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What changed in Dayforce's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Dayforce's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+343 added−339 removedSource: 10-K (2024-02-28) vs 10-K (2023-03-01)

Top changes in Dayforce's 2023 10-K

343 paragraphs added · 339 removed · 255 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

61 edited+19 added−17 removed12 unchanged
Biggest changeIn 2022, we received several accolades for our Dayforce solution, including being named as a Leader in the 2022 Gartner Magic Quadrant™ for Cloud HCM Suites for 1,000+ Employee Enterprises for the third consecutive year; Leader in Nucleus Research’s 2022 Human Capital Management Value Matrix and 2022 Workforce Management Technology Value Matrix; Leader in the Human Capital Management – Enterprise Data Quadrant by SoftwareReviews; and Canadian HR Reporter’s 5-Star Software and Technology Provider for 2022.
Biggest changeIn 2023, we received several accolades for our 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.
In addition to salaries, these benefits (which vary by country/region) include annual bonuses, equity awards, a global employee stock purchase program, retirement savings plans, healthcare and insurance benefits, fertility and family building benefits, health savings and flexible savings spending accounts, unlimited time away from work, parental leave, flexible and remote work options, employee assistance programs, and tuition reimbursement.
In addition to salaries, these benefits (which vary by country and region) include annual bonuses, equity awards, a global employee stock purchase program, retirement savings plans, healthcare and insurance benefits, fertility and family building benefits, health savings and flexible savings spending accounts, unlimited time away from work, parental leave, flexible and remote work options, employee assistance programs, and tuition reimbursement.
Our five strategic growth levers drive our long-term perspectives, near-term decision making and stockholder alignment: • Acquiring new customers in the markets where we have seen success to-date; • Extending the Dayforce platform, thereby allowing us to deliver more value to our current and prospective customers; • Expanding within the Enterprise segment; • Accelerating our global expansion both by serving local customers in new geographies, and by extending our scope to service global multinational customers; and finally, • Driving incremental value for our customers by innovating in adjacent markets around our core HCM suite, such as the Dayforce Wallet.
The following five strategic growth levers drive our long-term perspectives, near-term decision making, and stockholder alignment: • Acquiring new customers in the markets where we have seen success to-date; • Extending the Dayforce platform, thereby allowing us to deliver more value to our current and prospective customers; • Expanding within the enterprise segment; • Accelerating our global expansion both by serving local customers in new geographies, and by extending our scope to service global multinational customers; and finally, • Driving incremental value for our customers by innovating in adjacent markets around our core HCM suite, such as the Dayforce Wallet.
Intellectual Property Our success depends, in part, on our ability to protect our proprietary technology and intellectual property. We rely on a combination of patents, copyrights, trade secrets, and trademarks, as well as confidentiality and nondisclosure agreements and other contractual protections, to establish and to safeguard our intellectual property rights.
Intellectual Property Our success depends, in part, on our ability to protect our proprietary technology and intellectual property. We rely on a combination of patents, copyrights, trade secrets, trade names, and trademarks, as well as confidentiality and nondisclosure agreements and other contractual protections, to establish and to safeguard our intellectual property rights.
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.
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.
Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy and information statements, Section 16 reports, and amendments to reports and any registration statements filed or furnished pursuant to Sections 13(a), 14 and 15(d) of the Exchange Act are available, free of charge at http://investors.ceridian.com as soon as reasonably practicable after we file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”), and are also available on the SEC’s website at http://www.sec.gov .
Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy and information statements, Section 16 reports, and amendments to reports and any registration statements filed or furnished pursuant to Sections 13(a), 14 and 15(d) of the Exchange Act are available, free of charge at http://investors.dayforce.com as soon as reasonably practicable after we file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”), and are also available on the SEC’s website at http://www.sec.gov.
Fourth quarter revenue is driven by year-end processing fees and Dayforce customer go-lives; and first quarter revenue is driven by revenue earned for printing of year-end tax packages. Environmental, Social, and Governance ("ESG") and Human Capital At Ceridian, we believe that transparency and accountability are essential to any company’s success.
Fourth quarter revenue is driven by year-end processing fees and Dayforce customer go-lives; and first quarter revenue is driven by revenue earned for printing of year-end tax packages. Environmental, Social, and Governance ("ESG") and Human Capital We believe that transparency and accountability are essential to any company’s success.
Our Dayforce platform is used by organizations, regardless of industry or size, to optimize management of the entire employee lifecycle, including attracting, engaging, paying, deploying, and developing their people.
Our 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.
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. 3 | 2022 Form 10-K Table of Contents Payroll and Tax Dayforce empowers employers to manage their global payroll needs within a single system.
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. 4 | 2023 Form 10-K Table of Contents Payroll and Tax Dayforce empowers employers to manage their global payroll needs within a single system.
Armstrong joined Ceridian in 2004, and since then has held several commercial and operational leadership roles, including Executive Vice President, Chief Customer Officer from February 2020 until February 2022, Executive Vice President, Chief Operating Officer from May 2019 until February 2020, Executive Vice President, Operations from March 2018 until May 2019, and Executive Vice President, Customer Support from April 2016 until March 2018.
Armstrong joined the Company in 2004, and since then has held several commercial and operational leadership roles, including Executive Vice President, Chief Customer Officer from February 2020 until February 2022, Executive Vice President, Chief Operating Officer from May 2019 until February 2020, Executive Vice President, Operations from March 2018 until May 2019, and Executive Vice President, Customer Support from April 2016 until March 2018.
Our fourth amended and restated certificate of incorporation, our second amended and restated bylaws, charters of our Acquisition and Finance, Audit, Compensation, and Corporate Governance and Nominating Committees of our Board of Directors (our “Board”), our Corporate Governance Guidelines, and our Code of Conduct, as well as any waivers from and amendments to our Code of Conduct are available on our website at https://investors.ceridian.com/corporate-governance/governance-documents .
Our restated certificate of incorporation, our fourth amended and restated bylaws, charters of our Acquisition and Finance, Audit, Compensation, and Corporate Governance and Nominating Committees of our Board of Directors (the “Board”), our Corporate Governance Guidelines, and our Code of Conduct, as well as any waivers from and amendments to our Code of Conduct are available on our website at https://investors.dayforce.com/corporate-governance/governance-documents.
We believe it’s important to work closely with our customers to understand their needs and deliver technology solutions and support that address them. We continue to increase our global reach in supporting and serving our customers.
We believe it is important to work closely with our customers to understand their needs and deliver technology solutions and support that address them. We continue to increase our global reach in supporting and serving our customers.
While we control and have access to our servers and all of the components of our network that are located in our external data centers, we do not control the operation of these facilities. Additionally, we host our internal systems through data centers that we operate and lease in the United States and APJ.
While we control and have access to our servers and all of the components of our network that are located in our external data centers, we do not control the operation of these facilities. Additionally, we host our internal systems through data centers that we operate and lease in the U.S. and APJ.
This global payroll model is powered by a combination of Ceridian-owned and partner unified payroll engines with an automated data exchange that affords users and administrators to have a consistent, intuitive single user experience.
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.
Through our Dayforce platform, users with localized payroll functionality are able to make updates to time and pay in real-time. Dayforce supports payroll in over 160 countries around the world, whilst providing employers with a centralized global view of their payroll data.
Through our 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.
We work directly with customers to understand their needs and to deliver solutions that address their challenges, taking into consideration the entire user experience, without being constrained by individual modules or applications. We are committed to protecting our customer information, along with our employee and contractor information and other business data.
We work directly with customers to understand their needs and to deliver solutions that address their challenges, taking into consideration the entire user experience, without being constrained by individual modules or applications. We are committed to protecting the information of our customers, our employees, and our contractors, along with other business data.
Products and Services Dayforce Dayforce, our principal Cloud HCM platform, 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.
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.
Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference into, and is not considered part of, this Form 10-K. 8 | 2022 Form 10-K Table of Contents Executiv e Officers Our executive officers as of March 1, 2023 are as follows: Name Age Position David D.
Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference into, and is not considered part of, this Form 10-K. Information about Our Executiv e Officers Our executive officers as of February 28, 2024 are as follows: Name Age Position David D.
Our ESG and Human Capital approach is guided by five pillars: Governance and Trust; Our People; Tech for Good; Our Communities; and the Environment. Governance and Trust We safeguard the trust given to us by our partners, our customers, and their employees.
Our approach to ESG and Human Capital is guided by five pillars: Governance and Trust; Our People; Tech for Good; Our Communities; and the Environment. 7 | 2023 Form 10-K Table of Contents Governance and Trust We safeguard the trust given to us by our partners, our customers, and their employees.
We generally stopped selling our legacy North America Bureau payroll solutions to new customers in the United States in 2012, and in Canada in 2015, and we also intend to stop actively selling our acquired Bureau payroll solutions to new customers on a stand-alone basis.
However, we generally stopped selling our legacy North America payroll solutions to new customers in the United States ("U.S.") and Canada, and we intend to stop actively selling our acquired on-premise payroll solutions to new customers on a stand-alone basis.
Holdridge held the position of Senior Executive Vice President, Worldwide Services at MicroStrategy, Inc. from November 2017 until July 2019. 9 | 2022 Form 10-K Table of Contents Jeffrey S. Jacobs Mr. Jacobs is our Head of Accounting and Financial Reporting and serves as the principal accounting officer, positions he has held since May 2020. Mr.
Holdridge held the position of Senior Executive Vice President, Worldwide Services at MicroStrategy, Inc., an analytics and business intelligence company, from November 2017 until July 2019. Jeffrey S. Jacobs Mr. Jacobs is our Head of Accounting and Financial Reporting and serves as the principal accounting officer, positions he has held since May 2020. Mr.
As part of our international strategy, we work with partners to perform services in certain geographies where we do not currently have international operations or the particular service required by our customers. * Excluding the 2021 acquisitions of Ascender and ADAM HCM 5 | 2022 Form 10-K Table of Contents Implementation and Professional Services Our internal implementation team leverages proprietary onboarding technology for new customer activation and professional services work.
As part of our international strategy, we work with partners to perform services in certain geographies where we do not currently have international operations or the particular service required by our customers. Implementation and Professional Services Our internal implementation team leverages proprietary onboarding technology for new customer activation and professional services work.
Korngiebel 52 Executive Vice President, Chief Product and Technology Officer William E. McDonald 58 Executive Vice President, General Counsel and Corporate Secretary David D. Ossip Mr. Ossip is our Chair and Co-Chief Executive Officer. Mr. Ossip has held the position of Chair since August 2015 and Co-Chief Executive Officer since February 2022. Mr.
Korngiebel 53 Executive Vice President, Chief Product and Technology Officer William E. McDonald 59 Executive Vice President, General Counsel and Corporate Secretary David D. Ossip Mr. Ossip is our Chair of the Board and Chief Executive Officer. Mr. Ossip has held the position of Chair since August 2015 and sole Chief Executive Officer since November 2023. Previously, Mr.
Customer Support Our global customer support organization provides 24/7 application support from locations across North America and in the United Kingdom, Mauritius, Australia, Singapore, Philippines, and India. Our support function is organized into teams of representatives with deep domain expertise across our platform.
Customer Support Our global customer support organization provides 24/7 application support from locations across North America, APJ, and EMEA. Our support function is organized into teams of representatives with deep product and domain expertise across our platform.
Holdridge joined Ceridian in January 2020, serving as Global Head of Services until February 2022 and Executive Vice President, Chief Customer Officer from February 2022 until February 2023. Prior to joining the Company, Mr.
Stephen H. Holdridge Mr. Holdridge is our President, Customer and Revenue Operations, a position he has held since February 2023. Mr. Holdridge joined the Company in January 2020, serving as Global Head of Services until February 2022 and Executive Vice President, Chief Customer Officer from February 2022 until February 2023. Prior to joining the Company, Mr.
Jacobs served as our Vice President, Finance from December 2016 until May 2020. Mr. Jacobs is a certified public accountant (inactive). Joseph B. Korngiebel Mr. Korngiebel is our Executive Vice President, Chief Product and Technology Officer, positions he has held since August 2020. Prior to joining the Company, Mr.
Jacobs served as our Vice President, Finance from December 2016 until May 2020. Mr. Jacobs is a certified public accountant (inactive). Jeremy R. Johnson Mr. Johnson is our Executive Vice President, Chief Financial Officer, a position he has held since January 2024. Prior to joining the Company, Mr.
The Dayforce customer base has increased from 482 as of December 31, 2012 to 5,993 customers* on the platform as of December 31, 2022. For 2022, our 5,993 Dayforce customers* represented approximately 5.9 million global employees*. We define a customer as a single organization, such as a company, a non-profit association, an educational institution, or government entity.
The Dayforce customer base has increased from 482 as of December 31, 2012 to 6,393 customers* on the platform as of December 31, 2023 representing approximately 6.84 million global employees*. We define a customer as a single organization, such as a company, a non-profit association, an educational institution, or government entity. We also have approximately 38,000 Powerpay customer accounts.
We provide a wide range of compensation and benefits to our employees which enhance the workplace experience and drive our Makes Work Life Better™ brand.
We provide a wide range of compensation and benefits to our employees that enhance the workplace experience.
At Ceridian, in the United States, approximately 12% of our workforce is Black or African American, 15% is Asian, 6% is Hispanic or Latino, 2% is multiracial, less than 1% is Native Hawaiian or Pacific Islander, American Indian or Alaska Native, and approximately 62% is White.
In the U.S., approximately 12% of our workforce was Asian, 11% was Black or African American, 6% was Hispanic or Latino, 3% was multiracial, less than 1% was Native Hawaiian or Pacific Islander, American Indian or Alaska Native, and approximately 65% was White.
We also have approximately 38,500 Powerpay customer accounts. No single customer accounted for more than 10% of our revenues during the year ended December 31, 2022. Sales and Marketing We sell our Cloud solutions through a direct sales force and a variety of third-party channels, organized by customer size and geography.
No single customer accounted for more than 2% of our revenues during the year ended December 31, 2023. Selling and Marketing We sell our Cloud solutions through a direct sales force and a variety of third-party channels, organized by customer size and geography. We market Dayforce to organizations with more than 100 employees.
That means upholding the highest standards of corporate governance and ethics, ensuring customer data is protected, and developing products that are reliable and effective. Our People As of December 31, 2022, we had 8,526 employees, including 4,436 in North America, 2,547 in APJ, and 1,543 in Europe, the Middle East, and Africa ("EMEA").
This means upholding high standards of corporate governance and ethics, ensuring customer data is protected, and developing products that are reliable and effective. Our People As of December 31, 2023, we had 9,084 employees, including 4,563 employees in North America, 2,906 in APJ, and 1,615 in EMEA.
Korngiebel held various positions at Workday, Inc. since March 2006, including Chief Technology Officer from May 2017 until July 2020. William E. McDonald Mr. McDonald is our Executive Vice President and General Counsel, positions he has held since July 2021, and Corporate Secretary, a position he has held since February 2016. Mr.
Korngiebel is our Executive Vice President, Chief Product and Technology Officer, positions he has held since July 2020. Prior to joining the Company, Mr. Korngiebel held various positions at Workday, Inc., a provider of enterprise cloud applications, since March 2006, including Chief Technology Officer from May 2017 until July 2020. William E. McDonald Mr.
Ossip has served as Chief Executive Officer from July 2013 until February 2022. Mr. Ossip joined the Company following the Company’s acquisition of Dayforce Corporation in 2012, where he held the position of Chief Executive Officer. Mr. Ossip serves as a director of Dragoneer Growth Opportunities Corp. III, a NASDAQ listed special acquisition company. Mr.
Ossip served as our Co-Chief Executive Officer from February 2022 until November 2023, and our Chief Executive Officer from July 2013 until February 2022. Mr. Ossip joined the Company following the Company’s acquisition of Dayforce Corporation in 2012, where he held the position of Chief Executive Officer. Mr.
