Dayforce (DAY) Q4 2024 earnings summary

Executive summary

• Q4 and full-year 2024 sales exceeded expectations, with Dayforce recurring revenue up 20.6% to $1.34B and total revenue reaching $1.76B, supported by strong momentum, robust pipeline, and 98% gross retention.

• Product innovation, AI-driven features, and a mass advertising campaign in the U.S. contributed to differentiation and customer growth, with 146 net new customer go-lives in Q4 and 6,876 live customers at year-end.

• Adjusted EBITDA margin expanded to 28.5% for 2024, with free cash flow margin at 9.7%, both showing significant year-over-year improvement.

• Launched the Dayforce brand and Partner Network, achieving record attendance at Dayforce Discover 2024 and recognition in multiple HCM industry assessments.

• Guidance for 2025 includes 14%-15% total revenue growth (ex float, constant currency), 15%-17% Dayforce recurring revenue growth (ex float, constant currency), and further margin expansion.

Financial highlights

• Q4 total revenue: $465.2M, up 16.4% GAAP and 17% constant currency; Dayforce recurring revenue (ex float): $307.6M, up 20% GAAP.

• Full-year gross profit: $812M, up 25.6%; operating profit: $104.1M (includes $84M amortization expense).

• Adjusted EBITDA for 2024: $501.5M, up 22.3%, with a 28.5% margin (up 1.4 pts); Q4 adjusted EBITDA: $129.2M, margin 27.8%.

• Free cash flow: $171.5M, up 63.2%, representing 9.7% of revenue (up from 6.9%).

• Q4 cloud recurring gross margin: 80%, up 3 pts; full-year adjusted cloud recurring gross margin: 79.8%.

Outlook and guidance

• 2025 revenue (ex float, constant currency) expected to grow 14%-15%; Dayforce recurring revenue (ex float, constant currency) to grow 15%-17%.

• Adjusted EBITDA margin guidance raised to 32% (up 100 bps); free cash flow margin expected at 12%.

• Q1 2025 revenue (ex float) guided to $421M–$427M, up 13.5%–15% GAAP.

• Professional services and other revenue expected to grow slightly faster than Dayforce recurring revenue in 2025.

• Midterm outlook: sustain ~15% revenue growth and exceed 20% free cash flow margin.