Ceridian HCM Holding Stock

Dayforce, Inc. operates as a global human capital management (‘HCM’) software company.

Dayforce, the company’s flagship Cloud HCM platform, provides a full suite of HCM functionality, including global human resources (‘HR’), payroll and tax, workforce management, benefits, and talent intelligence functionality. In addition to Dayforce, the company sells Powerpay, a Cloud HR and payroll solution for the Canadian small business market, through both direct sales and established partner channels. The company also continues to support customers using the company’s legacy North America solutions and customers using the company’s acquired solutions in the Asia Pacific Japan (‘APJ’) region. The company invests in maintenance and necessary updates with the legacy technology to support the company’s customers and continue to migrate them to Dayforce. Revenue from the company’s recurring solutions includes investment income generated from holding customer funds, also referred to as float revenue or float.

The following five strategic growth levers drive the company’s long-term perspectives, near-term decision making, and stockholder alignment:

Acquiring new customers in the markets where the company have seen success to-date;

Extending the Dayforce platform, thereby allowing the company to deliver more value to the company’s customers;

Expanding within the enterprise segment;

Accelerating the company’s global expansion both by serving local customers in new geographies, and by extending the company’s scope to service global multinational customers; and finally

Driving incremental value for the company’s customers by innovating in adjacent markets around the company’s core HCM suite, such as the Dayforce Wallet.

Products and Solutions

Dayforce

Dayforce is a single application that 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. The company’s Dayforce platform is used by organizations, regardless of industry or size, to optimize management of the entire employee lifecycle, including attracting, hiring, engaging, paying, and developing their people. In 2023, the company received several accolades for the company’s Dayforce solution, including being named as a Leader in the 2023 Gartner Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises for the fourth consecutive year; Leader in compliance, payroll administration, and overall product satisfaction in the Gartner Critical Capabilities for Cloud HCM suites for 1000+ Employee Enterprises; Top 5 solution in the 2023 Constellation Shortlist for both Global HCM Suites and Workforce Management Suites; Leader in the Sapient Insights Group HR Systems Survey for Time Management Systems and in the Sapient Insights HR Survey - HRMS Voice of the Customer User Experience and Vendor Satisfaction.

Human Resources

Dayforce Human Resources provides HR professionals, managers, and employees a single, complete record for all of their HR information. The company’s HR functionality is centered on a comprehensive, flexible workflow engine that streamlines and automates administrative tasks. The component maintains a record of critical forms for the employee, such as signed workplace policy agreements, Occupational Safety and Health Administration regulations, and direct deposit information.

In addition to its primary record-keeping functionality, Dayforce HR comes with an organizational management system that allows managers to view the profiles of their team members, which includes contact and time off details, as well as pay, benefits, and performance data. It is also accessible to employees, who can view the organizational chart, appropriate information about other employees in the organization, and their own pay and time details. There are several self-service options available in the product as well, such as change of address or adding a dependent, making it easy for employees to keep their profiles up to date.

Payroll and Tax

Dayforce empowers employers to manage their global payroll needs within a single system. Through the company’s Dayforce platform, payroll administrators with localized payroll functionality are able to make updates to time and pay in real-time. Dayforce supports payroll in over 200 countries and territories around the world, whilst providing employers with a centralized global view of their payroll data. This global payroll model is powered by a combination of company-owned and partner unified payroll engines with an automated data exchange that affords employees and administrators to have a consistent, intuitive single user experience. Native payroll is available in certain countries across North America, APJ, and Europe, the Middle East, and Africa (‘EMEA’), where Dayforce’s continuous calculation engine offers flexibility, accuracy, and efficiency in the payroll process. In these native markets, the company also manages the movement and remittance of taxes to tax authorities on behalf of the company’s customers. With a flexible rules-based configuration and regional partnerships, Dayforce helps organizations with regulation and compliance concerns regardless of where employees work or live. The company is continuing to innovate and expand payroll functionality into new markets to enhance the customer experience for large enterprises operating globally.

In addition to customers who use the company’s payroll services, certain customers use the company’s tax filing services on a stand-alone basis. The company recently modernized the technology platforms used to provide stand-alone tax services. Beginning in 2023, with the technology migration complete, the company classified recurring revenues from stand-alone tax customers as Dayforce recurring revenue.

Workforce Management

Dayforce Workforce Management helps organizations equitably manage their workforces, improve operational efficiency, and enhance compliance by configuring the system to meet complex employment and working time rules and policies. Through Dayforce Workforce Management, customers are offered time and attendance, absence management, scheduling, task management, and labor planning. A variety of options are available for organizations to capture time and attendance data such as physical clocks and the mobile application.

Dayforce Wallet

Dayforce Wallet is a digital payment solution that gives employees instant access to their net earnings through on-demand pay requests. With Dayforce Wallet, employees’ funds are loaded onto a paycard, which generates interchange fee revenue when used. As of December 31, 2023, the company had more than 1,860 customers signed onto Dayforce Wallet with over 1,150 customers live on the product and the average registration rate was above 60% of all eligible employees.

