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Dayforce Q2 Earnings Beat Estimates, Revenues Up Y/Y, Shares Down
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Key Takeaways
{\"0\":\"DAY reported Q2 EPS of 61 cents, up 27.1% year over year.\",\"1\":\"Recurring revenues, excluding float, rose 13.6% to $315.5M, with margin up 450 bps to 26.9%.\",\"2\":\"DAY projects 2025 adjusted EBITDA margin of 32% and revenues of up to $1.955B.\"}
Dayforce (DAY - Free Report) reported second-quarter 2025 earnings of 61 cents per share, which beat the Zacks Consensus Estimate of 52 cents and increased 27.1% year over year.
Revenues of $464.7 million beat the Zacks Consensus Estimate by 1.5% and increased both 9.8% year over year and constant currency (cc) basis. Excluding float, total revenues were $417.3 million, an increase of 11.5% both on a year-over-year and cc basis.
Shares dropped 1.02% at the time of writing this blog.
DAY’s Q2 Top-Line Details
In the second quarter of 2025, recurring revenues (84.6% of total revenues) increased 7.7% year over year to $393.1 million. Dayforce’s recurring revenues, excluding float revenues, totaled $315.5 million, reflecting robust 13.6% year-over-year growth, or 13.5% at cc.
Dayforce achieved recurring revenue per customer of $171,075 in the trailing 12 months ended June 30, 2025, reflecting an impressive year-over-year increase of 10.4%. As of June 30, 2025, the number of live customers on the Dayforce platform reached 6,984, representing year-over-year growth of 4.9%.
Powerpay’s recurring revenues reached $19.9 million, unchanged year over year.
Professional Services and Other (15.4% of total revenues) increased 22.8% year over year to $71.6 million.
DAY’s Operating Details
In the first quarter of 2025, selling and marketing expenses were $83.7 million, up 1.6% year over year. General and Administrative expenses were $58.9 million, down 0.2% year over year.
Adjusted EBITDA was $147.2 million, up 26.6% year over year. Adjusted EBITDA margin was 31.7% up 420 basis points (bps).
In the second quarter of 2025, the adjusted operating profit was $125 million, up 31.6% year over year. Operating margin expanded 450 bps on a year-over-year basis to 26.9%.
DAY Balance Sheet & Cash Flow
As of June 30, 2025, cash and cash equivalents were $625.2 million compared with $557.3 million as of March 31.
In the second quarter of 2025, the company reported cash provided by operating activities of $112.7 million, up from $49.6 million in the prior quarter.
Free cash flow was $87.1 million compared with $19.5 million reported in the previous quarter.
DAY Offers 3Q25 and FY25 Guidance
For the third quarter of 2025, DAY expects total revenues of $476-$486 million.
Total revenue, excluding float, is in the range of $434 million to $444 million, an increase of 10.1% to 12.6% on a GAAP basis or approximately 11% to 13% on a constant currency basis. The company expects float revenues of $42 million in the third quarter of 2025.
Adjusted EBITDA margin is expected to be between 30% and 30.5%.
For 2025, DAY expects total revenues of $1.935 billion to $1.955 billion.
Total revenues, excluding float, are expected in the range of $1.749 billion to $1.769 billion, an increase of approximately 12.1% to 13.4% on a GAAP basis or approximately 13% to 14% on a constant currency basis.
Dayforce expects recurring revenues, excluding float, of $1.324 billion to $1.344 billion, an increase of approximately 14.2% to 15.9% on a GAAP basis, or approximately 15% to 17% on a constant currency basis. The company expects float revenues of $186 million in 2025.
Adjusted EBITDA margin is expected to be 32%.
Free cash flow margin is expected to be between 13.5% and 14%.
Image: Bigstock
Dayforce Q2 Earnings Beat Estimates, Revenues Up Y/Y, Shares Down
Key Takeaways
Dayforce (DAY - Free Report) reported second-quarter 2025 earnings of 61 cents per share, which beat the Zacks Consensus Estimate of 52 cents and increased 27.1% year over year.
