Dayforce (DAY) Baird 2024 Global Consumer, Technology & Services Conference summary

Business evolution and growth strategy

• Built a full HCM suite from payroll and workforce management, achieving a competitive advantage through a single application approach.

• Five growth levers: new business acquisition, customer expansion, enterprise growth, global expansion, and innovation in adjacent markets.

• Significant progress in large enterprise and global markets, especially with system integrators (SIs) in sales and implementation.

• Revenue targeted at mid-$1.7 billion for the year, with adjusted EBITDA margins approaching 28%.

• Market share currently around 3-4%, with long-term targets of 7-10%.

Product differentiation and customer value

• Offers a modern, fully integrated HCM platform with a continuous calculation engine and mobile-first user experience.

• Customers switch for user experience and ROI, consolidating multiple HR modules into a single solution.

• ROI is demonstrated through hard cost savings from retiring legacy systems and reducing support staff, as well as softer savings from improved retention and user experience.

• Workforce management tools and Dayforce Wallet provide additional value in labor planning and employee retention.

Financial performance and targets

• Recurring revenue growth remains in the high teens to 20% range, with a 2025 revenue target of $2 billion and 30% adjusted EBITDA margin.

• Recurring gross margins targeted at 80%+, with potential for further expansion.

• Free cash flow margins were 7.5% last year, expected to expand further as margins improve and CapEx is managed.

• Long-term vision includes scaling to $5 billion in revenue and over $1 billion in free cash flow, aiming for Rule of 40 performance.