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What changed in Dayforce's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Dayforce's 2023 and 2024 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 2024 report.

+346 added−341 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-28)

Top changes in Dayforce's 2024 10-K

346 paragraphs added · 341 removed · 244 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe 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.
Biggest changeWe define a customer as a single organization, such as a company, a non-profit association, an educational institution, or government entity. Our customer count and number of global employees excludes data from the acquisitions of Ascender, Adam HCM, and eloomi. We also have approximately 38,000 Powerpay customer accounts.
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.
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, time away from work, parental leave, flexible and remote work options, employee assistance programs, and tuition reimbursement.
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.
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 and Dayforce Flex Work.
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.
No single customer accounted for more than 2% of our revenues during the year ended December 31, 2024. 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.
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.
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 SEC, and are also available on the SEC’s website at http://www.sec.gov.
Our Career Explorer product provides our customers’ employees access to data-driven career pathing, gives them information about open internal roles that match their interests and abilities, and provides actionable steps to help them reach their career goals. Our Communities We are committed to giving back to the communities in which we live and work.
Our Career Explorer product provides our employees and our customers’ employees access to data-driven career pathing, gives them information about open internal roles that match their interests and abilities, and provides actionable steps to help them reach their career goals. Dayforce Cares We are committed to giving back to the communities in which we live and work.
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.
Our certificate of incorporation, our 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.
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.
Talent Intelligence Dayforce Talent Intelligence, a suite of next generation talent acquisition and talent management solutions powered by AI and driven by data, helps organizations recruit, hire, retain, and develop their workforce.
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.
Item 1. Bu siness. Overview Dayforce, 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.
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.
Our Dayforce platform is used by organizations to optimize management of the entire employee lifecycle, including attracting, hiring, engaging, paying, and developing their people.
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.
Through our employee-led charity Dayforce Cares, we provide financial support to individuals and families struggling with basic needs and quality of life across the U.S. and Canada and to local youth organizations in Mauritius. Since its inception, the foundation has given over $7 million in grants to over 5,000 people in need.
We also face competition from modern HCM providers, whose solutions have been specifically built as single application platforms in the Cloud. In addition, we face competition from large, long-established enterprise application software vendors.
We also face competition from modern HCM providers, whose solutions have been specifically built as single application platforms in the Cloud.
Competition The market for HCM technology solutions is highly competitive and subject to changing technology and shifting client needs. We compete with firms that provide both integrated and point solutions for HCM, as well as with local providers in each jurisdiction that we operate. Globally, we compete with legacy payroll service providers, as well as Cloud-enabled client-server HCM providers.
We compete with firms that provide both integrated and point solutions for HCM, as well as with local providers in each jurisdiction that we operate. Globally, we compete with legacy payroll service providers, as well as Cloud-enabled client-server HCM providers.
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.
We work directly with customers to understand their needs and deliver solutions that address their challenges while taking into consideration the entire user experience. We are committed to protecting the information of our customers, our employees, and our contractors, along with other business data. Our R&D team is responsible for the design, development, and testing of our applications.
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.
Dayforce supports payroll in over 200 countries and territories around the world, while providing employers with a centralized global view of their payroll data. This global payroll model is powered by a combination of company-owned and partner unified payroll engines with an automated data exchange that affords employees and administrators to have a consistent, intuitive single user experience.
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.
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.
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.
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.
Professional services include add-on implementation services for existing customers, ongoing product configuration changes when the customer does not have the resources to do it themselves, product usage consulting and a variety of additional services, such as report writing, usage audits, and process improvement.
Professional services include add-on implementation services for existing customers, ongoing product configuration changes when the customer does not have the resources to do it themselves, product usage consulting and a variety of additional services, such as report writing, usage audits, and process improvement. 6 | 2024 Form 10-K Table of Contents Index to Financial Statements Customer Support Our global customer support organization provides 24/7 application support from locations across North America, APJ, and EMEA.
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 support function is organized into teams of representatives with deep product and domain expertise across our platform. These teams are aligned to groups of customers based on geography and product type to provide a combination of deep product and industry knowledge, consistent relationships, and high availability.
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.
Talent Intelligence can also objectively measure workforce demographics while identifying inequity in everything from payroll to promotion opportunities to help employers create actionable policy changes. Customers can leverage Talent Intelligence tools for recruiting, onboarding, engagement, performance management, succession planning, compensation management, and employee career planning and skills development.
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 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. 9 | 2024 Form 10-K Table of Contents Index to Financial Statements
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.
Payroll and Tax Dayforce empowers employers to manage their global payroll needs within a single system. Through our Dayforce platform, payroll administrators with localized payroll functionality are able to make updates to time and pay in real-time.
Competition in the global HCM market is primarily based on product and service quality, including ease of use and accessibility of technology, breadth of offerings, reputation, and price.
In addition, we face competition from large, long-established enterprise application software vendors. 7 | 2024 Form 10-K Table of Contents Index to Financial Statements Competition in the global HCM market is primarily based on product and service quality, including ease of use and accessibility of technology, breadth of offerings, reputation, and price.
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.
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. Other We also offer payroll and payroll-related services using legacy technology and on-premise technology from our acquired businesses in APJ. We invest in maintenance and necessary updates to support our customers.
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.
Fourth quarter revenue seasonality is primarily driven by year-end processing fees and Dayforce customer go-lives; and first quarter revenue seasonality is primarily driven by revenue earned for printing of year-end tax packages. Human Capital Our people are core to our business as a leading HCM solutions provider.
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.
We host global events and provide resources in observance of Mental Health Awareness Month, and we offer two paid wellness days to all employees, in addition to other permitted leave. In addition, our global emergency threat monitoring and mass communications system helps to foster connectivity and support for our employees both during and after natural disasters and other dangerous events.
Our R&D team is responsible for the design, development, and testing of our applications. We believe that our modern Cloud technology stack, agile design and development methodology, and efficient software deployment process enable us to innovate quickly in response to industry trends.
We believe our modern Cloud technology stack, agile design and development methodologies, and efficient software deployment process enable us to innovate quickly in response to industry trends. We host our Cloud-based applications and serve our customers from facilities operated by third-party providers, primarily Microsoft Azure.
It is also accessible to employees, who can view the organizational chart, appropriate information about other employees in the organization, and their own pay and time details.
It is also accessible to employees, who can view the organizational chart, appropriate information about other employees in the organization, and their own pay and time details. There are several self-service options available in the product as well, such as change of address or adding a dependent, making it easy for employees to keep their profiles up to date.
Benefits Dayforce Benefits assists benefits administrators from enrollment to ongoing benefits administration, including eligibility, open enrollment and Affordable Care Act ("ACA") management.
As of December 31, 2024, over 1,350 customers were live on Dayforce Wallet. 5 | 2024 Form 10-K Table of Contents Index to Financial Statements Benefits Dayforce Benefits assists benefits administrators from enrollment to ongoing benefits administration, including eligibility, open enrollment and Affordable Care Act ("ACA") management.
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.
We market Powerpay to organizations with fewer than 100 employees in Canada. The majority of our revenue growth comes from new Cloud customers. Technology, Hosting, and Research and Development (“R&D”) Technology and innovation are at the core of Dayforce, Inc. Our innovation and development process are customer driven.
We provide a wide range of compensation and benefits to our employees that enhance the workplace experience.
In addition to our corporate employees, we launched Dayforce Flex Work in 2024, through which we hire shift workers to fill shift opportunities provided by our customers. The wide range of compensation and benefits we provide to our corporate employees enhance the workplace experience.
We maintain a culture of continuous learning and empowerment through programs that include professional skills training, leadership development, and job shadowing and job rotation opportunities. Our ability to attract and retain top talent remains critical to our continued success as a business, and our employee Net Promoter Score in 2023 was 50.
We maintain a culture of continuous learning and empowerment through programs open to our entire workforce that include professional skills training, leadership development, and job shadowing and job rotation opportunities. The health, safety, and wellbeing of our employees is a cornerstone of our employee culture, as it helps create an environment where all of our employees can grow and contribute.
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").
Our payroll trust structure provides bankruptcy-remoteness protection for client funds pending remittance to their employees, tax authorities, and other payees. Intellectual Property Our success and ability to compete depends in part upon our intellectual property.
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.
With Dayforce Wallet, employees’ funds are loaded onto a paycard, which generates interchange fee revenue when used.
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.
Please refer to Part I, Item 1A, “Risk Factors” for further discussion of our uses of AI and AI-related risks, including possible adverse developments and potential barriers to adoption. Human Resources Dayforce Human Resources provides HR professionals, managers, and employees a single, complete record for all of their HR information.
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In 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.
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In 2024, we received several accolades for our Dayforce solution, including: • Named as a Leader in the 2024 Gartner® Magic Quadrant™ for Cloud HCM Suites for 1,000+ Employee Enterprises for the fifth consecutive year. • Scored highest in both North American Compliance Suite 1,000-2,500 and North American Compliance Suite 2,500+ Use Cases in the Gartner 2024 Critical Capabilities report for Cloud HCM Suites for Enterprises with 1,000+ Employees. • Earned a 2024 Top HR Products of the Year Award from Human Resources Executive Magazine for Dayforce Career Explorer. • Placed on the Constellation ShortList™ within four categories: Workforce Management Suites, HCM Suites with a North American Focus, Global HCM Suites, and Payroll for North American SMBs. • Placed highest on the value realization axis within the Hackett Group’s inaugural Digital World Class Matrix™. • Named a Leader in both the PEAK Matrix® Assessment 2024 for People Analytics and in the Nucleus Research WFM Technology Value Matrix 2024. 4 | 2024 Form 10-K Table of Contents Index to Financial Statements Our Dayforce platform is continuously evolving to address the needs of organizations.
