Table of Contents
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly reporting period ended March 31, 2025
☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
Commission file number 001-38467
Dayforce, Inc.
(Exact name of registrant as specified in its charter)
Delaware
46-3231686
(State or Other Jurisdiction ofIncorporation or Organization)
(I.R.S. Employer
Identification Number)
3311 East Old Shakopee Road
Minneapolis, Minnesota 55425
(952) 853-8100
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common stock, $0.01 par value
DAY
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 30, 2025, there were 159,881,069 shares of common stock, par value of $0.01 per share, outstanding.
Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
3
PART I. FINANCIAL INFORMATION
5
Item 1.
Condensed Consolidated Financial Statements (unaudited)
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
25
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
34
Item 4.
Controls and Procedures
35
PART II. OTHER INFORMATION
36
Legal Proceedings
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Other Information
37
Item 6.
Exhibits
38
2 | Q1 2025 Form 10-Q
This Quarterly Report on Form 10-Q ("Form 10-Q") contains, or incorporates by reference, not only historical information, but also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and that are subject to the safe harbor created by those sections. Forward-looking statements include, without limitation, statements concerning the conditions of the human capital management solutions industry and our operations, performance, and financial condition, and include, in particular, statements relating to our business, growth strategies, product development efforts, and future expenses. Forward-looking statements can be identified by words such as “anticipate,” “intend,” “plan,” “seek,” “believe,” “estimate,” “expect,” “assume,” “project,” “could,” “continue,” “likely,” “may,” “will,” “should,” and similar references to future periods, or by the inclusion of forecasts or projections.
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Consequently, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national, or global political, economic, business, competitive, market, and regulatory conditions. In particular:
3 | Q1 2025 Form 10-Q
Please refer to Part II, Item IA. “Risk Factors” of this Form 10-Q and Part I, Item IA, “Risk Factors” of our most recently filed Annual Report on Form 10-K, for the year ended December 31, 2024 (“2024 Form 10-K”), for a further description of these and other factors. Although we have attempted to identify important risk factors, there may be other risk factors not presently known to us or that we presently believe are not material that could cause actual results and developments to differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. If any of these risks materialize, or if any of the above assumptions underlying forward-looking statements prove incorrect, actual results and developments may differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. For the reasons described above, we caution against relying on any forward-looking statements. Any forward-looking statement made by us in this Form 10-Q speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should be viewed as historical data.
Investors and others should note that we have in the past announced, and expect in the future to continue to announce, material business and financial information to our investors using our investor relations website (www.investors.dayforce.com), our filings and furnishings with the Securities and Exchange Commission (“SEC”), webcasts, press releases, conference calls, and other channels of distribution that are compliant with SEC regulations.
In the future, we may also announce material business and financial information to our investors using our corporate X (formerly known as Twitter) account (@Dayforce), our blog (www.dayforce.com/blog), and our corporate LinkedIn account (www.linkedin.com/company/dayforce). We use these mediums, including our website, to communicate with investors and the general public about us, our products, and other issues. It is possible that the information that we make available on these mediums may be deemed to be material information. We therefore encourage investors and others interested in us to review the information that we make available through these channels.
4 | Q1 2025 Form 10-Q
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(Unaudited)
March 31,
December 31,
2025
2024
(In millions, except per share data)
Assets
Current assets:
Cash and equivalents
$
557.3
579.7
Trade and other receivables, net
294.4
264.8
Prepaid expenses and other current assets
143.6
137.5
Total current assets before customer funds
995.3
982.0
Customer funds
5,362.7
5,001.5
Total current assets
6,358.0
5,983.5
Right of use lease assets, net
13.1
12.3
Property, plant, and equipment, net
228.5
223.7
Goodwill
2,343.4
2,336.7
Other intangible assets, net
162.4
189.2
Deferred sales commissions
242.2
231.8
Other assets
151.9
139.8
Total assets
9,499.5
9,117.0
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt
582.3
7.3
Current portion of long-term lease liabilities
6.0
5.7
Accounts payable
86.0
77.0
Deferred revenue
40.1
42.3
Employee compensation and benefits
114.4
126.8
Other accrued expenses
35.8
31.5
Total current liabilities before customer funds obligations
864.6
290.6
Customer funds obligations
5,361.8
5,024.2
Total current liabilities
6,226.4
5,314.8
Long-term debt, less current portion
632.4
1,209.1
Employee benefit plans
5.6
5.9
Long-term lease liabilities, less current portion
10.5
10.8
Other liabilities
32.5
30.1
Total liabilities
6,907.4
6,570.7
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, $0.01 par, 500.0 shares authorized, 160.0 and 159.0 shares issued and outstanding, respectively
1.6
Additional paid in capital
3,391.4
3,363.2
Accumulated deficit
(351.3
)
(335.8
Accumulated other comprehensive loss
(449.6
(482.7
Total stockholders’ equity
2,592.1
2,546.3
Total liabilities and stockholders' equity
See accompanying notes to condensed consolidated financial statements.
5 | Q1 2025 Form 10-Q
Condensed Consolidated Statements of Operations
Three Months Ended March 31,
Revenue:
Recurring services
410.5
382.7
Professional services
71.3
48.8
Total revenue
481.8
431.5
Costs and expenses:
Costs of recurring services
98.4
88.4
Costs of professional services
81.3
66.1
Product development and management
59.3
53.1
Selling and marketing
86.8
78.4
General and administrative
71.1
56.0
Depreciation and amortization
53.9
Total costs and expenses
450.8
390.8
Operating profit
31.0
40.7
Interest expense, net
7.9
13.3
Other expense, net
4.0
9.0
Income before income taxes
19.1
18.4
Income tax expense
4.2
11.3
Net income
14.9
7.1
Net income per share:
Basic
0.09
0.05
Diluted
0.04
Weighted average shares outstanding:
159.4
156.9
161.9
159.9
6 | Q1 2025 Form 10-Q
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In millions)
Items of other comprehensive income (loss) before income taxes:
Change in foreign currency translation adjustment
10.7
(22.7
Change in unrealized loss from invested customer funds
24.9
(7.4
Change in pension liability adjustment
5.2
3.2
Other comprehensive income (loss) before income taxes
40.8
(26.9
Income tax expense (benefit), net
7.7
(1.1
Other comprehensive income (loss) after income taxes
33.1
(25.8
Comprehensive income (loss)
48.0
(18.7
7 | Q1 2025 Form 10-Q
Condensed Consolidated Statements of Stockholders’ Equity
Common Stock
AdditionalPaid In
Accumulated
AccumulatedOtherComprehensive
TotalStockholders'
Shares
Capital
Deficit
Loss
Equity
Balance as of December 31, 2024
159.0
—
Issuance of common stock under share-based compensation plans
1.5
4.4
Taxes paid related to the net share settlement of equity awards
(17.1
Repurchases of common stock
(0.5
(30.4
Share-based compensation
40.9
Foreign currency translation
Change in unrealized loss, net of tax of $6.4
18.5
Change in pension liability adjustment, net of tax of $1.3
3.9
Balance as of March 31, 2025
160.0
Balance as of December 31, 2023
156.3
3,151.1
(317.8
(436.7
2,398.2
21.7
(6.4
38.0
Change in unrealized loss, net of tax of ($1.9)
(5.5
Change in pension liability adjustment, net of tax of $0.8
2.4
Balance as of March 31, 2024
157.9
3,204.4
(310.7
(462.5
2,432.8
8 | Q1 2025 Form 10-Q
Condensed Consolidated Statements of Cash Flows
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax benefit
(18.9
(11.8
Amortization of debt issuance costs and debt discount
1.1
Loss on debt extinguishment
4.3
Provision for doubtful accounts
3.8
0.8
Net periodic pension and postretirement cost
4.8
2.6
Share-based compensation expense
45.9
Other
(0.1
Changes in operating assets and liabilities, excluding effects of acquisitions:
Trade and other receivables
(35.4
(48.1
(13.1
(9.6
(6.3
Accounts payable and other accrued expenses
6.6
(1.8
(2.6
(2.3
(17.8
(27.8
Accrued taxes
18.9
17.8
Other assets and liabilities
1.2
(0.2
Net cash provided by operating activities
49.6
9.1
Cash flows from investing activities
Purchases of customer funds marketable securities
(180.0
(139.6
Proceeds from sale and maturity of customer funds marketable securities
86.9
Purchases of marketable securities
(3.7
Proceeds from sale and maturity of marketable securities
6.8
1.0
Expenditures for property, plant, and equipment
(4.0
(3.5
Expenditures for software and technology
(26.1
(24.4
Acquisition costs, net of cash acquired
(173.3
Net cash used in investing activities
(120.1
(290.7
Cash flows from financing activities
Increase in customer funds obligations, net
334.4
1,763.5
Proceeds from issuance of common stock under share-based compensation plans
Taxes paid related to the net share settlement of awards under share-based compensation plans
(30.1
Proceeds from debt issuance
650.0
Repayment of long-term debt obligations
(644.5
Payment of debt refinancing costs
(1.2
(11.4
Net cash provided by financing activities
288.6
1,772.9
Effect of exchange rate changes on cash, restricted cash, and equivalents
(13.5
Net increase in cash, restricted cash, and equivalents
219.1
1,477.8
Cash, restricted cash, and equivalents at beginning of period
3,253.9
3,421.4
Cash, restricted cash, and equivalents at end of period
3,473.0
4,899.2
Reconciliation of cash, restricted cash, and equivalents to the condensed consolidated balance sheets
392.5
Restricted cash
Restricted cash and equivalents included in customer funds
2,915.7
4,505.9
Total cash, restricted cash, and equivalents
9 | Q1 2025 Form 10-Q
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Organization
Dayforce, Inc. and its direct and indirect subsidiaries (also referred to in this report as “we,” “our,” “us,” or the “Company”) offer a broad range of services and software designed to help employers more effectively manage employment processes, such as payroll, payroll-related tax filing, human resource information systems, employee self-service, time and labor management, employee assistance programs, and recruitment and applicant screening. Our technology-based services are typically provided through long-term customer relationships that result in a high level of recurring revenue. While we operate in 19 countries globally, our operations are primarily located in the United States and Canada.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The accounting policies we follow are set forth in Part II, Item 8, Note 2, “Summary of Significant Accounting Policies,” to our audited consolidated financial statements in our 2024 Form 10-K. The following notes should be read in conjunction with these policies and other disclosures in our 2024 Form 10-K.
