Dayforce recurring revenue up 29.6% year-over-year, or 31.6% on a constant currency basis
Revenue of $315.6 million, up 22.7% year-over-year, or 25.3% on a constant currency basis
Cloud recurring gross margin of 72.1% and adjusted Cloud recurring gross margin of 74.8%
MINNEAPOLIS and TORONTO, Nov. 02, 2022 (GLOBE NEWSWIRE) — Ceridian HCM Holding Inc. (�Ceridian) (NYSE:CDAY) (TSX:CDAY), a global leader in human capital management (HCM) technology, today announced its financial results for the third quarter ended September 30, 2022.
We delivered strong financial and operating performance in the third quarter. Our results exceeded our guidance on all revenue and profitability metrics, with Dayforce recurring revenue growing 30%, and 32% at constant currency, said David Ossip, Chair and Co-CEO of Ceridian. We sustained topline growth while significantly expanding profitability. I am particularly pleased with our operating cash flows, which more than doubled year-on-year. We now have 5,848 customers live on the Dayforce platform, which validates our commitment to providing a great experience and delivering measurable value to our customers.
In the third quarter, we continued to demonstrate strong execution on our growth levers and our initiatives to drive scale in our business, said Leagh Turner, Co-CEO of Ceridian. We believe organizations are eager to invest in HCM technology and increasingly looking for insights and efficiencies that will enable them to adapt and compete in the new world of work. We saw continued momentum across all segments of our business from emerging to large enterprise, and in every region in which we operate.
Our third quarter results exceeded our guidance despite the headwind of a stronger than expected U.S. dollar, said Noemie Heuland, CFO of Ceridian. Looking ahead, we are raising the mid-point and narrowing our Full Year guidance range at constant currency across all revenue metrics, and raising guidance on our profitability metric, Adjusted EBITDA. Our profitability outlook reflects continued investments in our growth initiatives, efficiencies across our business and our commitment to longer-term margin expansion.
Financial Highlights for the Third Quarter 20221
Supplemental Quarterly Detail
1 The quarterly financial highlights are on a year-over-year basis, unless otherwise stated. All financial results are reported in U.S. dollars unless otherwise stated.
2 Excluding the 2021 acquisitions of Ascender HCM Pty Limited (Ascender) and ATI ROW, LLC and ADAM HCM MEXICO, S. de R.L. de C.V. (collectively, ADAM HCM).
3 Excluding float revenue, the impact of lower employment levels in 2021 and 2020 due to the Coronavirus disease 2019 (COVID-19) pandemic, Ascender and ADAM HCM revenue and on a constant currency basis.
Business Highlights
Sales Highlights
Customer Highlights
Product Innovation Highlights
4 Gartner, Magic Quadrant for Cloud HCM Suites for 1000+ Employee Enterprises, by Sam Grinter, Chris Pang, Jeff Freyermuth, Ron Hanscome, Helen Poitevin, Ranadip Chandra, John Kostoulas, Emi Chiba and Rania Stewart, October 31, 2022. Gartner does not endorse any vendor, product or service depicted in our research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Gartner and Magic Quadrant are registered trademarks of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
Business Outlook
Based on information available as of November 2, 2022, Ceridian is issuing guidance for the full year and fourth quarter of 2022 as follows:
Fourth Quarter 2022 Guidance | Supplemental Commentary and Factors | |||
Dayforce recurring revenue excluding float | $196 million to $198 million or an increase of 20% to 21% on a GAAP basis, and by 23% to 24% on a constant currency basis. | Ceridian continues to expect a return to more normalized employment levels. | ||
Cloud revenue | $288 million to $291 million, or an increase of 19% to 21% on a GAAP basis and 23% to 24% on a constant currency basis. | Ceridian expects PowerPay recurring excluding float to decline between 8% and 6%, primarily as a result of FX headwinds. | ||
Total revenue | $323 million to $326 million, or an increase of 14% to 16% on a GAAP basis and 18% to 19% on a constant currency basis. | Ceridian expects Bureau recurring excluding float to decline between 14% and 13%. | ||
Float revenue | $25 million | Float guidance reflects the near-term rate environment and the rolling maturity of its laddered core portfolio. | ||