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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.
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In 2024, Dayforce Co-Pilot, an artificial intelligence (“AI”) assistant personalized to answer contextual questions, summarize data, and provide step-by-step guidance, was made generally available to all customers.
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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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In 2024, we also announced the anticipated 2025 availability of several capabilities in the Dayforce platform, including Dayforce AI agents which are in production and in the final stages of testing and refinement, and Dayforce Demand Forecasting which is currently under development, that are designed to continue leveraging AI and AI enhanced machine learning algorithms, respectively, to help organizations improve productivity and planning.
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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.
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Customers Dayforce is scalable and designed to serve organizations with more than 100 employees. The Dayforce customer base has increased from 482 as of December 31, 2012 to 6,876 customers on the platform as of December 31, 2024 representing approximately 7.62 million global employees.
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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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While we control and have access to our infrastructure and all components of our network, we do not control the operation of these third-party facilities. Dayforce National Trust Bank Dayforce National Trust Bank (“DNTB”), our wholly-owned national trust bank chartered and regulated by the Office of Comptroller of the Currency (the "OCC"), acts as trustee for our U.S. payroll trust.
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We host Cloud-based applications and serve the majority of our customers from data centers operated by third party providers, primarily Microsoft Azure, AWS, VMWare Cloud on AWS, and Navisite.
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We primarily rely on copyright, trade secret, and trademark laws; trade secret protection; internal policies and technical controls; and confidentiality, non-disclosure or license agreements with our employees, customers, partners, and others to protect our intellectual property rights. Competition The market for HCM technology solutions is highly competitive and subject to changing technology and shifting client needs.
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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.
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Our Chief People Officer, together with our internal senior leadership committee, is responsible for developing and executing our human capital strategy.
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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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Our Chief People Officer and CEO regularly update our Board of Directors, the Corporate Governance and Nominating Committee, and the Compensation Committee on human capital matters and seek their input on subjects such as employee development, succession planning and executive compensation programs, as appropriate. Employee Base and Benefits As of December 31, 2024, we had more than 9,600 employees globally.
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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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The shift workers employed through the Dayforce Flex Work program are eligible for a different set of benefits than our corporate employees.
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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.
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Culture and Engagement We believe that promoting a culture of openness and belonging within our entire workforce helps our employees to succeed, helps our company attract and retain talented employees, and strengthens our ability to perform as a team.
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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.
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We have eight employee resource groups and global Connect Communities, which are open to all employees, on a voluntary basis, who want additional opportunities to foster inclusion, connect with colleagues, and share different perspectives. Further, we are committed to providing meaningful professional development opportunities to our entire workforce.
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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.
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Our ability to attract and retain top talent remains critical to our continued success as a business, and our employee Net Promoter Score in 2024 was above 55. 8 | 2024 Form 10-K Table of Contents Index to Financial Statements Tech for Good We believe that Tech for Good and responsible innovation can have a positive impact on all stakeholders, including our employees.
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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.
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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.
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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.
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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.
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Our AI Governance Framework closely evaluates the potential use of AI from idea through all key stages of the product development lifecycle. Our Dayforce Engagement product helps our customers build a culture of inclusion and respect within their workforce, and it gives them the ability to measure employee sentiment on equity and belonging.
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In addition, 50% of our employees globally participated in our giving and volunteering program in 2023. 8 | 2023 Form 10-K Table of Contents Environment We are committed to doing our part to help address the climate crisis.
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This includes actively working to decrease our carbon footprint by pursuing two near-term reduction targets that cover Scope 1, 2, and 3 emissions. Our decarbonization strategy includes consolidating our physical footprint globally, expanding our cloud strategy to sustainably deliver our data and technology solutions, and significantly reducing our in-house print operations.
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Each year, we source 100% renewable electricity across our global operations through the purchase of high-quality Energy Attribute Certificates. In 2023, we launched a new Responsible Sourcing Initiative to enhance the sustainability of our supply chain.
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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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In addition, past ESG reports, our Task Force on Climate-related Financial Disclosures Index, SASB Index, consolidated EEO-1 report, and ESG-related policies and principles can be found here. 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.
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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.
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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.
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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.
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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.
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Alkharrat is our Executive Vice President and Chief Revenue Officer, positions he has held since June 2023. Prior to joining the Company, Mr. Alkharrat served as Chief Partner Officer at Workday, Inc., a provider of enterprise cloud applications, from March 2022 to February 2023.
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Previously, he held the position of President and Chief Revenue Officer at C3 AI, an artificial intelligence software provider, from June 2021 to February 2022. Prior to that, he served as the Senior Vice President of Worldwide Sales at VMware LLC, a cloud service provider, from November 2019 to 2021. From August 2010 to November 2019, Mr.
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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.
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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.
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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.
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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.
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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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

105 edited+62 added−37 removed146 unchanged
Biggest changeFurther, 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.
Biggest changeBecause 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.
If not cured, an event of default under our Senior Secured Credit Facility could result in any amounts outstanding, including any accrued interest and unpaid fees, becoming immediately due and payable, which would require us, among other things, to seek additional financing in the debt or equity markets, to refinance or restructure all or a portion of our indebtedness, to sell selected assets, and/or to reduce or to delay planned capital or operating expenditures.
If not cured, an event of default under our 2024 Senior Secured Credit Facility could result in any amounts outstanding, including any accrued interest and unpaid fees, becoming immediately due and payable, which would require us, among other things, to seek additional financing in the debt or equity markets, to refinance or restructure all or a portion of our indebtedness, to sell selected assets, and/or to reduce or to delay planned capital or operating expenditures.
Our expanding international operations are subject to risks that could adversely affect those operations or our business as a whole, including but not limited to the costs of establishing a market presence, localizing product and service offerings for foreign customers, difficulties in managing and staffing international operations, and increased expenses related to introducing corporate policies and controls in our international operations and increased reliance on partners to provide services in additional geographies.
Our international operations are subject to risks that could adversely affect those operations or our business as a whole, including but not limited to the costs of establishing a market presence, localizing product and service offerings for foreign customers, difficulties in managing and staffing international operations, and increased expenses related to introducing corporate policies and controls in our international operations and increased reliance on partners to provide services in additional geographies.
To the extent that our applications depend upon the successful operation of third party software in conjunction with our software, any undetected errors or defects in this third party software could prevent the deployment or impair the functionality of our applications, delay new application introductions, and result in a failure of our applications, which could have a material adverse effect on our business, financial condition, and results of operations.
To the extent that our applications depend upon the successful operation or availability of third party software in conjunction with our software, any undetected errors or defects in this third party software could prevent the deployment or impair the functionality of our applications, delay new application introductions, and result in a failure of our applications, which could have a material adverse effect on our business, financial condition, and results of operations.
In the event of a customer’s failure to repay us, we may be required to seek additional sources of short-term liquidity, which may not be available on reasonable terms, or suffer credit losses, which could have a material adverse effect on our business, financial condition, and results of operations.
In the event of a customer’s failure to repay us, we may also be required to seek additional sources of short-term liquidity, which may not be available on reasonable terms, or suffer credit losses, which could have a material adverse effect on our business, financial condition, and results of operations.
Our business depends on the ability to implement our solutions on a timely, accurate, and cost-efficient basis and to provide professional services at the high level demanded by our customers. Implementation and other professional services may be performed by our own staff, by a third party, or by a combination of the two.
Our business depends on the ability to implement our solutions in a timely, accurate, and cost-efficient basis and to provide services at the high level demanded by our customers. Implementation and other professional services may be performed by our own staff, by a third party, or by a combination of the two.
Under the terms of the agreements governing our debt facilities, we are required to comply with specified operating covenants and, under certain circumstances, a financial covenant applicable to the Revolving Credit Facility, which may limit our ability to operate our business as we otherwise might operate it.
Under the terms of the agreements governing our debt facilities, we are required to comply with specified operating covenants and, under certain circumstances, a financial covenant applicable to the 2024 Revolving Credit Facility, which may limit our ability to operate our business as we otherwise might operate it.
In such an event, we may be required to seek additional sources of short-term liquidity, which may not be available on reasonable terms, which could have a material adverse effect on our business, financial condition, and results of operations.
In such an event, we may also be required to seek additional sources of short-term liquidity, which may not be available on reasonable terms, which could have a material adverse effect on our business, financial condition, and results of operations.
In addition, we need to continue to properly manage our technological operations infrastructure to support version control, changes in hardware and software parameters, and the evolution of our applications. We have experienced, and may in the future experience, website disruptions, outages, and other performance problems.
In addition, we need to continue to properly manage our technological operations infrastructure to support version control, changes in hardware and software parameters, and the evolution of our applications. We have experienced, and may in the future experience, disruptions, outages, and other performance problems.
However, there can be no assurance that our employees, consultants, or agents will not take actions in violation of our policies for which we may be ultimately responsible, or that our policies and procedures will be adequate or will be determined to be adequate by regulators.
There can be no assurance that our employees, consultants, or agents will not take actions in violation of our policies for which we may be ultimately responsible, or that our policies and procedures will be adequate or will be determined to be adequate by regulators.