Revenues of $464.7 million beat the Zacks Consensus Estimate by 1.5% and increased both 9.8% year over year and constant currency (cc) basis. Excluding float, total revenues were $417.3 million, an increase of 11.5% both on a year-over-year and cc basis.
Shares dropped 1.02% at the time of writing this blog.
DAY’s Q2 Top-Line Details
In the second quarter of 2025, recurring revenues (84.6% of total revenues) increased 7.7% year over year to $393.1 million. Dayforce’s recurring revenues, excluding float revenues, totaled $315.5 million, reflecting robust 13.6% year-over-year growth, or 13.5% at cc.
Dayforce, Inc. Price
Dayforce, Inc. price | Dayforce, Inc. Quote
Dayforce achieved recurring revenue per customer of $171,075 in the trailing 12 months ended June 30, 2025, reflecting an impressive year-over-year increase of 10.4%. As of June 30, 2025, the number of live customers on the Dayforce platform reached 6,984, representing year-over-year growth of 4.9%.
Powerpay’s recurring revenues reached $19.9 million, unchanged year over year.
Professional Services and Other (15.4% of total revenues) increased 22.8% year over year to $71.6 million.
DAY’s Operating Details
In the first quarter of 2025, selling and marketing expenses were $83.7 million, up 1.6% year over year. General and Administrative expenses were $58.9 million, down 0.2% year over year.
Adjusted EBITDA was $147.2 million, up 26.6% year over year. Adjusted EBITDA margin was 31.7% up 420 basis points (bps).
In the second quarter of 2025, the adjusted operating profit was $125 million, up 31.6% year over year. Operating margin expanded 450 bps on a year-over-year basis to 26.9%.
DAY Balance Sheet & Cash Flow
As of June 30, 2025, cash and cash equivalents were $625.2 million compared with $557.3 million as of March 31.
In the second quarter of 2025, the company reported cash provided by operating activities of $112.7 million, up from $49.6 million in the prior quarter.
Free cash flow was $87.1 million compared with $19.5 million reported in the previous quarter.
DAY Offers 3Q25 and FY25 Guidance
For the third quarter of 2025, DAY expects total revenues of $476-$486 million.
Total revenue, excluding float, is in the range of $434 million to $444 million, an increase of 10.1% to 12.6% on a GAAP basis or approximately 11% to 13% on a constant currency basis. The company expects float revenues of $42 million in the third quarter of 2025.
Adjusted EBITDA margin is expected to be between 30% and 30.5%.
For 2025, DAY expects total revenues of $1.935 billion to $1.955 billion.
Total revenues, excluding float, are expected in the range of $1.749 billion to $1.769 billion, an increase of approximately 12.1% to 13.4% on a GAAP basis or approximately 13% to 14% on a constant currency basis.
Dayforce expects recurring revenues, excluding float, of $1.324 billion to $1.344 billion, an increase of approximately 14.2% to 15.9% on a GAAP basis, or approximately 15% to 17% on a constant currency basis. The company expects float revenues of $186 million in 2025.
Adjusted EBITDA margin is expected to be 32%.
Free cash flow margin is expected to be between 13.5% and 14%.
Zacks Rank and Other Stocks to Consider
Dayforce currently carries a Zacks Rank #2 (Buy).
MKS Inc. (MKSI - Free Report) , DoorDash (DASH - Free Report) and Lumentum (LITE - Free Report) are some other top-ranked stocks in the broader Zacks Computer and Technology sector. Each of the three stocks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MKS shares have declined 11.8% year to date. MKS is set to report its second-quarter 2025 results on Aug. 6.
DoorDash shares have appreciated 52.3% year to date. DASH is set to report its second-quarter 2025 results on Aug. 6.
Lumentum shares are up 28.8% year to date. LITE is set to report its fourth-quarter fiscal 2025 results on Aug. 12.