Adjusted EBITDA | $49 million to $54 million | Ceridian continues to make investments to expand its global HCM footprint in addition to hosting its flagship Insights conference this quarter. |
Fiscal Year 2022 Guidance | Supplemental Commentary and Factors | |||
Dayforce recurring revenue excluding float | $750 million to $752 million, or an increase of 26% on a GAAP basis and 27% to 27.5% on a constant currency basis. | Ceridian continues to expect a return to more normalized employment levels. Contributions from acquired assets included in Dayforce Recurring revenue excluding float are expected to total $8M and reflect two months of Ascender ownership and eleven months of ADAM HCM ownership in 2022. | ||
Cloud revenue | $1,080 million to $1,083 million, or an increase of 24% on a GAAP basis and 26% on a constant currency basis. | Ceridian expects PowerPay recurring excluding float to increase between 1% and 2%. | ||
Total revenue | $1,233 million to $1,236 million, or an increase of 20% to 21% on a GAAP basis and 23% on a constant currency basis. | Ceridian expects Bureau recurring excluding float to decline 1%. | ||
Float revenue | $72 million | Float guidance reflects the near-term rate environment and the rolling maturity of our laddered core portfolio. | ||
Adjusted EBITDA | $232 million to $237 million | Ceridian continues to make investments to expand our global HCM footprint. |
Supplemental guidance details
As expected, Ceridian incurred severance and restructuring costs in the third quarter of 2022 in conjunction with the re-balancing of its workforce across its global footprint. These costs amounted to $2.5 million in the third quarter of 2022 and were accounted for in cost of recurring revenue. Ceridian now expects an additional $2.5 million of costs associated with this re-balancing of the workforce to be incurred in the fourth quarter.
Ceridian has not reconciled the Adjusted EBITDA range for the full year of 2022 to the directly comparable GAAP financial measure because applicable information for the future period, on which this reconciliation would be based, is not available without unreasonable efforts due to uncertainty regarding, and the potential variability of, depreciation and amortization, share-based compensation expense and related employer taxes, changes in foreign currency exchange rates, and other items.
Foreign Exchange
The average U.S. dollar to Canadian dollar foreign exchange rate was $1.30, with a daily range of $1.28 to $1.38 for the three months ended September 30, 2022 compared to $1.26, with a daily range of $1.23 to $1.29 for the three months ended September 30, 2021. As of September 30, 2022, the U.S. dollar to Canadian dollar foreign exchange rate was $1.37. To present the performance of the business excluding the effect of foreign currency rate fluctuations, Ceridian presents revenue on a constant currency basis, which it believes is useful to management and investors. Revenue was calculated on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period.
For the fourth quarter 2022, Ceridians guidance assumes an average U.S dollar to Canadian dollar foreign exchange rate of $1.37, compared to an average rate of $1.26 for the fourth quarter of 2021.
Supplemental FX Commentary | ||||
Summary of Incremental FX Impact to Guidance vs. Prior Guidance¹ | ||||
(Dollars in millions) | Q4 | |||
Dayforce recurring revenue excluding float | ($2.5 | ) | ||
Cloud revenue | ($5.4 | ) | ||
Total revenue | ($5.7 | ) | ||
Float revenue | ($0.6 | ) |
Summary of Full Year FX Impact¹ | |||||||||||||||||||||
(Dollars in millions) | Q1 | Q2 | Q3 | Q4² | FY22² | ||||||||||||||||
Dayforce recurring revenue excluding float | $0.6 | ($2.4 | ) | ($2.9 | ) | ($4.8 | ) | ($9.5 | ) | ||||||||||||
Cloud revenue | $0.3 | ($4.6 | ) | ($5.0 | ) | ($9.9 | ) | ($19.2 | ) | ||||||||||||
Total revenue | | ($6.1 | ) | ($6.8 | ) | ($10.9 | ) | ($23.8 | ) | ||||||||||||
Float revenue | | ($0.3 | ) | ($0.3 | ) | ($0.8 | ) | ($1.4 | ) |
Conference Call Details
Ceridian will host a conference call to discuss the third quarter of 2022 earnings at 5:00 p.m. Eastern Time on November 2, 2022. A live Zoom Video Webinar of the event can be accessed at that time, through a direct registration link at https://ceridian.zoom.us/webinar/register/WN_doYQwSKbQ8epA29HKZX4ag. Alternatively, the event can be accessed from the Events & Presentations page on Ceridians Investor Relations website at https://investors.ceridian.com. A replay and transcript will be available after the conclusion of the live event on Ceridians Investor Relations website.