Promoting diversity, equity and inclusion ("DEI") within our workforce is also a priority for Ceridian. We have a company-wide employee Global Diversity Advisory Council, and we provide funding to our nine inclusive-building employee resource YOUnity groups.
Promoting diversity, equity, and inclusion within our workforce is also a priority for us. We have a company-wide employee Global Diversity Advisory Council, and our nine employee resource groups foster inclusion, connection, and career development opportunities for their members.
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.
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, we offer Benefits Intelligence, which leverages enrollment data to get visibility into elections at the plan and option levels to help administrators analyze their program.
In 2022, we also launched a new Achieving Corporate Equity program that empowers high-potential talent from underrepresented or underserved communities to rise within our organization. As of December 31, 2022, women represent approximately 49% of our global workforce, including approximately 44% of employees in manager-level roles and above, and approximately 38% in vice president-level roles and above.
Our Achieving Corporate Equity program helps to empower high-potential diverse talent and improve the internal mobility of employees from underrepresented and underserved communities. As of December 31, 2023, women represented approximately 50% of our global workforce, including approximately 44% of employees in manager-level roles and above, and approximately 36% in vice president-level roles and above.
Ossip 56 Chair and Co-Chief Executive Officer Leagh E. Turner 51 Co-Chief Executive Officer Christopher R. Armstrong 54 Executive Vice President and Chief Operating Officer Noémie C. Heuland 45 Executive Vice President and Chief Financial Officer Stephen H. Holdridge 62 President, Customer and Revenue Operations Jeffrey S. Jacobs 47 Head of Accounting and Financial Reporting Joseph B.
Ossip 57 Chair and Chief Executive Officer Samer Alkharrat 55 Executive Vice President and Chief Revenue Officer Christopher R. Armstrong 55 Executive Vice President and Chief Operating Officer Stephen H. Holdridge 63 President, Customer and Revenue Operations Jeffrey S. Jacobs 48 Head of Accounting and Financial Reporting Jeremy R. Johnson 40 Executive Vice President and Chief Financial Officer Joseph B.
Human Resources Dayforce Human Resources functionality provides customers with a single, complete record for all employees. Our 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.
Human Resources Dayforce Human Resources provides HR professionals, managers, and employees a single, complete record for all of their HR information. Our HR functionality is centered on a comprehensive, flexible workflow engine that streamlines and automates administrative tasks.
McDonald served as Senior Vice President, Deputy General Counsel from February 2016 until July 2021. 10 | 2022 Form 10-K Table of Contents
McDonald is our Executive Vice President and General Counsel, positions he has held since July 2021, and Corporate Secretary, a position he has held since February 2016. Mr. McDonald served as Senior Vice President, Deputy General Counsel of the Company from February 2016 until July 2021. 10 | 2023 Form 10-K Table of Contents
In addition to customers who use our payroll services, certain customers use our legacy Bureau tax filing services on a stand-alone basis; and in 2019 we started to sell stand-alone legacy Bureau tax services again as well as begin the process of modernizing the technology platforms used to provide those services.
In addition to customers who use our legacy payroll services, prior to modernizing the technology platforms utilized for stand-alone tax services, certain customers used our legacy tax filing services on a stand-alone basis through 2022. Services and Support We offer a broad portfolio of services to enable customer success.
We developed a new emergency communications system to ensure connectivity and support for our employees both during and after natural disasters and other dangerous events.
In addition, our global emergency threat monitoring and mass communications system helps to ensure connectivity and support for our employees both during and after natural disasters and other dangerous events. We are committed to providing meaningful professional development opportunities to our workforce.
Turner is a member of the board of directors for Manulife Financial Corporation, a NYSE listed company. Christopher R. Armstrong Mr. Armstrong is our Executive Vice President, Chief Operating Officer, a position he has held since February 2022. Mr.
Alkharrat held the position of Chief Operating Officer at SAP SE, an enterprise application software provider. Christopher R. Armstrong Mr. Armstrong is our Executive Vice President, Chief Operating Officer, a position he has held since February 2022. Mr.
Through Dayforce, users 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 app. Dayforce Wallet Dayforce Wallet is a digital payment solution for customers using Dayforce Payroll.
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.
We believe that we are competitive in each of these areas and that our single application always-on technology and product innovations, combined with our commitment to service and our geographic reach, distinguishes us from our competitors. 6 | 2022 Form 10-K Table of Contents Seasonality We have in the past and expect in the future to experience seasonal fluctuations in our revenues and new customer contracts with the fourth quarter historically being our strongest quarter for new customer contracts, renewals, and customer go-lives.
We believe that we are competitive in each of these areas and that our single application always-on technology and product innovations, combined with our commitment to service and our geographic reach, distinguishes us from our competitors.
Item 1. Bu siness. Overview Ceridian is a global human capital management (“HCM”) software company. Dayforce, our flagship Cloud HCM platform, provides human resources (“HR”), payroll, benefits, workforce management, and talent intelligence functionality. In addition to Dayforce, we sell Powerpay, a Cloud HR and payroll solution for the Canadian small business market, through both direct sales and established partner channels.
Item 1. Bu siness. Overview Dayforce, Inc., formerly known as Ceridian HCM Holding Inc., is a global human capital management (“HCM”) software company. Dayforce, our 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.
We are continuing to innovate and expand into new markets to enhance the customer experience for large enterprises operating globally. Workforce Management Dayforce Workforce Management provides functionality to help organizations to equitably manage their workforces, improve operational efficiency, and enhance compliance by configuring the system to meet complex employment and working time rules and policies.
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.
These teams are aligned to groups of customers based on geography, product type, and client vertical to provide a combination of deep product and industry knowledge, consistent relationships, and high availability. Technology, Hosting, and Research and Development (“R&D”) Technology and innovation are at the core of Ceridian. Our innovation and development process is customer-driven.
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.
Our Dayforce Wallet product provides individuals with on-demand access to their earned pay, which enables them to better cover both everyday expenses as well as urgent or unplanned costs. Our Dayforce Engagement product’s Inclusivity Survey provides organizations with actionable inclusivity data to ensure their efforts to make progress on DEI are successful.
Tech for Good We believe that Tech for Good and responsible innovation can have a positive impact on all stakeholders. Our Dayforce Wallet product provides individuals with on-demand access to their earned pay, which enables them to better cover both everyday expenses as well as any urgent or unplanned costs.
We market Dayforce to organizations with more than 100 employees. We market Powerpay to organizations with fewer than 100 employees in Canada. The majority of our revenue growth comes from new Cloud customers. Services and Support We offer a broad portfolio of services aimed to ensure customer success.
We market Powerpay to organizations with fewer than 100 employees in Canada. The majority of our revenue growth comes from new Cloud 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.
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. Users can leverage Talent Intelligence tools for recruiting, onboarding, engagement, performance management, succession planning, compensation management, and employee career planning and skills development. Powerpay We offer Powerpay for Canadian organizations with fewer than 100 employees.
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.
In the United States, people of color represent approximately 26% of employees in manager-level roles and above, and approximately 28% of employees in vice president-level roles and above. The health, safety, and wellbeing of our employees is of paramount importance to us.
In the U.S., people of color represented approximately 24% of employees in manager-level roles and above, and approximately 27% of employees in vice president-level roles and above. The health, safety, and wellbeing of our employees is of high importance to us. We host an annual global Mental Health Summit, and we offer two paid wellness days to all employees.
Beginning in 2023, with the technology migration complete, we will begin classifying recurring revenues from stand-alone tax customers as Dayforce revenue on a go-forward basis. Customers Dayforce is designed to serve organizations with 100 to over 100,000 employees.
In addition to customers who use our payroll services, certain customers use our tax filing services on a stand-alone basis. We recently modernized the technology platforms used to provide stand-alone tax services. Beginning in 2023, with the technology migration complete, we classified recurring revenues from stand-alone tax customers as Dayforce recurring revenue.
Powerpay is a Cloud platform that provides scalable and straightforward payroll and HR solutions. Specifically designed for small businesses, Powerpay enables clients to pay their employees accurately and on-time. Bureau Our Bureau solutions offer payroll and payroll-related services using legacy technology and on-premise technology from our acquired businesses. We invest in maintenance and necessary updates to support our Bureau customers.
Other We also offer payroll and payroll-related services using legacy technology and on-premise technology from our acquired businesses in APJ, which we formerly referred to as Bureau. We invest in maintenance and necessary updates to support our customers.
Our Communities We are committed to giving back to the communities in which we live and work. Through our employee-led charity, Ceridian Cares, we provide financial support to individuals and families struggling with basic needs and quality of life.
Through our employee-led charity Dayforce Cares, formerly Ceridian Cares, we provide financial support to individuals and families struggling with basic needs and quality of life across the U.S. and Canada. Since its inception, the foundation has given over $6.5 million in grants to over 4,500 people in need.
In these native markets, we also manage the movement and remittance of taxes to federal and local tax authorities on behalf of our 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.
With a flexible rules-based configuration and regional partnerships, Dayforce helps organizations with regulation and compliance concerns regardless of where employees work or live. We are continuing to innovate and expand payroll functionality into new markets to enhance the customer experience for large enterprises operating globally.
We believe these features will enhance our Dayforce Wallet consumer experience and help bring greater financial flexibility and control to even more employees through Dayforce. Benefits Dayforce Benefits assists users from enrollment to ongoing benefits administration, including eligibility, open enrollment and Affordable Care Act ("ACA") management.
Benefits Dayforce Benefits assists benefits administrators from enrollment to ongoing benefits administration, including eligibility, open enrollment and Affordable Care Act ("ACA") management.
In addition, we offer Benefits Intelligence, which leverages enrollment data to get visibility into elections at the plan and option levels to help administrators analyze their program. 4 | 2022 Form 10-K Table of Contents 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, retain, and reskill their workforce.
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.
Revenue from our Cloud and Bureau solutions include investment income generated from holding customer funds before funds are remitted to taxing authorities, also referred to as float revenue or float.
We invest in maintenance and necessary updates with the legacy technology to support our customers and continue to migrate them to Dayforce. Revenue from our recurring solutions includes investment income generated from holding customer funds, also referred to as float revenue or float.
Ossip previously served as a director for Dragoneer Growth Opportunities Corp, a NYSE listed company, and Dragoneer Growth Opportunities Corp II, a NASDAQ listed company. Leagh E. Turner Ms. Turner is our Co-Chief Executive Officer since February 2022 and has been a member of our Board of Directors since February 2022. Ms.
Ossip previously served as a director for Dragoneer Growth Opportunities Corp., a NYSE listed company, Dragoneer Growth Opportunities Corp. II, a Nasdaq listed company, and Dragoneer Growth Opportunities Corp. III, a Nasdaq listed company. 9 | 2023 Form 10-K Table of Contents Samer Alkharrat Mr.
We also continue to support customers using our legacy North America Bureau solutions, which we generally stopped actively selling to new customers following the acquisition of Dayforce, and customers using our acquired Bureau solutions in the Asia Pacific Japan ("APJ") region. We invest in maintenance and necessary updates to support our Bureau customers and continue to migrate them to Dayforce.
In addition to Dayforce, we sell Powerpay, a Cloud HR and payroll solution for the Canadian small business market, through both direct sales and established partner channels. We also continue to support customers using our legacy North America solutions and customers using our acquired solutions in the Asia Pacific Japan ("APJ") region.
This includes our ongoing efforts to consolidate our physical footprint globally to meet the needs of an increasingly virtual-first era. We encourage you to review our Ceridian ESG Report for more detailed information which can be found on our website at https://www.ceridian.com/company/corporate/corporateresponsibility .
We also developed a company-wide Environmental Sustainability Policy and added new provisions to our Vendor Code of Conduct to further embed sustainable practices into our direct operations and procurement processes. We encourage you to review our ESG Report for more detailed information which can be found on our website at https://www.dayforce.com/who-we-are/corporate-responsibility.
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Dayforce offers a comprehensive range of functionality, including global HR, payroll and tax, workforce management, benefits, and talent intelligence on web and native iOS and Android platforms. Our Dayforce mobile app enables employees not only to request and to trade schedules, but also to see the real-time impact of schedule changes on their pay.
Added
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.
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As of December 31, 2022, native payroll was available in eight countries (United States, Canada, United Kingdom, Ireland, Australia, New Zealand, Mauritius, and Singapore), where Dayforce’s continuous calculation engine offers flexibility, accuracy, and efficiency in the payroll process.
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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, we also manage the movement and remittance of taxes to tax authorities on behalf of our customers.
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A benefactor of Dayforce’s continuous calculation engine, Dayforce Wallet offers employees on-demand access to their earned pay anytime, anywhere, in an intuitive mobile app experience. Rather than a plug-in or integration, Dayforce Wallet and Dayforce Payroll leverage the same underlying technology and system of record, providing real-time payroll accuracy.
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With Dayforce Wallet, employees’ funds are loaded onto a paycard, which generates interchange fee revenue when used. As of December 31, 2023, we 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.
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All on-demand payments are processed as regular pay runs and account for the appropriate taxes, deductions and garnishments in real-time, meaning there’s minimal impact to payroll administrators and no change to the employer’s cash flow. Dayforce Wallet is designed to empower employees with greater financial flexibility and choice.
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Customers can leverage Talent Intelligence tools for recruiting, onboarding, engagement, performance management, succession planning, compensation management, and employee career planning and skills development. 5 | 2023 Form 10-K Table of Contents Powerpay Powerpay is a Cloud platform that provides scalable and straightforward payroll and HR solutions. We offer Powerpay for Canadian organizations with fewer than 100 employees.
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The solution can be used for regular payroll, off-cycle payments, as a pay-card solution, and for on-demand pay. The Dayforce Wallet app allows employees to make any day payday by tracking their earned pay in real-time and requesting a payout of all or a portion of their earnings from the pay period.
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(formerly known as ADAM HCM MEXICO, S. de R.L. de C.V.) (collectively, "ADAM HCM") 6 | 2023 Form 10-K Table of Contents Technology, Hosting, and Research and Development (“R&D”) Technology and innovation are at the core of Dayforce, Inc. Our innovation and development process is customer-driven.
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The app also allows employees to transfer funds to other financial institutions, manage and pay bills, leverage cashback rewards, and view their transaction history. As a fee-free means of bridging the gap between paydays, Dayforce Wallet offers an effective alternative to cash advances, high-interest credit cards, and payday loans, helping reduce employees’ financial stress and drive employee engagement.
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Dayforce National Trust Bank The Office of Comptroller of the Currency (the "OCC") authorized the Ceridian National Trust Bank (the "CNTB") to open on January 3, 2023. Effective on this date, the CNTB commenced banking operations, acting as trustee for our U.S. payroll trust.
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Dayforce Wallet was launched in the U.S. in 2020, in Canada in 2021, and in the United Kingdom in 2022. We continue to introduce new features and enhancements (which vary by country/region) to the Dayforce Wallet, such as Dayforce Wallet Rewards, referrals, and access for workers aged 14-17 years old to use the Dayforce Wallet with parental consent.
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Historically, certain aspects of our U.S. client money movement activity were subject to regulation at both the federal and individual state levels with resulting inherent complexity across multiple jurisdictions. With the establishment of the CNTB, U.S. regulatory oversight will now be under the OCC, a single federal government agency.
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In 2022, we hosted our first-ever global Mental Health Summit and offered two paid wellness days to all employees. We also expanded access to a platform that provides digital and in-person solutions that help support overall wellbeing to all employees.
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Our payroll trust structure will continue to benefit our customers by providing bankruptcy-remoteness protection for client funds pending remittance to employees of our clients, tax authorities, and other payees. On January 31, 2024, the CNTB became the Dayforce National Trust Bank (the "DNTB").
