Dayforce (DAY) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $440 million, up 17% year-over-year, driven by growth in live Dayforce customers and higher recurring revenue per customer.

• Net income for Q3 was $2 million, reversing a net loss in Q3 2023, with adjusted EBITDA of $126.1 million and a 28.7% margin.

• Free cash flow for the nine months ended September 30, 2024, was $117.3 million, nearly tripling from the prior year period.

• Ended Q3 with 6,730 live customers, a 6.1% increase year-over-year, and a 15% rise in average recurring revenue per customer.

• Innovation highlights include new Dayforce Learning, integration of eloomi, cashless tips in Wallet, and enhanced People Analytics.

Financial highlights

• Q3 2024 total revenue: $440 million, up 16.6–17% year-over-year; nine months revenue: $1,294.8 million, up 16.2%.

• Dayforce recurring revenue: $333.2 million, up 19.2%; excluding float: $292 million, up 18.9%.

• Professional services and other revenue: $64.1 million, up 23%.

• Cloud recurring gross margin: 79% (up 200 bps); adjusted: 79.9% (up 160 bps).

• Q3 2024 net income: $2 million; adjusted net income: $74.5 million; diluted EPS: $0.01; adjusted EPS: $0.47.

Outlook and guidance

• FY24 Dayforce recurring revenue ex-float: $1.163–$1.168 billion, up 21%.

• FY24 total revenue: $1.747–$1.752 billion, up 15–16%.

• FY24 adjusted EBITDA: $492–$507 million (28.2–28.9% margin); free cash flow margin expected at 9.5–10%.

• Q4 Dayforce recurring revenue ex-float: $311–$316 million, up 21–23%; Q4 total revenue: $452–$457 million, up 13–14%.

• 2025 initial guidance: total revenue growth ex-float 14–15%, adjusted EBITDA margin above 31%, free cash flow margin above 12%.