About Ceridian HCM Holding Inc.
Ceridian. Makes Work Life Better.
Ceridian is a global human capital management software company. Dayforce, the flagship cloud HCM platform, provides human resources, payroll, benefits, workforce management, and talent management functionality. The Dayforce platform is used to optimize management of the entire employee lifecycle, including attracting, engaging, paying, deploying, and developing people. Ceridian has solutions for organizations of all sizes.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this press release are forward-looking statements. Forward-looking statements give Ceridians current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. Users can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements in this press release include statements relating to the fiscal year of 2022, as well as those relating to future growth initiatives. These statements may include words such as anticipate, estimate, expect, project, seek, plan, intend, believe, will, may, could, continue, likely, should, and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events but not all forward-looking statements contain these identifying words. The forward-looking statements contained in this press release are based on assumptions that Ceridian has made in light of its industry experience and its perceptions of historical trends, current conditions, expected future developments and other factors that it believes are appropriate under the circumstances. As users consider this press release, it should be understood that these statements are not guarantees of performance or results. These assumptions and Ceridians future performance or results involve risks and uncertainties (many of which are beyond its control). In particular:
Please refer to Part II, Item IA, Risk Factors of Ceridians most recently filed Quarterly Report on Form 10-Q, and Part I, Item IA, Risk Factors of Ceridians most recently filed Annual Report on Form 10-K, for the year ended December 31, 2021, for a further description of these and other factors. Although Ceridian has attempted to identify important risk factors, additional factors or events that could cause Ceridians actual performance to differ from these forward-looking statements may emerge from time to time, and it is not possible for Ceridian to predict all of them. Should one or more of these risks or uncertainties materialize, or should any of Ceridians assumptions prove incorrect, its actual financial condition, results of operations, future performance and business may vary in material respects from the performance projected in these forward-looking statements. In addition to any factors and assumptions set forth above in this press release, the material factors and assumptions used to develop the forward-looking information include, but are not limited to: the general economy remains stable; the competitive environment in the HCM market remains stable; the demand environment for HCM solutions remains stable; Ceridians implementation capabilities and cycle times remain stable; foreign exchange rates, both current and those used in developing forward-looking statements, specifically USD to CAD, remain stable at, or near, current rates; Ceridian will be able to maintain its relationships with its employees, customers and partners; Ceridian will continue to attract qualified personnel to support its development requirements and the support of its new and existing customers; and that the risk factors noted above, individually or collectively, do not have a material impact on Ceridian. Any forward-looking statement made by Ceridian in this press release speaks only as of the date on which it is made. Ceridian undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Ceridian HCM Holding Inc.