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We ensure that all necessary policies and procedures are in place at our facilities to protect employee health and safety, which includes those for vaccination, testing, masking, and physical distancing that conform to COVID-19 government requirements. We are committed to providing meaningful learning and leadership development opportunities to our workforce.
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Seasonality We have in the past and expect in the future to experience seasonal fluctuations in our revenues and new customer contracts with the fourth quarter historically being our strongest quarter for new customer contracts, renewals, and customer go-lives.
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In 2022, nearly 200,000 hours of in-person trainings, digital learning, and webinars related to leadership and learning development topics were completed by over 95% of our employees.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny disruption of fund movement could have significant consequences, including defaults under our customer agreements and exposure to monetary damages, in addition to reputational harm, that could have a material adverse effect on our business, financial condition and results of operations. 11 | 2022 Form 10-K Table of Contents Our aging software infrastructure, technology, and sophistication of these systems, and our migration to new platforms, has and will continue to lead to increased costs, vulnerability to cyber-attack, or disruptions in operations that could have a material adverse effect on our business, market brand, financial condition, and results of operations.
Biggest changeOur aging software infrastructure, technology, and sophistication of these systems, and our migration to new platforms, has and will continue to lead to increased costs, vulnerability to cyber-attack, or disruptions in operations that could have a material adverse effect on our business, market brand, financial condition, and results of operations. 11 | 2023 Form 10-K Table of Contents Our business continues to demand the use of sophisticated systems and technology, including technology infrastructure assets.
The success of our growth strategies will depend upon our ability to anticipate and to adapt to changes in technology and industry standards, and to effectively develop, to introduce, to market, and to gain broad acceptance of new product and service offerings and enhancements incorporating the latest technological advancements.
The success of our growth strategies will depend upon our ability to anticipate and to adapt to changes in technology and industry standards, and to effectively develop, introduce, market, and gain broad acceptance of new product and service offerings and enhancements incorporating the latest technological advancements.
Additionally, as we retire our legacy products like our bureau payroll services or sunset certain acquired products, we are decreasing investments in maintaining those systems which creates the potential for a potential security breach of one of those systems.
Additionally, as we retire our legacy products like our bureau payroll services or sunset certain acquired products, we are decreasing investments in maintaining those systems which creates the potential for a security breach of one of those systems.
Factors that may impact our performance and market price include those discussed elsewhere in this “Risk Factors” section of this Annual Report on Form 10-K and others such as: market factors such as economic recession or monetary policy actions by central banking authorities, announcement or filing with the SEC by us or our competitors of acquisitions, business plans or commercial relationships as well as new services; any major change in our senior management or board of director; sales, or anticipated sales, of our stock, including sales by our officers, directors, and significant stockholders; issuance of new, negative, or changed securities analysts’ reports or recommendations or estimates; investor perceptions of us and the industries in which we or our customers operate; and threatened or actual litigation and governmental investigations.
Factors that may impact our performance and market price include those discussed elsewhere in this “Risk Factors” section of this Annual Report on Form 10-K and others such as: market factors such as economic recession or monetary policy actions by central banking authorities, announcement or filing with the SEC by us or our competitors of acquisitions, business plans or commercial relationships as well as new services; any major change in our senior management or board of directors; sales, or anticipated sales, of our stock, including sales by our officers, directors, and significant stockholders; issuance of new, negative, or changed securities analysts’ reports or recommendations or estimates; investor perceptions of us and the industries in which we or our customers operate; and threatened or actual litigation and governmental investigations.
Provisions contained in our fourth amended and restated certificate of incorporation and second amended and restated bylaws, as well as provisions of Delaware law, could delay or make it more difficult to remove incumbent directors or could impede a merger, takeover or other business combination involving us or the replacement of our management, or discourage a potential investor from making a tender offer for our common stock, which, under certain circumstances, could reduce the market value of our common stock, even if it would benefit our stockholders.
Provisions contained in our restated certificate of incorporation and fourth amended and restated bylaws, as well as provisions of Delaware law, could delay or make it more difficult to remove incumbent directors or could impede a merger, takeover, or other business combination involving us or the replacement of our management, or discourage a potential investor from making a tender offer for our common stock, which, under certain circumstances, could reduce the market value of our common stock, even if it would benefit our stockholders.
If a customer is not satisfied with the timely access or the quality of work performed, then we could incur in loss of revenue or additional costs to address the situation, the customer’s dissatisfaction with such services could damage our ability to expand the number of applications subscribed to by that customer or we could be liable for loss or damage suffered as a result, any of which could have a material adverse effect on our business, financial condition, and results of operations.
If a customer is not satisfied with the timely access or the quality of work performed, then we could incur loss of revenue or additional costs to address the situation, the customer’s dissatisfaction with such services could damage our ability to expand the number of applications subscribed to by that customer or we could be liable for loss or damage suffered as a result, any of which could have a material adverse effect on our business, financial condition, and results of operations.
If we fail to manage our growth effectively or if our strategy is not successful, we may be unable to execute our business plan, to maintain high levels of service, or to adequately address competitive challenges. We have and we believe we will continue to experience a period of rapid growth in our operations and Cloud solutions.
If we fail to manage our growth effectively or if our strategy is not successful, we may be unable to execute our business plan, to maintain high levels of service, or to adequately address competitive challenges. We have experienced, and we believe we will continue to experience, a period of rapid growth in our operations and Cloud solutions.
In order to manage our growth effectively, we will need to continuously improve our operational, financial, technological, and management systems, and our internal controls, reporting systems, and procedures to scaled global capabilities which may require investment as we grow and could result in disruption as we transform.
In order to manage our growth effectively, we will need to continuously improve our management, administrative, operational, technological, and financial systems, and our internal controls, reporting systems, and procedures to scaled global capabilities which may require investment as we grow and could result in disruption as we transform.
Anti-takeover protections in our fourth amended and restated certificate of incorporation, our second amended and restated bylaws, or our contractual obligations may discourage or prevent a takeover of our company, even if an acquisition would be beneficial to our stockholders.
Anti-takeover protections in our restated certificate of incorporation, our fourth amended and restated bylaws, or our contractual obligations may discourage or prevent a takeover of our company, even if an acquisition would be beneficial to our stockholders.
We believe a significant portion of our market valuation is based upon our high Cloud revenue growth rate, and if we are unable to sell our Cloud solutions, including the Dayforce Wallet, into new markets or to further penetrate existing markets, or to increase sales from existing customers, or we have failures in new product functionalities, our revenue may not grow as expected, which could have a material adverse effect on our market valuation, and our business, financial condition, and results of operations.
We believe a significant portion of our market capitalization is based upon our high Cloud revenue growth rate, and if we are unable to sell our Cloud solutions, including the Dayforce Wallet, into new markets or to further penetrate existing markets, or to increase sales from existing customers, or we have failures in new product functionalities, our revenue may not grow as expected, which could have a material adverse effect on our market capitalization, and our business, financial condition, and results of operations.
Employer Funds Trust and our Ceridian Canada Payroll Trust) and our third party financial institution partners (in the case of employee wage funds held on their behalf as part of the U.S.
Employer Funds Trust and our Canada Payroll Trust) and our third party financial institution partners (in the case of employee wage funds held on their behalf as part of the U.S.
Insurance might not cover such claims, might not provide sufficient payments to cover all the costs to resolve one or more such claims and might not continue to be available on terms acceptable to us.
Further, insurance might not cover such claims, might not provide sufficient payments to cover all the costs to resolve one or more such claims and might not continue to be available on terms acceptable to us.
The uninterrupted operation of our information systems and our ability to maintain the confidentiality of personal information and other customer and individual and company information that resides on our systems are critical to the successful operation of our business.
The uninterrupted operation of our information systems and our ability to maintain the confidentiality and integrity of personal information and other customer and individual and company information that resides on our systems are critical to the successful operation of our business.
As a public company, we are required to design and maintain proper and effective internal controls over financial reporting and to report any material weaknesses in such internal controls.
As a public company, we are required to design and maintain proper and effective internal control over financial reporting and to report any material weaknesses in such internal controls.
Some of our business partners also have international operations and are subject to the risks described above. 14 | 2022 Form 10-K Table of Contents Customers depend on our solutions to assist them to comply with applicable laws, which requires us and our third party providers to constantly monitor applicable laws and to make applicable changes to our solutions.
Some of our business partners also have international operations and are subject to the risks described above. 14 | 2023 Form 10-K Table of Contents Customers depend on our solutions to assist them to comply with applicable laws, which requires us and our third party providers to constantly monitor applicable laws and to make applicable changes to our solutions.
Our quarterly results of operations, including the levels of our revenues, gross margin, profitability, cash flow, and deferred revenue, has varied and may vary significantly in the future, and period-to-period comparisons of our results of operations may not be meaningful. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance.
Our quarterly results of operations, including the levels of our revenues, gross margin, profitability, cash flow, and deferred revenue, have varied and may vary significantly in the future, and period-to-period comparisons of our results of operations may not be meaningful. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance.
The extent to which it will continue to adversely affect our business, operations, and financial results will depend on numerous evolving factors, including developments which are highly uncertain and cannot be predicted, such as the duration and scope of the event, and that affect our ability to sell and to provide our services to our current and future customers, and the ability of our customers to pay for our services or to make us whole for advances of earned net wages and associated tax amounts made on their behalf by us.
The extent to which it, or other similarly disrupting event, will continue to adversely affect our business, operations, and financial results will depend on numerous evolving factors, including developments which are highly uncertain and cannot be predicted, such as the duration and scope of the event, and that affect our ability to sell and to provide our services to our current and future customers, and the ability of our customers to pay for our services or to make us whole for advances of earned net wages and associated tax amounts made on their behalf by us.
Item 1A. R isk Factors. Risks Related to Our Business and Industry Our business ordinarily encounters and addresses risks, some of which can cause our future results to be different than we currently anticipate. The risk factors described below represent our current view of some of the most important risks facing our business and are important to its understanding.
Item 1A. R isk Factors. Our business ordinarily encounters and addresses risks, some of which can cause our future results to be different than we currently anticipate. The risk factors described below represent our current view of some of the most important risks facing our business and are important to its understanding.
Some of the crucial platforms on which we host our back office and bureau systems are aged and need to be replaced or are in the process of being replaced. Some of our customer instances have, and in the future will be, migrated to public Cloud environments.
Some of the crucial platforms on which we host our back office and legacy systems are aged and need to be replaced or are in the process of being replaced. Some of our customer instances have, and in the future will be, migrated to public Cloud environments.
As of December 31, 2022, we had federal and state net operating loss carryforwards due to prior period losses, which, if not utilized, will begin to expire in 2031 and 2023 for federal and state purposes, respectively.
As of December 31, 2023, we had federal and state net operating loss carryforwards due to prior period losses, which, if not utilized, will begin to expire in 2031 and 2024 for federal and state purposes, respectively.
Our fourth amended and restated certificate of incorporation authorizes us to issue up to five hundred million shares of common stock and up to ten million shares of preferred stock with such rights and preferences as may be determined by our board of directors.
Our restated certificate of incorporation authorizes us to issue up to five hundred million shares of common stock and up to ten million shares of preferred stock with such rights and preferences as may be determined by our board of directors.
These factors include: our ability to attract and retain new and current Cloud customers, as well as Dayforce Wallet customers; changes to services or pricing impacting our customer contracts; seasonal variations in sales of and revenue from our applications, changes to our operating expenses related to the maintenance and expansion of our business including new acquired businesses, operations, and infrastructure; and general economic, industry, and market conditions, including the addition or loss of employees by our Cloud customers who generally pay on a “per employee per month” basis, interest rates, and accounting rules.
These factors include: our ability to attract and retain new and current Cloud customers, as well as Dayforce Wallet customers; changes to services or pricing impacting our customer contracts; seasonal variations in sales of and revenue from our applications, changes to our operating expenses related to the maintenance and expansion of our business including newly acquired businesses, operations, and infrastructure; and general economic, industry, and market conditions, including the addition or loss of employees by our Cloud customers who generally pay on a per-employee, per-month ("PEPM") basis, interest rates, and accounting rules.
In February 1988, CDC entered into an arrangement with Northern Engraving Corporation and the Minnesota Pollution Control Agency in relation to groundwater contamination at a site in Spring Grove, Minnesota. In 2021 and 2022, we have been subject to asbestos related claims for former CDC employees.
In February 1988, CDC entered into an arrangement with Northern Engraving Corporation and the Minnesota Pollution Control Agency in relation to groundwater contamination at a site in Spring Grove, Minnesota. We have also been subject to asbestos related claims for former CDC employees.
We seek to maintain sufficient excess capacity in our operations infrastructure to meet the needs of all of our customers and to facilitate the rapid provision of new customer activations and the expansion of existing customer activations.
We seek to maintain sufficient capacity in our operations infrastructure to meet the needs of our customers and to facilitate the rapid provision of new customer activations and the expansion of existing customer activations.
In particular, our clients have sought to pursue indemnification claims against us where they have been subject to wage compliance claims. Litigation might result in substantial costs and may divert management’s attention and resources, which might materially harm our business, overall financial condition, and operating results.
In particular, our clients have sought to pursue indemnification claims against us where they have been subject to wage compliance, payroll fraud, and data privacy claims. Litigation might result in substantial costs and may divert management’s attention and resources, which might materially harm our business, overall financial condition, and operating results.
Changes in generally accepted accounting principles in the United States could have a material adverse effect on our previously reported results of operations. Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC, and various bodies formed to promulgate and to interpret appropriate accounting principles.
Changes in generally accepted accounting principles in the U.S. could have a material adverse effect on our previously reported results of operations. Generally accepted accounting principles in the U.S. are subject to interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC, and various bodies formed to promulgate and to interpret appropriate accounting principles.
Section 404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and determine the effectiveness of our internal controls over financial reporting and provide a management report on the internal controls over financial reporting, which must be attested to by our independent registered public accounting firm.
Section 404 of the Sarbanes-Oxley Act of 2002, as amended, requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on the internal control over financial reporting, which must be attested to by our independent registered public accounting firm.
Restrictions on cross border data flows and data residency requirements may negatively impact our clients’ and our own ability to transfer personal information to the United States and other countries as part of our provision of services, and in support of our own operations, potentially impacting revenues.
Restrictions on cross border data flows and data residency requirements may negatively impact our clients’ and our own ability to transfer personal information to the U.S. and other countries as part of our provision of services, and in support of our own operations, potentially impacting revenues.
We are growing our business throughout the world, including in numerous developing economies where companies and government officials are more likely to engage in business practices that are prohibited by domestic and foreign laws and regulations, including the United States Foreign Corrupt Practices Act.
We are growing our business throughout the world, including in numerous developing economies where companies and government officials are more likely to engage in business practices that are prohibited by domestic and foreign laws and regulations, including the U.S. Foreign Corrupt Practices Act.
Any violations of applicable anti-corruption, economic and trade sanctions or anti-money laundering laws or regulations could limit certain of our business activities until they are satisfactorily remediated and could result in civil and criminal penalties, including fines, which could damage our reputation and have a material adverse effect on our results of operation or financial condition.
Any violations of 18 | 2023 Form 10-K Table of Contents applicable anti-corruption, economic and trade sanctions or anti-money laundering laws or regulations could limit certain of our business activities until they are satisfactorily remediated and could result in civil and criminal penalties, including fines, which could damage our reputation and have a material adverse effect on our results of operation or financial condition.
We believe the principal competitive factors in our market include: breadth and depth of product functionality, scalability and reliability of applications, robust workforce management, comprehensive tax services, modern and innovative Cloud technology platforms combined with an intuitive user experience, multi-country and jurisdiction domain expertise in payroll and HCM, quality of implementation and customer service, integration with a wide variety of third party applications and systems, total cost of ownership and return on investment, brand awareness, and reputation, pricing and distribution.
