Dayforce Stock Jumps as Demand for HR Services Drives Strong Quarter

Dayforce (DAY) shares jumped after the provider of human resources software and services topped sales and profit estimates with its second-quarter results. Robust demand for Dayforce’s payroll and human capital management services (HCM) helped drive the strong performance.

Total revenue for the second quarter of 2024 came in at $423.3 million, representing a year-over-year increase of 16% and exceeding consensus estimates of $417.41 million, according to data from Zacks Equities Research. Earnings per share (EPS) grew to 48 cents from 32 cents in the year-ago period, outpacing consensus forecasts calling for 37 cents.

Recurring revenue, which can be an important metric for software and services firms like Dayforce, was up approximately 20% year over year, boosted by an 18% uptick in recurring revenue per customer.

Stock Buyback Program Authorized

The company touted the strong financial results as indicators of improving profitability and increasing cash flow generation. In conjunction with the quarterly report, Dayforce announced that its board of directors has authorized a $500 million stock buyback program.

“Our success is rooted in the simplicity that organizations around the world are seeing with the Dayforce platform, enabling them to create significant efficiencies in their businesses while delivering a best-in-class HCM experience for their employees,” said Dayforce CEO David Ossip.

In addition to the better-than-expected financial results, the company announced a milestone for its on-demand payment solution known as Dayforce Wallet. The service, which provides participating employees with early direct deposits and paycards, eclipsed $4 billion in total payroll delivered across Dayforce’s global network.

Dayforce shares gained 10.4% Wednesday to close at $59.28.