Dayforce, Inc.

Good day, ladies and gentlemen, and welcome to the Day Force second quarter 2025 earnings call. Our host for today's call is David Niedermann, vice president of investor relations. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. I would like to now turn the call over to your host, Mr. Niedermann, you may begin.

Thank you for joining, and welcome to the Day Force second quarter 2025 earnings call. I'm David Niedermann, vice president investor relations. As a reminder, all participants are in a listen only mode, and a question and answer session will follow our opening remarks. Joining me on the call today are CEO, David Ossoff, and CFO, Jeremy Johnson. We also have chief strategy, product and technology officer, Joe Corngabel, and our president and COO, Steve Holdridge, available for Q&A. Before I hand the call over to David, I want to remind everyone that our commentary may include forward-looking statements. These misstatements are subject to risks and uncertainties that could cause Day Force's results to differ materially from historical experience or present expectations. A description of some of these risks and uncertainties can be found in the reports we file with the Securities and Exchange Commission, such as the cautionary statements in our filings. Additionally, over the course of this call, we'll reference non-GAAP measures to describe our performance. Please review our earnings press release and filings with the SEC for a rationale behind the use of these non-GAAP measures and for a full reconciliation of these GAAP to non-GAAP metrics. These documents, in addition to a replay of this call and also a transcript, will be available on the Day Force investor relations website. And with that, I'd like to turn the call over to David.