We believe the principal competitive factors in our market include: breadth and depth of product functionality, scalability and reliability of applications, robust workforce management, comprehensive tax services, modern and innovative Cloud technology platforms combined with an intuitive user experience, rapi d technological change such as the rise of large language models, multi-country and jurisdiction domain expertise in payroll and HCM, quality of implementation and customer service, integration with a wide variety of third party applications and systems, total cost of ownership and return on investment, brand awareness, and reputation, pricing and distribution.
We face risk of litigation, regulatory investigations, and similar actions in the ordinary course of our business, including the risk of lawsuits and other legal actions relating to breaches of contractual obligations, tortious claims, employment and labor law matters, securities law claims, or claims related to erroneous transactions or breach of data privacy laws from customers, stockholders, employees or other third parties which could result in fines, penalties, interest, or other damages.
We face risk of litigation, regulatory investigations, and similar actions in the ordinary course of our business, including the risk of lawsuits and other legal actions relating to breaches of contractual obligations, tortious claims, employment and labor law matters, securities law claims, or claims related to erroneous transactions or breach of other laws or regulations from customers, stockholders, vendors, employees or other third parties which could result in fines, penalties, interest, loss of revenue, increased expense, or other damages.
Revenues from our Cloud solutions have grown substantially over the last few years, and we believe a significant portion of our market valuation is based upon maintaining our high Cloud solutions growth rate. Our efforts to continue increasing use of our Cloud solutions may not succeed and may reduce our revenue growth rate.
Risks Related to Our Business and Industry Revenues from our Cloud solutions have grown substantially over the last few years, and we believe a significant portion of our market capitalization is based upon maintaining our high Cloud solutions growth rate. Our efforts to continue increasing use of our Cloud solutions may not succeed and may reduce our revenue growth rate.
General Risk Factors Our quarterly results of operations have and may continue to fluctuate significantly and may not fully reflect the underlying performance of our business.
Our quarterly results of operations have and may continue to fluctuate significantly and may not fully reflect the underlying performance of our business.
If any third-party service providers on which we rely to provide us with services experience a disruption, go out of business, are acquired by our competitors, experience a decline in quality, or terminate their relationship with us, we could experience a material adverse effect on our business, financial condition, and results of operation.
If any third-party service providers on which we rely to provide 15 | 2023 Form 10-K Table of Contents us with services experience a disruption, go out of business, are acquired by our competitors, experience a decline in quality, or terminate their relationship with us, we could experience a material adverse effect on our business, financial condition, and results of operation.
These catastrophic events have the potential to disrupt the business of our third-party suppliers, partners, or customers. All the potential impacts could have a material adverse effect on our business, financial condition, and results of operations. For instance, the COVID-19 pandemic created significant global volatility, uncertainty, and economic disruption.
These catastrophic events have the potential to disrupt the business of our third-party 24 | 2023 Form 10-K Table of Contents suppliers, partners, or customers. All the potential impacts could have a material adverse effect on our business, financial condition, and results of operations. For instance, the COVID-19 pandemic created significant global volatility, uncertainty, and economic disruption.
In addition, we have and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications, the cumulative loss of which could raise the risk of failures to operate our business to the quality needed and could have a material adverse effect on our business, financial condition, and results of operations.
In addition, we have and we expect to continue 16 | 2023 Form 10-K Table of Contents to experience, difficulty in hiring and retaining employees with appropriate qualifications, the cumulative loss of which could raise the risk of failures to operate our business to the quality needed and could have a material adverse effect on our business, financial condition, and results of operations.
Although we are fully reserved for these groundwater contamination liabilities, and partially insured for the asbestos claims, we cannot be certain if additional claims, investigations, or liabilities related to such predecessor companies will surface. Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.
Although we are fully reserved for these groundwater contamination liabilities, and partially insured for the asbestos claims, we cannot be certain if additional claims, investigations, or liabilities related to such predecessor companies will surface. 19 | 2023 Form 10-K Table of Contents Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.
Further, bank regulators, including the Office of Comptroller of the Currency ("OCC"), which now regulates Ceridian National Trust Bank, continue to impose additional and stricter requirements on banks to ensure they are meeting their BSA obligations, and banks are increasingly viewing money services businesses, as a class, to be higher risk customers for money laundering.
Further, bank regulators, including the OCC, which now regulates the DNTB, continue to impose additional and stricter requirements on banks to ensure they are meeting their BSA obligations, and banks are increasingly viewing money services businesses, as a class, to be higher risk customers for money laundering.
If our lenders are unable to fund borrowings under their revolving credit commitments or we are unable to borrow or refinance our debt in the financial markets, it could be difficult to obtain sufficient funding to execute our business strategy or to meet our liquidity needs, which could have a material adverse effect on our business, financial condition, and results of operations.
If our lenders are unable to fund borrowings under their revolving credit commitments or we are unable to borrow or refinance our debt in the financial markets, it could substantially increase our cost of borrowing or be difficult to obtain sufficient funding to execute our business strategy or to meet our liquidity needs, which could have a material adverse effect on our business, financial condition, and results of operations. 25 | 2023 Form 10-K Table of Contents
We are also required to have portions of our security program, which apply to certain segments of our U.S. business, reviewed by an independent third party on a biennial basis.
We are also required to have portions of our security 12 | 2023 Form 10-K Table of Contents program, which apply to certain segments of our U.S. business, reviewed by an independent third party on a biennial basis.
Failure to effectively manage growth or to achieve a profitable growth strategy could result in problems or delays in implementing customers, declines in quality or customer satisfaction, decreased profitability on new customer deals, increases in costs, complications or delays in introducing new features or fixing or updating our existing technology and infrastructure, or other operational challenges; and any of these difficulties could have a material adverse effect on our business, financial condition, and results of operations. 13 | 2022 Form 10-K Table of Contents The markets in which we participate are highly competitive, and if we do not compete effectively, it could have a material adverse effect on our business, financial condition, and results of operations.
Failure to effectively manage growth or to achieve a profitable growth strategy could result in problems or delays in implementing customers, declines in quality or customer satisfaction, decreased profitability on new customer deals, increases in costs, complications or delays in 13 | 2023 Form 10-K Table of Contents introducing new features or fixing or updating our existing technology and infrastructure, or other operational challenges; and any of these difficulties could have a material adverse effect on our business, financial condition, and results of operations.
Risks Related to Our Indebtedness Our outstanding indebtedness could have a material adverse effect on our financial condition and our ability to operate our business, and we may not be able to generate sufficient cash flows to meet our debt service obligations.
Risks Related to Our Indebtedness 20 | 2023 Form 10-K Table of Contents Our outstanding indebtedness could have a material adverse effect on our financial condition and our ability to operate our business, and we may not be able to generate sufficient cash flows to meet our debt service obligations.
We may not be able to successfully provide new or enhanced functionality and features for our existing solutions that achieve market acceptance or that keep pace with rapid technological developments.
We may not be able to successfully provide new or enhanced functionality and features for our existing solutions, including those that may involve AI or machine learning or be created using AI or machine learning, that achieve market acceptance or that keep pace with rapid technological developments.
We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or to pay any dividends in the foreseeable future.
We have never declared nor paid cash dividends on our common stock. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or to pay any dividends in the foreseeable future.
Third parties, including our competitors, may own or claim to own intellectual property relating to our service offerings and may claim that we are infringing their intellectual property rights. We may be found to be infringing upon such rights, even if we are unaware of their intellectual property rights.
Third parties, including our competitors, may own or claim to own intellectual property relating to our service offerings and may claim that we are infringing their intellectual property rights.
Our business continues to demand the use of sophisticated systems and technology, including technology infrastructure assets. These systems and technologies must be refined, updated and/or replaced with more advanced systems on a regular basis in order for us to meet both our customers’ and employees’ demands and expectations.
These systems and technologies must be refined, updated and/or replaced with more advanced systems on a regular basis in order for us to meet both our customers’ and employees’ demands and expectations.
To execute our growth plan, we must attract and retain highly qualified personnel. Competition for talent is intense and has become more intense in recent years, including without limitation for individuals with high levels of experience in designing and developing software and Internet-related services and senior sales executives.
Competition for talent is intense and has become more intense in recent years, including without limitation for individuals with high levels of experience in designing and developing software and Internet-related services and senior sales executives.
Some of our applications include software covered by open source licenses. From time to time, there have been claims challenging the ownership of open source software against companies that incorporate such software into their products or applications.
The use of open source software in our applications may expose us to additional risks and harm our intellectual property rights. Some of our applications include software covered by open source licenses. From time to time, there have been claims challenging the ownership of open source software against companies that incorporate such software into their products or applications.
In addition, even if noteholders do not elect to convert their Convertible Senior Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Senior Notes as a current, rather than long-term, liability, which would result in a material reduction of our net working capital. 22 | 2022 Form 10-K Table of Contents Risks Related to Ownership of Our Common Stock The price of our common stock may be volatile and investors may lose all or part of their investment.
In addition, even if noteholders do not elect to convert their Convertible Senior Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Senior Notes as a current, rather than long-term, liability, which would result in a material reduction of our net working capital.
Catastrophic events as well as expectations related to environmental, social and governance (ESG) matters may disrupt our business and expose us to risks that could adversely affect our business, financial condition, results of operations and reputation.
Catastrophic events may disrupt our business and expose us to risks that could adversely affect our business, financial condition, results of operations, and reputation.
Finally, our ability to produce data-driven insights for our customers as we begin to leverage artificial intelligence (AI) in our HCM technology may be constrained by current and future privacy and ethics regulatory requirements, thereby restricting our ability to use data in innovative ways. Our business plan is focused on an aggressive growth strategy.
Finally, our ability to produce data-driven insights for our customers as we continue to leverage AI in our HCM technology may be constrained by current and future privacy, social and ethics regulatory requirements and considerations, thereby restricting our ability to use data in innovative ways.
We can provide no assurances as to the financial stability or viability of any option counterparty. Risks associated with the conversion of our Convertible Senior Notes issued under the Indenture may adversely affect our financial condition and results of operations. Under certain circumstances, noteholders may convert their Convertible Senior Notes at their option prior to the scheduled maturities.
Conversion of our Convertible Senior Notes issued under the Indenture may adversely affect our financial condition and results of operations. Under certain circumstances, noteholders may convert their Convertible Senior Notes at their option prior to the scheduled maturities.
Our disclosures and ambitions related to ESG matters may expose us to risks that could adversely affect our reputation and performance. We publicly share certain information about our ESG initiatives and goals. Our disclosures on these matters, and goals we set for ourselves or a failure to meet these goals may harm our reputation and brand.
Our disclosures and ambitions related to ESG matters may expose us to risks that could adversely affect our reputation and performance. We publicly share certain information about our company’s ambitions, programs, and goals on ESG matters.
These laws and regulations include the Bank Secrecy Act of 1970 as amended by the USA PATRIOT Act of 2000 (the “BSA”), that requires banks and money services businesses, among others, to develop and implement risk-based anti-money laundering programs, report large cash transactions and suspicious activity, and maintain transaction records We have implemented policies and procedures to monitor and address compliance with applicable anti-corruption, economic and trade sanctions and anti-money laundering laws and regulations, and we are continuously in the process of reviewing, upgrading, and enhancing certain of our policies and procedures.
These laws and regulations include the Bank Secrecy Act of 1970 as amended by the USA PATRIOT Act of 2000 (the “BSA”), that requires banks and money services businesses, among others, to develop and implement risk-based anti-money laundering programs, report large cash transactions and suspicious activity, and maintain transaction records.
Regulators worldwide are exercising heightened scrutiny with respect to anti-corruption, economic and trade sanctions, and anti-money laundering laws and regulations. Such heightened scrutiny has resulted in more aggressive investigations and enforcement of such laws and more burdensome regulations, any of which could have a material adverse impact on our business.
Such heightened scrutiny has resulted in more aggressive investigations and enforcement of such laws and more burdensome regulations, any of which could have a material adverse impact on our business.
There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our consolidated financial statements, which could have a material adverse effect on our business, financial condition, and results of operations. 25 | 2022 Form 10-K Table of Contents Item 1B. Unresolve d Staff Comments. None.
There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our consolidated financial statements, which could have a material adverse effect on our business, financial condition, and results of operations. Adverse economic and market conditions could affect our business, operating results, or financial condition.
Our success depends largely upon the continued services of our senior management team. Our executive officers, senior management or other key personnel have limited or no notice period applicable to their employment. Therefore, they could terminate their employment with us at any time.
Our executive officers, senior management or other key personnel have limited or no notice period applicable to their employment. Therefore, they could terminate their employment with us at any time. Additionally, we do not maintain key employee insurance on any of our executive officers, senior management, or key employees.
Additionally, we do not maintain key employee insurance on any of our executive officers, senior management, or key employees. The loss of one or more of our executive officers, senior management, or key employees could have a material adverse effect on our business, financial condition, and results of operations.
The loss of one or more of our executive officers, senior management, or key employees could have a material adverse effect on our business, financial condition, and results of operations. To execute our growth plan, we must attract and retain highly qualified personnel.
The market price and volume of our common stock trading has experienced, and may continue to experience, wide fluctuations and volatility.
Risks Related to Ownership of Our Common Stock The price of our common stock may be volatile, and investors may lose all or part of their investment. The market price and volume of our common stock trading has experienced, and may continue to experience, wide fluctuations and volatility.
In addition, negative publicity related to our customer relationships, regardless of its accuracy, may affect our ability to compete for new business with current and prospective customers, which could also have a material adverse effect on our business, financial condition, and results of operations. 16 | 2022 Form 10-K Table of Contents We depend on our senior management team, and the loss of one or more key employees or an inability to attract and to retain highly skilled employees could have a material adverse effect on our business, financial condition, and results of operations.
In addition, negative publicity related to our customer relationships, regardless of its accuracy, may affect our ability to compete for new business with current and prospective customers, which could also have a material adverse effect on our business, financial condition, and results of operations.
In the future, if our acquisitions do not yield expected returns, we may be required to record charges based on this impairment assessment, which could have a material adverse effect on our financial condition and results of operations. 18 | 2022 Form 10-K Table of Contents Failure to comply with anti-corruption laws and regulations, economic and trade sanctions, anti-money laundering laws and regulations, and similar laws could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.
In the future, if our acquisitions do not yield expected returns, we may be required to record charges based on this impairment assessment, which could have a material adverse effect on our financial condition and results of operations.
We may also be obligated to indemnify our customers, vendors, or partners in connection with any such claim or litigation.
We may also be obligated to indemnify our customers, vendors, or partners in connection with any such claim or litigation. Even if we were to prevail in such a dispute, any litigation regarding our intellectual property could be costly and time consuming.
If we are not able to generate sufficient cash flows to meet our debt service obligations or are forced to take additional measures to be able to service our indebtedness, it could have a material adverse effect on our business, financial condition, and results of operations. 21 | 2022 Form 10-K Table of Contents Aspects of the Capped Calls may not operate as planned and may affect the value of the Convertible Senior Notes and our common stock, and we are subject to counterparty credit risk with respect to the Capped Calls.
If we are not able to generate sufficient cash flows to meet our debt service obligations or are forced to take additional measures to be able to service our indebtedness, it could have a material adverse effect on our business, financial condition, and results of operations.
However, both our internal and third-party partners’ websites, networks, applications and technologies, and other information systems may be targeted by malevolent parties for sabotage, disruption, ramson, or data misappropriation. Further, as we grow by acquisition, these risks become acute in the period following the acquisition, as we set about integrating the acquisition target’s systems into ours.
However, both our internal and third-party partners’ websites, networks, applications and technologies, and other information systems have been, and may in the future be targeted by malevolent parties for sabotage, disruption, ransom, or data misappropriation.
Customer funds and wage funds of their employees that our trustees and third-party financial institution partners hold are subject to market, interest rate, credit, and liquidity risks. The loss of these funds could have a material adverse effect on our business, financial condition, and results of operations. Our trustees (in the case of customer funds held in our U.S.