In the opinion of management, the unaudited condensed consolidated financial statements contained herein reflect all adjustments (consisting only of normal recurring adjustments, except as set forth in these notes to the condensed consolidated financial statements) necessary to present fairly in all material respects the financial position, results of operations, comprehensive income (loss), and cash flows from all periods presented. Interim results are not necessarily indicative of results for a full year.
Recently Issued Accounting Pronouncements from the Financial Accounting Standards Board
In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expenses in the notes of the financial statements, to provide enhanced transparency into the expense captions presented on the condensed consolidated statements of operations. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and may be applied either prospectively or retrospectively. We are currently evaluating the impact that ASU 2024-03 will have on our condensed consolidated financial statements and related disclosures, including the adoption date and transition method.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendment is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the presentational impact that this ASU will have on our consolidated financial statements.
Segment Information
We operate as a single reporting unit, a single operating segment and a single reporting segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and assessing performance. Our CODM is our chief executive officer ("CEO"). Our CODM uses operating profit as the measure of segment profitability to assess performance.
10 | Q1 2025 Form 10-Q
In addition to the information contained in the condensed consolidated statements of operations, the significant segment expense category regularly provided to the CODM is labor and benefits. Both operating profit and labor and benefits expense are used to monitor budget versus actual results to assess performance of the segment. The labor and benefits expense information provided to the CODM primarily consists of base salaries and wages, payroll taxes, healthcare and insurance benefits, and retirement benefits. Expenses related to share-based compensation, incentive compensation, commissions, and external consulting and contract labor are excluded.
The following table sets forth our segment information of revenue, expenses, and operating profit:
(in millions)
Revenue
Labor and benefits
180.3
176.1
Other expenses
270.5
214.7
Reclassifications
Beginning in 2025, we have reclassified depreciation and amortization in our condensed consolidated statements of operations into a single financial statement line item. We made this change to enhance comparability with our peers and to better align reporting with how management assesses performance. Application of this change is being made on a retrospective basis. The following presents the line items in which depreciation and amortization were previously included for the period presented:
Three Months Ended March 31, 2024
Cost of revenue
0.6
29.7
Total depreciation and amortization
Efficiency Plan
On February 26, 2025, we announced an efficiency plan which included a reduction of approximately 5% of our workforce. The headcount reduction was substantially completed by March 31, 2025. In connection with this plan, we incurred non-recurring restructuring charges in the first quarter of 2025 of approximately $29.2 million, including severance payments, employee benefits and related costs, and non-cash charges for share-based compensation. These charges were recorded in all line items in costs and expenses in the condensed consolidated statements of operations, excluding depreciation and amortization. For the three months ended March 31, 2025, there were $10.6 million of restructuring charges paid or otherwise settled. As of March 31, 2025, the liability associated with this plan was $18.6 million. During the remainder of 2025, we expect to incur approximately $4.0 million to $7.0 million of additional non-recurring restructuring charges, including severance payments, employee benefits, and related costs, and non-cash charges for share-based compensation related to this plan.
3. Fair Value Measurements
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Our financial assets and liabilities measured at fair value on a recurring basis were categorized as follows:
March 31, 2025
Level 1
Level 2
Level 3
Total
Available for sale customer funds assets
2,447.0
(a)
Total assets measured at fair value
11 | Q1 2025 Form 10-Q
December 31, 2024
2,327.3
Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
During the three months ended March 31, 2025, we did not re-measure any financial assets or liabilities at fair value on a nonrecurring basis. During the year ended December 31, 2024, assets acquired and liabilities assumed as part of the business combination and liabilities recognized as part of our debt issuance have been measured at fair value on a nonrecurring basis.
4. Customer Funds
Overview
In certain jurisdictions, we collect funds for payment of payroll and taxes; temporarily hold such funds until payment is due; remit the funds to the customers’ employees and appropriate taxing authorities; file federal, state, and local tax returns; and handle related regulatory correspondence and amendments. The customer assets are held in segregated accounts intended for the specific purpose of satisfying customer funding obligations and therefore are not freely available for our general business use. In the U.S. and Canada, these customer funds are held in trusts.
Our customer funds are held and invested with the primary objectives being to protect the principal balance and to ensure adequate liquidity to meet cash flow requirements. Accordingly, we maintain on average approximately 45% to 55% of customer funds in liquidity portfolios with maturities ranging from one to 120 days, consisting of high-quality bank deposits, money market mutual funds, commercial paper, or collateralized short-term investments; and we maintain on average approximately 45% to 55% of customer funds in fixed income portfolios with maturities ranging from 120 days to 10 years, consisting of U.S. Treasury and agency securities, Canada government and provincial securities, as well as highly rated asset-backed, mortgage-backed, municipal, corporate, and bank securities. To maintain sufficient liquidity to meet payment obligations, we also have financing arrangements and may pledge fixed income securities for short-term financing.
Financial Statement Presentation
Investment income from invested customer funds, also referred to as float revenue or float, is a component of our compensation for providing services under agreements with our customers. Investment income from invested customer funds included in recurring revenue was $55.3 million and $60.7 million for the three months ended March 31, 2025, and 2024, respectively. Investment income includes interest income, realized gains and losses from sales of customer funds’ investments, and unrealized credit losses determined to be unrecoverable.
12 | Q1 2025 Form 10-Q
The amortized cost of customer funds as of March 31, 2025, and December 31, 2024, is the original cost of assets acquired. The amortized cost and fair values of investments of customer funds available for sale were as follows:
Amortized
Gross Unrealized
Fair
Cost
Gain
Value
Money market securities, investments carried at cost and other cash equivalents
2,888.4
Available for sale investments:
U.S. government and agency securities
839.5
2.8
(18.1
824.2
Canadian and provincial government securities
468.1
6.9
(2.0
473.0
Corporate debt securities
765.6
11.2
772.8
Asset-backed securities
207.7
209.6
Mortgage-backed securities
109.7
1.3
110.5
Other securities
57.2
0.2
56.9
Total available for sale investments
2,447.8
24.8
(25.6
Invested customer funds
5,336.2
5,335.4
Receivables
27.3
Total customer funds
5,363.5
2,650.9
818.3
0.5
(27.1
791.7
449.2
4.6
(3.6
450.2
734.7
(7.0
735.4
202.9
1.9
(0.6
204.2
83.5
0.1
(1.3
82.3
64.3
(0.9
63.5
2,352.9
(40.5
5,003.8
4,978.2
23.3
5,027.1
The following represents the gross unrealized losses and the related fair value of the investments of customer funds available for sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.
Less than 12 months
12 months or more
UnrealizedLosses
FairValue
(1.4
135.4
(16.7
410.4
545.8
173.4
(0.3
253.4
310.6
17.9
(0.4
42.0
59.9
22.9
7.4
30.3
3.5
41.4
44.9
236.9
(23.6
928.0
1,164.9
13 | Q1 2025 Form 10-Q
Management does not believe that any individual unrealized loss was unrecoverable as of March 31, 2025. The unrealized losses are primarily attributable to changes in interest rates and not to credit deterioration. We currently do not intend to sell or expect to be required to sell the securities before the time required to recover the amortized cost.
