Executive Summary

Q3 was operationally solid on revenue but messy on the bottom line: total revenue was $481.6M (+9.5% YoY), essentially in line with consensus, while adjusted EPS of $0.37 missed Street expectations; GAAP EPS swung to a loss on a large non‑cash pension settlement charge . Revenue consensus: $481.2M* vs actual $481.6M; EPS consensus: $0.55* vs actual $0.37 . Values retrieved from S&P Global.
Mix and macro mattered: Dayforce recurring ex‑float rose 14% YoY to $333.0M, but customer employment levels declined, pressuring recurring revenue growth; float revenue fell to $42.2M on lower average float balances .
Cash dynamics weakened in the quarter: free cash flow was $5.0M (1.0% margin) vs $63.4M in the prior year’s Q3, with restructuring costs (largely Thoma Bravo transaction‑related) cited as a headwind to FCF in Q3 .
Guidance and the call were suspended due to the pending Thoma Bravo acquisition at $70.00 per share EV ~$12.3B; management expects closing in late 2025 or early 2026, subject to approvals—this deal remains the primary stock narrative near‑term .

What Went Well and What Went Wrong

What Went Well

Strong core growth: Dayforce recurring revenue ex‑float grew 14% YoY to $333.0M; total revenue ex‑float +11.4% YoY to $439.4M .
Profitability quality (non‑GAAP) held up: Adjusted EBITDA was $147.3M (30.6% margin) vs $126.1M (28.7%) last year, reflecting operating discipline despite macro headwinds .
Product and brand momentum: “Dayforce sales strong momentum continued through the third quarter,” and the company was named a Leader in Gartner’s 2025 Magic Quadrant for Cloud HCM for the sixth consecutive year (three highest scores in Critical Capabilities use cases) . “Dayforce sales strong momentum continued through the third quarter.” — Company release

What Went Wrong

Macro drag on payrolls: “Dayforce saw declining employment levels at our customers in the third quarter negatively impacting Dayforce recurring revenue, excluding float.” — Company release
Float revenue headwind: Float revenue decreased to $42.2M (from $45.6M YoY) as average float balances fell to $4.54B; yield held at 3.7% .
Cash flow downturn and GAAP loss: Q3 FCF was $5.0M (1.0% margin) vs $63.4M (14.4%) in Q3’24, with $27.6M restructuring (primarily Thoma Bravo‑related) cited as a headwind; GAAP net loss of $(196.8)M was driven by a $177.4M non‑cash loss from pension plan termination .

Financial Results

Headline P&L and Cash Metrics

Metric	Q1 2025	Q2 2025	Q3 2025
Total revenue ($M)	$481.8	$464.7	$481.6
Revenue ex float ($M)	$426.5	$417.3	$439.4
Dayforce recurring ex float ($M)	$323.1	$315.5	$333.0
Professional services revenue ($M)	$71.3	$71.6	$78.5
Float revenue ($M)	$55.3	$47.4	$42.2
Operating profit ($M)	$31.0	$42.3	$30.5
Adjusted operating profit ($M)	$132.3	$124.9	$119.1
Net income (loss) ($M)	$14.9	$21.3	$(196.8)
Adjusted net income ($M)	$93.9	$98.2	$60.5
Diluted EPS ($)	$0.09	$0.13	$(1.23)
Adjusted diluted EPS ($)	$0.58	$0.61	$0.37
Adjusted EBITDA ($M)	$156.7	$147.2	$147.3
Adjusted EBITDA margin (%)	32.5%	31.7%	30.6%
Net cash from ops ($M)	$49.6	$112.7	$31.2
Free cash flow ($M)	$19.5	$87.1	$5.0

Segment/Revenue Mix – Q3 2025 vs Q3 2024

Metric ($M)	Q3 2024	Q3 2025
Dayforce recurring	$292.0	$333.0
Powerpay recurring	$20.2	$19.7
Other recurring	$18.1	$8.2
Float revenue	$45.6	$42.2
Total recurring services	$375.9	$403.1
Professional services	$64.1	$78.5
Total revenue	$440.0	$481.6
Total revenue ex float	$394.4	$439.4

Operating KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Live Dayforce customers (period end)	6,929	6,984	7,025
Dayforce recurring revenue per customer (TTM)	$167,600	$171,075	$175,172
Avg float balance ($B)	$5.86	$5.08	$4.54
Avg float yield (%)	3.8%	3.7%	3.7%
Float revenue ($M)	$55.3	$47.4	$42.2

Results vs Consensus (Q3 2025)

Metric	Actual	Consensus	# Estimates
Revenue ($M)	$481.6	$481.2*	15*
Adjusted/Normalized EPS ($)	$0.37	$0.55*	13*

Values retrieved from S&P Global.

Guidance Changes

Dayforce suspended forward guidance and did not host an earnings call due to the pending Thoma Bravo transaction. Prior guidance (from Q2) is shown for context.