Any failure to offer high-quality technical support services may adversely affect our relationships with our customers and could have a material adverse effect on our business, financial condition, and results of operations.
Any failure to offer high-quality support services may adversely affect our relationships with our customers and could have a material adverse effect on our business, financial condition, and results of operations.
Our obligations under the Senior Secured Credit Facility are secured by first priority security interests in substantially all of our assets and the domestic subsidiary guarantors, subject to permitted liens and certain exceptions.
Our obligations under the 2024 Senior Secured Credit Facility are secured by first priority security interests in substantially all of our assets and the domestic subsidiary guarantors, subject to permitted liens and certain exceptions.
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.
Our 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.
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.
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.
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.
Third parties, including our competitors, may own or claim to own intellectual property relating to our service offerings or brand and may claim that we are infringing their intellectual property rights.
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.
Provisions contained in our certificate of incorporation and 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.
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.
In addition, 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.
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.
These factors include: our ability to attract and retain new and current Cloud 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.
These problems may be caused by a variety of factors, including infrastructure changes, human or software errors, viruses, security attacks, fraud, increased resource consumption from expansion or modification to our Dayforce code, spikes in customer usage, denial of service issues and Cloud interruptions run by third party service providers and our ability to react.
These problems may be caused by a variety of factors, including hardware failures, infrastructure changes, human or software errors, viruses, security attacks, fraud, increased resource consumption from expansion or modification to our Dayforce code, spikes in customer usage, denial of service attacks and Cloud interruptions run by third party service providers and our ability to react.
In addition, some of our businesses and entities in the U.S. and a number of other countries in which we operate are and will continue to be subject to anti-money laundering laws and regulations. These laws require us to develop and implement risk-based anti-money laundering programs, report large cash transactions and suspicious activity, and maintain transaction records.
In addition, some of our businesses and entities in the U.S., Canada and other countries in which we operate are and will continue to be subject to anti-money laundering laws and regulations. These laws require us to develop and implement risk-based anti-money laundering programs, report large cash transactions and suspicious activity, and maintain transaction records.
We have experienced and will continue to experience significant growth in the number of users, transactions, and data that our operations infrastructure supports, including the acquisition of new systems via strategic transactions.
We have experienced and will continue to experience significant growth in the number of users, transactions, transmission volume and data that our operations infrastructure supports, including the acquisition of new systems via strategic transactions.
If our current or future applications fail to perform properly, our reputation could be adversely affected, our market share could decline, and we could be subject to liability claims, which could have a material adverse effect on our business, financial condition, and results of operations.
If our current or future applications that we provide to customers fail to perform properly, our reputation could be adversely affected, our market share could decline, and we could be subject to liability claims, which could have a material adverse effect on our business, financial condition, and results of operations.
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 to be out of 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 business, financial condition, results of operations, access to capital markets and borrowing costs may be adversely affected by a major natural disaster or catastrophic event, including civil unrest, economic recession, geopolitical instability, war, terrorist attack, the effects of climate change, or pandemics or other public health emergencies such as the COVID-19 outbreak, and measures taken in response thereto.
Our business, financial condition, results of operations, access to capital markets and borrowing costs may be adversely affected by a major natural disaster or catastrophic event, including civil unrest, economic recession, geopolitical instability, war, terrorist attack, the effects of climate change, or pandemics or other public health emergencies, and measures taken in response thereto.
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.
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, including matters that may arise related to our Dayforce Flex Work employees, 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.
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.
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.
Our outstanding indebtedness and any additional indebtedness we incur may have important consequences for us, including, without limitation, that: • we may be required to use a substantial portion of our cash flow to pay the principal of and interest on our indebtedness; • our indebtedness and leverage may increase our vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressures; • our ability to obtain additional financing for working capital, capital expenditures, acquisitions and for general corporate and other purposes may be limited; • our indebtedness may expose us to the risk of increased interest rates because certain of our borrowings, including and most significantly our borrowings under our Senior Secured Credit Facility, are at variable rates of interest; and • our indebtedness may prevent us from taking advantage of business opportunities as they arise or successfully carrying out our plans to expand our business.
Our outstanding 22 | 2024 Form 10-K Table of Contents Index to Financial Statements indebtedness and any additional indebtedness we incur may have important consequences for us, including, without limitation, that: • we may be required to use a substantial portion of our cash flow to pay the principal of and interest on our indebtedness; • our indebtedness and leverage may increase our vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressures; • our ability to obtain additional financing for working capital, capital expenditures, acquisitions and for general corporate and other purposes may be limited; • our indebtedness may expose us to the risk of increased interest rates because certain of our borrowings, including and most significantly our borrowings under our 2024 Senior Secured Credit Facility, are at variable rates of interest; and • our indebtedness may prevent us from taking advantage of business opportunities as they arise or successfully carrying out our plans to expand our business.
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.
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.
If a new customer is dissatisfied with implementation, the customer could refuse to go-live, which could result in a delay in our collection of fees or could result in a customer seeking repayment of its implementation fees or suing us for damages or could force us to enforce the termination provisions in our customer contracts in order to collect revenue.
If a new customer is dissatisfied with implementation, the customer could decide not to go-live, which could result in a delay in our collection of fees or could result in a customer seeking repayment of its implementation fees suing us for damages or could oblige us to enforce the termination provisions in our customer contracts in order to collect revenue.
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.
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.
Please refer to Part II, Item 8, Note 9, "Debt" for additional information.
Please refer to Part II, Item 8, Note 10, "Debt" for additional information.
Once our applications are deployed, our customers depend on our support organization and the support capabilities of our partners to resolve technical issues relating to our applications, as well as our partner’s applications.
We rely on retaining customers once our applications are deployed, and our customers depend on our support organization and the support capabilities of our partners to resolve technical issues relating to our applications, as well as our partner’s applications after our applications are deployed.
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.
As we retire our legacy products like our bureau payroll services or sunset certain acquired products, we decrease investments in maintaining those systems, which creates the potential for a security breach of those systems.
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.
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.
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.
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; repurchases of our common stock under our share repurchase program or the decision to terminate or suspend any repurchases; issuance of new, negative, or changed securities analysts’ reports or 24 | 2024 Form 10-K Table of Contents Index to Financial Statements 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.
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.
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 operations.
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.
Some of the crucial platforms on which we host our back office and legacy systems will need to be retired, replaced or are in the process of being replaced. All customer instances have been migrated to public Cloud environments or are in private Cloud environments on shared systems.
During periods of volatile credit markets, there is risk that lenders, even those with strong balance sheets and sound lending practices, could fail, no longer participate in credit offerings, or refuse to honor their existing legal commitments and obligations to us, including but not limited to, extending credit up to the maximum amount permitted by the Revolving Credit Facility.
During periods of volatile credit markets, there is risk that financial institutions, even those with strong balance sheets and sound lending practices, could fail, no longer participate in financial offerings, or refuse to honor their existing legal commitments and obligations to us, including but not limited to, extending credit up to the maximum amount permitted by the 2024 Revolving Credit Facility or purchasing eligible receivables under our Receivables Purchase Agreement.
These laws, which are not uniform, govern the collection, storage, hosting, transfer (including in some cases, the transfer outside the country of collection), use, disclosure, security, retention, and destruction of personal information; they require us to give notice to individuals of privacy practices; give individuals certain access and correction rights with respect to their personal information; and regulate the use or disclosure of personal information for secondary purposes such as marketing.
These laws, which are not uniform, govern the collection, storage, hosting, transfer (including in some cases, the transfer outside the country of origin), use, disclosure, security, retention, and destruction of personal information; they require us to give notice to individuals of privacy practices; give individuals certain access and correction rights with respect to their personal information; oversee third parties whom we engaged to process data on our behalf; and regulate the use or disclosure of personal information for secondary purposes such as marketing.
Because of the large amount of data that we collect and manage, it is possible that failures or errors in our systems could result in data loss or corruption or cause the information that we collect to be incomplete or to contain inaccuracies that our customers regard as significant.
Because of the large amount of data that we collect and manage, we have experienced, and we may continue to experience failures or errors in our systems could result in data loss or corruption or cause the information that we collect to be incomplete or to contain inaccuracies that our customers regard as significant.
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.
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.
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.
These catastrophic events have the potential to disrupt the business of our third-party suppliers, partners, or customers, which 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.
Any 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.
Any disruption of fund movement could have significant 11 | 2024 Form 10-K Table of Contents Index to Financial Statements 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.
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
If our financial counterparties are unable to fund borrowings under their revolving credit commitments or investments under their Receivables Purchase Agreement, 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.
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.
If we are unable to sell our Cloud solutions into new markets or further penetrate existing markets, or to increase sales from existing customers, or if 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.
A substantial liability arising from a lawsuit judgment or settlement or a significant regulatory action against us or a disruption in our business arising from adverse adjudications in proceedings against our directors, officers, or employees could have a material adverse effect on our business, financial condition, and results or operations.
A substantial 21 | 2024 Form 10-K Table of Contents Index to Financial Statements liability arising from a lawsuit judgment or settlement or a significant regulatory action against us or a disruption in our business arising from adverse adjudications in proceedings against our directors, officers, or employees could have a material adverse effect on our business, financial condition, and results or operations.
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.
We may also be obligated to indemnify our customers, vendors, or partners in connection with any such 18 | 2024 Form 10-K Table of Contents Index to Financial Statements 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.
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. 11 | 2023 Form 10-K Table of Contents Our business continues to demand the use of sophisticated systems and technology, including technology infrastructure assets.
