Dayforce : First Quarter 2024 Press Release

Dayforce Reports First Quarter 2024 Results1

Dayforce® recurring revenue of $337.2 million, up 24.3%, and excluding float revenue, up 23.0%

Total revenue of $431.5 million, up 16.4%

Operating profit of $40.7 million and adjusted operating profit of $109.1 million

Minneapolis, MN and Toronto, ON, May 1, 2024 - Dayforce, Inc. ("Dayforce" or the "Company") (NYSE:DAY) (TSX:DAY), a global leader in human capital management ("HCM") technology, today announced its financial results for the first quarter ended March 31, 2024.

"I am pleased to report another strong quarter for Dayforce. We grew both revenue and operating profit, and we exceeded guidance across all key revenue and profitability metrics," said David Ossip, Chair and CEO of Dayforce. "We remain confident in the business with momentum across sales, product, and operations, and we have raised our guidance across all key metrics."

Financial Highlights for the First Quarter 20241

• Total revenue was $431.5 million, an increase of 16.4%, or 16.5% on a constant currency basis.
• Dayforce recurring revenue was $337.2 million, an increase of 24.3% on a GAAP and on a constant currency basis. Excluding float revenue, Dayforce recurring revenue was $282.4 million, an increase of 23.0% on a GAAP and on a constant currency basis.
• Cloud recurring gross margin was 79.0%, compared to 77.3%. Adjusted cloud recurring gross margin was 80.0%, compared to 78.7%.
• Operating profit was $40.7 million, or 9.4% of total revenue, compared to $38.4 million, or 10.4% of total revenue. Adjusted operating profit was $109.1 million, or 25.3% of total revenue, compared to $88.5 million, or 23.9% of total revenue.
• Net income was $7.1 million, compared to $9.9 million. Adjusted net income was $68.0 million, compared to $49.3 million.
• Adjusted EBITDA was $129.9 million, compared to $105.4 million.
• Diluted net income per share was $0.04, compared to $0.06. Adjusted diluted net income per share was $0.43, compared to $0.31.
• Net cash provided by operating activities was $9.1 million, compared to $11.3 million.

Supplemental Detail

• 6,575 customers were live on the Dayforce platform as of March 31, 2024, an increase of 182 customers since December 31, 2023 and an increase of 396 customers since March 31, 2023, or 6.4% year-over-year.2
• Dayforce recurring revenue per customer was $150,362 for the trailing twelve months ended March 31, 2024, an increase of 19.2%.3
• The average float balance for Dayforce's customer funds during the quarter was $5.56 billion and the average yield on Dayforce's float balance was 4.4%, an increase of 80 basis points year-over-year. Float revenue from invested customer funds was $60.7 million for the three months ended March 31, 2024.
• The average U.S. dollar to Canadian dollar foreign exchange rate was $1.35 for the three months ended March 31, 2024 and 2023. Dayforce presents percentage change in revenue on a constant currency basis in order to exclude the effect of foreign currency rate fluctuations, which it believes is useful to management and investors. Percentage change in revenue was calculated on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period.

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• The financial highlights are on a year-over-year basis, unless otherwise stated. All financial results are reported in United States ("U.S.") dollars and in accordance with accounting principles generally accepted in the U.S. ("GAAP"), unless otherwise stated.
  2 Excluding Ascender, ADAM HCM, and eloomi A/S.
  3 Excluding float revenue, Ascender, ADAM HCM, and eloomi A/S revenue, and on a constant currency basis. Please refer to the "Non-GAAP Financial Measures" section for discussion of percentage change in revenue on a constant currency basis.

Business Highlights

In the first quarter, Dayforce:

• Changed its legal name and brand from Ceridian HCM Holding Inc. to Dayforce, Inc., and changed its ticker symbol to "DAY" on the New York Stock Exchange and the Toronto Stock Exchange.
• Acquired eloomi A/S, a learning experience platform software provider.
• Received recognition as one of America's Most JUST Companies by JUST Capital and CNBC, and a Most Loved Workplace® by Newsweek.
• Released its 2024 ESG Report, Impact through Innovation, which details the Company's performance in each of the five pillars of the Company's sustainability strategy: Our People, Governance and Trust, Tech for Good, the Environment, and Our Communities.
• Appointed Beata Reimer as Head, Global Partner Ecosystem to drive partnership and growth for its strategic global alliances.
• Hosted its Dayforce Summit in Los Angeles in February where customers learned how to harness the full potential of the boundless workforce. Dayforce announced that its next customer event, Dayforce Virtual Summit 2024, will occur on May 15 and 16, virtually.

