Dayforce Experiences 14% Surge in Recurring Revenue for Q3
Overview of Dayforce's Financial Performance
Dayforce, a global leader in human capital management technology, has demonstrated impressive growth in its financial performance during the latest reporting quarter. The recurring revenue, excluding float, reached an impressive $333 million, reflecting a robust year-over-year uptick of 14%. Furthermore, the company reported a total revenue of $482 million, which marks a growth of 10%. When adjusting for float, the revenue growth stands at 11% or 12% when applying a constant currency approach.
Key Financial Highlights
For the third quarter results, Dayforce reported:
- Total revenue of $481.6 million, an increase of 9.5% year-over-year, and an 11.4% increase excluding float.
- Recurring revenue, excluding float, was $333 million, up 14% year-over-year.
- An operating profit of $30.5 million, marking a notable increase compared to $20.8 million from the previous year.
- However, the company also reported a net loss of $196.8 million, as opposed to a slight net income of $2.0 million in the prior year.
- Adjusted EBITDA reached $147.3 million, reflecting a margin of 30.6%, showcasing the company’s operational efficiency.
- Free cash flow for the nine months was reported at $111.6 million.
Customer Growth and Engagement
As of September 30, 2025, Dayforce has a portfolio of 7,025 live customers on its platform, indicating a year-over-year increase of 4.4%. The increase in Dayforce’s recurring revenue per customer was also notable at $175,172, representing a 9.8% rise.
Strategic Developments and Merger Agreement
Dayforce recently made headlines with its announced merger agreement with affiliates of Thoma Bravo, L.P. This agreement, finalized in late August, presents an acquisition price of $70.00 in cash per share of Dayforce common stock, approximating the enterprise valuation at around $12.3 billion. The anticipated completion of this transaction is expected in late 2025 or early 2026, contingent upon customary closing conditions such as stockholder approval and regulatory clearances.
Thoma Bravo Transaction Impact
The restructuring expenses associated with the merger have adversely impacted free cash flow in the short term, recorded at $27.6 million in the third quarter. Despite these costs, Dayforce's sales momentum remained strong through the quarter, although it faced challenges due to declining customer employment levels impacting recurring revenue.
Acknowledgments and Awards
Dayforce continued its recognition as a leading provider in HCM solutions, earning its position as a Leader in the 2025 Gartner Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises for the sixth consecutive year. It also received high marks in three out of six use cases within the Gartner Critical Capabilities report, demonstrating its strong performance compared to competitors.
Event Participation
The company also celebrated record attendance at its annual customer conference, Dayforce Discover 2025, held in Las Vegas, bringing together customers, partners, and industry innovators to discuss trends and innovations in HCM solutions.
Business Outlook
Looking forward, Dayforce has opted against providing new forward-looking guidance due to the impending merger. The focus remains on enhancing operational performance while navigating through the phases leading to the acquisition’s completion.
Conclusion
Dayforce is poised for potential growth as it reinforces its market position through strategic mergers and by continuing to provide valuable services to its clients. With the expected completion of the Thoma Bravo transaction, the company aims to leverage new opportunities for investment and innovation.
Frequently Asked Questions
1. What is Dayforce's reported revenue growth for the third quarter?
Dayforce reported a total revenue growth of 10%, with recurring revenue, excluding float, increasing by 14% year-on-year.
2. What merger agreement has Dayforce entered into?
Dayforce has entered into a merger agreement with Thoma Bravo, L.P., valuing the company at approximately $12.3 billion at $70.00 per share.
3. How many customers are currently using Dayforce?
As of September 30, 2025, Dayforce has 7,025 live customers.
4. How much free cash flow did Dayforce generate?
The company generated free cash flow of $111.6 million for the nine months ending September 30, 2025.
5. What recognition has Dayforce received recently?
Dayforce was recognized as a Leader in the 2025 Gartner Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises for the sixth consecutive year.
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