Executive Summary

Q4 revenue grew 16.4% to $465.2M, above the company’s prior Q4 guidance range ($452–$457M); Adjusted EBITDA rose to $129.2M (27.8% margin). However, Dayforce recurring ex float ($307.6M) came in below the guided $311–$316M, with management citing lower employee volumes, reduced print/tax fees, and contract amendments shifting dollars to PS/Other as the drivers .
Profitability and cash generation improved: Cloud recurring gross margin expanded 300 bps YoY to 80.0%; FY24 Adjusted EBITDA margin reached 28.5% (+140 bps YoY) and free cash flow margin 9.7% (+280 bps). FY25 Adjusted EBITDA margin guidance was raised by 100 bps to 32% .
Strong go-to-market execution: management called Q4 “the strongest sales quarter in our history,” highlighted record January momentum, and cited ~4x pipeline coverage to start 2025; SI partnerships are helping push PS/Other toward breakeven in 2025—supportive of sustained margin expansion .
FY25 outlook: revenue ex float +14–15% cc, Dayforce recurring ex float +15–17% cc; float revenue ~$180M (rate cuts a headwind); Adjusted EBITDA margin 32% and FCF margin 12%. Q1’25 revenue ex float guided to $421–$427M, float $53M, Adj. EBITDA margin 31–32% .

What Went Well and What Went Wrong

What Went Well
- “Strongest sales quarter in our history” with healthy mix across enterprise and major market; record gross retention (98%); pipeline ~4x sales target—supportive of 2025 growth trajectory .
- Profitability levered to recurring gross margin expansion (Cloud recurring GM to 80.0%; Adjusted Cloud recurring GM 80.4%); Q4 Adjusted EBITDA +30% YoY to $129.2M (27.8% margin, +300 bps) .
- Product innovation/focus: 900+ compliance updates in 2024; Copilot GA and >60 units sold since November; AI Agents and AI-enhanced forecasting outlined; Wallet revenue scaled to >$30M in 2024 .
What Went Wrong
- Dayforce recurring ex float missed the Q4 guide due to: muted seasonal employee volumes (~~$1M impact), lower print/tax filing fees (~~$1M total), and contract amendments reallocating revenue to PS/Other (~$1M) .
- GAAP profitability mixed YoY: Q4 net income fell to $10.8M (from $45.6M) with “Other expense, net” at $20.2M vs a $5.6M benefit last year; diluted EPS $0.07 vs $0.29 YoY (Adjusted diluted EPS $0.60 vs $0.50) .
- FX and lower yields are headwinds into FY25; management estimates ~200 bps revenue growth headwind from FX in FY25 and float yield trending to ~3.6% (vs FY24 4.0–4.1%) amid expected rate cuts .

Financial Results

Summary performance and profitability

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenue ($M)	$399.7	$440.0	$465.2
GAAP Diluted EPS ($)	$0.29	$0.01	$0.07
Adjusted Diluted EPS ($)	$0.50	$0.47	$0.60
Operating Margin (%)	9.7%	4.7%	6.1%
Adjusted EBITDA ($M)	$99.2	$126.1	$129.2
Adjusted EBITDA Margin (%)	24.8%	28.7%	27.8%
Net Income Margin (%)	11.4%	0.5%	2.3%

Revenue mix detail

Revenue Line ($M)	Q4 2023	Q3 2024	Q4 2024
Dayforce Recurring ex Float	$256.4	$292.0	$307.6
Dayforce Float	$35.7	$41.2	$40.3
Total Dayforce Recurring	$292.1	$333.2	$347.9
Powerpay Recurring ex Float	$23.1	$20.2	$23.1
Powerpay Float	$5.0	$4.2	$4.4
Other Recurring	$18.9	$18.3	$18.3
Total Recurring	$339.1	$375.9	$393.7
Professional Services & Other	$60.6	$64.1	$71.5
Total Revenue	$399.7	$440.0	$465.2

KPIs and capital/returns

KPI / Metric	FY 2023	FY 2024
Cloud ARR ($M)	—	$1,474.1 (+17.9% YoY)
Dayforce Gross Revenue Retention	97.1%	98.0%
Live Dayforce Customers	6,393 (Δ calc)	6,876 (+483 YoY)
Employees Live on Dayforce	6.84M	7.62M (+11.4% YoY)
Dayforce Recurring Rev/Customer (TTM, cc, ex float)	—	$163,101 (+11.1%)
Cloud Recurring Gross Margin	77.0%	78.9%
Adjusted Cloud Recurring Gross Margin	78.3%	79.8%
Operating Cash Flow ($M)	$219.5	$281.1
Free Cash Flow ($M)	$105.1	$171.5
Average Float Balance (Q4)	$4.48B (Q3 refer)	$4.68B; Yield 3.8%; Float Rev $45.1M (Q4)

Non-GAAP notes: Q4 as-adjusted metrics exclude share-based comp and employer taxes, amortization, and other items (notably $17.1M FX loss; $3.2M costs tied to planned U.S. pension plan termination; $8.8M tax effects) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ex Float (cc growth)	FY 2025	+14% to +15% (cc)	+14% to +15% (cc) and $1,745–$1,760M ex float (GAAP +11.9%–12.8%)	Maintained (added $$ range)
Dayforce Recurring ex Float	FY 2025	—	$1,315–$1,340M (+15%–17% cc; GAAP +13.4%–15.5%)	New detail
Float Revenue	FY 2025	—	$180M	New detail
Adjusted EBITDA Margin	FY 2025	“Above 31%”	32%	Raised
Free Cash Flow Margin	FY 2025	“Above 12%”	12%	Clarified
Total Revenue ex Float	Q1 2025	—	$421–$427M (+13.5%–15% GAAP; +15.5%–17% cc)	New
Float Revenue	Q1 2025	—	$53M	New
Adjusted EBITDA Margin	Q1 2025	—	31%–32%	New

FX in guidance: USD/CAD 1.44, USD/GBP 0.81, USD/AUD 1.61; management cites ~200 bps FY25 revenue growth headwind from FX .

