Dayforce (DAY) 30 Oct 242024 Q3 Earnings call transcript

Greetings, and welcome to the Dayforce Third Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce David Niederman, Vice President of Investor Relations. Thank you.

You may begin.

and the joining, XXXX Third for Call. Earnings you welcome Dayforce to Quarter Thank Vice Relations. President, Niederman, David I'm Investor [Operator Instructions] Joining CEO, David me on the and Jeremy call CFO, Johnson. Ossip; today are

Joe Steve Holdridge for Chief and Strategy, We available our also COO, Technology Q&A. have Officer, and President Korngiebel; Product and

from historical A Before be I these in with that subject experience expectations. are materially David, to statements to risks and uncertainties over filings. and call cause I everyone Dayforce's remind differ statements Commission, to the hand statements. file in of or of some cautionary commentary Exchange present our These description we as the could and results uncertainties found the that may the our to such can Securities want include reports forward-looking risks

this reconciliation to rationale will measures the be and replay release Investor and earnings our call, transcript, a reference a addition Please non-GAAP non-GAAP also our of on the the this these our a in press our non-GAAP behind documents, full Relations over available use describe Dayforce course to SEC for we'll measures performance. These call metrics. of website. GAAP to Additionally, for review with and filings of of

With that, to to call David. the over I'd like turn

Jeremy Thanks, go-lives, to outlook. customer on to you provide updated and provide our our David, I'll details sales turn all an comments wins call and more thank some full third and high-level for us. joining the quarter financials and results year of

metrics margin flow Dayforce $XXX margin without recurring up we total combined XXX XX.X%, increased XX%. gross a on up and and basis recurring growth million of quarter, third adjusted with gross $XXX cash revenue million continue results we generation. profitability was with of to XX%, and points, on basis the up XXX achieved points. focus Cloud revenue cloud was floats, was XX% as In strong recurring focus healthy and

of free the to million, XXX%. the flow live XX.X%, with per EBITDA $XXX Dayforce $XXX million, year Year-to-date up was XX%, third up XX flow and $XXX up points. Dayforce margin with date, customer operating cash cash adjusted the platform, up recurring ended basis on quarter And revenue average X,XXX customers was EBITDA XX%. Adjusted We million, was XX%. up

We continue the believe positioned we with well advantage. providing win Dayforce to in a are platform marketplace to the competitive

allowing people than product, introduction Our Learning, ever, Dayforce nudges. Dayforce include eloomi with and of the the from analytics faster and wallet recent people examples our their into of pace a those our introduction and of innovation the performance of set of cashless product into delivery some thresholds is acquisition of the intelligent replatforming the release tips enhancement platform, with our track measures, organizations of to new

best-in-class a and HCM disparate with market are The can Organizations stem These that as significant the recognize remains adopting modern benefits. platform. substantial. system as benefits XX systems Dayforce replacing yield from opportunity many

industry was into Turning of this during instances sales. quarter, see did segment There we down sales where pronounced. was specific no more the our or elongated

guidance, underscored quarter our our our deals. continue to sales strong expanding by more motion suite and fourth confidence base in go-live we have their However, full our to plans, customer

the the drivers, including with QX include We growth opportunities expansion a key is Dayforce to implementation and move capabilities; Xx. leverage finally, and sales strong, our to system sales HCM our target of clients. set the pipeline partners' coverage to and allows of which offerings; of Our customers; to win up-market us broad building global of ratio platform result approximately a remains sales pipeline building the channel, serve condition win our integrated to and a believe the large target of strength

the quarter, XX% Additionally, of a growth intelligence compromising [ bookings growth add-on our with solid approximately ] driver sales be with sales in to across continues to our suite. of customer talent base total

Looking now Vegas weeks. Dayforce Las a customers host Discover to our few annual to the we in excited in at are quarter, fourth

also be We an will focus customer holding Investor the program. Day alongside

our to the financial in results I'll now you. discuss over more pass to to Jeremy, detail. call Jeremy

our by We David. results. quarter line margins. while remains expand to were and the growth third up Thanks, business pleased basis. scaled on or XX.X% and underlying million, trends. cash XX.X% healthy on up constant revenue up was XX.X% with basis, XX% strong or revenue Top strong, $XXX revenue currency flow recurring float Dayforce continued excluding recurring we $XXX.X million, customer currency a constant And up Dayforce underpinned a was go-lives

and was constant GAAP a $XX.X basis on currency currency million, was constant a on on million, revenue professional And $XXX up million, Powerpay basis. and basis basis. GAAP Total and up on was constant X.X% recurring XX.X% and X.X% revenue basis. other $XX.X a currency on revenue services on GAAP XX% a up XX.X% float a excluding a

to an Data related GAAP expense expense basis a retired million name, XX.X%. $XX.X XXX incremental XXXX recurring Cloud a million was including $X On Fusion. trade basis, amortization million, gross was margin points. earn-out of profit the up to of and acquisition XX%, million, $XXX.X gross Operating Ceridian the $X related profit up was