The amortized cost and fair value of investment securities available for sale at March 31, 2025, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or to prepay obligations with or without call or prepayment penalties.
Fair Value
Due in one year or less
3,275.5
3,273.2
Due in one to three years
1,002.1
988.5
Due in three to five years
671.6
683.2
Due after five years
387.0
390.5
5. Trade and Other Receivables, Net
Trade and other receivables, net, consist of the following:
Trade receivables from customers
244.0
226.9
Interest receivable from invested customer funds
23.0
16.8
Dayforce Wallet on-demand pay receivables
3.1
9.5
Other (a)
47.8
34.4
Total gross receivables
317.9
287.6
Less: reserve for sales adjustments and allowance for doubtful accounts
(23.5
(22.8
Receivables Securitization Program
We are party to a receivables securitization program (the "Receivables Securitization Program") with MUFG Bank, Ltd. (“MUFG”), under which MUFG acts as an agent to facilitate the sale of certain Dayforce receivables (the “Receivables”) to certain investors unaffiliated with Dayforce (the “Purchasers”). The sale of these Receivables to the Purchasers is accounted for as a sale of assets under Accounting Standards Codification ("ASC") 860, Transfers and Servicing, and as such the Receivables are derecognized from our condensed consolidated balance sheets. We continue to service any Receivables sold to the Purchasers. In connection with the Receivables Securitization Program, we sell certain trade and other receivables to special purpose entities (the “SPEs”), which are wholly-owned by Dayforce, which in turn sell a portion of these receivables to the Purchasers on a monthly basis. Per the terms of the Receivables Purchase Agreement between us and MUFG entered into in connection with the Receivables Securitization Program, we may have a maximum of $150.0 million of accounts receivable sold to the Purchasers outstanding at any point in time. The portion of the receivables held by the SPEs, but not sold to the Purchasers, serve as collateral to the Purchasers on the sold Receivables, and are considered restricted accounts receivable. Cash receipts from the sale of Receivables to the Purchasers are reflected in net cash provided by operating activities in the condensed consolidated statements of cash flows.
As of March 31, 2025, there was $234.9 million of restricted accounts receivable held by the SPEs that is reported within trade and other receivables, net on our condensed consolidated balance sheets. Of the Receivables sold to the Purchasers since the inception of the Receivables Securitization Program, $44.0 million remained outstanding as of March 31, 2025.
14 | Q1 2025 Form 10-Q
6. Goodwill and Other Intangible Assets, Net
Our goodwill balance was $2,343.4 million and $2,336.7 million as of March 31, 2025 and December 31, 2024, respectively. The change in goodwill was due to fluctuations in foreign currency exchange rates.
Other Intangible Assets, Net
Other intangible assets, net consisted of the following:
Gross CarryingAmount
AccumulatedAmortization
Net
Weighted Average Remaining Amortization Period
(In years)
Amortized - definite lived:
Customer lists and relationships
291.9
(242.4
49.5
Trade name
176.6
(148.8
27.8
0.3
Technology
304.4
(223.5
80.9
5.3
Total definite lived intangible assets
772.9
(614.7
158.2
4.5
Unamortized - indefinite lived:
n/a
Total other intangible assets
778.9
(616.5
291.1
(239.8
51.3
6.2
176.4
(127.3
49.1
300.3
(215.7
84.6
767.8
(582.8
185.0
773.8
(584.6
Amortization expense related to definite lived intangible assets was $28.7 million and $28.4 million for the three months ended March 31, 2025, and 2024, respectively.
15 | Q1 2025 Form 10-Q
7. Debt
Our debt obligations consisted of the following:
Term Debt, interest rate of 6.3% and 7.1%, respectively
645.1
646.8
Revolving Credit Facility ($350.0 million available capacity less $0.2 million reserved for letters of credit)
Convertible Senior Notes, interest rate of 0.25%
575.0
Line of Credit ($0.6 million and $0.9 million letter of credit capacity, respectively, which were fully utilized)
Financing lease liabilities
6.3
6.5
Total debt
1,226.4
1,228.3
Less unamortized debt issuance costs and discount
11.7
11.9
Less current portion of long-term debt
Accrued interest and fees related to the debt obligations was $5.4 million and $8.6 million as of March 31, 2025 and December 31, 2024, respectively, and is included within other accrued expenses in our condensed consolidated balance sheets.
Senior Secured Credit Facility
On February 29, 2024, we completed the refinancing of our debt by entering into a new credit agreement, which was subsequently amended on February 14, 2025 (the "Credit Agreement") to effect a refinancing. Pursuant to the terms of the Credit Agreement, we became the borrower of (i) a $650.0 million senior secured term loan facility (the “Term Debt”) and (ii) a $350.0 million senior secured revolving credit facility (the “Revolving Credit Facility”, and collectively, with the Term Debt, the “Senior Secured Credit Facility”). The Term Debt and the Revolving Credit Facility will mature on March 1, 2031 and March 1, 2029, respectively. Our obligations under the Senior Secured Credit Facility are secured by a lien on substantially all of our assets, as well as guarantees and pledged assets by our domestic subsidiaries, subject to certain exceptions.
The Term Debt is subject to amortization of principal, payable in equal quarterly installments on the last day of each fiscal quarter, commencing on September 30, 2024, with 0.25% of the aggregate principal amount of all initial term loans outstanding at closing to be payable each quarter prior to the maturity date of the Term Debt. The remaining initial aggregate principal amount will be payable at the maturity date of the Term Debt. The Term Debt bears interest at rates based upon, at our option, either (i) a base rate plus an applicable percentage of 1.0% or (ii) a term Secured Overnight Financing Rate ("SOFR") plus an applicable percentage of 2.0%.
The Revolving Credit Facility bears interest at rates based upon, at our option, either (i) the base rate or the Canadian prime rate, as applicable, plus an applicable percentage of between 1.0% and 1.5% per annum, depending on our consolidated first lien leverage ratio or (ii) the term SOFR or the Canadian Overnight Repo Rate Average ("CORRA") rate plus an applicable percentage of between 2.25% and 2.75% per annum, depending on our consolidated first lien leverage ratio. The February 2025 amendment to the Senior Secured Credit Facility reduced the base rate applicable percentage to between 1.0% and 1.5%, and reduced the SOFR applicable percentage to between 2.0% and 2.5%.
In connection with the refinancing of our debt in February 2024, we capitalized $7.5 million of additional financing costs and recognized a loss on debt extinguishment of $4.3 million within interest expense, net in our condensed consolidated statements of operations for the three months ended March 31, 2024.
The Senior Secured Credit Facility documents contain a requirement that we maintain a ratio of first lien net leverage to Credit Facility EBITDA below specified levels on a quarterly basis; however, such requirement is applicable only if more than 35% of the Revolving Credit Facility is utilized. As of March 31, 2025, no portion of the available capacity of the Revolving Credit Facility was drawn.
16 | Q1 2025 Form 10-Q
Convertible Senior Notes
In March 2021, we issued $575.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due March 2026 in a private offering to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act, and pursuant to exemptions from the prospectus requirements of applicable Canadian securities laws, including the exercise in full by the initial purchasers of their option to purchase an additional $75.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due 2026 (collectively, the “Convertible Senior Notes”). The Convertible Senior Notes bear interest at a rate of 0.25% per year and interest is payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021. The Convertible Senior Notes mature on March 15, 2026, unless earlier converted, redeemed, or repurchased. The total net proceeds from the offering, after deducting initial purchase discounts and other debt issuance costs, were $561.8 million.
The following table presents details of the Convertible Senior Notes:
Initial Conversion Rate per $1,000 Principal
Initial Conversion Price per Share
7.5641 shares
132.20
The Convertible Senior Notes will be convertible at the option of the holders at any time only under certain circumstances as outlined in Part II, Item 8, Note 10, “Debt,” to our audited consolidated financial statements in our 2024 Form 10-K. The conditions allowing holders of the Convertible Senior Notes to convert have not been met and therefore were not convertible as of March 31, 2025.
On December 30, 2021, we notified the holders of the Convertible Senior Notes of our irrevocable election to settle the conversion obligation in connection with the Convertible Senior Notes submitted for conversion on or after January 1, 2022, or at maturity with a combination of cash and shares of our common stock. Generally, under this settlement method, the conversion value will be settled in cash in an amount no less than the principal amount being converted, and any excess of the conversion value over the principal amount will be settled, at our election, in cash or shares of common stock.