Thanks, David, and thank you all for joining us. I'll begin with some high-level commentary on our results and outlook before handing the call over to Jeremy, who'll provide more detail on our financials and guidance. We had a great second quarter and came in above the high end of guidance across all metrics. Most noticeably, Day Force recurring revenue, excluding flirting on a constant currency basis, grew 14%. Adjusted EBITDA marching was up 420 basis points to .7% and free cashflow in the quarter was 87.1 million or .7% of revenue. Year to date, free cashflow was up 500 basis points to $106.6 million. We continue to balance profitability and growth. We are targeting to grow Day Force recurring revenue above 15% and we expect free cashflow margins to grow faster than we laid out at our investor day last fall. This year, we have increased our free cashflow margins guidance from 12% to between 13.5 to 14%, representing an expansion of approximately 400 basis points year over year. And we believe we can achieve $1 billion of free cashflow by 2031. Jeremy will expand on the levers we can pull to achieve this. Our momentum towards this goal is rooted in our deep cross organizational focus on driving efficiencies and simplicity that yield value, both in our business and with our customers. This begins with our sales cycle and a value proposition of consolidating an average of 12 systems to one, which continues to resonate strongly with prospects. It also extends to how we push ourselves to move quickly to provide value to our successful customers in our deployments, as evidenced by our industry leading retention rate. And it absolutely applies to how we innovate our products, delivering greater productivity as we further our placement as the AI people platform. I've seen this fly well around simplicity, productivity and value come to life over the past year at a highly successful Day Force Summit Series, where we host gatherings of prospective customers, partners and existing Day Force customers. The energy of the community and excitement around the product is palpable. With an impressive conversion and close rate that gives us great confidence in the year, as we move closer to our annual customer conference, Day Force Discover in Las Vegas in October. We invite the investment community to attend and look forward to seeing many of you there. Now more specifically on the sales front, Sam has created an operational machine that is firing across all segments with remarkable sales momentum for the third consecutive quarter. On a year to date basis, bookings have grown over 40%. New client bookings across all segments perform well in the second quarter. System integrator led sales growth outpaced overall sales growth and we are pleased with the traction our partners are gaining. Additionally, our back to the base sales strategy continues to succeed with sales existing customers growing over 50% in the second quarter and representing 40% of total bookings. There is a significant opportunity in back to base sales. We have almost 7,000 customers live on Day Force, but still have a relatively low penetration of modules in relation to our offerings. You can see this in that our average PEPM is still only about $13 across the base. However, today we have a full set of HCM offerings. At the thousand employees per customer level, payroll and time is about $10 per employee per month. The talent offerings add another $10, the manage another $10 and our data capabilities including the AI assistant, experience hub, studio and analytics add another $10. We are seeing strong evidence of this in both new and add on sales. For new customers this year, 93% of our enterprise segment and 90% of major market segment, new sales were full suite. And manage has been added to 17% of new business deals this year, with bookings up over 100% versus last year. Over time, we expect to achieve much deeper penetration and see an increase in the average PEPM across our base. This is important from two aspects. First, we have much higher sales productivity in back to base sales. And second, the product probability of these sales is much higher. So as we execute this strategy, we expect to see higher EBITDA and higher free cashflow conversions. Turning to our key business wins in the second quarter, we added several new large customers that we are excited to welcome to the Dayforce family, including a global leader in apparel expanded his relationship with Dayforce, adopting a full suite to support his global workforce of 37,000 employees. For this customer, we are displacing at least eight different software vendors in a terrific validation of our value proposition. We'll be helping them streamline their HR operations, enhance their workforce agility, reduce operational risk and elevate their employee experience. A leading US based provider of essential infrastructure services, selected Dayforce manage payroll, workforce management, HR and talent solutions to support his 10,000 employees across 45 states. This customer worked with over 300 different unions and the Dayforce platform will allow them to accommodate their complex reporting and tracking required by their employee organizations. A large multinational industrial company selected the full Dayforce suite, including managed payroll for a diverse mature consisting of 3,100 employees. This customer selected Dayforce for our integrated system and to have the ability to access real time data. An energy service company with operations in the United States and Canada selected Dayforce to provide a wide range of HCM functions for its largely field based workforce. This company needed a solution with an intuitive yet functional mobile user interface based on a single system. Additionally, this new customer is a great example of our summit strategy at work as they attended both our New York and Dallas summits. And finally in June, the government of Canada formally announced that they had selected Dayforce for HR and pay transformation for its employees. We are very pleased with our work with the government of Canada to date and look forward to providing their people with a modern and effective HCM solution that will allow them to do their best work. We also had a strong quarter of go lives. We took live our largest customer to date with over 300,000 employees. And we expect this to be over 500,000 by the end of the year. I want to give kudos to our product technology team, as well as our services team for their dedication and skills in making this possible. We continue to bring new customers live onto Dayforce at a predictable and sustained pace. On the innovation front, we continue to deliver on our AI roadmap and further cement Dayforce as the AI people platform. This consists of three core areas. First, integrating AI and intelligent functionality across the suite and delivering smarter functionality in every model. This quarter, we delivered features including AI skills-based learning to deliver personalized, efficient people development experiences, enhanced skills requirements for shifts in workforce management to optimize scheduling and workforce productivity, heightened letter management with advanced analytics and custom reports for streamlined HR communications, new total rewards in compensation management to simplify pay transparency and strengthen retention efforts, new Dayforce Experience Hub on mobile to provide seamless, intervallent experiences for frontline workers, and we added over 230 compliance updates to reduce manual effort and support regulatory alignment. Next is our Dayforce AI Assistant, which continues to gain significant traction with our customers. On both the second quarter and year to date basis, over half of new business wins also purchased Dayforce AI Assistant. This early success is encouraging and we are just getting started with our AI ethics. In addition, almost 100% of new business wins included our AI people platform, more than 80% of new business wins included our AI analytics and nearly 60% of new business wins included our AI learning products. And third is our Dayforce AI Agent. Joe has a roadmap of over 30 agents that we are delivering on, starting with our latest feature release available this month. This will include the availability of our Pay Discovery AI Agent and our Contextual Writer Agent, offering generative AI writing assistance across our platform, including performance goals, job descriptions, self-assessments, employee feedback, help tickets, and writing support across our HCM platform. We are focused on delivering on our commitments here and I'm pushing forward as an AI leader as we continue to see interest in these offerings increase. I look forward to sharing more about what's to come at Dayforce Discover. Getting back to our strong sales performance this year, we are seeing success because we purposely built Dayforce with a single data model with comprehensive capabilities from pre-hire to post-retirement. This allows customers to replace a multitude of disparate HCM technologies with a single Dayforce solution. And this in turn provides our customers with a strong cash internal rate of return alongside a much better experience and decision-making. You can see this reflected in our industry leading growth retention rate of 98%, growth of add-on modules, and percentage of full suite deals. From an AI perspective, this is immensely important too. As to leverage foundational language and machine learning modules, you need and require well-formed comprehensive data. Dayforce is unique in market in this. We have a single database across all aspects of HCM. This has allowed us to move very quickly to embed AI across our entire platform. It's also the reason why our competitive win rate has improved significantly, driving tremendous sales momentum. Simply, customers understand that in today's age of AI, a single application with a single data module is fundamentally required, and Dayforce is unique in this regard. In closing, I'd like to leave you with five points that highlight our confidence in our future. We have a -in-class enterprise-grade platform that has expanded from peril and compliance offerings to a comprehensive full-featured HCM suite, along with a roadmap for future development that we expect to extend our competitive advantage even further. We are a clear leader in the large and growing HCM market and continue to widen this lead. We have a blue-chip customer base with thousands of the highest quality companies across virtually every sector. Currently, we are serving approximately 25% of the Fortune 500. With these advantages, we see the opportunity to build a generational HCM AI-powered software company and are keenly focused on making this a reality. And finally, our people. Dayforce employees across the globe are some of the most talented, seasoned, and passionate people out there, focused on being the best HCM company in the world and creating a generational software company. To all our daymakers, thank you for all you do for us every day. I'll now pass the call to Jeremy to discuss our financial results in more detail. Jeremy, over to you.