scale or non-GAAP recurring adjusted XX basis reflecting adjusted Adjusted a and cloud our in XX.X% gross XXX basis, points. gross a improvement EBITDA was and million, margin margins G&A. up $XXX.X On in up points margin, profit X.X%, was basis continued $XX.X expanding

cash million, operating year-to-date XXX%. and cash cash X,XXX% as to ], $XXX.X a continue cash cash up on flows Year-to-date focus flow flow $XX.X cash was perspective, we free were flow operating million, was $XX.X XX.X%. $XXX.X million, up up XXX% flow over was margins. million, And flow From free [ up

remain and and Dayforce double on to transactions consistent than year. revenue rates remains track this month Wallet. more Registration per user wallet to Turning

globe U.S. full hotels across and XX,XXX retailer Australian managing wins manufacturing across operating and company the in selected employees hospitality employees solution support experience a to countries and major Mexico and the Zealand; XX sales HCM their North luxury in across American unified and support XX,XXX specializes a notable Australia leader its selected Canada. across QX the suite included to Some in and full as Dayforce to the enhance the distribution Dayforce employees of over Dayforce Canada; suite resorts multibrand U.S., developing a selected that global X,XXX New

and QX Payroll, a the Talent. company, live go-lives U.K. Dayforce recently went British live Dayforce a and and its hotel with XX,XXX HR, employees prominent U.S. Dayforce XXX key Managed recently for implemented A XX,XXX Workforce U.K. and restaurant XX,XXX employees included some went And HR, Dayforce And Management, HR, Management customer with multinational across with and retailer Time, Payroll, Document Management manufacturer Workforce Wallet fashion stores with Payroll employees. Wallet.

wins customer go-lives notable earnings our sales You in press release. can more and read about

other before A call-outs to move few guidance. on I

third eloomi quarter, quarter revenue expected, of points our last As revenue recurring Dayforce Dayforce the in business to points basis revenue of added tax the to approximately represented float movement basis headwind third year's ex ex while flow. a of to growth XXX XXX recurring approximately the

executed the quarter, Wallet. receivables Dayforce During related facility securitization to we a optimize movements cash to

while receivables to part that and in sold million we the capital fund investment of this, And Wallet pleased to of As repurchase and manage profitability to draws. million and have finally, Dayforce to we return are shareholders compensation, executed of maintaining plan, share business. we Wallet $XX.X the from million our share-based flexibility dilution $XXX our $XX

Now turning to guidance.

revenue. to currency revenue $XX as $X.XXX the to billion $X.XXX expect of or currency over Total reported XX% growth basis of XX.X% Adjusted float remain expect a year, a in last EBITDA from [ and on recurring XX.X% XX% billion target result XX% our dollar full constant XX% on confident flow XX% $X.XXX we free cash basis. ] which For constant conversion to of versus should billion year year, EBITDA billion, We of $X.XXX operating adjusted flow and year and or steady reported basis. X.X% to between full Dayforce ex in $XXX margin margin. cash XX% of or of or cash of to to growth flow expenditures revenue to on as remain million capital full a of

XX% for float to $XXX XX.X% to million Total on recurring million, to of year. for fourth XX% in now quarter, basis. EBITDA growth as on XX% to currency $XXX expected XX% million a or $XXX And the million, to a basis. million, constant reported constant growth margin. of we to million range as or XX% XX% is Adjusted revenue be of to Dayforce or revenue of $XXX $XXX reported million. of currency full XX.X% revenue to ex of Float the revenue expect $XXX And or the float million $XXX and $XX

original And for weakening QX year. to an or USD of versus XXXX are full Canadian X.XX headwind an CAD for the be clear, rates continues exchange for to CAD a guidance our versus for us CAD our be guidance to in and X.XX assumed average the last dollar year. The

XXXX, growth XX% flow above and of revenue adjusted we're good issuing initial free for XX% on currency XX%. and XX% constant feel trajectory. between margin basis, We above a cash our about excluding margin guidance total EBITDA float And growth,

As David November in Vegas. mentioned, Day Investor scheduled our Las for XX is

achieving $X we and free our expanding our lay of into a diving HCM to cash ambitions profitability billion growth our forward look out day, continued in the in as leader long-term path durable space. to strategy, During the billion revenue, differentiation, our $X our in product more, and we flow as

Q&A our can With call. the we that, begin portion of

the McVeigh from come UBS. Kevin questions first Our Instructions] [Operator line of with

gave wonder I you if of and maybe guidance? just to a could focused like I a results. the bit little to what that, confidence because continues conversion on of flow maybe offer the of you free to it looks wanted the little scale, XXXX on understand bit cash too. kind help kind us start there initial Congratulations focus,

nice hear for to comments. you, thanks and from Kevin, your

of business the guide, And a and go-live you've gives the in tackled recurring certainty part with combined high relative consistently very our revenue we on into of we have, early very, seen, that in our is plannable the of both a high degree accurately. the and degree certainty. us go the QX that we forecast come year know, you to as have we with or of based highly percentage As year,

that's In big terms focus. as of you the perspective, free cash know, a flow been

pivoted side? the that and on We the you company flow. do add make anything on profitability are cash Jeremy, sure cash we want free top have flow free of to to

guidance Look, here. But achieve that are leveraging I've and offered, all think I to on it's inherent highly the it focused metrics adjusted and a we're we something we I XX%. and which that cash confident business, got XX% can flow free on EBITDA both of down mean comes working that we're this I since above the focus, Yes. above profitability been

real this year initial buyback. on that Great. great it's balance Jeremy, And the David? into quick, over hear thoughts, or Any just to of the XXXX,

buy you shares the XX us about Yes. mean, saw million in Look, I quarter.

