Dayforce 2025 Q1 Earnings Record High Net Income Growth

Dayforce (DAY) reported its fiscal 2025 Q1 earnings on May 07th, 2025. The company achieved impressive financial results, with net income reaching a new record high for fiscal Q1. Dayforce surpassed earnings expectations in the quarter, underscoring a strong start to the year. Furthermore, the guidance for the second quarter remains in line with previous forecasts, maintaining optimism for sustained growth. Analysts have noted Dayforce's strategic initiatives and revenue growth, aligning with industry trends. These results foster confidence in the company’s ongoing expansion and reinforce its leadership in human capital management.

Revenue

Dayforce experienced an 11.7% increase in total revenue, reaching $481.80 million in Q1 2025, compared to $431.50 million in Q1 2024. Recurring services contributed $410.50 million, marking substantial growth. The professional services segment added $71.30 million. Meanwhile, product development and management did not generate revenue this quarter, maintaining the overall total revenue at $481.80 million.

Earnings/Net Income

Dayforce's earnings per share (EPS) climbed impressively to $0.09 in Q1 2025, up from $0.05 in Q1 2024, reflecting an 80.0% increase. Net income soared to $14.90 million, representing a 109.9% rise from $7.10 million in the previous year’s first quarter. The EPS performance indicates strong profitability and growth momentum.

Price Action

The stock price of Dayforce saw a slight decline of 0.46% on the latest trading day, with a notable drop of 5.93% over the past week. Despite these short-term fluctuations, the stock has experienced a growth of 5.73% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Dayforce shares after a quarter with decreased revenue and holding for 30 days has yielded poor results over the past five years. This approach resulted in a return of -7.40%, significantly underperforming the benchmark return of 84.08%, leading to an excess return of -91.48%. The compound annual growth rate (CAGR) was -1.53%, highlighting considerable losses. Additionally, the strategy suffered a maximum drawdown of -25.32% and a Sharpe ratio of -0.11, indicating substantial risk and negative returns. These figures reflect the strategy’s failure to capitalize on potential stock value appreciation and underscore the high volatility associated with previous earnings-related stock movements.

CEO Commentary

"We kicked off the year with strong first quarter results and excellent sales momentum," said David Ossip, Chair and CEO of Dayforce. The value proposition of consolidating multiple separate technologies into the single Dayforce platform continues to resonate with organizations, driving sales growth that builds on the strong fourth quarter performance. This reinforces optimism for continued momentum through 2025 and beyond as Dayforce aims to enhance its leadership position in human capital management.

Guidance

Dayforce expects total revenue for the second quarter of 2025 to range from $454 million to $460 million. Total revenue excluding float is projected to be between $408 million and $414 million, reflecting an approximate increase of 8.9% to 10.6% on a GAAP basis, or about 10% to 11% on a constant currency basis. Float revenue is anticipated to be $46 million.

Additional News

Dayforce recently announced an expanded partnership with Microsoft, making its platform available in the Microsoft Azure Marketplace. The company was also named a leader in the IDC MarketScape Worldwide Talent Acquisition 2025 Vendor Assessment and the Nucleus Research Enterprise HCM Value Matrix 2025. Additionally, Dayforce welcomed two significant clients: a large entertainment and leisure company and a uniform and workplace solutions provider, both opting for the complete Dayforce suite to support their workforce across North America. These developments underscore Dayforce's commitment to enhancing its technology offerings and expanding its customer base.