Customer funds and wage funds of their employees that our trustees and third-party financial institution partners hold are subject to market, interest rate, credit, and liquidity risks.
Our exposure will depend on many factors, but, generally, the increase in our exposure will be correlated with increases in the market price or the volatility of our common stock. In addition, upon a default by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock.
In addition, upon a default by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock. We can provide no assurances as to the financial stability or viability of any option counterparty.
Future issuances of our stock could cause an “ownership change.” It is possible that an ownership change could have a material effect on our ability to utilize our net operating loss carryforwards, which could have a material adverse effect on our financial condition and results of operations. 19 | 2022 Form 10-K Table of Contents Litigation and regulatory investigations aimed at us or resulting from actions of our predecessor may result in significant financial losses and harm to our reputation.
Similar rules may apply under state tax laws. Future issuances of our stock could cause an “ownership change.” It is possible that an ownership change could have a material effect on our ability to utilize our net operating loss carryforwards, which could have a material adverse effect on our financial condition and results of operations.
These laws or charges could limit the growth of Internet-related commerce or communications generally, resulting in reductions in the demand for Internet-based applications such as ours, any of which could have a material adverse effect on our business, financial condition, and results of operations. 17 | 2022 Form 10-K Table of Contents For our Dayforce Wallet service, we advance earned net wages and associated tax amounts on behalf of customers in connection with the “on demand pay” payroll feature of the service in order to provide their employees access to earned wages in advance of their standard payroll cycles.
These laws or charges could limit the growth of Internet-related commerce or communications generally, resulting in reductions in the demand for Internet-based applications such as ours, any of which could have a material adverse effect on our business, financial condition, and results of operations.
For example, in the event of a change of control default, the administrative agent under our credit facilities would have the right (or, at the direction of lenders holding a majority of the loans and commitments under our credit facilities, the obligation) to accelerate the outstanding loans and to terminate the commitments under our credit facilities, and if so accelerated, we would be required to repay all of our outstanding obligations under our credit facilities. 23 | 2022 Form 10-K Table of Contents Further, certain provisions in the Convertible Senior Notes and the Indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable.
For example, in the event of a change of control default, the administrative agent under our credit facilities would have the right (or, at the direction of lenders holding a majority of the loans and commitments under our credit facilities, the obligation) to accelerate the outstanding loans and to terminate the commitments under our credit facilities, and if so accelerated, we would be required to repay all of our outstanding obligations under our credit facilities.
Because we do not intend to pay cash dividends in the foreseeable future, investors may not receive any return on investment unless they are able to sell common stock for a price greater than the purchase price. We have never declared nor paid cash dividends on our common stock.
Further, the conversion of some or all of the Convertible Senior Notes will dilute the ownership interests of existing stockholders to the extent we deliver shares of our common stock upon conversion of any of the Convertible Senior Notes. 22 | 2023 Form 10-K Table of Contents Because we do not intend to pay cash dividends in the foreseeable future, investors may not receive any return on investment unless they are able to sell common stock for a price greater than the purchase price.
Maintaining, updating, monitoring, and revising an information security program in an effort to ensure that it remains reasonable and appropriate in light of changes in security threats, changes in technology, and security vulnerabilities that arise from legacy systems is time-consuming and complex, and is an ongoing effort. 12 | 2022 Form 10-K Table of Contents While we have taken and continue to take steps to ensure compliance with the consent order, if we are determined not to be in compliance with the consent order, or if any new breaches of security occur, the FTC may take enforcement actions or other parties may initiate a lawsuit.
While we have taken and continue to take steps to ensure compliance with the consent order, if we are determined not to be in compliance with the consent order, or if any new breaches of security occur, the FTC may take enforcement actions or other parties may initiate a lawsuit.
Our failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business, financial condition, and results of operations.
General Risk Factors We have identified a material weakness in our internal control over financial reporting and may identify material weaknesses in the future or otherwise fail to establish and maintain effective internal control over financial reporting, which could have a material adverse effect on our business, financial condition, and results of operations.
In order to protect our intellectual property rights, we have and will likely be required to continue to spend significant resources to monitor and to protect these rights.
In addition, use of AI tools may result in the release of confidential or proprietary information which could limit our ability to protect, or prevent us from protecting, our intellectual property rights. In order to protect our intellectual property rights, we have and will likely be required to continue to spend significant resources to monitor and to protect these rights.
In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time.
In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. If we do not accurately predict our infrastructure requirements, our existing customers may experience service outages that may subject them to financial penalties, causing us to incur financial liabilities and customer losses.
We may pay for such acquisitions or opportunities, in part or in full, through the issuance of additional equity securities. Further, the conversion of some or all of the Convertible Senior Notes will dilute the ownership interests of existing stockholders to the extent we deliver shares of our common stock upon conversion of any of the Convertible Senior Notes.
We may pay for such acquisitions or opportunities, in part or in full, through the issuance of additional equity securities.
The markets in which we participate are highly competitive, and competition could intensify in the future.
The markets in which we participate are highly competitive, and if we do not compete effectively, it could have a material adverse effect on our business, financial condition, and results of operations. The markets in which we participate are highly competitive, and competition could intensify in the future.
In connection with the pricing of the Convertible Senior Notes, we entered into the Capped Calls. Please refer to Note 9, "Debt" for additional information.
Aspects of the Capped Calls may not operate as planned and may affect the value of the Convertible Senior Notes and our common stock, and we are subject to counterparty credit risk with respect to the Capped Calls. In connection with the pricing of the Convertible Senior Notes, we entered into the Capped Calls.
Removed
If we do not accurately predict our infrastructure requirements, our existing customers may experience service outages that may subject them to financial penalties, causing us to incur financial liabilities and customer losses; and our operations infrastructure may fail to keep pace with increased sales, causing new customers to experience delays as we seek to obtain additional capacity, which could have a material adverse effect on our business, financial condition, and results of operations. 15 | 2022 Form 10-K Table of Contents Our growth depends in part on the success of our strategic relationships with third parties who provide us with services and license us software for use in or with both our applications and our internal operations.
Added
Our success is also subject to the risk of future disruptive technologies, such as large language models, AI, and machine learning. The failure to develop enhancements to our applications for, or that incorporate, technologies such as AI, machine learning, and large language models may impact our ability to increase the efficiency of and reduce costs associated with our customers’ operations.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our current facilities meet our needs, and we are confident that we will be able to obtain additional space on commercially reasonable terms to accommodate future growth as needed. Refer to Note 15, "Leases," to our consolidated financial statements for additional discussion of our leases.
Biggest changeWe believe that our current facilities meet our needs, and we are confident that we will be able to obtain additional space on commercially reasonable terms to accommodate future growth as needed. Refer to Part II, Item 8, Note 6, "Leases," to our consolidated financial statements for additional discussion of our leases.
Item 2. Pr operties. Our corporate headquarters is located in Minneapolis, Minnesota and we also have a major office location in Toronto, Ontario, Canada, both in leased facilities. In addition, as of December 31, 2022, we lease office space in various other locations across North America, APJ, and EMEA.
Item 2. Pr operties. Our corporate headquarters is located in Minneapolis, Minnesota and we also have a major office location in Toronto, Ontario, Canada, both in leased facilities. In addition, as of December 31, 2023, we lease office space in various other locations across North America, APJ, and EMEA.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeDiscussion of Legal Matters is incorporated by reference from Part II, Item 8, Note 17, “Commitments and Contingencies,” of this Form 10-K and should be considered an integral part of Part I, Item 3, “Legal Proceedings”. On October 21, 2021, a claim was issued by purported stockholder, Bluemoon Capital Ltd., in the Superior Court of Justice of Ontario, Canada.
Biggest changeDiscussion of legal matters is incorporated by reference from Part II, Item 8, Note 15, “Commitments and Contingencies,” of this Form 10-K and should be considered an integral part of Part I, Item 3, “Legal Proceedings” . Item 4. Mine Safe ty Disclosures. Not applicable. 27 | 2023 Form 10-K Table of Contents PART II
Removed
The claim is against the Company, together with David Ossip, Chair and Co-Chief Executive Officer of the Company, Arthur Gitajn, former EVP and Chief Financial Officer of the Company, Gnaneshwar Rao, director of the Company and Brent Bickett, director of the Company, as well as certain third parties.
Removed
The action, which is a proposed class action, alleges misrepresentations and negligence in connection with the disclosure made by the Company in its April 25, 2018 Prospectuses (which were later incorporated by reference into the Company’s May 24, 2018 Interim Financial Statements and MD&A) regarding matters surrounding the Company’s distribution to its pre-IPO stockholders of its 50% interest in LifeWorks Corporation Ltd.
Removed
On January 19, 2022, the Ontario court rejected the Norwich Application for discovery by plaintiff (equitable or discretionary remedy in Canada for disclosure of documentation to form an action), which had been filed prior to filing the class action on the basis that it did not meet the key criteria for pre-action discovery.
Removed
Plaintiff has appealed this decision which was denied, with costs, by the Ontario Court of Appeal on December 14, 2022. The action seeks unspecified monetary damages under the Ontario Securities Act and at common law.
Removed
A motion brought by the Company for Security for Costs regarding the class action is pending and a motion to strike the class action application is currently set for a hearing on March 31, 2023.
Removed
At this stage of the proceeding, the ultimate disposition is not yet determinable, but we believe that the likelihood of a material loss arising out of this claim is remote. Item 4. Mine Safe ty Disclosures. Not applicable. 26 | 2022 Form 10-K Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 26 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 Item 6. Reserved 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 46 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 27 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6. Reserved 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 45 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph assumes $100 was invested in each, based on closing prices, from our first trading day to the last trading day of each quarter for the period April 26, 2018 (the date our common stock began trading on the NYSE) through December 31, 2022.
Biggest changeThe following graph compares the cumulative total shareholder returns on our common stock with the cumulative total return on the S&P 500 Index and the S&P 1500 Application Software Index. The graph assumes $100 was invested in each, based on closing prices from December 31, 2018 through December 31, 2023, utilizing the last trading day of each respective quarter.
Stock price performance shown in the Stock Performance Graph for our common stock is historical and not necessarily indicative of future performance. Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2022.
Stock price performance shown in the Stock Performance Graph for our common stock is historical and not necessarily indicative of future performance. 28 | 2023 Form 10-K Table of Contents Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2022.
Dividend Policy We do not currently intend to pay cash dividends on our common stock in the foreseeable future. However, in the future, subject to factors described below and our future liquidity and capitalization, we may change this policy and choose to pay dividends. Stockholders As of December 31, 2022, there were 58 stockholders of record of our common stock.
However, in the future, subject to factors described below and our future liquidity and capitalization, we may change this policy and choose to pay dividends. Stockholders As of December 31, 2023, there were 54 stockholders of record of our common stock.
Stock Performance Graph The following shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or incorporated by reference into any of our other filings under the Exchange Act or the Securities Act, except to the extent we specifically incorporate it by reference into such filing. 27 | 2022 Form 10-K Table of Contents The following graph compares the cumulative total shareholder returns on our common stock with the cumulative total return on the S&P 500 Index and the S&P 1500 Application Software Index.
Stock Performance Graph The following shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or incorporated by reference into any of our other filings under the Exchange Act or the Securities Act, except to the extent we specifically incorporate it by reference into such filing.
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock has traded on the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange under the symbol “CDAY” since April 26, 2018, the date of our initial public offering.
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock is traded on the NYSE and the TSX. On February 1, 2024, our common stock began trading under the symbol "DAY".
Added
This replaced the symbol “CDAY”, which had been used since April 26, 2018, the date of our initial public offering. Dividend Policy We do not currently intend to pay cash dividends on our common stock in the foreseeable future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

100 edited+25 added−56 removed26 unchanged
Biggest changeThe following table sets forth certain information regarding our consolidated revenues for periods presented: Year Ended December 31, Percentage change in revenue as reported Impact of changes in foreign currency (a) Percentage change in revenue on a constant currency basis (a) 2022 2021 2022 vs. 2021 2022 vs. 2021 (Dollars in millions) Revenue: Dayforce recurring, excluding float $ 752.8 $ 596.9 26.1 % (1.6 )% 27.7 % Dayforce float 62.4 29.7 110.1 % (3.0 )% 113.1 % Total Dayforce recurring 815.2 626.6 30.1 % (1.6 )% 31.7 % Powerpay recurring, excluding float 80.7 78.2 3.2 % (4.0 )% 7.2 % Powerpay float 12.5 8.1 54.3 % (7.4 )% 61.7 % Total Powerpay recurring 93.2 86.3 8.0 % (4.3 )% 12.3 % Total Cloud recurring 908.4 712.9 27.4 % (2.0 )% 29.4 % Dayforce professional services and other 181.7 159.3 14.1 % (2.5 )% 16.6 % Powerpay professional services and other 0.7 0.9 (22.2 )% (— )% (22.2 )% Total Cloud professional services and other 182.4 160.2 13.9 % (2.5 )% 16.4 % Total Cloud revenue 1,090.8 873.1 24.9 % (2.1 )% 27.0 % Bureau recurring, excluding float 133.9 134.5 (0.4 )% (3.6 )% 3.2 % Bureau float 5.3 3.3 60.6 % (3.0 )% 63.6 % Total Bureau recurring 139.2 137.8 1.0 % (3.6 )% 4.6 % Bureau professional services and other 16.2 13.3 21.8 % (6.8 )% 28.6 % Total Bureau revenue 155.4 151.1 2.8 % (4.0 )% 6.8 % Total revenue $ 1,246.2 $ 1,024.2 21.7 % (2.3 )% 24.0 % Dayforce $ 996.9 $ 785.9 26.8 % (1.9 )% 28.7 % Powerpay 93.9 87.2 7.7 % (4.2 )% 11.9 % Total Cloud revenue $ 1,090.8 $ 873.1 24.9 % (2.1 )% 27.0 % Dayforce, excluding float $ 934.5 $ 756.2 23.6 % (1.7 )% 25.3 % Powerpay, excluding float 81.4 79.1 2.9 % (3.9 )% 6.8 % Cloud revenue, excluding float 1,015.9 835.3 21.6 % (2.0 )% 23.6 % Cloud float 74.9 37.8 98.1 % (4.0 )% 102.1 % Total Cloud revenue $ 1,090.8 $ 873.1 24.9 % (2.1 )% 27.0 % Cloud recurring, excluding float $ 833.5 $ 675.1 23.5 % (1.8 )% 25.3 % Bureau recurring, excluding float 133.9 134.5 (0.4 )% (3.6 )% 3.2 % Total recurring, excluding float 967.4 809.6 19.5 % (2.1 )% 21.6 % Total revenue, excluding float $ 1,166.0 $ 983.1 18.6 % (2.3 )% 20.9 % (a) We have calculated revenue on a constant currency by applying the average foreign exchange rate in effect during the comparable prior period.
Biggest changeThe following table sets forth certain information regarding our consolidated revenues for the periods presented: Year Ended December 31, Percentage change in revenue Impact of changes in foreign currency (a) Percentage change in revenue on a constant currency basis (a) 2023 2022 2023 vs. 2022 2023 vs. 2022 (In millions) Revenue: Recurring revenue: Dayforce recurring, excluding float $ 962.9 $ 752.8 27.9 % (0.8 )% 28.7 % Dayforce float 148.2 62.4 137.5 % (2.1 )% 139.6 % Total Dayforce recurring 1,111.1 815.2 36.3 % (0.9 )% 37.2 % Powerpay recurring, excluding float 81.9 80.7 1.5 % (3.7 )% 5.2 % Powerpay float 18.4 12.5 47.2 % (5.6 )% 52.8 % Total Powerpay recurring 100.3 93.2 7.6 % (4.0 )% 11.6 % Total Cloud recurring 1,211.4 908.4 33.4 % (1.2 )% 34.6 % Other recurring (b) 85.9 139.2 (38.3 )% (2.0 )% (36.3 )% Total recurring revenue 1,297.3 1,047.6 23.8 % (1.4 )% 25.2 % Professional services and other (c) 216.4 198.6 9.0 % (1.1 )% 10.1 % Total revenue $ 1,513.7 $ 1,246.2 21.5 % (1.3 )% 22.8 % (a) We have calculated percentage change in revenue on a constant currency by applying the average foreign exchange rate in effect during the comparable prior period.