Sales Highlights

• A large Canadian grocer is expanding its existing Dayforce partnership with the addition of Dayforce Talent to support more than 100,000 employees.
• A U.S. energy company with 17,000 employees has selected Dayforce for Payroll and Workforce Management.
• Western Digital Technologies is expanding its existing partnership with Dayforce by adding Managed Payroll for 8,000 employees in the U.S.
• A senior care network and technology platform with 5,000 employees across the U.S. selected Dayforce for the full suite of HCM technology.
• One of the top ten largest dental support organization in the U.S. selected Dayforce as a strategic partner to support 5,000 employees.
• A 4,000+ employee property management and senior living organization chose Dayforce to help with their compliance concerns in 30+ jurisdictions.
• Carhartt has selected Dayforce as its global people platform for 3,500 employees across seven countries.

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Customer Highlights

• A global manufacturing and retail organization with 65,000 employees across 56 countries extended its Dayforce use to include its Malaysian operations.
• A global analytics professional services company with over 35,000 employees in 40 countries recently expanded its Dayforce use to 6,000 employees in the United Kingdom.
• An international real estate developer and property manager launched Dayforce Managed Payroll, Managed Benefits, Time and Attendance, and Dayforce Industry Solutions to 22,000 employees in the U.S.
• A California grocery chain with 18,000 employees across 170 locations recently went live with Dayforce Industry Solutions, Managed Payroll, Time and Attendance, and Advanced Scheduling.
• Windstream Holdings went live with the full Dayforce suite for 9,500 employees across the U.S. and Canada.
• Wood Ranch has gone live with the full Dayforce suite for 2,000 employees across 17 locations in California.
• heroal, a leading aluminum system specialist with 1,100 employees in Germany, recently completed the first phase of its Dayforce implementation.
• Wikimedia Foundation has implemented Dayforce as its global people platform in 58 countries.
• Britax Child Safety expanded its existing use of Dayforce to a total of four countries globally by launching the platform to employees in China and Hong Kong.
• The Company had more than 1,960 customers signed onto Dayforce Wallet with over 1,200 customers live as of March 31, 2024. The average registration rate was above 65% across all eligible employees and the typical Dayforce Wallet user transacts on average 25 times per month throughout a calendar year.

Product Roadmap Highlights

In the first quarter, Dayforce continued to deliver innovations to help customers optimize their talent management processes, maintain compliance, drive productivity, and build great employee experiences.

• Dayforce Co-Pilot, an artificial intelligence-enhanced teammate for the boundless workforce, empowers employees with quick, on-demand access to company frequently asked questions. This new feature also helps boost recruiter productivity by assisting with repetitive tasks, such as authoring job postings.
• Dayforce Alumni Management helps organizations build and maintain strong relationships with past employees who could become boomerang talent or refer new candidates.
• Dayforce Talent enhancements streamline the candidate and recruiting experiences with optimized candidate sourcing, advanced search, and more.
• Dayforce Workforce Management enhancements drive efficiencies for large multi-location,multi-department organizations through centralized scheduling and multi-week calendar views for managers.
• Open and extensible platform unlocks greater value for customers and helps them work more efficiently through integrated partner, software, and system integrator solutions - customers can access benefits, learning, and talent development all within Dayforce.
• 160+ global compliance updates help customers operate with confidence through enhanced year-end requirements, optimized reporting functionalities, expanded data import fields, and updated tax rates.

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Business Outlook

Based on information available as of May 1, 2024, Dayforce is issuing the following guidance for the second quarter and full year of 2024 as indicated below. Comparisons are on a year-over-year basis, unless stated otherwise.

Guided Metrics	Second Quarter 2024	Full Year 2024
Total revenue	$414 million to $419 million, an increase of	$1,730 million to $1,740 million, an
	13% to 15% on a GAAP and on a constant	increase of 14% to 15% on a GAAP and on
	currency basis.	a constant currency basis.
Dayforce recurring revenue,	$276 million to $279 million, an increase of	$1,163 million to $1,168 million, an
excluding float	19% to 21%, or 20% to 21% on a constant	increase of 21%, on a GAAP and on a
	currency basis.	constant currency basis.
Float revenue	$47 million	$183 million
Adjusted EBITDA	$108 million to $113 million	$484 million to $499 million

Dayforce has not reconciled the Adjusted EBITDA ranges for the second quarter or full year of 2024 to the directly comparable GAAP financial measures because applicable information for the future period, on which these reconciliations would be based, is not available without unreasonable efforts due to uncertainty regarding, and the potential variability of, depreciation and amortization, share-based compensation expense and related employer taxes, changes in foreign currency exchange rates, and other items.