As you purpose share buyback primary our of to compensation. manage the dilution stock-based is know, from

But that. be should do we've to continuing got opportunistic market the lot in in ultimately, probably it. us that under capacity permit market could a and see You'll of future the

Our questions Mark come Baird. from next with of the Marcon line

Let a ended up from. really me you And Wondering add strong on you ended about specifically, bit congratulations past that little some major you can this results. who wins talk of if having the quarter. up winning my

So room much and investors ask can cycles ask terms know What about about if Australian decision when or look at can American company if well. wondering And a as I'm pipeline wondering I just you hospitality decision of are saturation, you left. is we retailer. you in they North how take earlier, you of there also this but -- about then that the a the lot talk mentioned seeing cycles?

to nice you hear Sure. this Martin, from morning.

efficiency well lead, in the again, very, fifth macro, are that and our particular we and have resonates might that to a have differentiate that year, would we're for their great of was to of there, that the workers. We're types components FTE very stack Gartner In our HR seen find simplification you subscription have and I to it of savings. a obviously, a we process. where on of reduction of say in at compliance in deal, consecutive a with And because you it simplifying other competitive often in in this and or particular I terms their compliance total as have move leads gone finding in size the XX:X and, tremendous ranked believe, continual enterprise these we the organizations the I deal, their platform of having payroll-focused had it is of X,XXX of they're a typically one final well and in of to the one employee deal. segment, for hospitality, to leadership number focusing frontline proposition organizations percentage of that, ERPs regardless believe organization. know, segment. as X,XXX you I that What's able would challenges #X that the the In above we high employees were they And us quadrant, in broaden it compliance in deals. believe because as X,XXX they the quite large case, when value

terms I of as the ACV In of very coverage pipeline, pipeline, a entered for with healthy. which means mentioned, [ ratio, ] targeted quarter which $X of dollar is we we had X:X every

did XX% could inside deals, be extend with see a In the of items. QX. of by terms of deals That about we driven the the by number length

as we doing that on that have means off Firstly, sign each simplifications, mostly people the of are XX:X different are now it to more there selections.

Talent as to of modules, look are at getting the longer the of now HR owners have all and we at just looking from owners well. we no So sign-off compliance but the

Second, increased. the know, as have deals, you

recurring, deal financial XX% that stable obviously, required sign-offs from cautious more And well. up, being and as that organizations perspective thorough up average goes more are the more say the macro, with I it's takes as at look time. actually in selections sizes And you more then lastly, their a the would year-over-year. are If and

passes, you year cycles. end bit rates deal been multiple and little the uncertainty across seeing to interest start some reversing you've up a progresses? that continuing Great. of the Do globe and think down faster up the come end might we through could some close as David, as election

eventually say lines would I time Mark, normalize. the

gets quarter. it quarter particular So something into a delayed eventually, that X eventually subsequent moves And normalizes. in

like. you out of machine, the if same the comes volume deal So

economy, roughly in what In overall is had that's look customer we terms growth seen if employment base And and the as at thought I across line they in expected, about came X.X% I employment or consistently. which so would with what numbers, year-over-year. say of we've the

positive. at If year-over-year. up We quite float balances, we the balances was float actual by actually go look saw that XX%

came to of outperformed on -- the of float the down float quarter. see you'll yield the came down although inside So the slightly, rate actual tune about million $X we kind that a

with from questions Jefferies. Samana come next Our the Samad of line

first, for Jeremy, you. Maybe one just

On the XXXX, float what recurring recurring ex for the Or Dayforce rate float about that's that is 'XX think that in the XXXX Dayforce for embedded outlook, you just are we for exit assumption guidance the for specifically? 'XX Dayforce as ex assuming outlook?

providing in this recurring at this advance Samad, we PS that look, it's kind -- of we're months or Dayforce X I and breakout clear, want of full other to not a Powerpay guidance normally for when and on is be point, give this.