Condensed Consolidated Balance Sheets
September 30, | December 31, | |||||||
2022 | 2021 | |||||||
(Dollars in millions, except share data) | (unaudited) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and equivalents | $ | 408.4 | $ | 367.5 | ||||
Restricted cash | 0.8 | 1.9 | ||||||
Trade and other receivables, net | 155.4 | 146.3 | ||||||
Prepaid expenses and other current assets | 107.3 | 92.6 | ||||||
Total current assets before customer funds | 671.9 | 608.3 | ||||||
Customer funds | 4,335.3 | 3,535.8 | ||||||
Total current assets | 5,007.2 | 4,144.1 | ||||||
Right of use lease asset | 27.5 | 29.4 | ||||||
Property, plant, and equipment, net | 144.7 | 128.2 | ||||||
Goodwill | 2,261.8 | 2,323.6 | ||||||
Other intangible assets, net | 298.4 | 332.5 | ||||||
Other assets | 266.8 | 208.4 | ||||||
Total assets | $ | 8,006.4 | $ | 7,166.2 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 8.1 | $ | 8.3 | ||||
Current portion of long-term lease liabilities | 14.9 | 11.3 | ||||||
Accounts payable | 56.7 | 51.7 | ||||||
Deferred revenue | 42.6 | 48.7 | ||||||
Employee compensation and benefits | 72.6 | 77.3 | ||||||
Other accrued expenses | 24.2 | 24.7 | ||||||
Total current liabilities before customer funds obligations | 219.1 | 222.0 | ||||||
Customer funds obligations | 4,456.6 | 3,519.9 | ||||||
Total current liabilities | 4,675.7 | 3,741.9 | ||||||
Long-term debt, less current portion | 1,214.1 | 1,124.4 | ||||||
Employee benefit plans | 19.3 | 20.7 | ||||||
Long-term lease liabilities, less current portion | 23.0 | 32.7 | ||||||
Other liabilities | 23.1 | 19.0 | ||||||
Total liabilities | 5,955.2 | 4,938.7 | ||||||
Commitments and contingencies | ||||||||
Stockholders equity: | ||||||||
Common stock, $0.01 par, 500,000,000 shares authorized, 153,033,594 and 151,995,031 shares issued and outstanding, respectively | 1.5 | 1.5 | ||||||
Additional paid in capital | 2,918.4 | 2,860.0 | ||||||
Accumulated deficit | (367.4 | ) | (309.2 | ) | ||||
Accumulated other comprehensive loss | (501.3 | ) | (324.8 | ) | ||||
Total stockholders equity | 2,051.2 | 2,227.5 | ||||||
Total liabilities and equity | $ | 8,006.4 | $ | 7,166.2 | ||||
Ceridian HCM Holding Inc.
Condensed Consolidated Statements of Operations
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(Dollars in millions, except share and per share data, unaudited) | ||||||||||||||||
Revenue: | ||||||||||||||||
Recurring | $ | 263.8 | $ | 215.0 | $ | 762.8 | $ | 619.1 | ||||||||
Professional services and other | 51.8 | 42.2 | 147.3 | 123.0 | ||||||||||||
Total revenue | 315.6 | 257.2 | 910.1 | 742.1 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Recurring | 77.1 | 66.0 | 234.4 | 191.1 | ||||||||||||
Professional services and other | 61.0 | 48.9 | 172.6 | 140.9 | ||||||||||||
Product development and management | 44.8 | 36.6 | 125.0 | 94.2 | ||||||||||||
Depreciation and amortization | 13.7 | 12.6 | 40.0 | 37.5 | ||||||||||||
Total cost of revenue | 196.6 | 164.1 | 572.0 | 463.7 | ||||||||||||
Gross profit | 119.0 | 93.1 | 338.1 | 278.4 | ||||||||||||
Selling, general, and administrative | 122.7 | 109.1 | 367.2 | 316.5 | ||||||||||||
Operating loss | (3.7 | ) | (16.0 | ) | (29.1 | ) | (38.1 | ) | ||||||||
Interest expense, net | 7.4 | 10.0 | 19.9 | 25.5 | ||||||||||||
Other expense, net | 5.9 | 3.4 | 11.4 | 16.2 | ||||||||||||
Loss before income taxes | (17.0 | ) | (29.4 | ) | (60.4 | ) | (79.8 | ) | ||||||||
Income tax expense (benefit) | 4.0 | (8.5 | ) | 7.8 | (13.9 | ) | ||||||||||
Net loss | $ | (21.0 | ) | $ | (20.9 | ) | $ | (68.2 | ) | $ | (65.9 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.14 | ) | $ | (0.14 | ) | $ | (0.45 | ) | $ | (0.44 | ) | ||||
Diluted | $ | (0.14 | ) | $ | (0.14 | ) | $ | (0.45 | ) | $ | (0.44 | ) | ||||
Weighted-average shares outstanding: | ||||||||||||||||
Basic | 153,184,846 | 150,450,595 | 152,691,008 | 149,083,666 | ||||||||||||
Diluted | 153,184,846 | 150,450,595 | 152,691,008 | 149,083,666 | ||||||||||||
Ceridian HCM Holding Inc.