Foreign Exchange

For the second quarter and full year of 2024, Dayforce's guidance assumes an average U.S dollar to Canadian dollar foreign exchange rate of $1.37 and $1.35, respectively, compared to an average rate of $1.34 and $1.35 for the second quarter and full year of 2023, respectively.

Conference Call Details

Dayforce will host a live webcast to discuss the first quarter 2024 earnings at 8:00 a.m. Eastern Time on May 1, 2024. The

event can be accessed via direct registration link at https://dayforce.zoom.us/webinar/register/WN_C3LfNRr5QFqETV4IzhKspg#/registrationor through the Investor Relations section of the Company's website at https://investors.dayforce.com. A recording of the event will be made available on the Investor Relations section of Dayforce's website following the call.

About Dayforce

Dayforce makes work life better. Everything it does as a global leader in HCM technology is focused on improving work for thousands of customers and millions of employees around the world. Its single, global people platform for HR, payroll, talent, workforce management, and benefits equips Dayforce customers to unlock their full workforce potential and operate with confidence. To learn how Dayforce helps create quantifiable value for organizations of all sizes and industries, visit dayforce.com.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this press release are forward- looking statements. Forward-looking statements give Dayforce's current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance, and business. Users can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements in this press release include statements relating to the second quarter and full fiscal year of 2024, as well as those relating to future growth initiatives. These statements may include words such as "anticipate," "estimate," "expect," "assume", "project," "seek," "plan," "intend," "believe," "will," "may," "could," "continue," "likely," "should," and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events, but not all forward-looking statements contain these identifying words. The forward-looking statements contained in this press release are based on assumptions that Dayforce has made in light of its industry experience and its perceptions of historical trends, current conditions, expected future developments and other factors that it believes are appropriate under the circumstances. As users consider this press release, it should be understood that these statements are not guarantees

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of performance or results. These assumptions and Dayforce's future performance or results involve risks and uncertainties (many of which are beyond its control). In particular:

• its inability to maintain its high Cloud solutions growth rate, manage its domestic and international growth effectively, or execute on its growth strategy;
• the impact of disruptions to the movement of funds to initiate payroll-related transactions on behalf of customers;
• its failure to manage its aging technical operations infrastructure;
• system breaches, interruptions or failures, including cyber-security breaches, identity theft, or other disruptions that could compromise customer information or sensitive company information, including its ongoing consent order with the Federal Trade Commission regarding data protection;
• its failure to comply with applicable privacy, data protection, information security, and financial services laws, regulations and standards;
• its inability to successfully compete in the markets in which Dayforce operates and expand its current offerings into new markets or further penetrate existing markets due to competition;
• its failure to properly update its solutions to enable its customers to comply with applicable laws;
• its failure to provide new or enhanced functionality and features, including those that may involve artificial intelligence or machine learning;
• its inability to maintain necessary third-party relationships, and third-party software licenses, and identify errors in the software it licenses;
• its inability to offer and deliver high-quality technical support, implementation, and professional services;
• its inability to attract and retain senior management employees and highly skilled employees;
• the impact of its outstanding debt obligations on its financial condition, results of operations, and value of its common stock;
• its ability to maintain effective internal control over financial reporting, and the effect of the existing material weakness in its internal control over financial reporting on its business, financial condition, and results of operations; or
• the impact of adverse economic and market conditions on its business, operating results, or financial condition.