mind into I the to And our the think we're in we full keep from do have some call pretty Dayforce of float good points kind XX% in right now. include this that for is One is grow ex a of recurring insight trajectory eloomi. would year does projected year. out. trajectory confident couple But tailwind that a and I at

in it goes So estimates. just away will your tailwind -- consider as that that of kind

we're think years. Powerpay working at And I prior kind larger deals rates. But other interest We've of think we've in look quarter. the some to future. cuts with show point, rate And the to through. should can the foreign fourth got finish PS we've the of to got exchange continue a similar and this big strength got revenue I

we're guidance to at hold going the recurring this on So Dayforce point. off float ex specific giving

having lot maybe sure as that you're about was Tech appreciate I'm early that a a seeing Great. guys talked the you at companies types. features? about what figure Is that. nature HR of longer use you a what have then, how and curious I maybe follow-up any theme big factors I'm what's cases out leading some that the maybe for are. David, you. deal And of It well. gave AI And that the implement I is your But on know as one AI. you maybe doing to to thinking impact decision-making? clarity on good

for Copilot. offer is any Yes. the We question. the is of in upload which we the now into with the first effectively Samad, content application offering. landing that HCM Dayforce way page the that On is likely the data thanks a that, system. GenAI the -- are a the hub works you adviser marketable management hub market And AI,

documents the they we questions the to users PDF documents from answered executives, So and documents, like, are employees, ask allow index are text application, in any managers, Word that and now of they whether the that the documents, be the of. audience we

typical allow a my if to are vision policy co-pay, upload So from use feature. could ask book back and to lift to of skew, questions my that like is if I a what you X%, particular and of We monetization going ask benefits to and that, I particular believe see Or base change. should case be employee could like, that X% the I that one questions my us go AI employee could handbook, up the could benefits between my when load I about like. just

throughout Of job it job have course, we We if a requisition, application. creating as things offer are the you description. you like drives know, that the AI

you're the of the ML acquisition, candidates a proprietary talent model. If in we grading do using

If requisitions your you set. to match based on opening you're we applying, job a particular candidate skill

perspective people adjust actual We algorithms is based the actual the strong leaving in if a labor predictor actually to use of constantly like. you Gartner that on using the energy learning the predictive we now to forecasting report, very the organization. And compensation individuals the have, leave, that on included employees. the module look the a that do you Management are side, and at read Workforce machine of and of of we if And compensation for like, from someone the the work which as allows

see others you encourage real. elongated catchable groups it in in the couple again, of AI sales by is and noted, Gartner kind factor a I to and it because of being as weeks, It Discover and largely have, which I AI cycles. showing and others do is live differentiation is on come AI to being have I from like a see be customer of we don't that AI the our I an We'll should Joe our focused as some I exciting. call new perspective. very cases show, which use conference. capabilities be very know, he'll very, and But

of come Securities. Mizuho Siti questions the line from with next Our Panigrahi

it back-end assumptions Jeremy, that of your sequential recurring you more float? about guidance, X% Or on Do any front-end looking assumptions in could or baked that into pipeline, Dayforce ex eloomi into terms expect, you QX? the that is growth? talk QX made loaded for go-live

it it take I'll and then hand Jeremy. to off

know, above of you a Dayforce As of recurring. given gone on guide we've That is have determined terms accounts the already for XX% in live. that QX based

we go-lives very which obviously good QX have that have in and the So we beyond. on, will QX, clarity impact

maybe Yes. right. XX% there. guidance I'll the at And kind to XX% Yes, in That's there. just of add

As It or talked the there. has It's about, QX. guidance a we from from quarter. But that's mostly, of the is nothing we really the the -- slight of kind go-lives. previous held changed acceleration reacceleration timing

visibility So have our and maintained, I our has that business clear very think there. predictable. it's in we guidance That is

actual bit the just clarity relative, I'd And a maybe expectations. guidance of Jeremy, on say, towards

million. If million everyone, we side you the increased might revenue beat year numbers, $X by look fiscal and $XX for on helpful the the we at which actual by be total

we the On year million side, and beat increased guide by $X $X the million. full EBITDA we by

float $X float. bonuses the is have of quarter the pointed as balances at $X out, could to and were in positive the tied $X million difference the numbers, Now QX, actually the very and been million and in Because that like. million when between we the the look I

Professional the million. of and the second were Services the to some differences is timing Other. And tune There $X about on

beat like, professional side those on of $X which timing. the million combination float the, the $X and the adjusted is million the services, to rise $X million, is delta so the of really you and between between of $X the of EBITDA of And if million related

clarification. good the for David, like you Thanks, have visibility. It seems

a David, Or could an position campaign. to more new brand company? about thing that? Is campaign. Another a that HR towards interesting That guys you found, you launched yourself I as more talk recently was

branding today. on Dayforce focus -- the brand The the very business the reflects is it is exciting. The today business Dayforce around product. It's as

on go a moving X products And be Dayforce. between As of XXXX, years bureau there the improve different simplification less around that, cloud X of profitability, I the products. cloud opposed types us And see are and so should end-of-life had on company able where a ago you to will go if being more this and and to the forward, or combination as the to we as business we of the into see bureau. final as focus back years profitability revenue you'll higher and we with effectively between we ago,

with from line Our Needham of Scott next the & Berg questions Company. come

your quarter It Show. side, to to of you your popping is is -- kind of sending X am year that follow-ups quarter are million sounds I you in range. or profitability you the forward kind look the adjusted expenses for there, the results, by beat if in float full QX to answer EBITDA Joe upside prior other float raised of of I in raised or of your saw some kind reinvesting I maybe the only from looking see I adjusted what either you'd Or by there million, on I the EBITDA be third your both up third business of QX? $X quarter? at title guess, some year go in was get have the you actually are that revenue kind by to the some there, last the that the not is like great. that, the of the David, guidance, $X

drive coming revenue really into looking had on at focus, we and we think year, the the are Yes. think year. year in that profitability both than this year I and even where at investments make into good greater we're earlier in mean, side. side Look, are I the I can the point benefit the next we things some Certainly, through

fourth those investments some the and make some that's kind that we decisions us quarter. see certainly here. come to you tough trying pulling of of every trade-off to And through So

think float, guidance points I basis, our adjusted the almost -- is to XXX And implies, float. XXX points. see the I that, our point basis be, fact And both within QX on XXX a guess, and I'd excluding without that by expanded we're year, maybe kind year of out full you should EBITDA throughout basis what