Metric	Period	Previous Guidance (8/6)	Current Guidance	Change
Total revenue	Q3 2025	$476M–$486M	No guidance (pending Thoma Bravo)	Suspended
Revenue ex float	Q3 2025	$434M–$444M	No guidance	Suspended
Dayforce recurring ex float	Q3 2025	$329M–$339M	No guidance	Suspended
Float revenue	Q3 2025	~$42M	No guidance	Suspended
Adjusted EBITDA margin	Q3 2025	30.0%–30.5%	No guidance	Suspended
Total revenue	FY 2025	$1,935M–$1,955M	No guidance	Suspended
Revenue ex float	FY 2025	$1,749M–$1,769M	No guidance	Suspended
Dayforce recurring ex float	FY 2025	$1,324M–$1,344M	No guidance	Suspended
Float revenue	FY 2025	~$186M	No guidance	Suspended
Adjusted EBITDA margin	FY 2025	32%	No guidance	Suspended
Free cash flow margin	FY 2025	13.5%–14.0% (raised on 8/6)	No guidance	Suspended

Earnings Call Themes & Trends

Note: The company did not host an earnings call for Q3 due to the pending transaction .

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
AI/technology initiatives	Q1: Introduced Dayforce AI Assistant on mobile; enhancements to Learning, Recruiting, Experience Hub, compliance updates . Q2: “Well positioned for AI” with uptake of AI offerings .	Continued positioning as “single AI‑powered people platform” (corporate description); no call commentary .	Steady strategic emphasis
Demand/bookings/go‑lives	Q1: “Strong first quarter results and excellent sales momentum” . Q2: YTD bookings >40% YoY; strong go‑live execution .	“Sales strong momentum continued through the third quarter” .	Sustained momentum
Macro/employment levels	No explicit pressure cited in Q1/Q2 PRs.	Customer employment levels declined, negatively impacting Dayforce recurring ex‑float .	New headwind
Float/interest	Q1 float rev $55.3M on $5.86B avg balance at 3.8% ; Q2 $47.4M on $5.08B at 3.7% .	$42.2M on $4.54B at 3.7% .	Diminishing tailwind
Services mix	Q2 guided that ProServ shift to SI partners underlies FY ex‑float growth framing .	Professional services +22.5% YoY to $78.5M .	Healthy, shift ongoing
Guidance/FCF targets	Q1 FY25 FCF margin 12% ; Q2 raised FY25 FCF margin to 13.5–14.0% (One Big Beautiful Bill Act) .	Guidance suspended; Q3 FCF $5.0M impacted by restructuring .	Guidance paused; near‑term FCF dip
Corporate actions	—	Pending Thoma Bravo acquisition at $70/share, EV ~$12.3B .	External overhang/anchor

Management Commentary

“Dayforce sales strong momentum continued through the third quarter.” — Company release
“Dayforce saw declining employment levels at our customers in the third quarter negatively impacting Dayforce recurring revenue, excluding float.” — Company release
Recognition/brand: Dayforce “was named a Leader in the 2025 Gartner Magic Quadrant for Cloud HCM… for the sixth consecutive year,” and achieved record attendance at Discover 2025 .
Prior quarter perspective (for trajectory):
- CEO (Q2): “Dayforce’s momentum remained strong… year‑to‑date bookings growing over 40% year‑over‑year… well positioned for AI” .
- CFO (Q2): “Increased confidence in our ability to achieve our long term target of $1 billion in free cash flow by 2031” .
- CEO (Q1): “Strong first quarter results and excellent sales momentum” .

Q&A Highlights

No Q3 earnings call or webcast; no Q&A, with the company noting it does not expect to host future quarter calls while the Thoma Bravo transaction is pending .

Estimates Context

Revenue was essentially in line/slightly above consensus: $481.6M actual vs $481.2M consensus* . Values retrieved from S&P Global.
Adjusted/normalized EPS missed: $0.37 actual vs $0.55 consensus* . Values retrieved from S&P Global.
Key drivers of the delta:
- Lower customer employment levels tempered recurring revenue growth ex‑float, while float revenue declined with falling average float balances .
- GAAP EPS was heavily impacted by a non‑cash pension plan termination loss ($177.4M) and restructuring costs; these were excluded from adjusted metrics but overall adjusted net income still fell sequentially (Q2 $98.2M to Q3 $60.5M) .

Key Takeaways for Investors

Core engine intact: Dayforce recurring ex‑float up 14% YoY and adjusted EBITDA margin ~31% demonstrate resilient core growth and margin discipline despite macro pressure on customer employment levels .
Macro mixed: declining customer headcount and shrinking float balances are near‑term headwinds to top‑line leverage and float revenue contribution .
Cash inflection deferred: restructuring tied to the take‑private pressured quarterly FCF to $5M; monitor FCF normalization post‑transaction close .
Deal dominates: no guidance or call while the $70/share Thoma Bravo deal progresses; timeline targeted for late 2025/early 2026, anchoring the stock near deal terms absent regulatory surprises .
Expect estimate revisions: modest revenue fine‑tune and EPS reductions vs prior models given the adjusted EPS miss and macro commentary; Street may shift focus to regulatory/closing risk and timing rather than standalone forecasts .
Quality signals: Gartner leadership and strong bookings/go‑lives underscore competitive positioning for medium‑term when private, with AI roadmap reiterated across prior quarters .
Trading lens: near‑term catalysts skew to merger milestones (shareholder/regulatory approvals), not quarterly fundamentals; downside support from deal price, upside tied to closing certainty narrowing the spread .

Dayforce, Inc. (DAY)·Q3 2025 Earnings Summary