The Convertible Senior Notes are accounted for as a single liability, and the carrying amount of the Convertible Senior Notes was $572.0 million as of March 31, 2025, with principal of $575.0 million, net of issuance costs of $3.0 million. The Convertible Senior Notes are included within current portion of long-term debt in our condensed consolidated balance sheets as of March 31, 2025. The issuance costs related to the Convertible Senior Notes are being amortized to interest expense over the contractual term of the Convertible Senior Notes at an effective interest rate of 5.1%.
Interest expense recognized related to the Convertible Senior Notes was as follows:
Contractual interest expense
0.4
Amortization of debt issuance costs
0.7
Capped Calls
In March 2021, in connection with the pricing of the Convertible Senior Notes, we entered into capped call transactions with the option counterparties (the “Capped Calls”). The Capped Calls each have an initial strike price of $132.20 per share, and an initial cap price of $179.26 per share, both subject to certain adjustments. The capped call transactions are generally expected to reduce potential dilution to our common stock upon any conversion of the Convertible Senior Notes and/or offset any potential cash payments we would be required to make in excess of the principal amount of converted Convertible Senior Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. For accounting purposes, the Capped Calls are separate transactions, and not part of the terms of the Convertible Senior Notes. As the Capped Calls qualify for a scope exception from derivative accounting for instruments that are both indexed to the issuer's own stock and classified in stockholder’s equity in our condensed consolidated balance sheets, we have recorded an amount of $33.0 million as a reduction to additional paid-in capital which will not be remeasured. This represents the premium of $45.0 million paid for the purchase of the Capped Calls, net of the deferred tax impact of $12.0 million.
17 | Q1 2025 Form 10-Q
Future Payments and Maturities of Debt
The future principal payments and maturities of our indebtedness, excluding financing lease obligations, are as follows:
Years Ending December 31,
Amount
2026
581.5
2027
2028
2029
Thereafter
614.3
1,220.1
Fair Value of Debt
Our debt does not trade in active markets and was considered to be a Level 2 measurement at March 31, 2025. The fair value of the Term Debt was based on the borrowing rates currently available to us for bank loans with similar terms, maturities, and volumes as our debt. The fair value of the Convertible Senior Notes was determined based on the closing trading price per $1,000 of the Convertible Senior Notes as of the last day of trading for the period and is primarily affected by the trading price of our common stock and market interest rates. The fair value of our debt was estimated to be $1.19 billion and $1.20 billion as of March 31, 2025, and December 31, 2024, respectively.
8. Employee Benefit Plans
Our benefit plans include defined contribution plans for the majority of our employees.
We also maintain defined benefit pension plans covering certain of our current and former U.S. employees (the U.S. pension plan and nonqualified defined benefit plan, collectively referred to as our “defined benefit plans”), as well as a postretirement benefit plan for certain U.S. retired employees that include heath care and life insurance benefits.
The U.S. defined benefit plans were terminated with an effective date of September 30, 2024. We are in the process of finalizing the wind down of the plans, which includes transferring the associated liabilities to an insurance company, which we expect will be completed in 2025. These steps include settling all future obligations under our defined pension plans through a combination of lump sum payments to eligible, electing participants and the transfer of any remaining benefits to a third-party insurance company through a group annuity contract.
The components of net periodic cost (gain) for our defined benefit pension plans and for our postretirement benefit plan are included in the following tables:
Interest cost
4.1
Actuarial loss amortization
5.0
3.3
Less: Expected return on plan assets
(4.4
Net periodic pension cost
3.0
Actuarial gain amortization
Net periodic postretirement benefit gain
18 | Q1 2025 Form 10-Q
9. Share-Based Compensation
Our share-based compensation consists of stock options, restricted stock units (“RSU”), and performance stock units (“PSU”), and is used to compensate certain employees and non-employee directors. We also offer an employee stock purchase plan to eligible employees.
As of March 31, 2025, there were 12.6 million stock options, RSUs, and PSUs outstanding and 6.6 million shares available for grant under approved equity compensation plans.
Total share-based compensation expense was $45.9 million and $38.0 million for the three months ended March 31, 2025, and 2024, respectively. As of March 31, 2025, there was $310.7 million of share-based compensation expense related to unvested share-based equity awards not yet recognized, which is expected to be recognized over a weighted average period of 2.2 years.
Performance-Based Stock Options
Performance-based stock option activity was as follows:
WeightedAverageExercisePrice(per share)
WeightedAverageRemainingContractualTerm(in years)
AggregateIntrinsicValue(in millions)
Outstanding at December 31, 2024
1,729,781
65.26
5.4
12.8
Granted
Exercised
Forfeited or expired
Outstanding at March 31, 2025
5.1
Exercisable at March 31, 2025
979,781
Performance Stock Units
PSU activity was as follows:
1,091,885
576,401
Vested and released
(451,070
Forfeited or canceled
(75,664
1,141,552
Releasable at March 31, 2025
Term-Based Stock Options
Term-based stock option activity was as follows:
4,477,645
56.53
4.7
79.7
(19,378
(41.64
(3,375
(68.46
4,454,892
56.59
32.7
4,374,166
56.03
19 | Q1 2025 Form 10-Q
For most term-based stock options, we estimated an expected term of 7.0 years, based on the vesting period and contractual life.
Restricted Stock Units
RSU activity was as follows:
4,110,131
2,493,697
(1,246,400
(70,901
5,286,527
Global Employee Stock Purchase Plan
Our GESPP activity was as follows:
Period Ended
Shares Issued
Purchase Price(per share)
69,467
49.58
A total of 1.1 million shares of common stock were available for future issuances under the plan as of March 31, 2025.
10. Revenue and Revenue-Related Activity
Disaggregation of Revenue
Recurring services:
Dayforce recurring
323.1
282.4
Powerpay recurring
19.0
20.5
Other recurring
Float
55.3
60.7
Total recurring services
Prior year amounts presented in the table above have been reclassified to conform to the current year presentation. The presentation was changed to enhance comparability with our peers and to better align reporting with how management assesses performance.
20 | Q1 2025 Form 10-Q
Contract Balances
In accordance with ASC 606, a contract asset is generally recorded when revenue recognized for professional service performance obligations exceed the contractual amount of billings for implementation related professional services. Additions to contract assets generally represent increases to professional services revenues, and reductions to contract assets generally represent reductions to recurring services revenue during the initial contract term. Contract assets expected to be recognized in revenue within twelve months are included within prepaid expenses and other current assets, with the remaining contract assets included within other assets on our condensed consolidated balance sheets. The changes in total contract assets were as follows:
Contract assets, beginning of period
100.2
89.0
Additions
22.4
Reductions
(22.6
(19.5
Contract assets, end of period
101.0
91.3
Deferred Revenue
Deferred revenue primarily consists of payments received in advance of revenue recognition. The changes in deferred revenue were as follows:
Deferred revenue, beginning of period
40.2
New billings
285.4
213.0
Acquired billings
8.6
Revenue recognized
(286.7
(215.4
Effect of exchange rate
Deferred revenue, end of period
45.5
Deferred Sales Commissions
In accordance with ASC 606, sales commissions paid based on the annual contract value of a signed customer contract are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions paid based on the annual contract value are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be ten years. Amortization expense for deferred sales commissions was $8.0 million and $6.3 million for the three months ended March 31, 2025, and 2024, respectively.
Transaction Price for Remaining Performance Obligations
As of March 31, 2025, approximately $1.28 billion of revenue is expected to be recognized over the next three years from remaining performance obligations, which represents contracted revenue for recurring services and fixed price professional services, primarily implementation services, that has not yet been recognized, including deferred revenue and unbilled amounts that will be recognized as revenue in future periods. Performance obligations that are billed and recognized as they are delivered, primarily professional services contracts that are on a time and materials basis, are excluded from the transaction price for remaining performance obligations disclosed above.
21 | Q1 2025 Form 10-Q
11. Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss were as follows:
ForeignCurrencyTranslationAdjustment
Unrealized Gain(Loss) fromInvestedCustomer Funds
PensionLiabilityAdjustment
(297.4
(27.6
(157.7
Other comprehensive income before income taxes and reclassifications
36.3
(7.7
Reclassifications to earnings
Other comprehensive income
(9.1
(153.8
12. Income Taxes
Our income tax provision represents federal, state, and international taxes on our income recognized for financial statement purposes and includes the effects of temporary differences between financial statement income and income recognized for tax return purposes. Deferred tax assets and liabilities are recorded for temporary differences between the financial reporting basis and the tax basis of assets and liabilities. We record a valuation allowance to reduce our deferred tax assets to reflect the net deferred tax assets that we believe will be realized. In assessing the likelihood that we will be able to recover our deferred tax assets and the need for a valuation allowance, we consider all available evidence, both positive and negative, including historical levels of pre-tax book income, expiration of net operating losses, changes in our debt and equity structure, expectations and risks associated with estimates of future taxable income, ongoing prudent and feasible tax planning strategies, as well as current tax laws. As of March 31, 2025, we have a valuation allowance of $39.4 million against certain deferred tax assets consisting primarily of $27.7 million attributable to other deferred tax assets consisting largely of foreign intangible assets and $11.7 million attributable to state and foreign net operating loss carryovers.
