Dayforce Q2 Earnings Beat Estimates, Revenues Up Y/Y, Shares Down

Dayforce DAY reported second-quarter 2025 earnings of 61 cents per share, which beat the Zacks Consensus Estimate of 52 cents and increased 27.1% year over year.

Revenues of $464.7 million beat the Zacks Consensus Estimate by 1.5% and increased both 9.8% year over year and constant currency (cc) basis. Excluding float, total revenues were $417.3 million, an increase of 11.5% both on a year-over-year and cc basis.

Shares dropped 1.02% at the time of writing this blog.

DAY’s Q2 Top-Line Details

In the second quarter of 2025, recurring revenues (84.6% of total revenues) increased 7.7% year over year to $393.1 million. Dayforce’s recurring revenues, excluding float revenues, totaled $315.5 million, reflecting robust 13.6% year-over-year growth, or 13.5% at cc.
 

Dayforce, Inc. Price

Dayforce, Inc. price | Dayforce, Inc. Quote

Dayforce achieved recurring revenue per customer of $171,075 in the trailing 12 months ended June 30, 2025, reflecting an impressive year-over-year increase of 10.4%. As of June 30, 2025, the number of live customers on the Dayforce platform reached 6,984, representing year-over-year growth of 4.9%.

Powerpay’s recurring revenues reached $19.9 million, unchanged year over year. 

Professional Services and Other (15.4% of total revenues) increased 22.8% year over year to $71.6 million.

DAY’s Operating Details

In the first quarter of 2025, selling and marketing expenses were $83.7 million, up 1.6% year over year. General and Administrative expenses were $58.9 million, down 0.2% year over year.

Adjusted EBITDA was $147.2 million, up 26.6% year over year. Adjusted EBITDA margin was 31.7% up 420 basis points (bps).

In the second quarter of 2025, the adjusted operating profit was $125 million, up 31.6% year over year. Operating margin expanded 450 bps on a year-over-year basis to 26.9%.

DAY Balance Sheet & Cash Flow

As of June 30, 2025, cash and cash equivalents were $625.2 million compared with $557.3 million as of March 31.

In the second quarter of 2025, the company reported cash provided by operating activities of $112.7 million, up from $49.6 million in the prior quarter. 

Free cash flow was $87.1 million compared with $19.5 million reported in the previous quarter.

DAY Offers 3Q25 and FY25 Guidance

For the third quarter of 2025, DAY expects total revenues of $476-$486 million.

Total revenue, excluding float, is in the range of $434 million to $444 million, an increase of 10.1% to 12.6% on a GAAP basis or approximately 11% to 13% on a constant currency basis. The company expects float revenues of $42 million in the third quarter of 2025.

Adjusted EBITDA margin is expected to be between 30% and 30.5%.

For 2025, DAY expects total revenues of $1.935 billion to $1.955 billion.

Total revenues, excluding float, are expected in the range of $1.749 billion to $1.769 billion, an increase of approximately 12.1% to 13.4% on a GAAP basis or approximately 13% to 14% on a constant currency basis.

Dayforce expects recurring revenues, excluding float, of $1.324 billion to $1.344 billion, an increase of approximately 14.2% to 15.9% on a GAAP basis, or approximately 15% to 17% on a constant currency basis. The company expects float revenues of $186 million in 2025.

Adjusted EBITDA margin is expected to be 32%.

Free cash flow margin is expected to be between 13.5% and 14%.

Zacks Rank and Other Stocks to Consider

Dayforce currently carries a Zacks Rank #2 (Buy).

MKS Inc. MKSI, DoorDash DASH and Lumentum LITE are some other top-ranked stocks in the broader Zacks Computer and Technology sector. Each of the three stocks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MKS shares have declined 11.8% year to date. MKS is set to report its second-quarter 2025 results on Aug. 6.

DoorDash shares have appreciated 52.3% year to date. DASH is set to report its second-quarter 2025 results on Aug. 6.

Lumentum shares are up 28.8% year to date. LITE is set to report its fourth-quarter fiscal 2025 results on Aug. 12.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research