So some see solid well. margin cash obviously, through pretty that, expansion there going as statement flow you the to

managing Yes, that we fiscal even Do to with me actually probably the brings from about greater we in headwind is more think operational business your XX%, or EBIT business, I here on in into maybe profitability? side, those what guidance should efficiencies than think than a positive, basis coming a year. year anything in is expansion you 'XX there some quite which adjusted you're, guess, Or core different theoretically, to what's 'XX? -- drive the think next expectation difference the that floats XXX about than how next I saw in point the

efficiency on productivity. focus a It's Yes. and

from not what reality different So than is coming seen. the it's anywhere you've

likely see to to You're improve the seeing going us -- you're margins. us gross continue recurring

G&A. next driving sales year efficiency of continue of productivity going focus investments. the year us of marketing. year adjusted will scale see You'll this kind We're and me, our to investment some -- be excuse was gross an on adjusted Obviously, and in to those out the

business the but cash flow it's So around expansion. and margin and focus no productivity a differences, real

the quarter. on Congrats Great.

questions next Bank. from come Deutsche Bhavin the Shah Our of line with

kind last bookings. what were? from of but Kind tick-down think of this healthy, competitors this And sales part touch kind looks the quarter. any is the going a the of cycles or elongation add-on drivers the in of It should of a XX% forward? any on are at about focus doing? of a of Was remains business in how of Just kind sense what like we result kind changes of kind this of it

the positive a this included quarter, quarter, the XX%. last number. would in Remember, add-ons. And target and for as the Canada It's GC, had year last the between mentioned we XX% be Government of we very

we to look suite the full like were right in we would at When it they deals it's where XX%. So quarter, be.

So simplification, about customer use is the XX:X have suite product. our which XX% base actual deals, of of now at

next a up And we I very go positive terms in see to look number. XX% of a the long-term on just basis client-based sales, would towards if we to As expect a But tremendously. move based at and longer, sales it's year trend. more decline year-over-year it's growth of

for too modestly outlook, And I want kind your we portfolio? give Jeremy. other it? on think initial float to next much the any know down laddered should That's think don't way but you helpful follow-up about kind high-level there. of Or yield any thoughts quick given just year's tick should how one on about of to

Yes. It's areas one float. the we on kind of where guidance -- quarter give of before the

no as to expect difference think the see there's and real in grow I in balances continue have to we past, that.

with both the But now. that Canada. the to how know don't You'll down U.S. cuts ], on in [ We much see kind things. rate of just rate is going of continue increase come to the right average and side the balance

laddering quite strategy helps a Our bit.

from and this example, rate the X.X quarter, link of For some our cuts you saw average to yield X.

on I on guidance that one. don't we'll and we the pretty, But think, a I go. see the more just yield wait to think give want to durable different central banks X where are see it's anyway So that going you'll quarter to

The year XX% a forecast float spoken million we've $XX EBITDA that next about. $XX previously would the above moment, And a one taken perspective. terms in had million you up as with At probably to the thing, that there's we headwind we the modeling year. for just next know, even from that, about say of

even looking the of with so float. at we're flow and very headwind And cash healthy adjusted EBITDA free growth growth

Citi. Our with next Steve come the questions from line Enders of

we assumptions deal be cycles here? or or to hear underlying like I this are, what I it the accounting and what guess, thinking And you're stick Okay. in outlook of of kind kind Maybe expecting guide would should of kind rates would to kind labor of what be outlook there. in great the of Great. around on the terms for 'XX the preliminary

a excluding revenue EBITDA question you there. don't and think on answered is Yes. currency XX%. pretty XX% float margin between cash the Similar I to then into that's and down flows. XX% constant to about breakout, earlier an Other flow to really I through Powerpay And And at PS point. basis adjusted above solid Learning to going and to and here, going provide is if how that the guidance that this grow breakout a want at

pretty good have visibility. We

that where side But want the largest think And see few feel And us. of rate and to into I've we've interest say, years, of I probably top think, of obviously, there. see and on the But sales spot next really things the and what them banks go we're a bit to profitability happens central the exchange we got, got I ahead we to we've things. both Canadian worst are rates as the quarter focus year, also just seen I a that's look, more on confident little going on that. on trying provide side line and the in

to of big that I there's maybe helpful the about you been so? they're what side and right. And All and focus Partner those a some I But want know there. the it's investment on guess kind kind That's or I are dynamics. context ask been the any to bringing in resonating? in table, past feeling of how change quarter of And if that's how area.

