Q4 2024 Dayforce Inc Earnings Call Transcript
Key Points
- Dayforce Inc (DAY) reported strong Q4 sales, exceeding expectations and setting a positive tone for 2025.
- Total revenue for 2024 was $1.76 billion, growing 17% on a constant currency basis, with recurring revenue excluding float growing 21%.
- The company achieved an adjusted EBITDA margin of 28.5%, expanding by 140 basis points, and free cash flow was $172 million, or 9.7% of revenue, expanding by 280 basis points.
- Dayforce Inc (DAY) secured several key new business wins, including large contracts with a 60,000 employee grocery chain and an 18,000 employee space exploration company.
- The company continues to lead in product innovation, with significant advancements in compliance, IT simplification, and AI-driven solutions, contributing to strong customer retention and industry recognition.
- Dayforce Inc (DAY) experienced some challenges in Q4 with lower-than-expected employee volumes, tax filing fees, and print fees, impacting recurring revenue.
- Contract amendments with a few customers led to a reallocation of revenue, affecting recurring revenue negatively.
- The company faces foreign exchange headwinds, with current FX rates driving about 200 basis points of headwind to full-year 2025 revenue growth ranges.
- Professional services and other revenue, historically a negative margin business, is only expected to break even in 2025, indicating ongoing challenges in this segment.
- Despite strong sales performance, the guidance for Dayforce recurring revenue growth in 2025 was slightly below consensus expectations, raising concerns about future growth momentum.
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.
Thank you for joining and welcome to the Dayforce fourth quarter 2024 earnings call. I'm David Niederman, Vice President, Investor Relations. As a reminder, all participants are in a listen-only mode, and a question and answer session will follow our opening remarks.
Joining me on the call today are CEO David Ossip; and CFO Jeremy Johnson. We also have Chief Strategy, Product, and Technology Officer Joe Korngiebel; and our President and COO, Steve Holdridge, available for Q&A.
Before I hand the call over to David, I want to remind everyone that our commentary may include forward-looking statements. These statements are subject to risks and uncertainties that could cause Dayforce's results to differ
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