Benefits

Dayforce Benefits assists benefits administrators from enrollment to ongoing benefits administration, including eligibility, open enrollment and Affordable Care Act (‘ACA’) management. The company’s proprietary Benefits Decision Support scoring system guides employees through a self-service experience, giving information about each of the available benefit plans and the impact of plan options, to help them choose the best option for their specific needs.

The system integrates with hundreds of benefits carriers, contains a library of qualifiers to help define eligibility rules, and leverages real-time connections to payroll and HR to inform eligibility and calculate employee deductions. In addition, the company offers Benefits Intelligence, which leverages enrollment data to get visibility into elections at the plan and option levels to help administrators analyze their program.

Talent Intelligence

Dayforce Talent Intelligence, a suite of next generation talent acquisition and talent management solutions powered by Artificial Intelligence (‘AI’) and driven by data, helps organizations recruit, hire, retain, and develop their workforce. Dayforce Talent Intelligence transforms talent management and recruitment strategies by using AI in conjunction with talent data from across the employee lifecycle to provide organizations insights that enable them to make more efficient, accurate, and fair talent decisions. Talent Intelligence can also objectively measure workforce demographics while identifying inequity in everything from payroll to promotion opportunities to help employers create actionable policy changes. Customers can leverage Talent Intelligence tools for recruiting, onboarding, engagement, performance management, succession planning, compensation management, and employee career planning and skills development.

Powerpay

Powerpay is a Cloud platform that provides scalable and straightforward payroll and HR solutions. The company offers Powerpay for Canadian organizations with fewer than 100 employees.

Other

The company also offers payroll and payroll-related services using legacy technology and on-premise technology from the company’s acquired businesses in APJ, which the company formerly referred to as Bureau. The company invest in maintenance and necessary updates to support the company’s customers. However, the company generally stopped selling its legacy North America payroll solutions to new customers in the United States (‘U.S.’) and Canada, and the company intends to stop actively selling its acquired on-premise payroll solutions to new customers on a stand-alone basis. In addition to customers who use the company’s legacy payroll services, prior to modernizing the technology platforms utilized for stand-alone tax services, certain customers used the company’s legacy tax filing services on a stand-alone basis through 2022.

Services and Support

The company offers a broad portfolio of services to enable customer success. It is important to work with the company’s customers to understand their needs and deliver technology solutions and support that address them. The company continues to increase its global reach in supporting and serving the company’s customers. As part of the company’s international strategy, the company works with partners to perform services in certain geographies where the company does not have international operations or the particular service required by the company’s customers.

Implementation and Professional Services

The company’s internal implementation team leverages proprietary onboarding technology for new customer activation and professional services work. The company’s internal team is supplemented by third party services partners and system integration partners (‘SI’). The company’s implementation services include solution configuration and activation for new customers. Professional services include add-on implementation services for existing customers, ongoing product configuration changes when the customer does not have the resources to do it themselves, product usage consulting and a variety of additional services, such as report writing, usage audits, and process improvement.

Customer Support

The company’s global customer support organization provides 24/7 application support from locations across North America, APJ, and EMEA. The company’s support function is organized into teams of representatives with deep product and domain expertise across the company’s platform. These teams are aligned to groups of customers based on geography and product type to provide a combination of deep product and industry knowledge, consistent relationships, and high availability.

Customers

Dayforce is designed to serve organizations with 100 to over 100,000 employees. The Dayforce customer base included 6,393 customers (excluding the 2021 acquisitions of Ascender HCM Pty Limited (‘Ascender’) and ATI ROW, LLC and Dayforce Mexico S. de R.L. de C.V. (formerly known as ADAM HCM MEXICO, S. de R.L. de C.V.) (collectively, ‘ADAM HCM’)) on the platform as of December 31, 2023 representing approximately 6.84 million global employees (excluding the 2021 acquisitions of Ascender HCM Pty Limited (‘Ascender’) and ATI ROW, LLC and Dayforce Mexico S. de R.L. de C.V. (formerly known as ADAM HCM MEXICO, S. de R.L. de C.V.) (collectively, ‘ADAM HCM’)). The company defines a customer as a single organization, such as a company, a non-profit association, an educational institution, or government entity. The company also has approximately 38,000 Powerpay customer accounts.

Selling and Marketing

The company sells its Cloud solutions through a direct sales force and a variety of third-party channels, organized by customer size and geography. The company markets Dayforce to organizations with more than 100 employees. The company markets Powerpay to organizations with fewer than 100 employees in Canada. The majority of the company’s revenue growth comes from new Cloud customers.

Seasonality

The company has in the past and expects in the future to experience seasonal fluctuations in the company’s revenues and new customer contracts with the fourth quarter (year ended December 2023) historically being the company’s strongest quarter for new customer contracts, renewals, and customer go-lives.

Intellectual Property

The company and its subsidiaries own or have the rights to various trademarks, trade names and service marks, including the following: Dayforce, Ceridian, Powerpay and various logos used in association with these terms.

Research and Development

For the year ended December 31, 2023, the company’s research and development expense included $112.0 million.

History

The company was founded in 1992. It was incorporated in Delaware in 2013. The company was formerly known as Ceridian HCM Holding Inc. and changed its name to Dayforce, Inc. in January 2024.