Still very positive.

integrators Discover, come you that sponsorships to If the partners. we other have across number and of the you'll system, see

well. the at You'll by see attendance the as partners conference level the actual

the to as helping the side well perspective from implementation leverage on us partners of helping both sales as the continue on us We side. a

from of come the Reback Our next with Stifel. line Brad questions

you today, a that still high in Great. that told continue you assume those early cycles assumptions that maybe that the in do gone levels form employment just us sales what are elongated 'XX, Jeremy, understanding have flat on to from the it's and level numbers?

talked we've and kind the sales that the kind had which assume really in the QX. feel would seeing from little a unchanged confident solid I environment And We in really they bit of Yes. sales bit now. I We've context on would provide remain into look as commentary think of employment are about now, a hope we're a little to content. right a try providing really what in what of the helps year-to-date. I where demand think give good that levels of past. I right you on And is cycles, pretty elongated we

It the does. first real And of quick, David, commentary any month quarter? the then, on

our of month of haven't look a QX quarter. December. are And actually which And about December what ratio. the But on nicely quite basis, towards closed entered at [indiscernible]. the fact, I It's is be quarter, think it, particular weeks his we the as first will also I Xx the Sam skewed as of year-over-year. last mentioned, On the month quarter. is it at we I for a monthly On if quarter up probably first in quarter, the the yet. determines largest always of coverage target X

execution actual it to really the deals. across down So comes

from with come line Daniel BMO questions the Our Jester of Capital Markets.

just Maybe X,XXX on live Wallet Great. one the customers.

looks think you're sequentially XX% and about I in customers that's of it live customer up XX the base today. like

be in would customers have many that slowdown the we many, in think go-lives. your talked about of past, customers, potential but Wallet those a seen you've I

sort and of into potential think opportunity any updated it thoughts growth about year beyond? as Wallet next about the we and its So

year been of very This has a actual for growth the year strong wallet.

As ARR We'll the this about revenue exit Wallet million. next will XXs. you somewhere million, on $XX.X go the and Dayforce was probably year into with year know, of year, $XX above last in an

the for a of the features this We obviously a spent lot in year quite use of successful year been and it's Wallet. time monetization new that help out bringing the Wallet. So with

we've goals, nice This that users IFt, again, actual accounts year, wallet. put goals very, savings quite a we on $X and of are that and particular savings over reminder, just launched to AST feature, the been Recently, probably adoption which a the we the across launched it and those into using seen and nice. very types million of has

Another new wallet. the feature just we cashless are tips on released

have are the pay you if to on very, hospitality, now gross So is your in Dayforce the Wallet restaurants. a useful which for through ability basis, you tips very

as to of users the we'll debit and In as the with should believe existing which Wallet have, the November, year. that use revenue help we lift releasing capability, well will into card allows help also be next BYOC go and monetization we they

actual in in exciting, So that would of it's very I type product. of -- also terms very, growth it's particular say, the

a for Great. one quick And then Jeremy on flow. XXXX just cash

and going that numbers. that? to of the sort that think And there's embedded in settlement Can the you of make there? in remind clarity you be the pension sizing 'XX mentioned past, that's need I to us a just you any about any updates

or Yes. likely kind $XX quarter Thanks the million. of operating underway And pension termination the the be free that frame, our time next flow third guidance. question. Yes, for year. cash that and and be $XX included to of timing million in would cash would would in The payments included be flow fourth is in the again, our

Our next line Markets. questions with Celino come Jason KeyBanc from the of Capital

ask to level, to at down usually usual? than than do, should high But giving it conservative framework we by you not a I'm guide more be the Jeremy, viewing earlier XXXX going this break further. you as

it I Thanks Look, than usual. more I wouldn't for the -- question. call don't conservative

at than I think February would a it we normally just call when give of I we focused kind have frame this. less time

that we giving aperture and just total EBITDA. guidance we I which would exact recurring point, Dayforce to we're have don't So is always like revenue not same is this have why the adjusted would, the which that it's that at

the in us we have PS to this I think early Dayforce in and in you I the our business cycle. this on to get And ultimately, at recurring between look difference and this things guidance -- should that and Other. the think is of enough some feeling confident give you that the has model focused

have market on understands reasons or been that make guidance preliminary profitability. sure Jason, one focus we the giving is the guidance of for the XXXX to

we would more expect, have so I you are -- as company have much terms we focus As we argue, in a now scaled and of probability. will would

I in the 'XX, know, be adjusted cash lift this go that growth, flow, been keep a EBITDA And the will which you As would into we'll focus, nice of as or number. same adjusted year, free in EBITDA terms argue, quite tremendous. it's we

spoken year. about XX% previously have We next

points XXX that in this point up by at taken basis particular we've So time.