We recorded income tax expense of $4.2 million during the three months ended March 31, 2025, which included tax expense of $4.0 million attributable to current operations, $2.1 million attributable to state income taxes, $0.8 million attributable to Global Intangible Low Taxed Income, partially offset by $3.2 million of valuation allowance released. As a percentage of income before income taxes as compared to the three months ended March 31, 2024, income tax expense decreased due to a reduction in valuation allowances, and lower tax expense related to share-based compensation and the Global Intangible Low Taxed Income regime.
The total amount of unrecognized tax benefits as of March 31, 2025, and December 31, 2024, was $2.9 million and $2.7 million, respectively. The $2.9 million represents the amount that, if recognized, would impact our effective income tax rate as of March 31, 2025. We adjust these reserves when facts and circumstances change, such as the closing of tax audits or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and operating results.
We file income tax returns in the U.S. federal jurisdiction, various states, and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2020.
13. Commitments and Contingencies
Legal Matters
We are subject to claims and a number of judicial and administrative proceedings considered normal in the course of our current and past operations, including employment-related disputes, contract disputes, disputes with our competitors, intellectual property disputes, government audits and proceedings, customer disputes, and tort claims. In some proceedings, the claimant seeks damages as well as other relief, which, if granted, would require substantial expenditures on our part.
22 | Q1 2025 Form 10-Q
Our general terms and conditions in customer contracts frequently include a provision indicating we will indemnify and hold our customers harmless from and against any and all claims alleging that the services and materials furnished by us violate any third party’s patent, trade secret, copyright, or other intellectual property right. We are not aware of any material pending litigation concerning these indemnifications.
Some of these matters raise difficult and complex factual and legal issues and are subject to many uncertainties, including the facts and circumstances of each particular action, and the jurisdiction, forum, and law under which each action is proceeding. Because of these complexities, final disposition of some of these proceedings may not occur for several years. As such, we are not always able to estimate the amount of our possible future liabilities, if any.
There can be no certainty that we may not ultimately incur charges in excess of presently established or future financial accruals or insurance coverage. Although occasional adverse decisions or settlements may occur, it is management’s opinion that the final disposition of these proceedings will not, considering the merits of the claims and available resources or reserves and insurance, and based upon the facts and circumstances currently known, have a material adverse effect on our financial position or results of operations.
14. Net Income per Share
We compute net income per share of common stock using the treasury stock method. The basic and diluted net income per share computations were calculated as follows:
Numerator:
Denominator:
Weighted average shares outstanding - basic
Effect of dilutive equity instruments
2.5
Weighted average shares outstanding - diluted
Net income per share - basic
Net income per share - diluted
The following potentially dilutive weighted average shares were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive:
Stock options
Restricted stock units
23 | Q1 2025 Form 10-Q
The shares underlying the conversion option in the Convertible Senior Notes were not considered in the calculation of diluted net income per share as the effect would have been anti-dilutive. Based on the initial conversion price, the entire outstanding principal amount of the Convertible Senior Notes as of March 31, 2025 would have been convertible into approximately 4.3 million shares of our common stock. Since we expect to settle the principal amount of the Convertible Senior Notes in cash, we use the treasury stock method for calculating any potential dilutive effect on diluted net income per share, if applicable. As a result, only the amount by which the conversion value exceeds the aggregate principal amount of the Convertible Senior Notes (the “conversion spread”) is considered in the diluted earnings per share computation. The conversion spread has a dilutive impact on diluted net income per share when the average market price of our common stock for a given period exceeds the initial conversion price of $132.20 per share for the Convertible Senior Notes. We excluded the potentially dilutive effect of the conversion spread of the Convertible Senior Notes as the average market price of our common stock during the three months ended March 31, 2025 was less than the conversion price of the Convertible Senior Notes. In connection with the issuance of the Convertible Senior Notes, we entered into Capped Calls, which were not included for purposes of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive.
15. Share Repurchase Program
On July 31, 2024, we announced that our Board of Directors had approved a share repurchase program with authorization to purchase up to $500 million of our common stock.
Share repurchase activity was as follows:
Three Months Ended March 31, 2025
Total number of shares purchased
518,909
Average price paid per share (a)
58.65
Total cost of shares purchased
30,436,397
24 | Q1 2025 Form 10-Q
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion and analysis of our financial condition and results of operations as of, and for, the periods presented and should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included elsewhere in this report and with our audited consolidated financial statements and notes thereto in our 2024 Form 10-K. This discussion and analysis contains forward-looking statements, including statements regarding industry outlook, our expectations for the future of our business, and our liquidity and capital resources as well as other non-historical statements. These statements are based on current expectations and are subject to numerous risks and uncertainties, including but not limited to the risks and uncertainties described in Part II, Item 1A, “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by these forward-looking statements. Any reference to a “Note” in this discussion relates to the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this report unless otherwise indicated.
Dayforce, Inc. is a global human capital management (“HCM”) software company. We categorize our solutions into two categories: recurring services and professional services. Recurring services are generated from HCM solutions that are primarily delivered via two offerings: Dayforce, our flagship HCM platform, and Powerpay, a human resources (“HR”) and payroll solution for the Canadian small business market. Revenue from our recurring services solutions include investment income generated from holding customer funds, also referred to as float revenue or float.
Dayforce provides HR, payroll and tax, benefits, workforce management, and talent management functionality. Our platform is used by organizations of all sizes, from small businesses to global organizations, regardless of industry, to optimize management of the entire employee lifecycle, including attracting, hiring, engaging, paying, and developing their people. Dayforce was built as a single application from the ground up that combines a modern, consumer-grade user experience with proprietary application architecture, including a single employee record and a rules engine spanning all areas of HCM. Dayforce provides continuous real-time calculations across all modules to enable, for example, payroll administrators access to data through the entire pay period, and managers access to real-time data to optimize work schedules. Our platform is designed to drive efficiencies for our customers and their employees by improving HCM decision-making processes, streamlining workflows, revealing strategic organizational insights, and simplifying legislative compliance. The platform is designed to ease administrative work for both employees and managers, creating opportunities for companies to increase employee engagement. We sell Dayforce through our direct sales force on a subscription per-employee, per-month ("PEPM") basis. Our subscriptions are typically structured with an initial fixed term of between three and five years, with evergreen renewal thereafter.
Our Business Model
Our business model focuses on supporting the rapid growth of Dayforce and maximizing the lifetime value of our Dayforce customer relationships. Our ratable recognition of subscription revenues over the term of the subscription period combined with our high revenue retention rates yield a high level of visibility into our future revenues. The profitability of a customer depends, in large part, on how long they have been a customer. We estimate that it takes approximately two years before we are able to recover our implementation, customer acquisition, and other direct costs on a new Dayforce customer contract.
Over the lifetime of the customer relationship, we have the opportunity to realize additional PEPM revenue, both as the customer grows or offers the Dayforce solution to additional employees, and also by selling additional functionality to existing customers that do not currently utilize all of the modules we offer. We also incur costs to manage the account, to retain customers, and to sell additional functionality, however, these costs are significantly less than the costs initially incurred to acquire and to take customers live.
Global Events
We are closely monitoring changes in international trade relations, economic policies, and legislation and regulations, which could adversely impact the global economy and our operating results. Currently, we are not experiencing any material impact to our operating results as a result of the direct impact of tariffs on goods to certain countries from which we export hardware for our time clocks. However, prolonged changes and uncertainty in interest rates and foreign exchange rates, and shifts in the overall macroeconomic demand for our services could adversely impact our operating results.
25 | Q1 2025 Form 10-Q
Additional discussion of the ways in which adverse economic and market conditions could affect our business, operating results, or financial condition is referenced below and contained in Part II, Item 1A, “Risk Factors” in this Form 10-Q and in Part I, Item 1A. "Risk Factors” in our 2024 Form 10-K.
How We Assess Our Performance
In assessing our performance, we consider a variety of annual and quarterly performance indicators in addition to revenue and net income. Set forth below are descriptions of our quarterly key performance measures. Additional information on our annual performance measures is described in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the heading "How We Assess Our Performance" contained in our 2024 Form 10-K. Please refer to the "Non-GAAP Financial Measures" and “Results of Operations” sections below for further description and definitions of certain performance indicators which are considered non-GAAP financial measures.
