Dayforce Q4 Earnings Beat Estimates, Stock Slips As Outlook Disappoints

Dayforce, Inc. DAY shares are trading lower on Wednesday.

The company reported fourth-quarter adjusted earnings per share of 60 cents, beating the street view of 45 cents. Quarterly sales of $465.20 million outpaced the analyst consensus estimate of $455.08 million.

Sales surged 16.4%, or 17.0% on a constant currency basis. Dayforce’s recurring revenue grew 19.1% to $347.9 million.

Adjusted cloud gross margin rose to 80.4%. Adjusted operating profit increased to $103.3 million, and adjusted EBITDA grew to $129.2 million with a 27.8% margin, compared to 24.8%, an increase of 3.0 percentage points.

“We saw a healthy mix of enterprise, major-market, and global sales on top of annual gross retention rate of 98% – another company record. This momentum, alongside the strength of our sales pipeline, gives us great confidence in our right to continue winning in 2025,” said Stephen Holdridge, President and COO of Dayforce.

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Outlook: Dayforce expects first quarter total revenue, excluding float, of $421 million to $427 million, up 13.5% to 15% YoY, below the street estimate of $482.4 million.

For FY25, it expects revenue, excluding float, of $1.745 billion to $1.76 billion, up 11.9% to 12.8% YoY, compared with the street view of $1.961 billion.

“Looking out to 2025, we plan to continue executing on the vision laid out during our November investor day, operating the business for optimal cash generation while maintaining our pace of innovation and high levels of customer success,” said Jeremy Johnson, CFO of Dayforce.

“I’m pleased that we are starting the year with demonstrable progress toward our profitability goals, raising our 2025 Adjusted EBITDA guidance 100 basis points to 32%,” Johnson adds.

Price Action: DAY shares are trading lower by 6.43% to $67.13 at last check Wednesday.

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