Dayforce delivered a solid second quarter, outperforming Wall Street’s revenue and non-GAAP profit expectations, while the market reaction remained muted. Management attributed this performance to robust demand for its single-platform human capital management (HCM) solution, with CEO David Ossip highlighting strong sales momentum, particularly in system integrator-led channels and the company’s focus on back-to-base sales. Key product innovation around AI-enabled features and the successful onboarding of large enterprise customers also played a role. Ossip noted, “Our momentum towards this goal is rooted in our deep cross-organizational focus on driving efficiencies and simplicity that yield value, both in our business and with our customers.”
Is now the time to buy DAY? Find out in our full research report (it’s free).
Dayforce (DAY) Q2 CY2025 Highlights:
- Revenue: $464.7 million vs analyst estimates of $457.7 million (9.8% year-on-year growth, 1.5% beat)
- Adjusted EPS: $0.61 vs analyst estimates of $0.53 (16.1% beat)
- Adjusted Operating Income: $124.9 million vs analyst estimates of $114.2 million (26.9% margin, 9.4% beat)
- The company slightly lifted its revenue guidance for the full year to $1.76 billion at the midpoint from $1.76 billion
- Operating Margin: 9.1%, up from 3.3% in the same quarter last year
- Billings: $471.5 million at quarter end, up 11.1% year on year
- Market Capitalization: $8.23 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Dayforce’s Q2 Earnings Call
- Scott Randolph Berg (Needham) asked about differences between system integrator-led deals and direct sales. CEO David Ossip explained that SI-led sales are up 80%, with high full-suite attachment across all segments, driven by the platform’s data model advantage.
- Sitikantha Panigrahi (Mizuho) inquired about how bookings translate to revenue and the speed of go-lives. Ossip confirmed add-on sales to existing customers convert faster than new clients, and SI-led implementation is increasing.
- Mark Steven Marcon (Baird) questioned the monetization of new AI products and the opportunity to upsell current clients. Ossip highlighted 30 new AI agents in development and significant potential to increase average revenue per employee.
- Aleksandr J. Zukin (Wolfe Research) probed the sequential dip in Dayforce recurring revenue and wider guidance ranges. CFO Jeremy Johnson attributed this to the timing of large deal go-lives and clarified that back-half acceleration is expected as bookings convert.
- Michael James Turrin (Wells Fargo) asked about trends in customer go-lives and deal mix. Ossip explained the focus on larger customers makes simple go-live counts less informative, emphasizing higher sales productivity and large enterprise deployments.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace at which booked large enterprise deals and government contracts convert to live revenue, (2) progress in upselling AI modules and managed services to the existing customer base, and (3) continued expansion of system integrator partnerships and their impact on market share. The evolution of Dayforce’s AI product roadmap and execution in regulated verticals will also be important indicators.
Dayforce currently trades at $51.08, down from $53.06 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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