Live Dayforce Customers
We use the number of live Dayforce customers as an indicator of future revenue and the overall performance of the business and to assess the performance of our implementation services.
Dayforce Recurring Revenue Per Customer
We use Dayforce recurring revenue per customer, a non-GAAP financial measure, as an indicator of the average size of our Dayforce customer, which we believe is also useful to management and investors. We calculate and monitor Dayforce recurring revenue per customer on a quarterly basis. Our Dayforce recurring revenue per customer may fluctuate as a result of a number of factors, including the number of live Dayforce customers and the number of modules purchased by each customer.
Constant Currency Revenue
We present percentage change in revenue on a constant currency basis, a non-GAAP financial measure, to assess how our underlying business performed, excluding the effect of foreign currency rate fluctuations, which we believe is useful to management and investors. The average U.S. dollar to Canadian dollar, Australian dollar, and Great British pound foreign exchange rates were $1.44, $1.59, and $0.79 for the three months ended March 31, 2025, respectively, compared to$1.35, $1.52, and $0.79 for the three months ended March 31, 2024, respectively.
Adjusted Operating Profit, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, and Free Cash Flow Margin
We believe that Adjusted operating profit, Adjusted EBITDA, Adjusted EBITDA margin, free cash flow, and free cash flow margin, non-GAAP financial measures, are useful to management and investors as supplemental measures to evaluate our overall operating performance. Adjusted operating profit, free cash flow, and free cash flow margin are components of certain management compensation plans, and these metrics are used by management to assess performance and to compare our operating performance to our competitors. Management believes that these non-GAAP financial measures are helpful in highlighting management performance trends because these metrics exclude the results of decisions that are outside the normal course of our business operations. Additionally, we believe that the non-GAAP financial measure free cash flow and free cash flow margin are meaningful to investors because they are measures of liquidity that provide useful information in understanding and evaluating the strength of our liquidity and future ability to generate cash that can be used for strategic opportunities or investing in our business. The reduction of capital expenditures facilitates comparisons of our liquidity on a period-to-period basis and excludes items that management does not consider to be indicative of our liquidity.
26 | Q1 2025 Form 10-Q
Results of Operations
Three Months Ended March 31, 2025 Compared With Three Months Ended March 31, 2024
Increase/(Decrease)
Percentage of Revenue
%
85.2
88.7
22.5
46.1
14.8
50.3
100.0
10.0
20.4
15.2
16.9
15.3
8.4
18.0
18.2
15.1
27.0
13.0
Total cost and expenses
60.0
15.4
93.6
90.6
(9.7
(23.8
)%
6.4
9.4
Interest income
(4.8
12.7
(1.0
Interest expense
18.8
(6.1
(32.4
(5.0
(55.6
2.1
(7.1
(62.8
0.9
7.8
109.9
Revenue. The following table sets forth certain information regarding our revenues for the periods presented:
Percentage change in revenue
Impact ofchanges inforeigncurrency (a)
Percentage change in revenue on a constant currency basis (a)
2025 vs. 2024
14.4
(1.5
15.9
(7.3
(31.4
(2.1
(29.3
(8.9
(7.6
(1.7
49.8
(1.9
13.6
Total revenue, excluding float
426.5
370.8
15.0
17.1
27 | Q1 2025 Form 10-Q
Total revenue increased $50.3 million, or 11.7%, to $481.8 million for the three months ended March 31, 2025, compared to $431.5 million for the three months ended March 31, 2024. This increase was primarily attributable to the increase in the number of live Dayforce customers and the increase in Dayforce recurring revenue per customer. The number of live Dayforce customers increased 5.4% to 6,929 at March 31, 2025 from 6,575 at March 31, 2024. Additionally, for the trailing twelve months ended March 31, 2025, Dayforce recurring revenue per customer grew to $167,600 compared to $150,362 for the comparable period in 2024. Please refer to the "How We Assess Performance" and “Non-GAAP Financial Measures” section for discussion of and the definition of Dayforce recurring revenue per customer.
The increase in total revenue was partially offset by a decrease in float revenue, which was driven by a decrease in average yield of 60 basis points compared to the three months ended March 31, 2024. This was partially offset by a 5.4% increase in average float balance for our customer funds for the three months ended March 31, 2025, which increased to $5.86 billion, compared to $5.56 billion for the three months ended March 31, 2024.
Costs of recurring services. The increase of $10.0 million, or 11.3%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was due to a $6.3 million increase in labor and employee benefit expense, including increases in severance and consulting and contract labor, as well as a $3.7 million increase of certain costs related to product partnerships.
Costs of professional services. The increase of $15.2 million, or 23.0%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to a $15.0 million increase in labor and benefit expenses, including increases in consulting and contract labor, severance, employee labor and employee benefits, and share-based compensation. These increases were primarily the result of efforts to implement new customers and additional modules.
Product development and management expense. The increase of $6.2 million, or 11.7%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to a $5.7 million increase in labor and benefit expenses, including increases in severance, share-based compensation, incentives, and consulting and contract labor.
For the three months ended March 31, 2025, and 2024, our investment in software development was $55.8 million and $50.4 million, respectively, consisting of $33.4 million and $28.4 million of research and development expense, and $22.4 million and $22.0 million in capitalized software development costs, respectively.
Selling and marketing expense. The increase of $8.4 million, or 10.7%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to a $10.6 million increase in labor and benefit expenses, including increases in severance, share-based compensation, employee labor and benefits, commissions, and incentives. These increases were partially offset by a reduction of $2.6 million in consulting and contract labor and advertising expenses. The reduction in advertising expenses was primarily related to the transition of the Company's name to Dayforce, Inc. and the related branding campaign in the prior year.
General and administrative expense. The increase of $15.1 million, or 27.0%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to a $14.1 million increase in labor and benefit expenses, including increases in share-based compensation, severance, employee labor and benefits, and incentives.
Depreciation and amortization expense. The increase of $5.1 million, or 10.5%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily higher as we continue to capitalize and subsequently amortize Dayforce related and other development costs.
Operating profit. For the three months ended March 31, 2025, operating profit was $31.0 million, compared to $40.7 million for the three months ended March 31, 2024. Operating profit decreased as the increase in revenue was more than offset by higher labor and benefits expenses, primarily severance related.
Interest income. The decrease of $0.7 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to lower interest rates during the period.
28 | Q1 2025 Form 10-Q
Interest expense. The decrease of $6.1 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to a $4.3 million loss on debt extinguishment recognized during the three months ended March 31, 2024 related to the refinancing of certain credit agreements. Please refer to Part I, Item 1. Note 7, "Debt" for additional information.
Other expense, net. The decrease of $5.0 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to a decrease of foreign currency translation losses (gains) of $8.3 million, partially offset by an increase in net periodic pension expense of $3.0 million.
Income tax expense. The decrease of $7.1 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to decreases of $3.2 million of valuation allowances, $2.8 million of share-based compensation, and $2.3 million related to the Global Intangible Low Taxed Income, partially offset by an increase of $1.3 million change in state income taxes.
Net income. We realized net income of $14.9 million for the three months ended March 31, 2025, compared to $7.1 million for the three months ended March 31, 2024. The change was primarily due to an increase in revenue, lower interest expense, and lower other expense, net, partially offset by increases in total costs and expenses.
Liquidity and Capital Resources
Our primary sources of liquidity are our existing cash and equivalents, cash provided by operating activities, availability under our Revolving Credit Facility and the Receivables Securitization Program, and proceeds from debt issuances and equity offerings. As of March 31, 2025, we had cash and equivalents of $557.3 million and our total debt was $1,226.4 million.
Our primary liquidity needs are related to funding of general business requirements, including the payment of interest and principal on our debt, capital expenditures, fulfilling our contractual commitments, product development, funding Dayforce Wallet on-demand pay requests on behalf of our customers, and executing purchases under our share repurchase program. From time to time, we have made investments in businesses or acquisitions of companies, which are also liquidity needs.
We believe that our cash flow from operations, available cash and equivalents, and availability under our Revolving Credit Facility and the Receivables Securitization Program will be sufficient to meet our liquidity needs for the next twelve months and for the foreseeable future. Our liquidity and our ability to meet our obligations and to fund our capital requirements, Dayforce Wallet on-demand pay requests, and share repurchases are also dependent on our future financial performance, which is subject to general economic, financial, and other factors that are beyond our control. Accordingly, we cannot provide assurance that our business will generate sufficient cash flow from operations or that future borrowings will be available from additional indebtedness or otherwise to meet our liquidity needs. If we decide to pursue one or more significant acquisitions, we may incur additional debt or raise additional equity to finance such acquisitions, which would result in additional expenses and/or dilution.