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.
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.
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.
If any of these systems fail to operate properly or become disabled even for a brief period of time, we could potentially miss a critical filing period, resulting in potential fees and penalties, or lose control of customer data, all of which could result in financial loss, a disruption of our business, liability to customers, regulatory intervention, or damage to our reputation.
If any of the IT Systems fail to operate properly or become disabled even for a brief period, we could miss a critical filing period or lose control of customer data, either of which could result in financial loss, a disruption of our business, liability to customers, or regulatory intervention.
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.
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.
Our success and ability to compete depend in part upon our intellectual property. We primarily rely on copyright, trade secret, and trademark laws; trade secret protection; and confidentiality or license agreements with our employees, customers, partners, and others to protect our intellectual property rights. However, the steps we take to protect our intellectual property rights may be ineffective or inadequate.
We primarily rely on copyright, trade secret, and trademark laws; trade secret protection; internal policies and technical controls; and confidentiality, non-disclosure or license agreements with our employees, customers, partners, and others to protect our intellectual property rights. However, the steps we take to protect our intellectual property rights may be ineffective or inadequate.
Changing regulatory requirements can make introduction of new services more costly or more time-consuming than we currently anticipate and could even prevent introduction by us of new services or cause the continuation of our existing services to become more costly.
This might in turn impose additional costs upon us to comply or to further develop our products and services. Changing regulatory requirements can make introduction of new services more costly or more time-consuming than we currently anticipate and could even prevent introduction by us of new services or cause the continuation of our existing services to become more costly.
The implementation of new systems and enhancements may be disruptive to our business and can be time-consuming and divert management’s attention. Any disruptions relating to our systems or any problems with implementation, particularly any disruptions impacting our operations or our ability to accurately report our financial performance on a timely basis, could materially and adversely affect our business and operations.
Any disruptions relating to our systems or any problems with implementation of new applications, particularly any disruptions impacting our operations or our ability to accurately report our financial performance on a timely basis, could materially and adversely affect our business and operations .
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.
In connection with the order, we are required to have portions of our security program, which apply to certain segments of our U.S. business, 17 | 2024 Form 10-K Table of Contents Index to Financial Statements reviewed by an independent third party on a biennial basis.
Our applications are inherently complex and may contain material defects or errors that we are not yet aware of.
Our applications are inherently complex and we have, and may continue to identify material defects or errors in them that we are not yet aware of.
Any information security breach in our business processes or of our processing systems (whether they are maintained internally or externally at third parties) has the potential to impact our customer information and sensitive company information, including our financial reporting capabilities, which could result in the potential loss of business and our ability to accurately report financial results.
Any information security breach in our IT Systems has the potential to impact our customer information and sensitive company information, including our financial reporting capabilities, which could result in the potential loss of business and our ability to accurately report financial results.
The number of related laws and regulations we are subject to continue to increase as we enter new markets in Europe, Asia Pacific, and Latin America, and as we continue our entry into the consumer space through our Dayforce Wallet product. Restrictions on transfers of personal information from one geography to another continue to evolve.
The number of related laws and regulations we are subject to continues to increase as we enter new markets in Europe, Asia Pacific, and Latin America, and as we continue our entry into the consumer space through our Dayforce Wallet product and Dayforce Flex Work service.
Any such resulting fines and penalties could have a material adverse effect on our liquidity and financial results, and any reputational damage therefrom could adversely affect our relationships with our existing customers and our ability to attain new customers. Insurance may be inadequate or may not be available in the future on acceptable terms, or at all.
Any such resulting fines and penalties could have a material adverse effect on our liquidity and financial results, and any reputational damage therefrom could adversely affect our relationships with our existing customers and our ability to attain new customers.
Regulatory requirements placed on our software and services could impose increased costs on us, delay or prevent our introduction of new products and services, and impair the function or value of our existing products and services. Our products and services are subject to increasing regulatory requirements, and as these requirements proliferate, we are required to change or adapt to comply.
Regulatory requirements placed on our software and services could impose increased costs on us, delay or prevent our introduction of new products and services, and impair or prevent the function or value of our existing products and services.
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.
Moving forward, the extent to which other similarly disrupting events will 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. 27 | 2024 Form 10-K Table of Contents Index to Financial Statements Our disclosures and ambitions related to sustainability matters, which include environmental, social, and governance matters, may expose us to risks that could adversely affect our reputation and performance.
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.
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. 16 | 2024 Form 10-K Table of Contents Index to Financial Statements The implementation of new accounting systems or other applications could interfere with our business and operations.
These regulatory requirements and considerations may also impose burdensome and costly requirements on our ability to leverage data, and potentially result in brand or reputational harm. Our business plan is focused on an aggressive growth strategy.
These regulatory requirements and considerations may also impose burdensome and costly requirements on our ability to leverage data to develop or improve our products, services, and management of our business, and potentially result in brand or reputational harm.
Our business is dependent on our payroll, transaction, financial, accounting, and other data processing systems. We rely on these systems, which are maintained both internally and externally at third parties, to process, on a daily and time sensitive basis, a large number of complicated transactions.
We rely on our IT Systems, which are maintained both internally and externally by third parties, to operate our business, including to process, on a daily and time sensitive basis, a large number of complicated transactions.
Any failure to maintain high-quality technical support, or a market perception that we do not maintain high-quality support, could adversely affect our reputation and our ability to sell our applications to existing and prospective customers, which could have a material adverse effect on our business, financial condition, and results of operations.
Any failure to maintain high-quality technical support, or a market perception that we do not maintain high-quality support, could adversely affect our reputation and our ability to sell our applications to existing and prospective customers, which could have a material adverse effect on our business, financial condition, and results of operations. 14 | 2024 Form 10-K Table of Contents Index to Financial Statements If our customers are not satisfied with the quality and pace of the implementation and professional services provided by us or our partners, it could have a material adverse effect on our business, financial condition, and results of operations.
An information security breach of our systems or the loss of, or unauthorized access to, customer information or sensitive company information; the failure to comply with the U.S. Federal Trade Commission’s (“FTC”) ongoing consent order regarding data protection; or a system disruption could have a material adverse effect on our business, market brand, financial condition, and results of operations.
Risks Related to Security and Intellectual Property An information security breach of our systems or the loss of, or unauthorized access to, customer information or sensitive company information; or a system disruption could have a material adverse effect on our business, market brand, financial condition, and results of operations.
An economic decline could result in reductions in sales of our applications, decreased revenue, longer sales cycles, slower adoption of new technologies, and increased price competition, any of which could adversely affect our business, operating results, or financial condition. In addition, HCM spending levels may not increase following any recovery.
An economic decline could result in reductions in sales of our applications, decreased revenue, longer sales cycles, slower adoption of new technologies, and increased price competition, any of which could 26 | 2024 Form 10-K Table of Contents Index to Financial Statements adversely affect our business, operating results, or financial condition.
Under certain circumstances, some of these laws require us to provide notification to affected individuals, clients, data protection authorities and/or other regulators in the event of a data breach. In many cases, these laws apply not only to third-party transactions, but also to transfers of information among the Company and its subsidiaries.
Under certain circumstances, some of these laws require us to provide notification to affected individuals, clients, data protection authorities and/or other regulators in the event of a data breach.
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.
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 depends on sustaining the revenue growth trajectory of our Cloud solutions.
A reduction in the ratings that rating agencies assign to our debt may negatively impact our access to the debt capital markets and increase our cost of borrowing, which could have a material adverse effect on our business, financial condition, and results of operations.
A reduction in the ratings that rating agencies assign to our debt may negatively impact our access to the debt capital markets and increase our cost of borrowing, which could have a material adverse effect on our business, financial condition, and results of operations. 23 | 2024 Form 10-K Table of Contents Index to Financial Statements Volatility and weakness in bank and capital markets may adversely affect credit availability, liquidity, and related financing costs for us.
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.
The market price and volume of our common stock trading has experienced, and may continue to experience, wide fluctuations and volatility.
We may also be subject to various regulatory inquiries, such as information requests, subpoenas, and book and records examinations, from regulators and other authorities in the geographic markets in which we operate.
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. We may also be subject to various regulatory inquiries, such as information requests, subpoenas, and book and records examinations, from regulators and other authorities in the geographic markets in which we operate.
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.
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, more burdensome regulations, and more expansive application of those regulations, any of which could have a material adverse impact on our business.
Consequently, stockholders must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which investors have purchased their shares.
Consequently, stockholders must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.
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.
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.
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.
General Risk Factors 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.
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.
Our business plan is focused on an aggressive growth strategy. 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, to adequately address competitive challenges, or to achieve our profitability goals.
Volatility and weakness in bank and capital markets may adversely affect credit availability and related financing costs for us. Disruptions in the financial markets can also adversely affect our lenders, insurers, customers, and other counterparties.
Disruptions in the financial markets can also adversely affect our lenders, insurers, customers, and other counterparties.
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.
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.
We may not be able to utilize a significant portion of our net operating loss, which could have a material adverse effect on our financial condition and results of operations.
Our debt may be downgraded, which could have a material adverse effect on our business, financial condition, and results of operations.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 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.
Biggest changeItem 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, 2024, we lease office space in various other locations across North America, APJ, and EMEA.
We 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.
We 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 7, "Leases," to our consolidated financial statements for additional discussion of our leases.

