Dayforce (DAY) Q2 2024 earnings summary

Executive summary

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

• Dayforce recurring revenue was $321.6 million, up 20% year-over-year, and cloud recurring gross margin reached 77.7%, up 100 basis points.

• Adjusted EBITDA was $116.3 million, up 18%, with a margin of 27.5%.

• Net loss for Q2 2024 was $1.8 million, compared to net income of $3.1 million in Q2 2023, primarily due to higher operating expenses.

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

Financial highlights

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

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

• Adjusted EBITDA: $116.3 million (27.5% margin), up from $98.4 million (26.9% margin) in Q2 2023.

• Free cash flow for the first half of 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.

• FY24 adjusted EBITDA guidance: $490–$505 million, margin 28.2%–28.9%.

• Q3 2024 revenue guidance: $425–$430 million (up 13–14%); Dayforce recurring revenue ex float: $289–$294 million, up 18%–20%.

• Float revenue for FY24 expected at $187 million.