpoint, we your ecosystem positively maybe year, as benefit the David, going get over on PS your partner and partner know, on partners, obviously, me, breakeven then strong XX during Understood. months commentary to excuse XX Helpful. quarter of margins are terms last that your -- you've partners getting going And And the kind on of view some into do that's pushing or around company. to environment? improved about think to just that for sales year the this impacting kind pipeline is your guidance? that the of that year. the full Or X.X in is you the forward, I over breakeven pushed line sales

David Ossip

Yes.

first to of with year So we about integrators we're the we've in be system in noticing Yes, the implementation. and them prime made and improvement actually success that the this which for the expect seeing the thanks that. is breakeven result of other, investments all, the the professional largely services

at development, very behind going across as SI if to the in sales quite excited metric help we're they conversion nicely. internally the expect with to So it's the that that. terms deals, you channels. Obviously, seeing It's of influence are that, success determine what would look that we pipeline actual with seeing we're actual we of partially be

Operator

The We'll move Steve is Enders next question from question. next coming of the to Citi. on

Steven Enders

rate the for secondarily, to for maybe Okay. from you're a for based conservatism those employment Great. what's the incremental and impacted macro start, you there's to any maybe high cut that being in I cadence of like guess performance. I there. wanted of if about And making maybe accounted of just of I some assumptions that talk called out in level accounted terms some some being kind and Dayforce XQ assumptions on guess, factors maybe

Jeremy Johnson

with It's Yes. can assumptions. of we good the Thanks, go speak to Steve. you. into a couple Yes,

specifically inform forecast think we're on cuts, consensus there. rate were of our assumed the kind to bank I

XX Canada basis just the flat. held end points by U.S. So cut at of and January rates

expect until of at built each kind X those at about meeting in year are also U.S. we cuts in, we'd rate cut Canada the continue you about expect -- to middle the cuts would XX October. And XX basis basis expect the with So rate points. would or in about of points

things. think net float balances average year. mid-single in kind With X.X% that, this of on about we'll the about of of more digits cuts to to So -- a X we year. this out of all on you low the think side yield growing

in As on digits rate QX very as a from forecast in levels, the inform of are kind growth low perspective far be employment to learned we'd other certainly our the and assumptions in single to what using expect and guidance we XXXX. that

Steven Enders

the the for And Perfect. year. some factors want Pro performance just growth just Okay. recurring then outpacing commentary appreciate us I Dayforce the Can the maybe through you think services -- the of of and that on that highlighted what that I help Analyst just is Day there. growth kind forward? this moving to impacting ask Services thinking managed Like were of and continues and at factors kind of we in some the be pulling there like kind through about capabilities the that what a of should of more reflection that?

Jeremy Johnson

Yes.

off proportion see the QX with sales of there, will. think also foremost got cap implementation and think I haven't kind services really really We've that with to we're first that, if that's matured, strong alongside continue doing had driving year we'll we're primary of It's projects you a And efficiency of spear work. productivity, we then services for. the working value-added And I in work greater large relationships you And And a the of really process. into we think is larger a some you sales sales we're and our -- comes think strong mentioned, that tip the as XXXX. integrated if implementation it's through. strong systems and a that I systems drivers. those we few about to the also customers integrators. David

with really few talked relationships, driving how building how come Day, We we're we're about but across years ago, out together pleased these that these at and implementation SI have Investor a this process. we efficiency and that the began November

Operator

McVeigh UBS. Kevin question next of The is from coming

Kevin McVeigh

think usage? increased in adoption that any $XX $XX about like think facing million And contribute from XX in to million? 'XX. wallet up I you way what the or talked Is that QX, can about

David Ossip

capabilities of we and released XXXX, those launched to a wallet, of adoption bank. the IFT we XXXX, AFT we just money. quite direct and movements In of In to good saw Yes. types

X we're money if is existing an can as well. And you cards take to bank do to check-in come. pass off nicely quite that their attached that you the an savings actually now that pay, direct seeing or a select debit of what on-demand to So employee existing

of continue We see organizations as more adoption and use wallet expect, to the would you in terms employees well. increased also, obviously, more actual as

wallet So continue this on we year. to the momentum expect would the

Kevin McVeigh

or And Great. in SIs driving is at probably that this then that the point, volume starts something sales any still are

David Ossip

Yes, we are.

in can towards system As other reflected moves question. professional services implementations integrators. strengthened see SIs, to professional breakeven. And answer margins, the We're the the Obviously I services and traction margin think I I answered, more we now as think Scott you the we the and nice with seeing which the that move year-over-year. other