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 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
Biggest changeDiscussion of legal matters is incorporated by reference from Part II, Item 8, Note 16, “Commitments and Contingencies,” of this Form 10-K and should be considered an integral part of Part I, Item 3, “Legal Proceedings” .

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock 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.
Biggest changeStock 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. 31 | 2024 Form 10-K Table of Contents Index to Financial Statements 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.
The actual number of stockholders is considerably greater than this number of record holders, and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None.
The actual number of stockholders is considerably greater than this number of record holders, and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Recent Sales of Unregistered Securities None.
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.
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, 2024, there were 52 stockholders of record of our common stock.
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".
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 New York Stock Exchange and the Toronto Stock Exchange. On February 1, 2024, our common stock began trading under the symbol "DAY".
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.
The graph assumes $100 was invested in each, based on closing prices from December 31, 2019 through December 31, 2024, 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.
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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. 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.
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Issuer Purchases of Equity Securities The table below presents information with respect to our common stock purchases made during the three months ended December 31, 2024 by us or any "affiliated purchaser" of Dayforce, Inc., as defined in Rule 10b-18(a)(3) under the Exchange Act: Period Total Number of Shares Purchased (a) Average Price Paid per Share (b) Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (in millions) October 1 - 31, 2024 97,108 $ 63.02 97,108 $ 463.9 November 1 - 30, 2024 — — — 463.9 December 1 - 31, 2024 — — — 463.9 Total 97,108 $ 63.02 97,108 $ 463.9 (a) On July 31, 2024, we announced that our Board of Directors had approved a share repurchase program with authorization to purchase up to $500 million of our common stock.
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The share repurchase program has no expiration date. (b) Average price paid includes costs associated with the repurchases.

Item 7. Management's Discussion & Analysis

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

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Biggest changeOn February 1, 2024 we completed the purchase of 100% of the outstanding shares of eloomi A/S, a learning experience platform software provider based in Copenhagen, Denmark, and Orlando, Florida. 33 | 2023 Form 10-K Table of Contents Results o f Operations Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 The following table sets forth our results of operations for the periods presented: Year Ended December 31, Increase/(Decrease) Percentage of Revenue 2023 2022 Amount % 2023 2022 (In millions) Revenue: Recurring Cloud $ 1,211.4 $ 908.4 $ 303.0 33.4 % 80.0 % 72.9 % Other 85.9 139.2 (53.3 ) (38.3 )% 5.7 % 11.2 % Total recurring 1,297.3 1,047.6 249.7 23.8 % 85.7 % 84.1 % Professional services and other 216.4 198.6 17.8 9.0 % 14.3 % 15.9 % Total revenue 1,513.7 1,246.2 267.5 21.5 % 100.0 % 100.0 % Cost of revenue: Recurring Cloud 278.5 254.4 24.1 9.5 % 18.4 % 20.4 % Other 46.4 55.0 (8.6 ) (15.6 )% 3.1 % 4.4 % Total recurring 324.9 309.4 15.5 5.0 % 21.5 % 24.8 % Professional services and other 265.6 238.7 26.9 11.3 % 17.5 % 19.2 % Product development and management 209.9 169.9 40.0 23.5 % 13.9 % 13.6 % Depreciation and amortization 66.8 55.0 11.8 21.5 % 4.4 % 4.4 % Total cost of revenue 867.2 773.0 94.2 12.2 % 57.3 % 62.0 % Gross profit 646.5 473.2 173.3 36.6 % 42.7 % 38.0 % Selling and marketing 250.2 251.5 (1.3 ) (0.5 )% 16.5 % 20.2 % General and administrative 263.2 247.5 15.7 6.3 % 17.4 % 19.8 % Operating profit (loss) 133.1 (25.8 ) 158.9 615.9 % 8.8 % (2.1 )% Interest expense, net 36.1 28.6 7.5 26.2 % 2.4 % 2.3 % Other expense, net 1.0 8.5 (7.5 ) (88.2 )% 0.1 % 0.7 % Income (loss) before income taxes 96.0 (62.9 ) 158.9 252.6 % 6.3 % (5.0 )% Income tax expense 41.2 10.5 30.7 292.4 % 2.7 % 0.8 % Net income (loss) $ 54.8 $ (73.4 ) $ 128.2 174.7 % 3.6 % (5.9 )% 34 | 2023 Form 10-K Table of Contents Revenue .
Biggest changeResults o f Operations Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 The following table sets forth our results of operations for the periods presented: Year Ended December 31, Increase/(Decrease) Percentage of Revenue 2024 2023 Amount % 2024 2023 (In millions) Revenue: Recurring Cloud $ 1,442.4 $ 1,211.4 $ 231.0 19.1 % 82.0 % 80.0 % Other 74.9 85.9 (11.0 ) (12.8 )% 4.3 % 5.7 % Total recurring 1,517.3 1,297.3 220.0 17.0 % 86.2 % 85.7 % Professional services and other 242.7 216.4 26.3 12.2 % 13.8 % 14.3 % Total revenue 1,760.0 1,513.7 246.3 16.3 % 100.0 % 100.0 % Cost of revenue: Recurring Cloud 303.7 278.5 25.2 9.0 % 17.3 % 18.4 % Other 49.0 46.4 2.6 5.6 % 2.8 % 3.1 % Total recurring 352.7 324.9 27.8 8.6 % 20.0 % 21.5 % Professional services and other 291.0 265.6 25.4 9.6 % 16.5 % 17.5 % Product development and management 223.8 209.9 13.9 6.6 % 12.7 % 13.9 % Depreciation and amortization 80.4 66.8 13.6 20.4 % 4.6 % 4.4 % Total cost of revenue 947.9 867.2 80.7 9.3 % 53.9 % 57.3 % Gross profit 812.1 646.5 165.6 25.6 % 46.1 % 42.7 % Selling and marketing 342.0 250.2 91.8 36.7 % 19.4 % 16.5 % General and administrative 366.0 263.2 102.8 39.1 % 20.8 % 17.4 % Operating profit 104.1 133.1 (29.0 ) (21.8 )% 5.9 % 8.8 % Interest income (18.1 ) (20.2 ) 2.1 (10.4 )% (1.0 )% (1.3 )% Interest expense 58.7 56.3 2.4 4.3 % 3.3 % 3.7 % Other expense, net 25.9 1.0 24.9 2490.0 % 1.5 % 0.1 % Income before income taxes 37.6 96.0 (58.4 ) (60.8 )% 2.1 % 6.3 % Income tax expense 19.5 41.2 (21.7 ) (52.7 )% 1.1 % 2.7 % Net income $ 18.1 $ 54.8 $ (36.7 ) (67.0 )% 1.0 % 3.6 % 36 | 2024 Form 10-K Table of Contents Index to Financial Statements Revenue .
Investing Activities During the year ended December 31, 2023, net cash used in investing activities was $202.8 million, primarily consisting of purchases of customer funds marketable securities of $528.1 million, capital expenditures of $114.4 million, and purchases of marketable securities of $6.8 million, partially offset by proceeds from the sale and maturity of customer funds marketable securities of $445.5 million, and proceeds from the sale and maturity of marketable securities of $2.0 million.
During the year ended December 31, 2023, net cash used in investing activities was $202.8 million, primarily consisting of purchases of customer funds marketable securities of $528.1 million, capital expenditures of $114.4 million, and purchases of marketable securities of $6.8 million, partially offset by proceeds from the sale and maturity of customer funds marketable securities of $445.5 million and proceeds from the sale and maturity of marketable securities of $2.0 million.
(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 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.
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.
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.
We used an aggregate amount of $45.0 million of the net proceeds of the Convertible Senior Notes to purchase the Capped Calls. We used the remainder of the net proceeds from the offering (i) to repay $295.0 million principal amount under the Revolving Credit Facility and pay related accrued interest and (ii) for general corporate purposes.
We used an aggregate amount of $45.0 million of the net proceeds of the Convertible Senior Notes to purchase the Capped Calls. We used the remainder of the net proceeds from the offering (i) to repay $295.0 million principal amount under the 2018 Revolving Credit Facility and pay related accrued interest and (ii) for general corporate purposes.
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 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 eloomi, 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.
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.
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, ADAM HCM, and eloomi revenue.
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.
Dollars, Canadian Dollars, Euros and/or Pounds Sterling; up to $100.0 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. Dollars).
This amount is divided by the number of live Dayforce customers at the end of the trailing twelve month period, excluding Ascender and ADAM HCM.
This amount is divided by the number of live Dayforce customers at the end of the trailing twelve month period, excluding Ascender, ADAM HCM, and eloomi.
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.
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 5, "Customer Funds," for further discussion of these funds.
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.
Adjusted EBITDA is a component of our management incentive plan and Adjusted operating profit and Adjusted Cloud recurring gross margin are components 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.
Additionally, our liquidity and our ability to meet our obligations and to fund our capital requirements and Dayforce Wallet on-demand pay requests are also dependent on our future financial performance, which is subject to general economic, financial, and other factors that are beyond our control.
Additionally, our liquidity and our ability to meet our obligations and to fund our capital requirements, Dayforce Wallet on-demand pay requests, and share repurchases are also dependent on our future financial performance, which is subject to general economic, financial, and other factors that are beyond our control.
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.
The majority of Powerpay revenue is generated from recurring fees charged on a PEPM 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.
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.
The following discussion and analysis of our financial condition and results of operations covers fiscal 2024 and fiscal 2023 items and year-over-year comparisons between fiscal 2024 and fiscal 2023.