If we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity to finance such acquisitions, which would result in additional expenses or dilution. Our customer funds are held and invested with the primary objectives being to protect the principal balance and to ensure adequate liquidity to meet cash flow requirements.
If we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity to finance such acquisitions, which would result in additional expenses and/or dilution. Our customer funds are held and invested with the primary objectives being to protect the principal balance and to ensure adequate liquidity to meet cash flow requirements.
Over the lifetime of the customer relationship, we have the opportunity to realize additional PEPM revenue, both as the customer grows or rolls out the Dayforce solution to additional employees, and also by selling additional functionality to existing customers that do not currently utilize our full suite of capabilities.
Over the lifetime of the customer relationship, we have the opportunity to realize additional PEPM revenue, both as the customer grows or rolls out the Dayforce solution to additional employees, and also by selling additional functionality to existing customers that do not currently utilize our full suite.
The amount of our future contractual obligation to vendors as of December 31, 2022 was not material. Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements and related notes, which have been prepared in accordance with GAAP.
The amount of our future contractual obligation to vendors as of December 31, 2023 was not material. Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements and related notes, which have been prepared in accordance with GAAP.
We have not reconciled Cloud ARR because there is no directly comparable GAAP financial measure. • Annual Dayforce revenue retention rate is calculated as a percentage, excluding Ascender and ADAM HCM, where the numerator is the Dayforce ARR for the prior year, less the Dayforce ARR from lost Dayforce customers during that year; and the denominator is the Dayforce ARR for the prior year.
We have not reconciled Cloud ARR because there is no directly comparable GAAP financial measure. • Annual Dayforce revenue retention rate is calculated as a percentage, excluding Ascender, where the numerator is the Dayforce ARR for the prior year, less the Dayforce ARR from lost Dayforce customers during that year; and the denominator is the Dayforce ARR for the prior year.
We believe this non-GAAP financial measure is useful to management and investors. We have calculated revenue on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period.
We believe this non-GAAP financial measure is useful to management and investors. We have calculated percentage change in revenue on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period.
Our platform is used by organizations of all sizes, from small businesses to global organizations, regardless of industry, to optimize management of the entire employee lifecycle, including attracting, engaging, paying, deploying, and developing their people.
Our platform is used by organizations of all sizes, from small businesses to global organizations, regardless of industry, to optimize management of the entire employee lifecycle, including attracting, hiring, engaging, paying, and developing their people.
Our Dayforce revenue retention rate may fluctuate as a result of a number of factors, including the mix of Dayforce solutions used by customers, the level of customer satisfaction, and changes in the number of users live on our Dayforce solutions.
Our Dayforce revenue retention rate may fluctuate as a result of a number of factors, including the mix of Dayforce solutions used by customers, the level of customer satisfaction, and changes in the number of employees live on our Dayforce solutions.
Our primary liquidity needs are related to funding of general business requirements, including the payment of interest and principal on our debt, capital expenditures, product development, and funding Dayforce Wallet on demand pay requests on behalf of our customers. From time to time, we have made investments in businesses or acquisitions of companies.
Our primary liquidity needs are related to funding of general business requirements, including the payment of interest and principal on our debt, capital expenditures, fulfilling our contractual commitments, product development, and funding Dayforce Wallet on-demand pay requests on behalf of our customers. From time to time, we have made investments in businesses or acquisitions of companies.
The net positive cash inflow in both periods is primarily due to our growing revenue and collections of such revenue, partially offset by our operating costs, mainly, investment in our sales force to support our growth initiatives and our product development and management costs which are not eligible for capitalization.
The net positive cash inflow in both periods is primarily due to our growing revenue, partially offset by our operating costs, mainly, investment in our sales force to support our growth initiatives and our product development and management costs which are not eligible for capitalization.
Our In debtedness Our primary liquidity needs are related to funding of general business requirements, including the payment of interest and principal on our debt, capital expenditures, product development, and funding Dayforce Wallet on demand pay requests on behalf of our customers.
Our In debtedness Our primary liquidity needs are related to funding of general business requirements, including the payment of interest and principal on our debt, capital expenditures, fulfilling our contractual commitments, product development, and funding Dayforce Wallet on-demand pay requests on behalf of our customers.
When adjusted diluted net income per share is positive, diluted weighted average common shares outstanding incorporate the effect of dilutive equity instruments. • Revenue on a constant currency basis is calculated by applying the average foreign exchange rate in effect during the comparable prior period. • Cloud ARR is calculated by starting with recurring revenue at year end, excluding revenue from Ascender and ADAM HCM, subtracting the once-a-year charges, annualizing the revenue for customers live for less than a full year to reflect the revenue that would have been realized if the customer had been live for a full year, and adding back the once-a-year charges.
When adjusted diluted net income per share is positive, diluted weighted average common shares outstanding incorporate the effect of dilutive equity instruments. • Percentage change in revenue, including total revenue and revenue by solution, on a constant currency basis is calculated by applying the average foreign exchange rate in effect during the comparable prior period. • Cloud ARR is calculated by starting with recurring revenue at year end, excluding revenue from Ascender, subtracting the once-a-year charges, annualizing the revenue for customers live for less than a full year to reflect the revenue that would have been realized if the customer had been live for a full year, and adding back the once-a-year charges.
To the extent this consideration exceeds the customer billings, a contract asset would be recognized, as professional services revenue related to implementation activities is generally recognized at the beginning of the contract. Please refer to Note 2, “Summary of Significant Accounting Policies,” for a description of our revenue recognition policy and our significant accounting policies.
To the extent this consideration exceeds the customer billings, a contract asset would be recognized, as professional services revenue related to implementation activities is generally recognized at the beginning of the contract. Please refer to Part II, Item 8, Note 2, “Summary of Significant Accounting Policies,” for a description of our revenue recognition policy and our significant accounting policies.
Our Dayforce recurring revenue per customer may fluctuate as a result of a number of factors, including the number of live Dayforce customers and the number of customers purchasing the full HCM suite. *Excluding the 2021 acquisitions of Ascender and ADAM HCM. 32 | 2022 Form 10-K Table of Contents Constant Currency Revenue We present revenue on a constant currency basis to assess how our underlying business performed, excluding the effect of foreign currency rate fluctuations.
Our Dayforce recurring revenue per customer may fluctuate as a result of a number of factors, including the number of live Dayforce customers and the number of customers purchasing the full HCM suite. *Excluding the 2021 acquisitions of Ascender and ADAM HCM. 32 | 2023 Form 10-K Table of Contents Constant Currency Revenue We present percentage change in revenue on a constant currency basis to assess how our underlying business performed, excluding the effect of foreign currency rate fluctuations.
This cash inflow was primarily attributable to the net increase in our customer funds obligations of $840.1 million and proceeds from the issuance of common stock under share-based compensation plans of $38.4 million, partially offset by payments on our long-term debt obligations of $8.4 million.
This cash inflow was primarily attributable to the net increase in our customer funds obligations of $734.6 million and proceeds from the issuance of common stock under our share-based compensation plans of $38.4 million, partially offset by payments on our long-term debt obligations of $8.4 million.
The following discussion and analysis of our financial condition and results of operations covers fiscal 2022 and fiscal 2021 items and year-over-year comparisons between fiscal 2022 and fiscal 2021.
The following discussion and analysis of our financial condition and results of operations covers fiscal 2023 and fiscal 2022 items and year-over-year comparisons between fiscal 2023 and fiscal 2022.
These statements are based on current expectations and are subject to numerous risks and uncertainties, including but not limited to the risks and uncertainties described in “Risk Factors” and “Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by these forward-looking statements.
These statements are based on current expectations and are subject to numerous risks and uncertainties, including but not limited to the risks and uncertainties described in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by these forward-looking statements.
For an additional description of the Senior Secured Credit Facility and the Senior Convertible Notes, please refer to Note 9, “Debt,” to our consolidated financial statements. Contractual Obligations Our future contractual obligations generally consist of long-term debt, leases, retirement plans, and vendor payments.
For an additional description of the Senior Secured Credit Facility and the Senior Convertible Notes, please refer to Part II, Item 8, Note 9, “Debt,” to our consolidated financial statements. Contractual Obligations Our future contractual obligations generally consist of long-term debt, leases, retirement plans, and vendor payments.
We expect to satisfy these remaining obligations through investment income from and appreciation in the fair value of plan assets and from future employer contributions. Refer to Note 10, "Employee Benefit Plans," to our consolidated financial statements for additional discussion of our employee benefit plans.
We expect to satisfy these remaining obligations through investment income from and appreciation in the fair value of plan assets and from future employer contributions. Refer to Part II, Item 8, Note 10, "Employee Benefit Plans," to our consolidated financial statements for additional discussion of our employee benefit plans.
Discussions of fiscal 2020 items and year-over-year comparisons between fiscal 2021 and 2020 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, that was filed with the SEC on February 28, 2022.
Discussions of fiscal 2021 items and year-over-year comparisons between fiscal 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, that was filed with the SEC on March 1, 2023.
Our actual results may differ from these estimates. We believe the following is our critical accounting estimate: Revenue Recognition Description: We recognize revenue for professional services and Cloud subscription services performance obligations based on an allocation of the total transaction price to each performance obligation using the respective stand-alone selling prices (“SSP”).
Our actual results may differ from these estimates. We believe the following is our critical accounting estimate: 40 | 2023 Form 10-K Table of Contents Revenue Recognition Description: We recognize revenue for professional services and Cloud subscription services performance obligations based on an allocation of the total transaction price to each performance obligation using the respective stand-alone selling prices (“SSP”).
The average U.S. dollar to Canadian dollar foreign exchange rate was $1.30, with a daily range of $1.25 to $1.39 for the twelve months ended December 31, 2022, compared to $1.25, with a daily range of $1.20 to $1.29 for the twelve months ended December 31, 2021.
The average U.S. dollar to Canadian dollar foreign exchange rate was $1.35, with a daily range of $1.31 to $1.39 for the twelve months ended December 31, 2023, compared to $1.30, with a daily range of $1.25 to $1.39 for the twelve months ended December 31, 2022.
Our management team uses these non-GAAP financial measures to assess operating performance because these measures exclude the results of decisions that are outside the normal course of our business operations, and are used for internal budgeting and forecasting purposes both for short- and long-term operating plans. Additionally, Adjusted EBITDA and Adjusted EBITDA margin are components of our management incentive plan.
Our management team uses these non-GAAP financial measures to assess operating performance because these financial measures exclude the results of decisions that are outside the normal course of our business operations, and are used for internal budgeting and forecasting purposes both for short- and long-term operating plans.
Please refer to Note 2, “Summary of Significant Accounting Policies,” for further discussion of our accounting policy for capitalizing internally developed software costs.
Please refer to Part II, Item 8, Note 2, “Summary of Significant Accounting Policies,” for further discussion of our accounting policy for capitalizing internally developed software costs.
As of December 31, 2022, approximately $1,143.6 million of revenue is expected to be recognized over the next three years from remaining performance obligations. For a discussion of seasonality, please refer to Part 1, Item I, “Business” of this Form 10-K.
As of December 31, 2023, approximately $1.22 billion of revenue is expected to be recognized over the next three years from remaining performance obligations. For a discussion of seasonality, please refer to Part 1, Item I, “Business” of this Form 10-K.
Professional services and other gross margin was (20.2)% for the year ended December 31, 2022, declining from (12.2)% for the year ended December 31, 2021, reflecting additional costs incurred to take new customers live, expansion of our capabilities to serve international customers, and increased share-based compensation. Selling, general, and administrative expense.
Professional services and other gross margin was (22.7)% for the year ended December 31, 2023, declining from (20.2)% for the year ended December 31, 2022, reflecting additional costs incurred to take new customers live, expansion of our capabilities to serve international customers, and increased share-based compensation. Selling and marketing expense.
Our annual Dayforce revenue retention rate has been above 97% for the years ended December 31, 2022 and 2021, and above 95% for the year ended December 31, 2020. We set annual targets for Dayforce revenue retention rate and monitor progress toward those targets on a quarterly basis by reviewing known and anticipated customer losses.
Our annual Dayforce revenue retention rate was above 97% for the years ended December 31, 2023, 2022, and 2021. We set annual targets for Dayforce revenue retention rate and monitor progress toward those targets on a quarterly basis by reviewing known and anticipated customer losses.
The Term Debt will mature on April 30, 2025. We are required to make annual amortization payments in respect of the Term Debt in an amount equal to 1.00% of the original principal amount thereof, payable in equal quarterly installments of 0.25% of the original principal amount of the first lien term debt.
We are required to make annual amortization payments in respect of the Term Debt in an amount equal to 1.00% of the original principal amount thereof, payable in equal quarterly installments of 0.25% of the original principal amount of the first lien term debt.
Convertible Senior Notes In March 2021, we issued $575.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due 2026. The total net proceeds from the offering, after deducting initial purchase discounts and issuance costs, were $561.8 million.
The Revolving Credit Facility does not require amortization payments. Convertible Senior Notes In March 2021, we issued $575.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due 2026. The total net proceeds from the offering, after deducting initial purchase discounts and issuance costs, were $561.8 million.
As of December 31, 2022, our defined benefit pension plans had a projected benefit obligation that exceeded the fair value of the plans’ assets by $11.1 million and our postretirement benefit plan had a projected benefit obligation that exceeded the fair value of the plans’ assets by $8.8 million.
As of December 31, 2023, our defined benefit pension plans had a projected benefit obligation that exceeded the fair value of the plans’ assets by $21.5 million and our postretirement benefit plan had a projected benefit obligation that exceeded the fair value of the plans’ assets by $8.5 million.
The following table presents total gross margin and solution gross margins for the periods presented: Year Ended December 31, 2022 2021 Total gross margin 38.0 % 37.3 % Gross margin by solution: Cloud recurring 72.0 % 72.3 % Bureau recurring 60.5 % 53.0 % Professional services and other (20.2 )% (12.2 )% Total gross margin is defined as total gross profit as a percentage of total revenue, which is inclusive of product development and management costs, as well as depreciation and amortization associated with cost of revenue.
The following table presents total gross margin and solution gross margins for the periods presented: Year Ended December 31, 2023 2022 Total gross margin 42.7 % 38.0 % Gross margin by solution: Cloud recurring 77.0 % 72.0 % Other recurring 46.0 % 60.5 % Professional services and other (22.7 )% (20.2 )% Total gross margin is defined as total gross profit as a percentage of total revenue, which is inclusive of product development and management costs, as well as depreciation and amortization associated with cost of revenue.
Depreciation and amortization expense associated with cost of revenue increased by $4.1 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, as we continue to capitalize Dayforce related and other development costs and subsequently amortize those costs. Gross profit and gross margin.
Depreciation and amortization expense associated with cost of revenue increased by $11.8 million, or 21.5%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, as we continue to capitalize Dayforce related and other development costs and subsequently amortize those costs. Gross profit and gross margin.
The Revolving Credit Facility may, at our option, be made available in United States Dollars, Canadian Dollars, Euros and/or Pounds Sterling; up to $70.0 million may, at our option, be made available for letters of credit and $100.0 million may, at our option, be made available for swingline loans (denominated in Canadian Dollars and/or United States Dollars).
Dollars, Canadian Dollars, Euros and/or Pounds Sterling; up to $70.0 million may, at our option, be made available for letters of credit and $100.0 million may, at our option, be made available for swingline loans (denominated in Canadian Dollars and/or U.S.