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, | ||||||||
2022 | 2021 | |||||||
(Dollars in millions, unaudited) | ||||||||
Net loss | $ | (68.2 | ) | $ | (65.9 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Deferred income tax expense (benefit) | 5.1 | (45.0 | ) | |||||
Depreciation and amortization | 64.4 | 59.3 | ||||||
Amortization of debt issuance costs and debt discount | 3.0 | 11.5 | ||||||
Provision for doubtful accounts | 2.2 | 1.5 | ||||||
Net periodic pension and postretirement cost | 3.6 | 6.6 | ||||||
Share-based compensation | 113.5 | 83.6 | ||||||
Change in fair value of contingent consideration | 3.2 | | ||||||
Other | | 0.6 | ||||||
Changes in operating assets and liabilities excluding effects of acquisitions and divestitures: | ||||||||
Trade and other receivables | (16.2 | ) | (5.3 | ) | ||||
Prepaid expenses and other current assets | (14.0 | ) | (13.9 | ) | ||||
Accounts payable and other accrued expenses | 4.5 | 1.9 | ||||||
Deferred revenue | (3.5 | ) | 5.2 | |||||
Employee compensation and benefits | (2.8 | ) | (5.1 | ) | ||||
Accrued interest | (0.3 | ) | 0.3 | |||||
Accrued taxes | (0.1 | ) | 20.9 | |||||
Other assets and liabilities | (3.6 | ) | (7.3 | ) | ||||
Net cash provided by operating activities | 90.8 | 48.9 | ||||||
Cash Flows from Investing Activities | ||||||||
Purchase of customer funds marketable securities | (534.3 | ) | (500.5 | ) | ||||
Proceeds from sale and maturity of customer funds marketable securities | 304.2 | 409.2 | ||||||
Expenditures for property, plant, and equipment | (10.4 | ) | (7.3 | ) | ||||
Expenditures for software and technology | (54.5 | ) | (38.4 | ) | ||||
Acquisition costs, net of cash and restricted cash acquired | | (373.5 | ) | |||||
Net cash used in investing activities | (295.0 | ) | (510.5 | ) | ||||
Cash Flows from Financing Activities | ||||||||
Increase in customer funds obligations, net | 1,010.4 | 1,631.0 | ||||||
Proceeds from issuance of common stock under share-based compensation plans | 22.6 | 70.9 | ||||||
Repayment of long-term debt obligations | (6.3 | ) | (4.3 | ) | ||||
Proceeds from revolving credit facility | | 295.0 | ||||||
Repayment of revolving credit facility | | (295.0 | ) | |||||
Proceeds from issuance of convertible senior notes, net of issuance costs | | 561.8 | ||||||
Purchases of capped calls related to convertible senior notes | | (45.0 | ) | |||||
Net cash provided by financing activities | 1,026.7 | 2,214.4 | ||||||
Effect of exchange rate changes on cash, restricted cash, and equivalents | (8.1 | ) | (0.5 | ) | ||||
Net increase in cash, restricted cash, and equivalents | 814.4 | 1,752.3 | ||||||
Cash, restricted cash, and equivalents at beginning of period | 1,952.8 | 2,228.5 | ||||||
Cash, restricted cash, and equivalents at end of period | $ | 2,767.2 | $ | 3,980.8 | ||||
Reconciliation of cash, restricted cash, and equivalents to the condensed consolidated balance sheets | ||||||||
Cash and equivalents | $ | 408.4 | $ | 378.8 | ||||
Restricted cash | 0.8 | 1.9 | ||||||
Restricted cash and equivalents included in customer funds | 2,358.0 | 3,600.1 | ||||||
Total cash, restricted cash, and equivalents | $ | 2,767.2 | $ | 3,980.8 | ||||
Ceridian HCM Holding Inc.