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.
As of December 31, 2024, approximately $1.26 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.
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.
Our annual Dayforce revenue retention rate was 98% for the year ended December 31, 2024, and above 97% for the years ended December 31, 2023, and 2022. 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.
How We Ass ess Our Performance In assessing our performance, we consider a variety of performance indicators in addition to revenue and net income (loss). Set forth below is a description of our key performance measures.
How We Ass ess Our Performance In assessing our performance, we consider a variety of performance indicators in addition to revenue, operating profit, and net income. Set forth below is a description of our key performance measures.
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.
Discussions of fiscal 2022 items and year-over-year comparisons between fiscal 2023 and 2022 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, 2023, that was filed with the SEC on February 28, 2024.
We believe that our cash flow from operations, available cash and equivalents, and availability under our Revolving Credit Facility will be sufficient to meet our liquidity needs for the next twelve months and for the foreseeable future.
We believe that our cash flow from operations, available cash and equivalents, and availability under our 2024 Revolving Credit Facility and the Receivables Securitization Program will be sufficient to meet our liquidity needs for the next twelve months and for the foreseeable future.
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”).
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”).
Additionally, 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.
Additionally, Adjusted EBITDA is a component of our management incentive plan and Adjusted operating profit and Adjusted Cloud recurring gross margin are components of certain performance based equity awards for our named executive officers.
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.
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). 34 | 2024 Form 10-K Table of Contents Index to Financial Statements The following table sets forth the number of live Dayforce customers at the end of the years presented: Cloud 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.
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.
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, funding Dayforce Wallet on-demand pay requests on behalf of our customers, and executing purchases under our share repurchase program.
The increase in gross margin and gross profit was primarily due to the increase in revenue, including float revenue, which outpaced the increase in cost of revenue. Cloud recurring gross margin was 77.0% for the year ended December 31, 2023, compared to 72.0% for the year ended December 31, 2022.
The increase in gross margin and gross profit was primarily due to the increase in revenue, including float revenue, which outpaced the increase in cost of revenue. Cloud recurring gross margin was 78.9% for the year ended December 31, 2024, compared to 77.0% for the year ended December 31, 2023.
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.
When adjusted diluted net income per share is positive, diluted weighted average common shares outstanding incorporate the effect of dilutive equity instruments. • Free cash flow is defined as net cash provided by operating activities, as adjusted to exclude capital expenditures. • Free cash flow margin is determined by calculating the percentage that free cash flow is of total revenue. • 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 and eloomi, 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.
We derive the majority of our Cloud revenues from recurring fees, primarily PEPM subscription charges. We also derive recurring revenue from fees related to the rental and maintenance of clocks, charges for once-a-year services, such as year-end tax statements, and float revenue on our customer funds before such funds are remitted to taxing authorities, customer employees, or other third parties.
We also derive recurring revenue from fees related to the rental and maintenance of payroll time clocks, charges for once-a-year services, such as year-end tax statements, and float revenue on our customer funds before such funds are remitted to taxing authorities, customer employees, or other third parties.
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.
Convertible Senior Notes In March 2021, we issued $575.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due in March 2026. The total net proceeds from the offering, after deducting initial purchase discounts and issuance costs, were $561.8 million.
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.
As of December 31, 2024, we had cash and equivalents of $579.7 million and our total debt balance was $1,228.3 million. Please refer to Part II, Item 8, Note 10, “Debt,” to our consolidated financial statements and “Our Indebtedness” section below for further information on our debt.
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.
Over the lifetime of the customer relationship, we have the opportunity to realize additional PEPM revenue, both as the customer grows or offers the Dayforce solution to additional employees, and also by selling additional functionality to existing customers that do not currently utilize all of the modules we offer.
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.
Dayforce Wallet on-demand pay requests are currently funded from our operating cash balances and as needed, through our Receivables Securitization Program, until they are reimbursed by our customers through their normal payroll funding cycles. We evaluate the creditworthiness of each customer for the Dayforce Wallet feature.
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.
The amount of our future contractual obligations to vendors as of December 31, 2024 was not material. 42 | 2024 Form 10-K Table of Contents Index to Financial Statements 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 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.
The following table presents total gross margin and solution gross margins for the periods presented: Year Ended December 31, 2024 2023 Total gross margin 46.1 % 42.7 % Gross margin by solution: Cloud recurring 78.9 % 77.0 % Other recurring 34.6 % 46.0 % Professional services and other (19.9 )% (22.7 )% 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.
Please refer to the "Non-GAAP Financial Measures" section for discussion of percentage change in revenue on a constant currency basis. (b) Other recurring contains solutions previously described as Bureau. Float attributable to this solution was $2.1 million and $5.3 million for the years ended December 31, 2023, and 2022, respectively.
Please refer to the "Non-GAAP Financial Measures" section for discussion of percentage change in revenue on a constant currency basis. (b) Float attributable to Other recurring was $1.3 million and $2.1 million for the years ended December 31, 2024, and 2023, respectively.
The number of live Dayforce customers increased 6.7% to 6,393 at December 31, 2023 from 5,993 at December 31, 2022, representing approximately 6.84 million global employees*. Additionally for the trailing twelve months ended December 31, 2023, Dayforce recurring revenue per customer grew to $146,771 compared to $121,425 for the comparable period in 2022.
The number of live Dayforce customers increased 7.6% to 6,876 at December 31, 2024 from 6,393 at December 31, 2023, representing approximately 7.62 million global employees. Additionally for the trailing twelve months ended December 31, 2024, Dayforce recurring revenue per customer grew to $163,101 compared to $146,771 for the comparable period in 2023.
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.
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. 44 | 2024 Form 10-K Table of Contents Index to Financial Statements • 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.
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.
Depreciation and amortization expense associated with cost of revenue increased by $13.6 million, or 20.4%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, as we continue to capitalize and subsequently amortize Dayforce-related and other development costs. Gross profit and gross margin.
(c) For the year ended December 31, 2023, Professional services and other consisted of $202.1 million, $13.8 million, and $0.5 million associated with Dayforce, Other, and Powerpay, respectively. For the year ended December 31, 2022, Professional services and other consisted of $181.7 million, $16.2 million, and $0.7 million associated with Dayforce, Other, and Powerpay, respectively.
(c) For the year ended December 31, 2024, Professional services and other consisted of $233.8 million, $8.5 million, and $0.4 million associated with Dayforce, Other, and Powerpay, respectively. For the year ended December 31, 2023, Professional services and other consisted of $202.1 million, $13.8 million, and $0.5 million associated with Dayforce, Other, and Powerpay, respectively.
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.
As of December 31, 2024, our defined benefit pension plans had a projected benefit obligation ("PBO") that exceeded the fair value of the plans’ assets by $24.5 million and our postretirement benefit plan had a PBO that exceeded the fair value of the plans’ assets by $6.9 million.
The average time it takes to implement Dayforce typically ranges from three months for smaller customers to twelve months for larger customers. We begin to generate recurring revenue when we provide a production instance to the customer.
The average time it takes to implement Dayforce typically ranges from three months for smaller customers to twelve months for larger customers. We begin to generate recurring revenue when we provide a production instance to the customer. We offer Powerpay for Canadian organizations with fewer than 100 employees.
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.
For our Dayforce and Other recurring customers, we also provide outsourced HR solutions, 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.
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.
The increase in float revenue was driven by the 8.4% increase in average float balance for our customer funds for the year ended December 31, 2024, which increased to $4.88 billion, compared to $4.50 billion for the year ended December 31, 2023, in addition to an increase in average yield of 35 basis points compared to the year ended December 31, 2023.
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.
The table below summarizes the activity within the consolidated statements of cash flows: Year Ended December 31, 2024 2023 (In millions) Net cash provided by operating activities $ 281.1 $ 219.5 Net cash used in investing activities (471.9 ) (202.8 ) Net cash provided by financing activities 59.6 242.0 Effect of exchange rate changes on cash, restricted cash, and equivalents (36.3 ) 11.5 Net (decrease) increase in cash, restricted cash, and equivalents (167.5 ) 270.2 Cash, restricted cash, and equivalents at beginning of period 3,421.4 3,151.2 Cash, restricted cash, and equivalents at end of period 3,253.9 3,421.4 Cash and equivalents 579.7 570.3 Restricted cash and equivalents 2,674.2 2,851.1 Total cash, restricted cash, and equivalents $ 3,253.9 $ 3,421.4 40 | 2024 Form 10-K Table of Contents Index to Financial Statements Operating Activities Net cash provided by operating activities was $281.1 million during the year ended December 31, 2024, compared to $219.5 million during the year ended December 31, 2023.
Overview Dayforce, Inc., formerly known as Ceridian HCM Holding Inc., is a global HCM software company. We categorize our solutions into three categories: Cloud recurring, other recurring (formerly referred to as Bureau), and professional services and other.
Overview Dayforce, Inc. is a global HCM software company. We categorize our solutions into three categories: Cloud recurring, other recurring, and professional services and other.
These costs, however, are significantly less than the costs initially incurred to acquire and to take customers live. 30 | 2023 Form 10-K Table of Contents Revenues We generate recurring revenues primarily from recurring fees charged for the use of our Cloud recurring solutions, Dayforce and Powerpay, as well as from our other recurring solutions.