Senior Secured Credit Facility On April 30, 2018, we entered into a credit agreement pursuant to which the lenders agreed to provide Senior Secured Credit Facility, consisting of the Term Debt in the original principal amount of $680.0 million and a $300.0 million Revolving Credit Facility.
Senior Secured Credit Facility On April 30, 2018, we entered into a credit agreement pursuant to which the lenders agreed to provide Senior Secured Credit Facility, consisting of the Term Debt in the original principal amount of $680.0 million and a $300.0 million Revolving Credit Facility. The Revolving Credit Facility may, at our option, be made available in U.S.
Financing Activities Net cash provided by financing activities was $870.1 million during the year ended December 31, 2022.
Net cash provided by financing activities was $764.6 million during the year ended December 31, 2022.
Powerpay can typically be implemented on a remote basis within one to three days, at which point we start receiving recurring fees. For our Bureau solutions, we typically charge recurring fees on a per-process basis. Typical processes include the customer’s payroll runs, year-end tax packages, and delivery of customers’ remittance advices or checks.
The majority of Powerpay revenue is generated from recurring fees charged on a per-employee, per-process basis. Typical processes include the customer’s payroll runs, year-end tax packages, and delivery of customers’ remittance advices or checks. Powerpay can typically be implemented on a remote basis within one to three days, at which point we start receiving recurring fees.
Please refer to Note 5, "Customer Funds," for further discussion of these funds. 38 | 2022 Form 10-K Table of Contents Statements of Cash Flows Changes in cash flows due to purchases of customer fund marketable securities and proceeds from the sale or maturity of customer fund marketable securities, as well as the carrying value of customer fund accounts as of period end dates can vary significantly due to several factors, including the specific day of the week the period ends, which impacts the timing of funds collected from customers and payments made to satisfy customer obligations to employees, taxing authorities, and others.
Statements of Cash Flows Changes in cash flows due to purchases of customer fund marketable securities and proceeds from the sale or maturity of customer fund marketable securities, as well as the carrying value of customer fund accounts as of period end dates can vary significantly due to several factors, including the specific day of the week the period ends, which impacts the timing of funds collected from customers and payments made to satisfy customer obligations to employees, taxing authorities, and others.
Refer to Note 15, "Leases," to our consolidated financial statements for additional discussion of our leases. Payments of retirement plan obligations include employer commitments to fund our defined benefit and postretirement plans and do not include estimated future benefit payments to participants expected to be made from liquidation of the assets in our defined benefit plan trusts.
Payments of retirement plan obligations include employer commitments to fund our defined benefit and postretirement plans and do not include estimated future benefit payments to participants expected to be made from liquidation of the assets in our defined benefit plan trusts.
To calculate Dayforce recurring revenue per customer, we start with Dayforce recurring revenue on a constant currency basis by applying the same exchange rate to all comparable periods for the trailing twelve months and excludes float revenue, the impact of lower employment levels in 2021 and 2020 due to the COVID-19 pandemic, and Ascender and ADAM HCM revenue.
To calculate Dayforce recurring revenue per customer, we start with Dayforce recurring revenue on a constant currency basis by applying the same exchange rate to all comparable periods for the trailing twelve months and excludes float revenue, and Ascender and ADAM HCM revenue.
Product development and management expense increased $35.9 million for the year ended December 31, 2022, compared to the year ended December 31, 2021. The increase reflects additional personnel costs, including share-based compensation and severance.
Product development and management expense increased $40.0 million, or 23.5%, for the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase reflects additional personnel costs, including share-based compensation.
We also provide outsourced human resource solutions to certain of our Dayforce customers, which are tailored to meet their individual needs, and entail performing the duties of a customer’s human resources department, including payroll processing, time and labor management, performance management, and recruiting, as needed. The Powerpay offering serves our small market Canadian customers.
We also provide outsourced HR solutions to certain of our Dayforce customers, which are tailored to meet their individual needs, and entail performing the duties of a customer’s HR department, including payroll processing, time and labor management, performance management, and recruiting, as needed. We offer Powerpay for Canadian organizations with fewer than 100 employees.
Our long-term debt obligations are described in Note 9, “Debt,” to our consolidated financial statements, and the “Our Indebtedness” section above. 40 | 2022 Form 10-K Table of Contents As of December 31, 2022, all of our facilities are leased. Most of these leases contain renewal options and require payments for taxes, insurance, and maintenance.
Our long-term debt obligations are described in Part II, Item 8, Note 9, “Debt,” to our consolidated financial statements, and the “Our Indebtedness” section above. As of December 31, 2023, all of our facilities are leased. Most of these leases contain renewal options and require payments for taxes, insurance, and maintenance. We also lease equipment for use in our business.
We estimate that it takes approximately two years before we are able to recover our implementation, customer acquisition, and other direct costs on a new Dayforce customer contract.
The profitability of a customer depends, in large part, on how long they have been a customer. We estimate that it takes approximately two years before we are able to recover our implementation, customer acquisition, and other direct costs on a new Dayforce customer contract.
For the years ended December 31, 2022 and 2021, other expense, net of $8.5 million and $18.9 million, respectively, was comprised of net periodic pension expense and foreign currency translation loss. Income tax expense (benefit). For the years ended December 31, 2022 and 2021, we had income tax expense of $10.5 million and income tax benefit of $14.9 million, respectively.
For the years ended December 31, 2023 and 2022, other expense, net of $1.0 million and $8.5 million, respectively, was comprised of foreign currency translation (gains) losses and net periodic pension expense. Income tax expense. For the years ended December 31, 2023 and 2022, we had income tax expense of $41.2 million and $10.5 million, respectively.
For the years ended December 31, 2022, and 2021, our investment in software development was $162.2 million and $131.7 million, respectively, consisting of $92.3 million and $81.1 million of research and development expense, and $69.9 million and $50.6 million of capitalized software development, respectively.
For the years ended December 31, 2023, and 2022, our investment in software development was $198.5 million and $162.2 million, respectively, consisting of $112.0 million and $92.3 million of research and development expense, and $86.5 million and $69.9 million of capitalized software development, respectively.
We recognized $182.4 million of Cloud professional services revenue for the year ended December 31, 2022, and the related contract assets were $68.5 million as of December 31, 2022.
We recognized $202.6 million of Cloud professional services revenue for the year ended December 31, 2023, and the related contract assets were $89.0 million as of December 31, 2023.
The customer assets are held in segregated accounts intended for the specific purpose of satisfying customer funding obligations and therefore are not freely available for our general business use.
The customer assets are held in segregated accounts intended for the specific purpose of satisfying customer funding obligations and therefore are not freely available for our general business use. Please refer to Part II, Item 8, Note 4, "Customer Funds," for further discussion of these funds.
We define our non-GAAP financial measures as follows: • EBITDA as net income (loss) before interest, taxes, depreciation, and amortization, and Adjusted EBITDA as EBITDA, as adjusted to exclude foreign exchange gains (losses), share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, and certain other non-recurring items. • Adjusted EBITDA margin is determined by calculating the percentage that Adjusted EBITDA is of total revenue. • Adjusted operating profit is defined as operating profit (loss), as adjusted to exclude foreign exchange gains (losses), share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, amortization of acquisition-related intangible assets, and other non-recurring items. • Adjusted net income is defined as net income (loss), as adjusted to exclude foreign exchange gains (losses), share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, amortization of acquisition-related intangible assets, and other non-recurring items, all of which are adjusted for the effect of income taxes. • Adjusted diluted net income per share is calculated by dividing adjusted net income by diluted weighted average common shares outstanding.
Our presentation of non-GAAP financial measures should not be construed to imply that our future results will be unaffected by similar items to those eliminated in this presentation. 41 | 2023 Form 10-K Table of Contents We define our non-GAAP financial measures as follows: • EBITDA is net income (loss) before interest, taxes, depreciation, and amortization, and Adjusted EBITDA is EBITDA, as adjusted to exclude share-based compensation expense and related employer taxes, and certain other items. • Adjusted EBITDA margin is determined by calculating the percentage that Adjusted EBITDA is of total revenue. • Adjusted Cloud recurring gross margin is defined as Cloud recurring gross margin, as adjusted to exclude share-based compensation and related employer taxes, and certain other items, as a percentage of total Cloud recurring revenue. • Adjusted operating profit is defined as operating profit (loss), as adjusted to exclude share-based compensation expense and related employer taxes, amortization of acquisition-related intangible assets, and certain other items. • Adjusted operating profit margin is determined by calculating the percentage that Adjusted operating profit is of total revenue. • Adjusted net income is defined as net income (loss), as adjusted to exclude share-based compensation expense and related employer taxes, amortization of acquisition-related intangible assets, and certain other items, all of which are adjusted for the effect of income taxes. • Adjusted net profit margin is determined by calculating the percentage that Adjusted net income is of total revenue. • Adjusted diluted net income per share is calculated by dividing adjusted net income by diluted weighted average common shares outstanding.
Our outsourced human resource solutions are tailored to meet the needs of individual customers, and entail our contracting to perform many of the duties of a customer’s human resources department, including payroll processing, time and labor management, performance management, and recruiting.
Our outsourced HR solutions are tailored to meet the needs of individual customers, and entail our contracting to perform many of the duties of a customer’s HR department, including payroll processing, time and labor management, performance management, and recruiting. We also perform individual services for customers, such as check printing, wage attachment and disbursement, and ACA management.
The following table sets forth the number of live Dayforce customers* at the end of the years presented: Cloud Annualized Recurring Revenue (“ARR”) We use Cloud annualized recurring revenue ("ARR"), a non-GAAP financial measure, to measure the size and growth of our recurring Cloud business, which we believe is useful to management and investors.
We market Dayforce to customers of all sizes, including small (under 500 employees), major (500 to 5,999 employees), and enterprise (6,000 or more employees). 31 | 2023 Form 10-K Table of Contents The following table sets forth the number of live Dayforce customers* at the end of the years presented: Cloud Annualized Recurring Revenue (“ARR”) We use Cloud ARR, a non-GAAP financial measure, to measure the size and growth of our recurring Cloud business, which we believe is useful to management and investors.
Year Ended December 31, 2022 2021 2020 Live Dayforce customers (a) 5,993 5,434 4,906 Cloud annualized recurring revenue (ARR) (a,b,d) (in millions) $ 1,041.3 $ 779.8 $ 617.9 Annual Dayforce revenue retention rate (a,b,d) 97.1 % 97.1 % 96.0 % Dayforce recurring revenue per customer (c,d) $ 121,425 $ 108,631 $ 98,655 Adjusted EBITDA (d) (in millions) $ 250.4 $ 162.5 $ 159.0 Adjusted EBITDA margin (d) 20.1 % 15.9 % 18.9 % (a) Excluding the 2021 acquisitions of Ascender and ADAM HCM.
Year Ended December 31, 2023 2022 Live Dayforce customers (a) 6,393 5,993 Cloud annualized recurring revenue (ARR) (a,b) (in millions) $ 1,250.6 $ 1,041.3 Annual Dayforce revenue retention rate (a,b) 97.1 % 97.1 % Dayforce recurring revenue per customer (b,c) $ 146,771 $ 121,425 Adjusted EBITDA (b) (in millions) $ 410.2 $ 250.4 Adjusted EBITDA margin (b) 27.1 % 20.1 % (a) Excluding the 2021 acquisitions of Ascender and ADAM HCM.
We also lease equipment for use in our business. We ceased use of certain leased facilities during 2021 and 2020 and recognized lease abandonment charges within our consolidated statements of operations; however, we are still required to make future payments under the existing lease terms.
We ceased use of certain leased facilities during 2021 and recognized lease abandonment charges within general and administrative on our consolidated statements of operations; however, we are still required to make future payments under the existing lease terms. Refer to Part II, Item 8, Note 6, "Leases," to our consolidated financial statements for additional discussion of our leases.
Our solutions are typically provided through long-term customer relationships that result in a high level of recurring revenue. We also generate recurring revenue from investment income on our Cloud and Bureau customer funds before such funds are remitted to taxing authorities, customer employees, or other third parties. We refer to this investment income as float revenue.
We also generate recurring revenue from investment income on our recurring customer funds before such funds are remitted to taxing authorities, customer employees, or other third parties. We refer to this investment income as float revenue.
We sell Dayforce through our direct sales force and partner ecosystem on a subscription per-employee, per-month (“PEPM”) basis. Our subscriptions are typically structured with an initial fixed term of between three and five years, with evergreen renewal thereafter.
The platform is designed to ease administrative work for both employees and managers, creating opportunities for companies to increase employee engagement. We sell Dayforce through our direct sales force and partner ecosystem on a subscription PEPM basis. Our subscriptions are typically structured with an initial fixed term of between three and five years, with evergreen renewal thereafter.
Our total debt balance was $1,234.5 million as of December 31, 2022. Please refer to Note 9, “Debt,” to our consolidated financial statements and “Our Indebtedness” section below for further information on our debt. As of December 31, 2022 and 2021, we held $0.8 million and $1.9 million, respectively, of restricted cash as collateral for bank guarantees.
As of December 31, 2023, we had cash and equivalents of $570.3 million and our total debt balance was $1,226.6 million. Please refer to Part II, Item 8, Note 9, “Debt,” to our consolidated financial statements and “Our Indebtedness” section below for further information on our debt.
(b) The Adjusted column is a non-GAAP financial measure, adjusted to exclude foreign exchange gains (losses), share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, amortization of acquisition-related intangible assets, and other non-recurring items, all of which are adjusted for the effect of income taxes.
(b) The as adjusted column is a non-GAAP financial measure, adjusted to exclude share-based compensation expense and related employer taxes, amortization of acquisition-related intangible assets, and certain other items.
(b) The Adjusted column is a non-GAAP financial measure, adjusted to exclude foreign exchange gains (losses), share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, amortization of acquisition-related intangible assets, and other non-recurring items, all of which are adjusted for the effect of income taxes.
(b) The as adjusted column is a non-GAAP financial measure, adjusted to exclude share-based compensation expense and related employer taxes, amortization of acquisition-related intangible assets, and certain other items.
We record a valuation allowance to reduce our deferred tax assets to reflect the net deferred tax assets that we believe will be realized. As of December 31, 2022, we will continue to record a valuation allowance against certain deferred tax assets including state net operating loss carryovers and tax basis intangibles. Net loss.
As of December 31, 2023, we will continue to record a valuation allowance against certain deferred tax assets including state net operating loss carryovers and tax basis intangibles. Net income (loss). Net income was $54.8 million for the year ended December 31, 2023, compared to net loss of $73.4 million for the year ended December 31, 2022.
We believe that these non-GAAP financial measures are useful to management and investors as supplemental measures to evaluate our overall operating performance including comparison across periods and with competitors.
Adjusted Operating Profit, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Cloud Recurring Gross Margin We believe that Adjusted operating profit, Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Cloud recurring gross margin, non-GAAP financial measures, are useful to management and investors as supplemental measures to evaluate our overall operating performance.
Due to our subscription model, where we recognize subscription revenues ratably over the term of the subscription period, and our high customer retention rates, we have a high level of visibility into our future revenues. The profitability of a customer depends, in large part, on how long they have been a customer.
Our Business Model Our business model focuses on supporting the rapid growth of Dayforce and maximizing the lifetime value of our Dayforce customer relationships. Due to our subscription model, where we recognize subscription revenues ratably over the term of the subscription period, and our high customer retention rates, we have a high level of visibility into our future revenues.
Overview Ceridian is a global HCM software company. We categorize our solutions into two categories: Cloud and Bureau solutions. Cloud revenue is primarily generated from HCM solutions that are delivered via two Cloud offerings: Dayforce, our flagship Cloud HCM platform, and Powerpay, a Cloud HR and payroll solution for the Canadian small business market.