Our customer funds are held and invested with the primary objectives being to protect the principal balance and to ensure adequate liquidity to meet cash flow requirements. Our cash flows can vary significantly due to purchases of and proceeds from the sale and maturity of customer fund marketable securities, as well as the carrying value of customer fund accounts as of period end dates due to several factors, including the specific day of the week the period ends, which impacts the timing of funds collected from customers and payments made to satisfy customer obligations to employees, taxing authorities, and others. The customer assets are held in segregated accounts intended for the specific purpose of satisfying customer funding obligations and therefore are not freely available for our general business use, however, are evaluated and tracked separately by management. Please refer to Part 1, Item 1, Note 4, “Customer Funds” for further discussion of these funds.
29 | Q1 2025 Form 10-Q
Cash Flows
The table below summarizes the activity within the condensed consolidated statements of cash flows:
Restricted cash and equivalents
4,506.7
Operating Activities
Net cash provided by operating activities was $49.6 million for the three months ended March 31, 2025 compared to $9.1 million for the three months ended March 31, 2024. For both periods, cash inflows from operating activities are primarily generated from the subscriptions of our solutions. Cash outflows from operating activities for both periods are primarily comprised of personnel-related expenditures, including the payout of year-end employee compensation, and the renewals of prepaid annual contracts that are integral to our business operations. The positive cash inflows in both periods is primarily due to our growing revenue, partially offset by our operating costs, mainly, investment in our sales force to support our growth initiatives and those product development and management costs which are not eligible for capitalization.
Investing Activities
During the three months ended March 31, 2025, net cash used in investing activities was $120.1 million, consisting of purchases of customer funds marketable securities of $180.0 million, capital expenditures of $30.1 million and purchases of marketable securities of $3.7 million, partially offset by proceeds from the sale and maturity of customer funds marketable securities of $86.9 million and proceeds from the sale and maturity of marketable securities of $6.8 million. Our capital expenditures included $26.1 million for software and technology and $4.0 million for property, plant, and equipment.
During the three months ended March 31, 2024, net cash used in investing activities was $290.7 million, consisting of acquisition costs, net of cash acquired of $173.3 million, purchases of customer funds marketable securities of $139.6 million, capital expenditures of $27.9 million, and purchases of marketable securities of $0.5 million, partially offset by proceeds from the sale and maturity of customer funds marketable securities of $49.6 million and proceeds from the sale and maturity of marketable securities of $1.0 million. Our capital expenditures included $24.4 million for software and technology and $3.5 million for property, plant, and equipment.
Financing Activities
Net cash provided by financing activities was $288.6 million during the three months ended March 31, 2025. This cash inflow is primarily attributable to an increase in net customer fund obligations of $334.4 million and proceeds from issuance of common stock under our share-based compensation plans of $4.4 million, partially offset by repurchases of common stock of $30.1 million, taxes paid related to the net share settlement of equity awards of $17.1 million, payments on our long-term debt obligations of $1.8 million, and payment of debt refinancing costs of $1.2 million.
Net cash provided by financing activities was $1,772.9 million during the three months ended March 31, 2024. This cash inflow is primarily attributable to an increase in net customer fund obligations of $1,763.5 million, proceeds from our debt issuance of $650.0 million, and proceeds from issuance of common stock under our share-based compensation plans of $21.7 million, partially offset by payments on our long-term debt obligations of $644.5 million and payment of debt refinancing costs of $11.4 million.
30 | Q1 2025 Form 10-Q
Backlog
Backlog is equivalent to our remaining performance obligations, which represents contracted revenue for recurring services and fixed price professional services, primarily implementation services, that has not yet been recognized, including deferred revenue and unbilled amounts that will be recognized as revenue in future periods. As of March 31, 2025, our remaining performance obligations were approximately $1.28 billion. Please refer to Part 1, Item 1, Note 10, “Revenue and Revenue-Related Activities” for further discussion of our remaining performance obligations.
Off-Balance Sheet Arrangements
As of March 31, 2025, we did not have any “off-balance sheet arrangements” (as such term is defined in Item 303 of Regulation S-K).
Contractual Obligations
During the three months ended March 31, 2025, there were no significant changes to our contractual obligations as described in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the heading "Contractual Obligations" contained in our 2024 Form 10-K.
Critical Accounting Policies and Estimates
During the three months ended March 31, 2025, there were no significant changes to our critical accounting policies and estimates as described in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the heading "Critical Accounting Policies and Estimates" contained in our 2024 Form 10-K.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures in this document including:
Non-GAAP Financial Measure
GAAP Financial Measure
EBITDA
Adjusted EBITDA
Adjusted EBITDA margin
Net profit margin
Adjusted operating profit
Adjusted operating profit margin
Operating profit margin
Adjusted net income
Adjusted net profit margin
Adjusted diluted net income per share
Diluted net income per share
Free cash flow
Free cash flow margin
Operating cash flow margin
Percentage change in revenue, including total revenue and revenue by solution, on a constant currency basis
Percentage change in revenue, including total revenue and revenue by solution
Dayforce recurring revenue per customer
No directly comparable GAAP measure
We believe that these non-GAAP financial measures are useful to management and investors as supplemental measures to evaluate our overall operating performance including comparison across periods and with competitors. Our management team uses these non-GAAP financial measures to assess operating performance because these financial measures exclude the results of decisions that are outside the normal course of our business operations, and are used for internal budgeting and forecasting purposes both for short- and long-term operating plans. Additionally, Adjusted operating profit, free cash flow, and free cash flow margin are components of certain management compensation plans. Additionally, we believe that the non-GAAP financial measures free cash flow and free cash flow margin are meaningful to investors because they are measures of liquidity that provide useful information in understanding and evaluating the strength of our liquidity and future ability to generate cash that can be used for strategic opportunities or investing in our business. The reduction of capital expenditures facilitates comparisons of our liquidity on a period-to-period basis and excludes items that management does not consider to be indicative of our liquidity.
31 | Q1 2025 Form 10-Q
These non-GAAP financial measures are not required by, defined under, or presented in accordance with, GAAP, and should not be considered as alternatives to our results as reported under GAAP, have important limitations as analytical tools, and our use of these terms may not be comparable to similarly titled measures of other companies in our industry. Our presentation of non-GAAP financial measures should not be construed to imply that our future results will be unaffected by similar items to those eliminated in this presentation.
We define our non-GAAP financial measures as follows:
The following tables reconcile our reported results to our non-GAAP financial measures:
As reported
As reported margins (a)
Share-basedcompensation
Amortization
Other (b)
As adjusted (b)
As adjusted margins (a)
(Dollars in millions, except per share data)
46.0
28.7
26.6
132.3
27.5
93.9
19.5
Income tax expense (c)
(25.5
25.2
29.8
156.7
0.28
0.18
0.03
0.58
32 | Q1 2025 Form 10-Q
28.4
2.0
109.1
25.3
68.0
15.8
(16.9
28.2
80.5
11.4
129.9
0.24
(0.03
0.43
The following table reconciles net cash provided by operating activities and operating cash flow margin to the non-GAAP financial measures free cash flow and free cash flow margin:
Capital expenditures
(27.9
(18.8
Operating cash flow margin (a)
10.3
Free cash flow margin (b)
33 | Q1 2025 Form 10-Q
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks related to foreign currency exchange rates, interest rates, and pension obligations. We seek to minimize or to manage these market risks through normal operating and financing activities. These market risks may be amplified by events and factors surrounding global events. We do not trade or use instruments with the objective of earning financial gains on market fluctuations, nor do we use instruments where there are not underlying exposures.
Foreign Currency Risk. Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Canadian Dollar. Our exposure to foreign currency exchange rates has historically been partially hedged as our foreign currency denominated inflows create a natural hedge against our foreign currency denominated expenses. Accordingly, our results of operations and cash flows were not materially affected by fluctuation in foreign currency exchange rates, and we believe that a hypothetical 10% change in foreign currency exchange rates or an inability to access foreign funds would not materially affect our ability to meet our operational needs or result in a material foreign currency loss in the future. Due to the relative size of our international operations to date, we have not instituted an active hedging program. We expect our international operations to continue to grow in the near term, and we are monitoring the foreign currency exposure to determine if we should begin a hedging program.
Interest Rate Risk. Our operating results and financial condition are subject to fluctuations due to changes in interest rates, primarily in relation to: (1) our customer funds market valuation and float revenue derived therefrom, (2) our debt and the interest paid on such, and (3) our cash and equivalents and the interest income earned on these balances. Collectively, we do not believe that a change in interest rates of 100 basis points would have a material effect on our operating results or financial condition.