Revenue Financial Measures
(Unaudited)
Three Months Ended September 30, | Percentage change in revenue as reported | Impact of changes in foreign currency (a) | Percentage change in revenue on constant currency basis (a) | |||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | 2022 vs. 2021 | |||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Dayforce recurring, excluding float | $ | 191.0 | $ | 153.0 | 24.8 | % | (1.9 | )% | 26.7 | % | ||||||||||
Dayforce float | 16.8 | 7.3 | 130.1 | % | (2.8 | )% | 132.9 | % | ||||||||||||
Total Dayforce recurring | 207.8 | 160.3 | 29.6 | % | (2.0 | )% | 31.6 | % | ||||||||||||
Powerpay recurring, excluding float | 19.3 | 18.7 | 3.2 | % | (3.8 | )% | 7.0 | % | ||||||||||||
Powerpay float | 3.3 | 2.0 | 65.0 | % | (5.0 | )% | 70.0 | % | ||||||||||||
Total Powerpay recurring | 22.6 | 20.7 | 9.2 | % | (3.8 | )% | 13.0 | % | ||||||||||||
Total Cloud recurring | 230.4 | 181.0 | 27.3 | % | (2.1 | )% | 29.4 | % | ||||||||||||
Dayforce professional services and other | 46.4 | 38.4 | 20.8 | % | (2.9 | )% | 23.7 | % | ||||||||||||
Powerpay professional services and other | 0.1 | 0.2 | (50.0 | )% | ( | )% | (50.0 | )% | ||||||||||||
Total Cloud professional services and other | 46.5 | 38.6 | 20.5 | % | (2.8 | )% | 23.3 | % | ||||||||||||
Total Cloud revenue | 276.9 | 219.6 | 26.1 | % | (2.3 | )% | 28.4 | % | ||||||||||||
Bureau recurring, excluding float | 32.2 | 33.4 | (3.6 | )% | (4.5 | )% | 0.9 | % | ||||||||||||
Bureau float | 1.2 | 0.6 | 100.0 | % | ( | )% | 100.0 | % | ||||||||||||
Total Bureau recurring | 33.4 | 34.0 | (1.8 | )% | (4.4 | )% | 2.6 | % | ||||||||||||
Bureau professional services and other | 5.3 | 3.6 | 47.2 | % | (8.4 | )% | 55.6 | % | ||||||||||||
Total Bureau revenue | 38.7 | 37.6 | 2.9 | % | (4.8 | )% | 7.7 | % | ||||||||||||
Total revenue | $ | 315.6 | $ | 257.2 | 22.7 | % | (2.6 | )% | 25.3 | % | ||||||||||
Dayforce | $ | 254.2 | $ | 198.7 | 27.9 | % | (2.1 | )% | 30.0 | % | ||||||||||
Powerpay | 22.7 | 20.9 | 8.6 | % | (3.8 | )% | 12.4 | % | ||||||||||||
Total Cloud revenue | $ | 276.9 | $ | 219.6 | 26.1 | % | (2.3 | )% | 28.4 | % | ||||||||||
Dayforce, excluding float | $ | 237.4 | $ | 191.4 | 24.0 | % | (2.1 | )% | 26.1 | % | ||||||||||
Powerpay, excluding float | 19.4 | 18.9 | 2.6 | % | (3.7 | )% | 6.3 | % | ||||||||||||
Cloud revenue, excluding float | 256.8 | 210.3 | 22.1 | % | (2.2 | )% | 24.3 | % | ||||||||||||
Cloud float | 20.1 | 9.3 | 116.1 | % | (3.3 | )% | 119.4 | % | ||||||||||||
Total Cloud revenue | $ | 276.9 | $ | 219.6 | 26.1 | % | (2.3 | )% | 28.4 | % | ||||||||||
Cloud recurring, excluding float | $ | 210.3 | $ | 171.7 | 22.5 | % | (2.1 | )% | 24.6 | % | ||||||||||
Bureau recurring, excluding float | 32.2 | 33.4 | (3.6 | )% | (4.5 | )% | 0.9 | % | ||||||||||||
Total recurring, excluding float | 242.5 | 205.1 | 18.2 | % | (2.5 | )% | 20.7 | % | ||||||||||||
Total revenue, excluding float | $ | 294.3 | $ | 247.3 | 19.0 | % | (2.6 | )% | 21.6 | % |
(a) Ceridian has calculated revenue on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period.
Ceridian HCM Holding Inc.