We also incur costs to manage the account, to retain customers, and to sell additional functionality, however, these costs are significantly less than the costs initially incurred to acquire and to take customers live. 33 | 2024 Form 10-K Table of Contents Index to Financial Statements Revenues We generate recurring revenues primarily from recurring fees charged for the use of our Cloud recurring solutions, Dayforce and Powerpay, as well as from our other recurring solutions.
Total revenue increased $267.5 million, or 21.5%, to $1,513.7 million for the year ended December 31, 2023, compared to $1,246.2 million for the year ended December 31, 2022. This increase was primarily driven by an increase in live Dayforce customers, the increase in Dayforce recurring revenue per customer, and the increase in float revenue.
Total revenue increased $246.3 million, or 16.3%, to $1,760.0 million for the year ended December 31, 2024, compared to $1,513.7 million for the year ended December 31, 2023. This increase was primarily driven by an increase in the number of live Dayforce customers, the increase in Dayforce recurring revenue per customer, and the increase in float revenue of $31.6 million.
Our capital expenditures included $95.4 million for software and technology and $19.0 million for property, plant and equipment.
Our capital expenditures included $95.3 million for software and technology and $14.3 million for property, plant and equipment.
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.
(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. 46 | 2024 Form 10-K Table of Contents Index to Financial Statements 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 $ 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.
Total gross margin for the year ended December 31, 2023 increased 470 basis points compared to December 31, 2022, and gross profit increased by $173.3 million, or 36.6%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Total gross margin for the year ended December 31, 2024 increased 340 basis points compared to December 31, 2023, and gross profit increased by $165.6 million, or 25.6%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Net cash provided by financing activities was $764.6 million during the year ended December 31, 2022.
Net cash provided by financing activities was $242.0 million during the year ended December 31, 2023.
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.
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 modules purchased by each customer. 35 | 2024 Form 10-K Table of Contents Index to Financial Statements 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.
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.
Our Business Model Our business model focuses on supporting the rapid growth of Dayforce and maximizing the lifetime value of our Dayforce customer relationships. Our ratable recognition of subscription revenues over the term of the subscription period combined with our high revenue retention rates yield a high level of visibility into our future revenues.
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.
This cash inflow was primarily attributable to the increase in proceeds from our debt issuance of $650.0 million, proceeds from the issuance of common stock under our share-based compensation plans of $56.6 million, and the net increase in our customer funds obligations of $51.8 million, partially offset by payments on our long-term debt obligations of $648.3 million, repurchases of common stock of $36.1 million, payment of debt refinancing costs of $11.4 million, and payment of contingent consideration of $3.0 million.
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.
We recognized $234.2 million of Cloud professional services revenue for the year ended December 31, 2024, and the related contract assets were $100.2 million as of December 31, 2024.
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.
For the years ended December 31, 2024, and 2023, our investment in software development was $213.1 million and $198.5 million, respectively, consisting of $123.0 million and $112.0 million of research and development expense, and $90.1 million and $86.5 million of capitalized software development, respectively.
For both periods, cash inflows from operating activities are primarily generated from the subscriptions of our solutions. Cash outflows from operating activities for both periods are primarily comprised of personnel-related expenditures that are integral to our business operations.
For both periods, cash inflows from operating activities were primarily generated from the subscriptions of our solutions. Cash outflows from operating activities for both periods are primarily comprised of personnel-related expenditures, including the payout of year-end employee compensation, and the renewals of prepaid annual contracts that are integral to our business operations.
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.
Our capital expenditures included $95.4 million for software and technology and $19.0 million for property, plant and equipment. Financing Activities Net cash provided by financing activities was $59.6 million during the year ended December 31, 2024.
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.
Other expense, net. For the years ended December 31, 2024 and 2023, other expense, net of $25.9 million and $1.0 million, respectively, was primarily comprised of foreign currency translation losses (gains) of $14.1 million and ($0.5) million, respectively, and net periodic pension expense of $11.5 million and $1.5 million, respectively. Income tax expense.
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.
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, funding Dayforce Wallet on-demand pay requests on behalf of our customers, and executing purchases under our share repurchase program.
The 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.
The following table sets forth certain information regarding our 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) 2024 2023 2024 vs. 2023 2024 vs. 2023 (In millions) Revenue: Recurring revenue: Dayforce recurring, excluding float $ 1,159.7 $ 962.9 20.4 % (0.3 )% 20.7 % Dayforce float 180.2 148.2 21.6 % (0.3 )% 21.9 % Total Dayforce recurring 1,339.9 1,111.1 20.6 % (0.2 )% 20.8 % Powerpay recurring, excluding float 83.7 81.9 2.2 % (1.6 )% 3.8 % Powerpay float 18.8 18.4 2.2 % (1.6 )% 3.8 % Total Powerpay recurring 102.5 100.3 2.2 % (1.6 )% 3.8 % Total Cloud recurring 1,442.4 1,211.4 19.1 % (0.3 )% 19.4 % Other recurring (b) 74.9 85.9 (12.8 )% (0.7 )% (12.1 )% Total recurring revenue 1,517.3 1,297.3 17.0 % (0.3 )% 17.3 % Professional services and other (c) 242.7 216.4 12.2 % (0.3 )% 12.5 % Total revenue $ 1,760.0 $ 1,513.7 16.3 % (0.4 )% 16.7 % (a) We have calculated the percentage change in revenue on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period.
Non-GA AP Financial Measures We use certain non-GAAP financial measures in this document including: Non-GAAP Financial Measure GAAP Financial Measure EBITDA Net income (loss) Adjusted EBITDA Net income (loss) Adjusted EBITDA margin Net profit margin Adjusted Cloud recurring gross margin Cloud recurring gross margin Adjusted operating profit Operating profit (loss) Adjusted operating profit margin Operating profit (loss) margin Adjusted net income Net income (loss) Adjusted net profit margin Net profit margin Adjusted diluted net income per share Diluted net income (loss) per share Percentage change in revenue, including total revenue and revenue by solution, on a constant currency basis Percentage change in revenue, including total revenue and revenue by solution Cloud ARR No directly comparable GAAP measure Dayforce revenue retention rate No directly comparable GAAP measure Dayforce recurring revenue per customer No directly comparable GAAP measure 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.
Recently Issued Accounting Pronouncements Please refer to Part II, Item 8, Note 2, “Summary of Significant Accounting Policies,” for a full discussion of recent accounting pronouncements. 43 | 2024 Form 10-K Table of Contents Index to Financial Statements Non-GA AP Financial Measures We use certain non-GAAP financial measures in this document including: Non-GAAP Financial Measure GAAP Financial Measure EBITDA Net income (loss) Adjusted EBITDA Net income (loss) Adjusted EBITDA margin Net profit margin Adjusted Cloud recurring gross margin Cloud recurring gross margin Adjusted operating profit Operating profit Adjusted operating profit margin Operating profit margin Adjusted net income Net income (loss) Adjusted net profit margin Net profit margin Adjusted diluted net income per share Diluted net income (loss) per share Free cash flow Net cash provided by operating activities Free cash flow margin Operating cash flow margin Percentage change in revenue, including total revenue and revenue by solution, on a constant currency basis Percentage change in revenue, including total revenue and revenue by solution Cloud annualized retention rate No directly comparable GAAP measure Dayforce revenue retention rate No directly comparable GAAP measure Dayforce recurring revenue per customer No directly comparable GAAP measure 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.
General and administrative expense increased $15.7 million, or 6.3%, for the year ended December 31, 2023, compared to the year ended December 31, 2022.
General and administrative expense increased $102.8 million, or 39.1%, for the year ended December 31, 2024, compared to the year ended December 31, 2023.
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.
Pursuant to the terms of the credit agreement, we became borrower of the 2024 Senior Secured Credit Facility, consisting of the 2024 Term Debt in the original principal amount of $650.0 million and the 2024 Revolving Credit Facility of $350.0 million. The 2024 Revolving Credit Facility may, at our option, be made available in U.S.
The increase in net income was primarily due to an increase in revenue, including float revenue, gross margin expansion, and reductions in severance, restructuring and commission expenses, partially offset by increases in amortization expense and income tax expense. 37 | 2023 Form 10-K Table of Contents Liquidity and Capital Resources Our primary sources of liquidity are our existing cash and equivalents, cash provided by operating activities, availability under our Revolving Credit Facility, and proceeds from debt issuance and equity offerings.
Net income declined primarily due to a decrease in operating profit and an increase in other expense, net, partially offset by lower income tax expense. 39 | 2024 Form 10-K Table of Contents Index to Financial Statements Liquidity and Capital Resources Our primary sources of liquidity are our existing cash and equivalents, cash provided by operating activities, availability under our 2024 Revolving Credit Facility and the Receivables Securitization Program, and proceeds from debt issuances and equity offerings.
The increase is also due to the growth of the proportion of Dayforce customers live for more than two years, which increased from 82% as of December 31, 2022 to 85% as of December 31, 2023.
The increase in Cloud recurring gross margin was primarily due to the increase in revenue, including float revenue, and due to the growth of the proportion of Dayforce customers live for more than two years, which increased from 85% as of December 31, 2023 to 87% as of December 31, 2024.
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.
Contractual Obligations Our future contractual obligations generally consist of long-term debt, leases, retirement plans, and vendor payments. Our long-term debt obligations are described in Part II, Item 8, Note 10, “Debt,” to our consolidated financial statements, and the “Our Indebtedness” section above. As of December 31, 2024, all of our facilities are leased.
During the year ended December 31, 2022, net cash used in investing activities was $342.5 million, consisting of purchases of customer funds marketable securities of $652.8 million and capital expenditures of $94.5 million, partially offset by proceeds from the sale and maturity of customer funds marketable securities of $404.8 million.