And then year. operating on cash free cash a next free cash flow perspective, you'll flow see of continued and flow expansion

ties to product, really Now the overall of the overall of this simplification the company.

having from confident very X now on -- continue are improving And able the Dayforce our sorry, bureau company both products, gross that up and we've margin. having of type go-forward those -- XX% that to margin cloud on to we'll recurring. focus. moved hit cloud And the Powerpay, should of plus in of gross on products we a the significantly be we recurring As We're several in now basis. are resetting target a

coverage, of especially and a then this healthy definitely you very ForEx But exchange? year to just The at. extended curious you've partner maybe has time, with over as David. within want that rule gave see the channel follow-up, pipelines Excellent. the And how that the and pipeline launch thumb Great. of you software trended this

The pipeline well. qualified a better is as year pipeline this

and building allow and base very, qualifying has revenue of in Sam's very to of back the out of So under and his Talent And operations robust really pipeline over in the the has and comes us a from good job very terms nice pipeline there. team actually done that go sell which team is done really work Joe building that up to base What's very more. HR a to a it that healthy opportunities capabilities, the clean. so to is a the there's that percentage

pricing the we've if an Ben a finally, about packaging perspective, simplification you think and client our compliance price really $XX also Managed employee of top lot we which for say, that. can for Services X,XXX net Managed we The a and than probably another modules, customers. proven good done margins And Talent about expecting are work as remember, Time, I'd sell new you're Services, of that. the And be add range is, of example, very we on driver the $XX. we a that. that a very to When adds and around level, more probably $XX to just that base around Payroll, offering, about modules, of From to, way effectively double has cloud. that have to And also similar growth for on

is continue you an a have the to space Copilot bit base, earlier, revenue we us allows expand Dayforce. from know, customers a perspective, example. X,XXX as from add growing continue live of to important we component, As the The discussed the that The the kind across of on which obviously platform. growth we about AI the client white will Copilot, XX% it's

with Our next Lenschow the come questions from line Barclays. Raimo of

or focus one like Capgemini and see now areas the last in engaging channel to night. them cut you like seeing How you're that What for do see last the as partner guys? What's the you out you at partners. We Perfect. revenue progress moment, engage was the the there? well big of quarter building just outlook with more

we an answer. I don't can agreement don't Capgemini. Steve with know think I if have SI so.

an of it mean I yes. as more example,

Sorry.

It's Okay. nicely. quite Yes, thanks. going

bit which another fact, seen I'll one In but got the a get through X through signed actually that. recently, we the of paperwork, top global -- X time SIs finally with of an top to world, the agreement we say, has in of, or X

growth events November, and now XXth really is we customers their it attendance across and the they to believe the to I healthy. of strong see SI is to to continue we of have the and the So on types SI us the from these sponsorship bring to if come that Discover, channels. Again, you refer XXth the channels

Yes.

Okay. from then And quarter, talk thing a kind we or questions give a word that the Perfect. I is because be investors think get if going they're confused. that of you you I to think bit the little every most about you detected. Obviously, know guidance about are

that we of but really way, you the So but on hasn't talking coverage, a in changed, about a Like a started elongation we're still one like is kind quite pipeline macro good -- you hand, bit. little that have about like should the macro ideal. Like a into -- situation, first into that? for Or that are quarters think macro into time? so kind being few how talking overreading you're of we not about

quarters of relative business I've year always basis. vacations the the in a quarter The ends about impacted as when kind thought often Raimo, are to like. to and the half

half first when the can't than look seen the seeing if And differences I half of year, the So beforehand. can't say any that that at I look at the year, differences. I what I've I'm seen I've second of any I say

is You of as basis X-month see half as opposed well, year really more to of that terms the same in go-lives it basis. a a

which have gone to as contracts are to longer of deals speak upmarket than as terminate buying to selling too kind more the Core wouldn't do we take their we have Time now they deals, look and read work XX% number more with it. But existing a And and to at move those Dayforce. I again, we of as and of the a Talent and So suite, more the modules, people these Pay customers that how because to. much often suite the out of have vendors means customers are just into so HR, broader

completing So half the I wouldn't deal. and read more be weighted December. when This at contracts. year, of than a actual customers It's that second most into towards year, the the it. In it'll of look volume our buying we're type of very

get tremendous through. So there's that we a to number have opportunities of

different would are the to to that have those that we you sure sales across make We required execute expect all can steps agreements. finalize

Our Research. from with the next Wolfe come line of Zukin Alex questions

to is I about elongation, a guess like to rather QX? -- again, I of of commentary implementations issue like out because moving this push Raimo's broad-based to QX the from question, David, Dayforce you're do specific it some to from, But on that's general cycle more kind the changing. talking a the of sounds Or about it of XX.X% than environment, upmarket we to XX% the you're guide going isn't about very is idiosyncratic think, comment just impact demand Maybe given narrowing the the sales QX XX%, how which think that?

not last kept we visibility quarter, tremendous And into a quarter, the consistent Alex, So if year we the we QX. mentioned as out. for have guide

as on plan came in In expect. go-lives, of you they at would end QX, the terms of

One upmarket will take in largely and of which to In have more terms we of the longer finalize. time. are There are had deals actually a is mentioned. there, gone take more as global elongation, there number I also aspects, obviously

actual more inside to deals, people require which more organizations. suite have off sign We

actual and And the then being are the side, macro in much we organizations mention, on diligent sign-off as more did contracting seeing I process.