Although Dayforce has attempted to identify important risk factors, additional factors or events that could cause Dayforce's actual performance to differ from these forward-looking statements may emerge from time to time, and it is not possible for Dayforce to predict all of them. Should one or more of these risks or uncertainties materialize, or should any of Dayforce's assumptions prove incorrect, its actual financial condition, results of operations, future performance, and business may vary in material respects from the performance projected in these forward-looking statements. In addition to any factors and assumptions set forth above in this press release, the material factors and assumptions used to develop the forward-looking information include, but are not limited to: the general economy remains stable; the competitive environment in the HCM market remains stable; the demand environment for HCM solutions remains stable; Dayforce's implementation capabilities and cycle times remain stable; foreign exchange rates, both current and those used in developing forward-looking statements, specifically USD to CAD, remain stable at, or near, current rates; Dayforce will be able to maintain its relationships with its employees, customers, and partners; Dayforce will continue to attract qualified personnel to support its development requirements and the support of its new and existing customers; and that the risk factors noted above, individually or collectively, do not have a material impact on Dayforce. Any forward-looking statement made by Dayforce in this press release speaks only as of the date on which it is made. Dayforce undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

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Dayforce, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

		March 31,		December 31,
		2024		2023
(In millions, except per share data)
Assets
Current assets:
Cash and equivalents	$	392.5	$	570.3
Restricted cash		0.8		0.8
Trade and other receivables, net		276.0		228.8
Prepaid expenses and other current assets		139.5		126.7
Total current assets before customer funds		808.8		926.6
Customer funds		6,746.6		5,028.6
Total current assets		7,555.4		5,955.2
Right of use lease assets, net		16.0		19.1
Property, plant, and equipment, net		215.3		210.1
Goodwill		2,386.0		2,293.9
Other intangible assets, net		286.5		230.2
Deferred sales commissions		197.2		192.1
Other assets		118.8		110.3
Total assets	$	10,775.2	$	9,010.9
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt	$	5.6	$	7.6
Current portion of long-term lease liabilities		6.4		7.0
Accounts payable		69.2		66.7
Deferred revenue		45.5		40.2
Employee compensation and benefits		64.3		92.9
Other accrued expenses		41.6		30.4
Total current liabilities before customer funds obligations		232.6		244.8
Customer funds obligations		6,816.4		5,090.1
Total current liabilities		7,049.0		5,334.9
Long-term debt, less current portion		1,211.5		1,210.1
Employee benefit plans		26.8		27.7
Long-term lease liabilities, less current portion		15.9		18.9
Other liabilities		39.2		21.1
Total liabilities		8,342.4		6,612.7
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par, 500.0 shares authorized, 157.9 and 156.3 shares issued
and outstanding, respectively		1.6		1.6
Additional paid in capital		3,204.4		3,151.1
Accumulated deficit		(310.7)		(317.8)
Accumulated other comprehensive loss		(462.5)		(436.7)
Total stockholders' equity		2,432.8		2,398.2
Total liabilities and stockholders' equity	$	10,775.2	$	9,010.9

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Dayforce, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended March 31,
	2024			2023
(In millions, except per share data)
Revenue:
Recurring	$	382.7	$	317.9
Professional services and other		48.8		52.7
Total revenue		431.5		370.6
Cost of revenue:
Recurring		88.4		80.1
Professional services and other		66.1		63.9
Product development and management		53.1		51.0
Depreciation and amortization		18.5		15.3
Total cost of revenue		226.1		210.3
Gross profit		205.4		160.3
Selling and marketing		79.0		54.2
General and administrative		85.7		67.7
Operating profit		40.7		38.4
Interest expense, net		13.3		9.2
Other expense, net		9.0		0.8
Income before income taxes		18.4		28.4
Income tax expense		11.3		18.5
Net income	$	7.1	$	9.9
Net income per share:
Basic	$	0.05	$	0.06
Diluted	$	0.04	$	0.06
Weighted average shares outstanding:
Basic		156.9		154.2
Diluted		159.9		157.7

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Dayforce, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