Cloud recurring revenue is primarily generated from HCM solutions that are delivered via two Cloud offerings: Dayforce, our flagship Cloud HCM platform, and Powerpay, a Cloud HR and payroll solution for the Canadian small business market. We also continue to support customers using our legacy North America solutions and customers using our acquired solutions in APJ.
Gross margin for each solution in the table above is defined as total revenue less cost of revenue for the applicable solution as a percentage of total revenue for that related solution, which is exclusive of any product development and management or depreciation and amortization cost allocations. *Excluding the 2021 acquisitions of Ascender and ADAM HCM. 36 | 2022 Form 10-K Table of Contents Cloud recurring gross margin was 72.0% for the year ended December 31, 2022, compared to 72.3% for the year ended December 31, 2021.
Gross margin for each solution in the table above is defined as total revenue less cost of revenue for the applicable solution as a percentage of total revenue for that related solution, which is exclusive of any product development and management or depreciation and amortization cost allocations.
Revenue from our Cloud and Bureau solutions includes investment income generated from holding customer funds before they are remitted to taxing authorities, also referred to as float revenue or float. Dayforce provides HR, payroll, workforce management, benefits, and talent intelligence functionality.
We invest in maintenance and necessary updates to support our customers and continue to migrate them to Dayforce. Revenue from our Cloud recurring and other recurring solutions includes investment income generated from holding customer funds, also referred to as float revenue or float. Dayforce provides global HR, payroll and tax, workforce management, benefits, and talent intelligence functionality.
The increase in cost of revenue for professional services and other of $44.1 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, was primarily due to costs incurred to take new customers live.
Professional services and other cost of revenue increased $26.9 million, or 11.3%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to increased labor-related costs incurred to take new customers live and increased share-based compensation expense.
The table below summarizes the activity within the consolidated statements of cash flows: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Net cash provided by (used in) operating activities $ 132.6 $ 48.8 $ (30.2 ) Net cash (used in) provided by investing activities (342.5 ) (711.1 ) 38.8 Net cash provided by financing activities 870.1 407.5 565.3 Effect of exchange rate on cash and equivalents (8.1 ) (20.9 ) (4.0 ) Net increase (decrease) in cash, restricted cash, and equivalents 652.1 (275.7 ) 569.9 Cash, restricted cash, and equivalents at beginning of period 1,952.8 2,228.5 1,658.6 Cash, restricted cash, and equivalents at end of period 2,604.9 1,952.8 2,228.5 Cash and equivalents $ 431.9 $ 367.5 $ 188.2 Restricted cash and equivalents 2,173.0 1,585.3 2,040.3 Total cash, restricted cash, and equivalents $ 2,604.9 $ 1,952.8 $ 2,228.5 Operating Activities Net cash provided by operating activities was $132.6 million during the year ended December 31, 2022, compared to $48.8 during the year ended December 31, 2021.
The table below summarizes the activity within the consolidated statements of cash flows: Year Ended December 31, 2023 2022 (In millions) Net cash provided by operating activities $ 219.5 $ 132.6 Net cash used in investing activities (202.8 ) (342.5 ) Net cash provided by financing activities 242.0 764.6 Effect of exchange rate changes on cash, restricted cash, and equivalents 11.5 (46.8 ) Net increase in cash, restricted cash, and equivalents 270.2 507.9 Cash, restricted cash, and equivalents at beginning of period 3,151.2 2,643.3 Cash, restricted cash, and equivalents at end of period 3,421.4 3,151.2 Cash and equivalents 570.3 431.9 Restricted cash and equivalents 2,851.1 2,719.3 Total cash, restricted cash, and equivalents $ 3,421.4 $ 3,151.2 38 | 2023 Form 10-K Table of Contents Operating Activities Net cash provided by operating activities was $219.5 million during the year ended December 31, 2023, compared to $132.6 million during the year ended December 31, 2022.
We also incur costs to manage the account, to retain customers, and to sell additional functionality. These costs, however, are significantly less than the costs initially incurred to acquire and to take customers live.
We also incur costs to manage the account, to retain customers, and to sell additional functionality.
We cannot provide assurance that we will be able to obtain this additional liquidity on reasonable terms, or at all.
We anticipate that to the extent that we require additional liquidity, it will be funded through the issuance of equity, the incurrence of additional indebtedness, or a combination thereof. We cannot provide assurance that we will be able to obtain this additional liquidity on reasonable terms, or at all.
Petersburg, Florida facility, foreign exchange loss, restructuring consulting fees, the difference between the historical five-year average pension expense and the current period actuarially determined pension expense associated with the planned termination of the frozen U.S. pension plan and related changes in investment strategy associated with protecting the now fully funded status, and the impact of the fair value adjustment for the DataFuzion contingent consideration.
The Other column includes $33.7 million of severance charges, of which $19.5 million relates to cost of Cloud recurring revenue, $7.7 million of restructuring consulting fees, $4.6 million related to the impact of the fair value adjustment for the DataFuzion contingent consideration, $3.5 million of foreign exchange loss, $1.4 million related to the difference between the historical five-year average pension expense and the current period actuarially determined pension expense associated with the planned termination of the frozen U.S. pension plan and related changes in investment strategy associated with protecting the now fully funded status, and $0.3 million related to the net impact of the abandonment of certain leased facilities, along with a $32.7 million net adjustment for the effect of income taxes related to these items.
Investing Activities During the year ended December 31, 2022, net cash used in investing activities was $342.5 million, related to net purchases of customer funds marketable securities of $248.0 million, and capital expenditures of $94.5 million. Our capital expenditures included $74.3 million for software and technology and $20.2 million for property and equipment.
Our capital expenditures included $74.3 million for software and technology and $20.2 million for property, plant and equipment. Financing Activities Net cash provided by financing activities was $242.0 million during the year ended December 31, 2023.
GAAP basic and diluted net loss per share are calculated based upon 150,402,321 weighted-average shares of common stock and Adjusted basic and diluted net income per share are calculated based upon 150,402,321 and 156,842,934 weighted-average shares of common stock, respectively. 45 | 2022 Form 10-K Table of Contents
(d) GAAP diluted net loss per share is calculated based upon 152.9 million weighted average shares of common stock, and Adjusted diluted net income per share is calculated based upon 155.8 million weighted average shares of common stock. 44 | 2023 Form 10-K Table of Contents
Dayforce 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. Our platform is designed to ease administrative work for both employees and managers, creating opportunities for companies to increase employee engagement.
Dayforce 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. Our platform is designed to drive efficiencies for our customers and their employees by improving HCM decision-making processes, streamlining workflows, revealing strategic organizational insights, and simplifying legislative compliance.
Revenues We generate recurring revenues primarily from recurring fees charged for the use of our Cloud solutions, Dayforce and Powerpay, as well as from our Bureau solutions. We also generate professional services and other revenue associated primarily with the work performed to assist customers with the planning, design, and implementation of their Cloud-based solution.
We also generate professional services and other revenue associated primarily with the work performed to assist customers with the planning, design, and implementation of their Cloud-based solution. Our solutions are typically provided through long-term customer relationships that result in a high level of recurring revenue.
Management believes that EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin are helpful in highlighting management performance trends because EBITDA, Adjusted EBITDA and Adjusted EBITDA margin exclude the results of decisions that are outside the normal course of our business operations.
Management believes that Adjusted operating profit, Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Cloud recurring gross margin are helpful in highlighting management performance trends because these metrics exclude the results of decisions that are outside the normal course of our business operations. Recent Events Effective January 31, 2024, Ceridian HCM Holding Inc. changed its corporate name to Dayforce, Inc.
We believe that our cash flow from operations, availability under our Revolving Credit Facility, and available cash and equivalents will be sufficient to meet our liquidity needs for the foreseeable future. Dayforce Wallet on demand pay requests are currently funded from our operating cash balances, until it is reimbursed by the customers through their normal payroll funding cycles.
Dayforce Wallet on-demand pay requests are currently funded from our operating cash balances, until it is reimbursed by our customers through their normal payroll funding cycles. We evaluate the creditworthiness of each customer for the Dayforce Wallet feature.
At the end of 2022, enterprise businesses accounted for 51% of the total number of global employees, major businesses accounted for 41% of the total number of global employees, and small businesses accounted for 8% of the total number of global employees.* The increase in float revenue is driven by the 12.4% increase in average float balance for our customer funds for the year ended December 31, 2022, which increased to $4,370.7 million, compared to $3,889.5 million for the year ended December 31, 2021, in addition to an increase in average yield of 76 basis points compared to the year ended December 31, 2021.
The increase in float revenue is driven by the 3.0% increase in average float balance for our customer funds for the year ended December 31, 2023, which increased to $4.50 billion, compared to $4.37 billion for the year ended December 31, 2022, in addition to an increase in average yield of 192 basis points compared to the year ended December 31, 2022.
Adjusted EBITDA and Adjusted EBITDA margin are components of our management incentive plan and are used by management to assess performance and to compare our operating performance to our competitors.
Adjusted EBITDA is a component of our management incentive plan and Adjusted Cloud recurring gross margin is a component of certain performance based equity awards for our named executive officers, and these metrics are used by management to assess performance and to compare our operating performance to our competitors.
(c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period. (d) Both GAAP and Adjusted net income (loss) per share are calculated by dividing either GAAP or Adjusted net income by the basic or diluted weighted average common shares outstanding.
(c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
(c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period. (d) Both GAAP and Adjusted net income (loss) per share are calculated by dividing either GAAP or Adjusted net income by the basic or diluted weighted average common shares outstanding.
(c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
We have not reconciled the Dayforce recurring revenue per customer because there is no directly comparable GAAP financial measure. 42 | 2022 Form 10-K Table of Contents The following table reconciles our reported results to our non-GAAP financial measures EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin for the periods presented: Year Ended December 31, 2022 2021 (Dollars in millions) Net loss $ (73.4 ) $ (75.4 ) Interest expense, net 28.6 35.9 Income tax expense (benefit) 10.5 (14.9 ) Depreciation and amortization 89.0 77.5 EBITDA 54.7 23.1 Foreign exchange loss 3.5 9.5 Share-based compensation (a) 145.1 116.8 Severance charges (b) 33.7 7.4 Restructuring consulting fees (c) 7.7 16.7 Other non-recurring items (d) 5.7 (11.0 ) Adjusted EBITDA $ 250.4 $ 162.5 Net profit margin (e) (5.9 )% (7.4 )% Adjusted EBITDA margin 20.1 % 15.9 % (a) Represents share-based compensation expense and related employer taxes.
We have not reconciled the Dayforce recurring revenue per customer because there is no directly comparable GAAP financial measure. 42 | 2023 Form 10-K Table of Contents The following tables reconcile our reported results to our non-GAAP financial measures: Year Ended December 31, 2023 As reported As reported margins (a) Share-based compensation Amortization Other (b) As adjusted (b) As adjusted margins (a) (Dollars in millions, except per share data) Cost of Cloud recurring revenue $ 278.5 77.0 % $ 15.4 $ — $ — $ 263.1 78.3 % Operating profit $ 133.1 8.8 % $ 137.1 $ 60.5 $ 9.1 $ 339.8 22.4 % Net income $ 54.8 3.6 % $ 137.1 $ 60.5 $ (13.7 ) $ 238.7 15.8 % Interest expense, net 36.1 — — — 36.1 Income tax expense (c) 41.2 — — (22.2 ) 63.4 Depreciation and amortization 132.5 — 60.5 — 72.0 EBITDA $ 264.6 $ 137.1 $ — $ 8.5 $ 410.2 27.1 % Net income per share - diluted (d) $ 0.35 $ 0.86 $ 0.38 $ (0.09 ) $ 1.51 (a) Cloud recurring gross margin is defined as total Cloud recurring revenue less cost of Cloud recurring revenue as a percentage of total Cloud recurring revenue.
Net loss was $73.4 million for the year ended December 31, 2022, compared to $75.4 million for the year ended December 31, 2021.
Operating profit for the year ended December 31, 2023, was $133.1 million, compared to operating loss of $25.8 million for the year ended December 31, 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2022, the projected benefit obligation ("PBO") exceeded the fair value of plan assets by $11.1 million. Please refer to Note 10, "Employee Benefit Plans," for additional information. The effective discount rate used in accounting for pension and other benefit obligations in 2022 ranged from 4.72% to 4.84%.
Biggest changeAs of December 31, 2023, the projected benefit obligation ("PBO") exceeded the fair value of plan assets by $21.5 million. Please refer to Part II, Item 8, Note 10, "Employee Benefit Plans," for additional information. The effective discount rate used in accounting for pension and other benefit obligations in 2023 ranged from 4.52% to 4.65%.
Fluctuations in the value of our investment securities caused by a change in interest rates (gains or losses on the carrying value) are recorded in other comprehensive income, and are realized only if we sell the underlying securities. 46 | 2022 Form 10-K Table of Contents Pension Obligation Risk .
Fluctuations in the value of our investment securities caused by a change in interest rates (gains or losses on the carrying value) are recorded in other comprehensive income, and are realized only if we sell the underlying securities. 45 | 2023 Form 10-K Table of Contents Pension Obligation Risk .
Based on current market conditions, portfolio composition and investment practices, a 100 basis point increase in market investment rates would result in approximately $24 million increase in float revenue over the ensuing twelve month period. There are no incremental costs of revenue associated with changes in float revenue.
Based on current market conditions, portfolio composition and investment practices, a 100 basis point decrease in market investment rates would result in approximately $25 million decrease in float revenue over the ensuing twelve month period. There are no incremental costs of revenue associated with changes in float revenue.
Please refer to Note 9, “Debt,” for additional information. We do not enter into investments for trading or speculative purposes. Our cash equivalents and our portfolio of marketable securities are subject to market risk due to changes in interest rates.
Please refer to Part II, Item 8, Note 9, “Debt,” for additional information. We do not enter into investments for trading or speculative purposes. Our cash equivalents and our portfolio of marketable securities are subject to market risk due to changes in interest rates.
The following table reflects the estimated sensitivity associated with a change in certain significant actuarial assumptions (each assumption change is presented mutually exclusive of other assumption changes): Impact on 2023 Pension Expense Increase (Decrease) Change in Assumption Pension Benefits Post Retirement (Dollars in millions) Increase in discount rate 50 basis points $ 0.1 $ — Decrease in discount rate 50 basis points $ (0.1 ) $ — Increase in return on plan asset 50 basis points $ (2.2 ) N/A Decrease in return on plan asset 50 basis points $ 2.2 N/A 47 | 2022 Form 10-K Table of Contents
The following table reflects the estimated sensitivity associated with a change in certain significant actuarial assumptions (each assumption change is presented mutually exclusive of other assumption changes): Impact on 2024 Pension Expense Increase (Decrease) Change in Assumption Pension Benefits Post Retirement (In millions) Increase in discount rate 50 basis points $ 0.1 $ — Decrease in discount rate 50 basis points $ (0.1 ) $ — Increase in return on plan asset 50 basis points $ (1.8 ) N/A Decrease in return on plan asset 50 basis points $ 1.8 N/A 46 | 2023 Form 10-K Table of Contents
We pay floating rates of interest on our Term Debt and Revolving Credit Facility. The interest paid on these borrowings will fluctuate up or down in relation to changes in market interest rates. A 100 basis point increase in the LIBOR rates would result in approximately $7 million increase in our interest expense over the ensuring twelve-month period.
We pay floating rates of interest on our Term Debt and Revolving Credit Facility. The interest paid on these borrowings will fluctuate up or down in relation to changes in market interest rates. A 100 basis point decrease in the applicable reference rates would result in approximately $6 million decrease in our interest expense over the ensuring twelve-month period.
The expected rate of return on plan assets for qualified pension benefits in 2022 was 3.30%.
The expected rate of return on plan assets for qualified pension benefits in 2023 was 5.20%.

Other DAY 10-K year-over-year comparisons