So of all those. it's of X say, would a combination, I

say as across the a I positive, gave place see a the size year-over-year. you XX% the we customer has the of the deal just size client On sales a client-based recurring, lift seeing evidence motion Dayforce that in we base gone Dayforce would recurring the of up average of year that growing are as put consistent of the is about even came the very with with working is mentioned again at in the quarter, And at sales. healthy about in the very, I well, talks year, we the very guide very year-over-year again, it the of predictability improvements. which, business. beginning which XX% of

that to where as the be that, important free and terms and gave, there. streams increase the are the actual get more we which say flows expectations with outlook XXXX, and Dayforce is as a line. focus it's are true on of business, would that better I as organization, an next And to the which Powerpay. the felt profitability products cash bottom what we we consistent in comes of revenue very simplification the of In it business -- period that And we we And Jeremy an focused with nicely time flow. out do think year, of probability on the that the will was see you with

a Perfect. maybe And then just clarifying question.

I'm headwind. not $XX year, you You $XX be flatter assuming a going million this next million. mentioned million to million grew year, it's down be $XX means first for $XX by would million $XX $XX million probably or year float to that

That's correct.

the to yield for likely yield was be at The X% about will last this year you about X.X%. X.X%. year, look If

We balances If quarter, the nice have the particular in year-over-year. terms I were balances. for growth at of up seen we the look XX.X%

math last For what to so. the year, next a if that, at most, was the yield be, of on you or would And headwind about year, equal that about creates X.X%. the million $XX I had that expect will again we which do

JPMorgan. the line will Our questions with from come of Mark Murphy final

standpoint? I your year QX with from able up October, elongated month up the a to of October experience you the think also, experienced your Can the that I did elongation smaller, about is regarding that you're then which Do to be that complex sales fiscal year-over-year. being logical. saying less-complicated And just of you given David, more extent of confirm that larger, booking the you cycles? in and type plan -- tied you'll expect to not comments deals catch in elongation sales deals, month guess, the seems

out. I segment stand didn't see Remember, in mentioned business. the Mark, the don't one we we call, sell As on any small

employees. that we which different above up full mostly we're employees, selling X,XXX the of the major majority suite are are goes the in have deals, X,XXX our replacing. components So And XX we markets, which that to deals sell

that's other XX% of part is of the above the basis from gross month or more actual I healthy, at on coverage a first basis, in of probability quarters in basis, target. look Much December. the it December. If whether I months. side, it's look the more moment month is be get ACV dependent the year, even about question, an when would the different we're QX so between very tie pipeline quarter at in we at a the the always you linearity coverage look very To -- so I the than your a more of coverage at weighted in weighted

summers, is up month at year-over-year. the the attendance of look If activity. but come of lot other down at will a conference, at customer it the indicators, significantly to December, So there I Discover

work And group. So really think in Sam increases activity is I there's that's good a I the the lot we've that think that productivity when I look seen of doing, occurring. at

payroll assessing follow-up, whether pay I for simply centers, AI-based, workflows. the I customer it. managers become and quick integrators, a ask willingness heard HR? how monetizing curious the seems I'm as value be developers, uplift comes realm managers as is The is you it contrasted perceived or to of with pay building Agents investors comment when to about reason fastest on your to when service be areas? HR to we in other some moving well. understand, or willingness But areas think to some these and in to trying I the seems like to It that are monetization get And into contact you of Copilot the the just are par it's and marketing

we've think kind focused was GenAI actually I on used. of where Mark, first

the really out in you development market as been tools coming put So they've saw the case, some use first of that in place, so of Microsoft longer.

think AI seen use a you've across you're being to other into stack. now the added moving phase cases I enterprise where

We we have are, remember, I back don't that GenAI in separate product And we it's the believe, offering. to now charge on first is the talent here. the Copilot things the market for writing can actual job great a acquisition. Rather, with is go this in And customers. -- this like we description where for it separate view a price product sheet, the of

simplification do where we on at to see XX:X me there's reduce the see us, you'll fees deliver the value when the subscription fact, always for of management can remember, it, customers In Discover. tremendous around a whether FTEs it stack. HCM And of show excitement. a And amount we're focused customer, it's and how we reduce

of they're and GenAI how organization. application get of if teams themselves; on or Copilot, how or information the able conversation. and number managers frontline to executives, and their organization, a tremendous of up answer their lifting calls we're the the about get same And really data of at delivering users the through time, about the interact their they they experience reducing to policies, performance about In terms about to we're by inbound being the question the teams value HR the

to further closing Ossip back at David over hand There for remarks. call questions are would now no the like this time. I to

We're will see do you enhance Investor well. much, very you we and be Dayforce you and Again, of I'm for you just as excited in. very, that of many Day all a at And the looking hoping for the Discover experience Discover, Thank I'm to around as the many platform. at for that thank you attend shown dialing community products very exciting. wonderful our everyone

conclude We your does today's appreciate teleconference. participation. This you. Thank

Enjoy the your time. at You day. may lines rest of disconnect your this