In certain jurisdictions, we collect funds for payment of payroll and taxes; temporarily hold such funds in segregated accounts until payment is due; remit the funds to the customers’ employees and appropriate taxing authority; file federal, state and local tax returns; and handle related regulatory correspondence and amendments. We invest the customer funds in high- quality bank deposits, money market mutual funds, commercial paper or collateralized short-term investments. We may also invest these funds in government securities, as well as highly rated asset-backed, mortgage-backed, corporate, and bank securities.
We have exposure to risks associated with changes in laws and regulations that may affect customer fund balances. For example, a change in regulations, either reducing the amount of taxes to be withheld or allowing less time to remit taxes to government authorities, would reduce our average customer fund balances and float revenue. Based on current market conditions, portfolio composition and investment practices, a 100 basis point decrease in market investment rates would result in approximately $27 million decrease in float revenue over the ensuing twelve month period. There are no incremental costs of revenue associated with changes in float revenue.
We pay floating rates of interest on our Term Debt and Revolving Credit Facility. The interest paid on these borrowings will fluctuate up or down in relation to changes in market interest rates. A 100 basis point decrease in the applicable reference rates would result in approximately $6 million decrease in our interest expense over the ensuring twelve-month period. Please refer to Part I, Item 1. Note 7, "Debt" for additional information. In addition, certain fees related to our Receivables Securitization Program fluctuate based on changes in market interest rates.
We do not enter into investments for trading or speculative purposes. Our cash equivalents and our portfolio of marketable securities are subject to market risk due to changes in interest rates. Fixed rate securities may have their market value adversely affected due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectation due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates.
However, because we classify our securities as “available for sale,” no gains or losses are recognized due to changes in interest rates unless such securities are sold prior to maturity or declines in fair value are determined to be unrecoverable. Fluctuations in the value of our investment securities caused by a change in interest rates (gains or losses on the carrying value) are recorded in other comprehensive income, and are realized only if we sell the underlying securities. Please refer to Part I, Item 1. Note 4, "Customer Funds" for additional information.
34 | Q1 2025 Form 10-Q
Pension Obligation Risk. We provide a pension plan for certain current and former U.S. employees that closed to new participants on January 2, 1995. In 2007, the U.S. pension plan was amended (1) to exclude from further participation any participant or former participant who was not employed by us or another participating employer on January 1, 2008, (2) to discontinue participant contributions, and (3) to freeze the accrual of additional benefits as of December 31, 2007.
We are in the process of finalizing the wind down of the plan, which includes transferring the associated liabilities to an insurance company, which we expect will be completed in 2025. These steps include settling all future obligations through a combination of lump sum payments to eligible, electing participants and the transfer of any remaining benefits to a third-party insurance company through a group annuity contract. In applying relevant accounting policies, we have made critical estimates related to actuarial assumptions, including assumptions of expected returns on plan assets, discount rates, and health care cost trends. The cost of pension benefits in future periods will depend on actual returns on plan assets, assumptions for future periods, contributions, and benefit experience. The effective discount rate used in accounting for pension and other benefit obligations in 2024 ranged from 5.06% to 5.35%. The expected rate of return on plan assets for qualified pension benefits in 2025 is 5.10%.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Based on that evaluation our Chief Executive Officer and our Chief Financial Officer concluded that as of March 31, 2025, our disclosure controls and procedures were effective at the reasonable assurance level. While our disclosure controls and procedures are designed to provide reasonable assurance of their effectiveness, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting during the three months ended March 31, 2025 that have materially affected, or that are reasonably likely to materially affect, our internal controls over financial reporting.
35 | Q1 2025 Form 10-Q
ITEM 1. LEGAL PROCEEDINGS
Some of these matters raise difficult and complex factual and legal issues and are subject to many uncertainties, including the facts and circumstances of each particular action, and the jurisdiction, forum, and law under which each action is proceeding. Because of these complexities, final disposition of some of these proceedings may not occur for several years. As such, we are not always able to estimate the amount of our possible future liabilities, if any. We are not presently a party to any legal proceedings that, if determined adversely to us, we believe would individually or taken together have a material adverse effect on our business, financial condition or liquidity.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Form 10-Q, such as Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations", the reader should carefully consider the factors discussed in Part I, Item 1A. "Risk Factors” in our 2024 Form 10-K. There have been no material changes in our risk factors from those disclosed in Part I, Item 1A. of our 2024 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
The table below presents information with respect to Dayforce common stock purchases made during the three months ended March 31, 2025 by Dayforce or any "affiliated purchaser" of Dayforce, as defined in Rule 10b-18(a)(3) under the Exchange Act:
Period
Total Number of Shares Purchased (a)
Average Price Paid per Share (b)
Total Number of Shares Purchased as Part of Publicly Announced Program
Approximate Dollar Value of Shares that May Yet be Purchased Under the Program
January 1 - 31, 2025
463.9
February 1 - 28, 2025
159,802
64.71
453.5
March 1 - 31, 2025
359,107
55.96
433.4
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
36 | Q1 2025 Form 10-Q
ITEM 5. OTHER INFORMATION
Insider Adoption or Termination of Trading Arrangements
On March 4, 2025, Stephen H. Holdridge, President and Chief Operating Officer of the Company, adopted a “Rule 10b5-1 trading arrangement” as defined in Regulation S-K Item 408 (the “Holdridge Plan”). The Holdridge Plan provides for the potential sale of up to 54,000 shares of our common stock, subject to certain conditions, from June 3, 2025 through March 4, 2026. The Holdridge Plan was effected within our open trading window periods and was carried out in compliance with our insider trading policy.
Other than the aforementioned, during the fiscal quarter ended March 31, 2025, none of our directors or officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement.
37 | Q1 2025 Form 10-Q
ITEM 6. EXHIBITS
(a) Exhibits
The following exhibits are filed or furnished as a part of this report:
Exhibit No.
Description
3.1^
Amended and Restated Certificate of Incorporation of the Registrant.
Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant on October 30, 2024).
Registration Rights Agreement, dated April 30, 2018, by and among the Registrant and the other parties thereto (incorporated by reference to Exhibit 4.4 to the Quarterly Report on Form 10-Q filed by the Registrant on May 24, 2018).
Indenture, dated as of March 5, 2021, between the Registrant and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by the Company on March 5, 2021).
Form of 0.25% Convertible Senior Notes due 2026 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by the Registrant on March 5, 2021).
10.1
First Amendment to Credit Agreement, dated as of February 14, 2025, by and among the Registrant, the Subsidiary Guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on February 14, 2025).
10.2*
Form of Director Restricted Stock Unit Award Agreement (for awards made after January 1, 2025) (incorporated by reference to Exhibit 10.40 to the Annual Report on Form 10-K filed by the Registrant on February 28, 2025).
10.3*
Form of Performance Stock Unit Award Agreement (for awards made after January 1, 2025) (incorporated by reference to Exhibit 10.41 to the Annual Report on Form 10-K filed by the Registrant on February 28, 2025).
10.4*
Form of Restricted Stock Unit Award Agreement (for awards made after January 1, 2025) (incorporated by reference to Exhibit 10.42 to the Annual Report on Form 10-K filed by the Registrant on February 28, 2025).
10.5*
Form of Restricted Stock Unit Award Agreement (for Canadian executive awards) (incorporated by reference to Exhibit 10.43 to the Annual Report on Form 10-K filed by the Registrant on February 28, 2025).
10.6*
Form of Performance Stock Unit Award Agreement (for Canadian executive awards) (incorporated by reference to Exhibit 10.44 to the Annual Report on Form 10-K filed by the Registrant on February 28, 2025).
10.7*
Dayforce, Inc. 2025 Management Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on March 5, 2025).
10.8*^+
Sales Incentive Plan for Samer Alkharrat.
31.1^
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2^
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1#
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
38 | Q1 2025 Form 10-Q
32.2#
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS^
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH^
Inline XBRL Taxonomy Extension Schema with Embedded Linkbases Document.
104^
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Management compensatory plan or arrangement.
^ Filed herewith.
+ Confidential portions of this exhibit have been redacted in compliance with Item 601(b)(10) of Regulation S-K.
# In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986, Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purpose of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
39 | Q1 2025 Form 10-Q
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DAYFORCE, INC.
Date: May 7, 2025
By:
/s/ David D. Ossip
Name:
David D. Ossip
Title:
Chief Executive Officer
(Principal Executive Officer)
/s/ Jeremy R. Johnson
Jeremy R. Johnson
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
40 | Q1 2025 Form 10-Q