Investing Activities During the year ended December 31, 2024, net cash used in investing activities was $471.9 million, primarily consisting of purchases of customer funds marketable securities of $541.1 million, acquisition costs, net of cash acquired, of $173.1 million, capital expenditures of $109.6 million, and purchases of marketable securities of $16.2 million, partially offset by proceeds from the sale and maturity of customer funds marketable securities of $353.4 million and proceeds from the sale and maturity of marketable securities of $14.7 million.
As of December 31, 2023, the U.S. dollar to Canadian dollar foreign exchange rate was $1.33.
The average U.S. dollar to Canadian dollar foreign exchange rate was $1.37 and $1.35 for the years ended December 31, 2024 and 2023, respectively.
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.
Global Intangible Low Tax Income regime. 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, 2024, 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.
Operating profit margin and net profit margin are determined by calculating the percentage operating profit and net income are of total revenue. Please refer to the "Non-GAAP Financial Measures" section for the definitions of Adjusted Cloud recurring gross margin, Adjusted operating profit, Adjusted EBITDA margin, and Adjusted net profit margin.
Operating profit margin and net profit margin are determined by calculating the percentage operating profit and net income are of total revenue. Please refer above for additional information on the as adjusted margins.
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.
Net income was $18.1 million for the year ended December 31, 2024, compared to $54.8 million for the year ended December 31, 2023.
Operating profit margin and net profit margin are determined by calculating the percentage operating profit (loss) and net income (loss) are of total revenue. Please refer to the "Non-GAAP Financial Measures" section for the definitions of Adjusted Cloud recurring gross margin, Adjusted operating profit, Adjusted EBITDA margin, and Adjusted net profit margin.
Operating profit margin and net profit margin are determined by calculating the percentage operating profit and net income are of total revenue. Please refer above for additional information on the as adjusted margins.
(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.
The adjustments to net income also include $0.6 million of foreign exchange gain and a $22.2 million net adjustment for the effect of income taxes related to these items. (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.
The Other column includes $4.7 million of restructuring consulting fees, $4.3 million related to the impact of the fair value adjustment for the DataFuzion contingent consideration, $0.1 million related to the net impact of the abandonment of certain leased facilities, and $0.6 million of foreign exchange gain, along with a $22.2 million net adjustment for the effect of income taxes related to these items.
The adjustments to operating profit consist of $4.7 million of restructuring expenses, $4.3 million related to the impact of the fair value adjustment for the DataFuzion contingent consideration, and $0.1 million related to the net impact of the abandonment of certain leased facilities.
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.
Product development and management expense increased $13.9 million, or 6.6%, for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase reflects increased costs of $7.7 million in hosting our development applications, and an additional $5.1 million of additional labor-related costs.
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 retire the Convertible Senior Notes upon maturity in March 2026 with cash and liquidity on hand. For an additional description of the 2024 Senior Secured Credit Facility and the Senior Convertible Notes, please refer to Part II, Item 8, Note 10, “Debt,” to our consolidated financial statements.
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.
The 2024 Term Debt and 2024 Revolving Credit Facility will mature on March 1, 2031 and March 1, 2029, respectively. We are required to make annual amortization payments in respect of the 2024 Term Debt, payable in equal quarterly installments of 0.25% of the aggregate principal amount of all initial term loans outstanding at closing.
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.
These increases were partially offset by a reduction of $3.4 million in share-based compensation expense. 37 | 2024 Form 10-K Table of Contents Index to Financial Statements Professional services and other cost of revenue increased $25.4 million, or 9.6%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to $24.0 million of additional labor-related costs, including increases in consulting, contract labor, employee labor, and employee benefits, incurred to implement new customers and additional modules.
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 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. 41 | 2024 Form 10-K Table of Contents Index to Financial Statements 2024 Senior Secured Credit Facility On February 29, 2024, we completed the refinancing of our 2018 Senior Secured Credit Facility by entering into a new credit agreement.
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.
Management believes that these non-GAAP financial measures 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.
(d) GAAP and Adjusted diluted net income per share is calculated based upon 158.5 million weighted average shares of common stock. 43 | 2023 Form 10-K Table of Contents Year Ended December 31, 2022 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 $ 254.4 72.0 % $ 14.2 $ — $ 19.5 $ 220.7 75.7 % Operating (loss) profit $ (25.8 ) (2.1 )% $ 145.1 $ 30.9 $ 46.0 $ 196.2 15.7 % Net (loss) income $ (73.4 ) (5.9 )% $ 145.1 $ 30.9 $ 17.9 $ 120.5 9.7 % Interest expense, net 28.6 — — — 28.6 Income tax expense (c) 10.5 — — (32.7 ) 43.2 Depreciation and amortization 89.0 — 30.9 — 58.1 EBITDA $ 54.7 $ 145.1 $ — $ 50.6 $ 250.4 20.1 % Net (loss) income per share - diluted (d) $ (0.48 ) $ 0.93 $ 0.20 $ 0.11 $ 0.77 (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.
We have not reconciled the Dayforce recurring revenue per customer because there is no directly comparable GAAP financial measure. 45 | 2024 Form 10-K Table of Contents Index to Financial Statements The following tables reconcile our reported results to our non-GAAP financial measures: Year Ended December 31, 2024 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 $ 303.7 78.9 % $ 11.3 $ — $ 1.0 $ 291.4 79.8 % Operating profit $ 104.1 5.9 % $ 156.6 $ 120.0 $ 29.8 $ 410.5 23.3 % Net income $ 18.1 1.0 % $ 156.6 $ 120.0 $ 21.1 $ 315.8 17.9 % Interest expense, net 40.6 — — — 40.6 Income tax expense (c) 19.5 — — (35.8 ) 55.3 Depreciation and amortization 209.8 — 120.0 — 89.8 EBITDA $ 288.0 $ 156.6 $ — $ 56.9 $ 501.5 28.5 % Net income per share - diluted $ 0.11 $ 0.98 $ 0.75 $ 0.13 $ 1.97 (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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+4 added−0 removed12 unchanged
Biggest changeWe provide a pension plan for certain current and former U.S. employees that closed to new participants on January 2, 1995.
Biggest changePlease refer to Part II, Item 8, Note 5, “Customer Funds,” for additional information. 48 | 2024 Form 10-K Table of Contents Index to Financial Statements Pension Obligation Risk . We provide a pension plan for certain current and former U.S. employees that closed to new participants on January 2, 1995.
We do not trade or use instruments with the objective of earning financial gains on the market fluctuations, nor do we use instruments where there are not underlying exposures. Foreign Currency Risk . Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Canadian Dollar.
We do not trade or use instruments with the objective of earning financial gains on market fluctuations, nor do we use instruments where there are not underlying exposures. Foreign Currency Risk . Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Canadian Dollar.
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.
Based on current market conditions, portfolio composition and investment practices, a 100 basis point decrease in market investment rates would result in approximately $27 million decrease in float revenue over the ensuing twelve month period. There are no incremental costs of revenue associated with changes in float revenue.
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
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 2025 Pension Expense Increase (Decrease) Change in Assumption Pension Benefits Post Retirement (In millions) Increase in discount rate 50 basis points $ 0.6 n/a Decrease in discount rate 50 basis points (0.6 ) n/a Increase in return on plan asset 50 basis points (1.6 ) n/a Decrease in return on plan asset 50 basis points 1.6 n/a 49 | 2024 Form 10-K Table of Contents Index to Financial Statements
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 .
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.
As 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%.
As of December 31, 2024, the PBO exceeded the fair value of plan assets by $24.5 million. Please refer to Part II, Item 8, Note 11, "Employee Benefit Plans," for additional information. The effective discount rate used in accounting for pension and other benefit obligations in 2024 ranged from 5.06% to 5.35%.
We have exposure to risks associated with changes in laws and regulations that may affect customer fund balances. For example, a change in regulations, either reducing the amount of taxes to be withheld or allowing less time to remit taxes to government authorities, would reduce our average customer fund balances and float revenue.
For example, a change in regulations, either reducing the amount of taxes to be withheld or allowing less time to remit taxes to government authorities, would reduce our average customer fund balances and float revenue.
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.
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 expected rate of return on plan assets for qualified pension benefits in 2023 was 5.20%.
The expected rate of return on plan assets for qualified pension benefits in 2024 was 4.80%.
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.
We pay floating rates of interest on our 2024 Term Debt and 2024 Revolving Credit Facility. The interest paid on these borrowings will fluctuate up or down in relation to changes in market interest rates.
Added
We invest the customer funds in high- quality bank deposits, money market mutual funds, commercial paper or collateralized short-term investments. We may also invest these funds in government securities, as well as highly rated asset-backed, mortgage-backed, corporate, and bank securities. We have exposure to risks associated with changes in laws and regulations that may affect customer fund balances.
Added
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. Please refer to Part II, Item 8, Note 10, “Debt,” for additional information. In addition, certain fees related to our Receivables Securitization Program fluctuate based on changes in market interest rates.
Added
We are in the process of finalizing the wind down of the plan, which includes transferring the associated liabilities to an insurance company, which we expect will be completed in 2025.
Added
These steps include settling all future obligations through a combination of lump sum payments to eligible, electing participants and the transfer of any remaining benefits to a third-party insurance company through a group annuity contract.

Other DAY 10-K year-over-year comparisons