Unknown Executive

we're the But brand our pipeline with the seeing community with not increased SIs, only amplification but and partners also our partners. and advisory of increased technology

Operator

Research. The is Wolf next of question Zukin coming Alex from

Aleksandr Zukin

not deal. And for Can slightly modeling standpoint, that's we help we're just think guiding the 'XX guide how play ramp Jeremy, longer fiscal time? of us to given to maybe I the the government maybe Canadian know flowing year? the maybe should just relative guys just into that today kind recurring, last how going but from about year you a through Maybe remind

Jeremy Johnson

bit on those I to good towards of a kind work and government is kind spoke to most of think on time milestones, Alex, things. we little on which lines, more recent side we're Canadian talked as recurring the about in the deadlines to with deal, those that you. the XXXX. Look, Steve April track achieve continuing speak We're that's targeting of to is

we On have to doing of work continue Canada. government and with been do work, we've the seeing work the we and professional been services,

constant giving there the for continuous as good a full of kind year things of basis On should kind in things, looked XX% remain of the XX% kind with quarterly short the side of you'll a I see in how that recurring we is full and have balance or cadence for stopping well. think and past guidance guide, think of consistent currency I those to the number cadence

Aleksandr Zukin

about But it. you when spoken on of earlier Got then, call, -- X think talked But just watching David, kind actually out to those time more as maybe take the time And you for a were the earnings go I execute it seems lengthening -- and December visibility that just January. questions. I'll sales reask cycles when the given on. market you'd like of as you up something last deals changed in

XX visibility? what tailwinds from So Is -- in I'm out just ago perspective Is respect that Like your your days to the curious, is AI? figured now on demand you environment? to from something from it execution? with it it the changed

David Ossip

Discover, have think did I an in of that the client terms purchasing I of conference our cycles. impact impact

think relative work very the technology differentiating the and product others the Dayforce clearly had in I So team that impact. done have to really

is of last in types making mentioned, mind is share I invested Steve we get approvals large deals. year in it getting us very for the the more think also final branding and work As that easier us the to

proud that way go the very of they product the I that Third, they way well, and think I'm market to they that that show really is performing story do the the very the way and as tell well. sales team and the

makers, I as with is and interact our force we organization, an day partner customers way that the our and reflected. that think they

that see much side got cycles then that be that rate now in purchasing I macro leaders business You market. XX% across well helping do And the more is and there's the as is to best think retention with as well. which in the on can lastly, about on has as mentioned, I optimism economy, Dayforce, that

Operator

Brad question Stifel. today coming Reback final of Our is from

Brad Reback

percent of the Did ones. was? quick X Maybe new what back mention all base sales the to you

Jeremy Johnson

was number with haven't pleased XX%, . the but it we're XX% and really above was We yet, that. this past year,

David Ossip

of suite And well. full actually we saw number XX% also as same the deals

Brad Reback

puts different a have XQ in philosophy, all takes bit, conservatism given 'XX? to on things you some taken all relates Jeremy, guidance unusual -- then, of And you it up that's at the of XQ, as and a increased Great. knocked and maybe

Jeremy Johnson

learned Look, we've that Yes. ultimately QX our inform and think to future. taken use guidance what I we the in for

kind that that and think growth ranges we're see to these think that trying be of there. giving the float really we're you ultimately tight constant ex pleased XX% basis using a revenue the and adjusted margins and about the those we're constant flow. I with expanding ranges, of we XX%, then and float at we're but can growing recurring clear assumptions setting currency give currency kind then our while also FX XX% XX% on EBITDA and really and rate total do to to down Dayforce free ability And on still cash about to and you revenue numbers

Operator

to question-and-answer closing for would floor This session. to the I brings back comments. the turn us end to Rose the over of like Mr.

David Ossip

Great.are. joining for everyone, us. Thanks,

you we'll those have questions for Sorry to of but we that the casual one-on-one today, following. didn't get

with, sales in few reiterating like to for our into and confidence saw a pieces QX and again, momentum the one, QX January we Just in that sales for year. continued end the I'd

lastly, current today. And thank aspects. we joining for that moving levels free cash for you, Dayforce seeing while plus profitability we basis all year revenue us for adjusted flow. sustained meaningful EBITDA the the that The XXX and increasing that the are reiterate is holding while we're second I want that improvement midterm everyone, in are XX% Again, growth across positioning towards in to guide the around by the points

Operator

this and concludes Ladies gentlemen, today's event.

webcast You lines your of off and the may enjoy time rest log day. or the disconnect your this at

Dayforce (DAY) 5 Feb 252024 Q4 Earnings call transcript