			Three Months Ended
			March 31,
			2024		2023
(In millions)
Cash flows from operating activities
Net income	$	7.1	$	9.9
Adjustments to reconcile net income to net cash provided by operating activities:
	Deferred income tax (benefit) expense		(11.8)		6.1
	Depreciation and amortization		48.8		22.1
	Amortization of debt issuance costs and debt discount		1.1		1.1
	Loss on debt extinguishment		4.3		-
	Provision for doubtful accounts		0.8		2.4
	Net periodic pension and postretirement cost		2.6		0.4
	Share-based compensation expense		38.0		40.2
	Change in fair value of contingent consideration		-		3.5
	Other		-		0.5
	Changes in operating assets and liabilities, excluding effects of acquisitions:
	Trade and other receivables		(48.1)		(26.9)
	Prepaid expenses and other current assets		(13.1)		(20.6)
	Deferred sales commissions		(6.3)		(4.8)
	Accounts payable and other accrued expenses		(1.8)		4.2
	Deferred revenue		(2.3)		6.0
	Employee compensation and benefits		(27.8)		(40.1)
	Accrued taxes		17.8		8.3
	Other assets and liabilities		(0.2)		(1.0)
Net cash provided by operating activities		9.1		11.3
Cash flows from investing activities
Purchases of customer funds marketable securities		(139.6)		(72.5)
Proceeds from sale and maturity of customer funds marketable securities		49.6		100.5
Purchases of marketable securities		(0.5)		-
Proceeds from sale and maturity of marketable securities		1.0		-
Expenditures for property, plant, and equipment		(3.5)		(6.5)
Expenditures for software and technology		(24.4)		(21.9)
Acquisition costs, net of cash acquired		(173.3)		-
Other		-		(1.0)
	Net cash used in investing activities		(290.7)		(1.4)
Cash flows from financing activities
Increase in customer funds obligations, net		1,763.5		2,174.4
Proceeds from issuance of common stock under share-based compensation plans		15.3		14.8
Proceeds from debt issuance		650.0		(2.1)
Repayment of long-term debt obligations		(644.5)		-
Payment of debt refinancing costs		(11.4)		-
	Net cash provided by financing activities		1,772.9		2,187.1
Effect of exchange rate changes on cash, restricted cash, and equivalents		(13.5)		(6.8)
Net increase in cash, restricted cash, and equivalents		1,477.8		2,190.2
Cash, restricted cash, and equivalents at beginning of period		3,421.4		3,151.2
Cash, restricted cash, and equivalents at end of period	$	4,899.2	$	5,341.4
Reconciliation of cash, restricted cash, and equivalents to the condensed
consolidated balance sheets
Cash and equivalents	$	392.5	$	428.6
Restricted cash		0.8		0.8
Restricted cash and equivalents included in customer funds		4,505.9		4,912.0
Total cash, restricted cash, and equivalents	$	4,899.2	$	5,341.4
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Dayforce, Inc.

Revenue Financial Measures

(Unaudited)

							Percentage
						Impact of	change in
						changes in	revenue on
					Percentage	foreign	a constant
		Three Months Ended	change in	currency	currency
		March 31,		revenue	(a)	basis (a)
					2024 vs.		2024 vs.
		2024		2023	2023		2023
		(In millions)
Revenue:
Recurring revenue:
Dayforce recurring, excluding float	$	282.4	$	229.6	23.0%	(-)%	23.0%
Dayforce float		54.8		41.6	31.7%	(-)%	31.7%
Total Dayforce recurring		337.2		271.2	24.3%	(-)%	24.3%
Powerpay recurring, excluding float		20.5		19.5	5.1%	0.5%	4.6%
Powerpay float		5.5		4.6	19.6%	(-)%	19.6%
Total Powerpay recurring		26.0		24.1	7.9%	0.4%	7.5%
Total Cloud recurring		363.2		295.3	23.0%	0.1%	22.9%
Other recurring (b)		19.5		22.6	(13.7)%	(2.2)%	(11.5)%
Total recurring revenue		382.7		317.9	20.4%	(0.1)%	20.5%
Professional services and other (c)		48.8		52.7	(7.4)%	(-)%	(7.4)%
Total revenue	$	431.5	$	370.6	16.4%	(0.1)%	16.5%

1. Dayforce has calculated percentage change in revenue on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period. Please refer to the "Non-GAAPFinancial Measures" section for discussion of percentage change in revenue on a constant currency basis.
2. Float attributable to Other recurring was $0.4 million and $0.7 million for the three months ended March 31, 2024, and 2023, respectively.
3. For the three months ended March 31, 2024, Professional services and other consisted of $46.2 million, $2.5 million, and $0.1 million associated with Dayforce, Other, and Powerpay, respectively. For the three months ended March 31, 2023, Professional services and other consisted of $49.4 million and $3.3 million associated with Dayforce and Other, respectively.

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Dayforce, Inc.

Share-Based Compensation Expense and Related Employer Taxes

(Unaudited)

	Three Months Ended March 31,
		2024		2023
		(in millions)
Cost of revenue - Cloud	$	3.6	$	4.0
Cost of revenue - Other		0.5		0.3
Professional services and other		3.8		4.4
Product development and management		8.0		8.1
Sales and marketing		8.5		5.2
General and administrative		13.6		18.2
Total	$	38.0	$	40.2

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