Dayforce, Inc.

As a reminder, this conference is being recorded. On the call today, we have Ceridian Chair and CEO David Ossip and CFO Noemi Hewlett. Before I hand the call over to David for some brief remarks, allow me to please provide a disclaimer regarding forward-looking statements. This call may include forward-looking statements about our current and future outlook, guidance, plans, expectations, and intentions, results, levels of activities, performance, goals, or achievements, or any other future events or developments. These statements are based on management's reasonable assumptions and beliefs in light of information currently available to us. Listeners are cautioned not to place undue reliance on such statements. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ material from those set forth in such statements. We refer you to our previous filings in the SEC for information regarding the significant assumptions underlying forward-looking statements. and certain risks and other factors that could affect our future performance and ability to deliver these statements. We undertake no obligation to update or revise any forward-looking statements made on this call, except for those that may be required by law. The third quarter stockholder letter, earnings release, and form 10-Q have been furnished or filed with the SEC and will be available on the SEC's EDGAR database in the U.S. and the CDAR database in Canada. as well as on Ceridian Investor Relations website and investors.ceridian.com. With that, I will turn the call over to David.

Thank you, Eric, and welcome, everyone, to our Q3 earnings call. Let me say a few quick words about the quarter before we open it up for general Q&A. We had a very solid quarter with continued great execution across the entire business. Day-force recurring revenue, ex-float, grew on a gap basis by 33% or on a constant currency basis by 31%. Total revenue increased on a gap basis by 26% or 24% on a constant currency basis. For the fiscal year of 2021, we slightly increased the guidance and we narrowed the range to $1.14 billion to $1.19 billion. On the gross cloud margin, we saw an improvement of the gross cloud margin to 72.7%, which is up to 90 basis points on a constant currency basis and up 70 basis points on a quarter-over-quarter basis. Customer accounts increased by about 11% year over year, and the average size of the customers also increased about 11%. On a 12-month basis, we have taken live about 523 customers. Float balances also increased by about 25%, but float income was negatively impacted by a slight decline in the yield by 36 basis points. Adjusted EBITDA. was 39.4, which is up 20 basis points on an ex-float basis. On the Dayforce wallet, we continue to see very strong metrics. The number of customers live on Dayforce wallet is now above 290 customers. We have sold over 800 accounts at this point in time. We saw registration rates across the eligible employees who have access to the wallets grow to above 29%. And when we look at the top quartile of tenured customers, we see registration rates above 50%. Usage of the wallets continues to be very healthy with an average number of transactions of above 25 transactions per month. In early October, we closed on an acquisition of Data Fusion, which further increases our compliance advantage and gives us specific capabilities for certified payroll reporting, prevailing wage rate calculations, incentive payments, union rate calculations, and very complex general ledger reporting. This technology is immediately available and will be integrated into Dayforce. This acquisition will obviously help accelerate our growth in construction, government contracting, manufacturing, unionized environments, the public sector, and not-for-profit. Also in the first week of October, we held our first in-person customer event in over two years with the first stop of the Cerulean World Tour in Las Vegas. At the CWT event, we shared our vision for Dayforce to deliver the Always on People platform for the global workforce, which is anchored by our brand promise of making work life better. A few highlights of the event. We had some product announcements, including the announcement of streaming pay, which is the automatic delivery of earnings and net earnings to employees' day-force wallets. We announced the HR service delivery, which is an end-to-end employee solution that provides an always-on HR compliance support. And we also discussed Dayfall's Talent Intelligent, a suite of new transformative talent management solutions empowered by AI and data. We plan to build on success with our next CWT tour stop in New York. This event, which is primarily focused on customers, will also feature an investor track, including a session with the civilian executive team starting at 3.30 p.m. Eastern time on Thursday, November the 11th. That portion will be webcast, so please join us. You can find the information on our investor website on how to register the event or join this session via live webcast. I'm also very pleased to share that Ceridian was once again named a leader in the 2021 Gartner Magic Quadrant for Cloud Human Capital Management Suites for enterprises above 1,000 employees. We believe this report further validates our vision the innovation of the default product, and our commitment to delivering quantifiable value for our customers. Before I hand it back to Eric, I would like to close by saying how proud I am of our Ceridian team across the globe. Our engagement metrics are up. Our culture remains vibrant. As we, alongside our customers, transition to a new hybrid work environment, and our purpose and our brand promise to make work life better has never been more clear and relevant. Eric, back to you.

Thanks, David. As we go through the Q&A portion of the call, I will announce the name. And at that point, we ask you to please unmute your line and ask your question and then re-mute your line. We will also ask you to please limit your time to one question and one follow-up. And thank you in advance for that. Today, the first question comes from the line of Alex Zukin of Wolf. Alex, please go ahead.