Earnings Call Themes & Trends

Topic	Q2 2024 (Prev-2)	Q3 2024 (Prev-1)	Q4 2024 (Current)	Trend
AI/Technology (Copilot, Agents, Analytics)	Transcript unavailable in dataset	New Dayforce Learning; People Analytics “Measures”; Wallet enhancements; strong AI positioning	Copilot GA; >60 units sold; AI Agents roadmap; AI-enhanced forecasting; Workforce Insights	Accelerating
Sales Cycles & Pipeline	—	Some elongation with larger suite/upmarket deals; ~4x pipeline; strong Discover impact expected	Sales cycles “returned to historical levels”; record Q4 and strong January; ~4x pipeline to start 2025	Improving
Professional Services/SIs	—	SI channel maturing; PS/Other +23% YoY; efficiency initiatives	PS breakeven targeted in 2025; SI partners aiding margins and pipeline	Improving
Wallet monetization	—	On track to more than double in 2024	2024 Wallet revenue >$30M; Direct-to-Bank launched; continued momentum expected	Improving
Macro/FX/Float	—	CAD weakness a headwind; float yields easing from peak	~200 bps FY25 growth headwind from FX; float yield ~3.6% assumed; balances low/mid-single-digit growth	Modest headwind
Government of Canada	—	—	On track for April 2025 milestone; continued PS work	Steady

Management Commentary

Strategic focus: “We are positioning Dayforce for sustained revenue growth at levels similar to 2025, while driving towards a 20% plus free cash flow margin.”
Profit profile: “We are starting the year with demonstrable progress toward our profitability goals, raising our 2025 Adjusted EBITDA guidance 100 basis points to 32%.”
Sales momentum: “The fourth quarter of 2024 was the strongest sales quarter in our history… This momentum… gives us great confidence in our right to continue winning in 2025.”
Product/AI: “Since launching in November, we have sold more than 60 Copilot units… [and] planned releases of AI agents and other new capabilities.”
Margin levers: “Adjusted cloud recurring gross margins… expanding… resulting from efficiency gains… automation, AI-driven optimizations and a higher proportion of add-on sales.”

Q&A Highlights

Q4 Dayforce recurring ex float shortfall: Management quantified three small drivers—employee volumes (~~$1M), print/tax fees (~~$1M total), and contract amendments shifting revenue to PS (~$1M)—and characterized them as one-time and not indicative of 2025 trajectory .
Guidance philosophy: Emphasis shifting to total revenue, Adjusted EBITDA and FCF; no quarterly Dayforce recurring ex float guide going forward, with detailed annual targets instead .
FX/Float: FY25 revenue growth headwind of ~200 bps from FX; float yield ~3.6% with balances growing low/mid-single digits on average .
Capital allocation/liability management: Plan to double share repurchases in 2025 (>1M shares), reprice $650M Term Loan B lower than SOFR+250, and retire $575M converts at cash maturity in Mar-2026 .
Canadian government program: On track for April 2025 milestone; no expected impact from political changes .

Estimates Context

Wall Street consensus from S&P Global was unavailable at the time of this analysis due to API limits; therefore, beat/miss vs. S&P consensus cannot be quantified here.
Versus company guidance: Q4 total revenue of $465.2M exceeded the prior $452–$457M guide, while Dayforce recurring ex float ($307.6M) missed the $311–$316M guide due to the specific items described above .

Key Takeaways for Investors

Quality of growth remains solid: Q4 revenue beat company guidance and FY24 profitability and FCF margin expanded meaningfully, with FY25 Adjusted EBITDA margin raised to 32%—a clear positive for valuation frameworks prioritizing durable margin expansion .
The Q4 Dayforce-ex-float shortfall appears episodic and well-explained; management held FY25 revenue ex float growth (cc) at +14–15% and Dayforce ex float +15–17% (cc) .
Sales momentum and pipeline depth (record Q4 and strong January; ~4x coverage) suggest healthy ACV conversion into 2025; SI leverage should support PS breakeven and blended margins .
AI differentiation (Copilot GA, agents roadmap) and Wallet monetization (> $30M 2024) create incremental upsell vectors, aiding net expansion and recurring margin mix over the medium term .
Watch FX and float: management embeds ~200 bps FX growth headwind and lower yields; nonetheless, targets still point to margin and FCF expansion, suggesting efficient cost controls and mix discipline offset macro drags .
Capital actions reduce risk and dilution: planned loan repricing, share repurchases, and cash retirement of 2026 converts bolster per-share metrics and financing flexibility .
Near-term trading catalysts: execution on Q1 guide (31–32% Adj. EBITDA margin), demonstration of sustained PS breakeven trajectory, and AI/Wallet monetization updates; any incremental ARR/retention strength or larger enterprise wins could positively reset expectations .

Dayforce, Inc. (DAY)·Q4 2024 Earnings Summary