Dayforce (DAY) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $423.3 million, up 16% year-over-year, driven by growth in live Dayforce customers and higher recurring revenue per customer.

• Adjusted EBITDA was $116.3 million (27.5% margin), up 18% year-over-year, while net loss was $1.8 million due to higher operating expenses.

• Free cash flow for Q2 was $72.7 million, up 36%, and net cash from operating activities for H1 2024 was $108.3 million, up 16%.

• Ended Q2 with 6,657 customers live on the platform and recurring revenue per customer up 18%.

• Board approved a $500 million share repurchase program and announced the first-ever investor day.

Financial highlights

• Total revenue was $423.3 million, up 15.7% GAAP and 16.3% constant currency; recurring revenue rose 19.9% to $321.6 million.

• Cloud recurring gross margin reached 77.7% (adjusted 78.8%), up from 76.7% (adjusted 78.1%) year-over-year.

• Operating profit was $14.1 million, including $20.9 million amortization expense; adjusted operating profit was $94.9 million.

• Free cash flow for H1 2024 was $53.9 million, up from $36.5 million.

• Float revenue from invested customer funds was $48.9 million in Q2 2024, with an average float balance of $4.74 billion and a 4.1% yield.

Outlook and guidance

• FY24 total revenue guidance: $1.736–$1.746 billion, up 15% as reported.

• FY24 Dayforce recurring revenue ex float expected at $1.163–$1.168 billion, up 21% as reported.

• Adjusted EBITDA guidance of $490–$505 million (28.2%–28.9% margin).

• Q3 2024 revenue guidance: $425–$430 million, up 13–14%.

• Guidance incorporates $13 million FX headwind to total revenue and $7 million to recurring revenue ex float.