Revenue Financial Measures
(Unaudited)
Nine Months Ended September 30, | Percentage change in revenue as reported | Impact of changes in foreign currency (a) | Percentage change in revenue on constant currency basis (a) | |||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | 2022 vs. 2021 | |||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Dayforce recurring, excluding float | $ | 554.5 | $ | 433.7 | 27.9 | % | (1.0 | )% | 28.9 | % | ||||||||||
Dayforce float | 36.2 | 22.5 | 60.9 | % | (1.8 | )% | 62.7 | % | ||||||||||||
Total Dayforce recurring | 590.7 | 456.2 | 29.5 | % | (1.1 | )% | 30.6 | % | ||||||||||||
Powerpay recurring, excluding float | 58.3 | 55.6 | 4.9 | % | (2.8 | )% | 7.7 | % | ||||||||||||
Powerpay float | 8.2 | 5.9 | 39.0 | % | (3.4 | )% | 42.4 | % | ||||||||||||
Total Powerpay recurring | 66.5 | 61.5 | 8.1 | % | (3.0 | )% | 11.1 | % | ||||||||||||
Total Cloud recurring | 657.2 | 517.7 | 26.9 | % | (1.4 | )% | 28.3 | % | ||||||||||||
Dayforce professional services and other | 134.2 | 113.2 | 18.6 | % | (2.1 | )% | 20.7 | % | ||||||||||||
Powerpay professional services and other | 0.4 | 0.8 | (50.0 | )% | ( | )% | (50.0 | )% | ||||||||||||
Total Cloud professional services and other | 134.6 | 114.0 | 18.1 | % | (2.1 | )% | 20.2 | % | ||||||||||||
Total Cloud revenue | 791.8 | 631.7 | 25.3 | % | (1.5 | )% | 26.8 | % | ||||||||||||
Bureau recurring, excluding float | 102.6 | 98.8 | 3.8 | % | (3.2 | )% | 7.0 | % | ||||||||||||
Bureau float | 3.0 | 2.6 | 15.4 | % | ( | )% | 15.4 | % | ||||||||||||
Total Bureau recurring | 105.6 | 101.4 | 4.1 | % | (3.1 | )% | 7.2 | % | ||||||||||||
Bureau professional services and other | 12.7 | 9.0 | 41.1 | % | (5.6 | )% | 46.7 | % | ||||||||||||
Total Bureau revenue | 118.3 | 110.4 | 7.2 | % | (3.2 | )% | 10.4 | % | ||||||||||||
Total revenue | $ | 910.1 | $ | 742.1 | 22.6 | % | (1.8 | )% | 24.4 | % | ||||||||||
Dayforce | $ | 724.9 | $ | 569.4 | 27.3 | % | (1.3 | )% | 28.6 | % | ||||||||||
Powerpay | 66.9 | 62.3 | 7.4 | % | (2.9 | )% | 10.3 | % | ||||||||||||
Total Cloud revenue | $ | 791.8 | $ | 631.7 | 25.3 | % | (1.5 | )% | 26.8 | % | ||||||||||
Dayforce, excluding float | $ | 688.7 | $ | 546.9 | 25.9 | % | (1.3 | )% | 27.2 | % | ||||||||||
Powerpay, excluding float | 58.7 | 56.4 | 4.1 | % | (2.8 | )% | 6.9 | % | ||||||||||||
Cloud revenue, excluding float | 747.4 | 603.3 | 23.9 | % | (1.4 | )% | 25.3 | % | ||||||||||||
Cloud float | 44.4 | 28.4 | 56.3 | % | (2.2 | )% | 58.5 | % | ||||||||||||
Total Cloud revenue | $ | 791.8 | $ | 631.7 | 25.3 | % | (1.5 | )% | 26.8 | % | ||||||||||
Cloud recurring, excluding float | $ | 612.8 | $ | 489.3 | 25.2 | % | (1.3 | )% | 26.5 | % | ||||||||||
Bureau recurring, excluding float | 102.6 | 98.8 | 3.8 | % | (3.2 | )% | 7.0 | % | ||||||||||||
Total recurring, excluding float | 715.4 | 588.1 | 21.6 | % | (1.6 | )% | 23.2 | % | ||||||||||||
Total revenue, excluding float | $ | 862.7 | $ | 711.1 | 21.3 | % | (1.7 | )% | 23.0 | % |
(a) Ceridian has calculated revenue on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period.
Ceridian HCM Holding Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
The following tables present a reconciliation of the reported results to the non-GAAP financial measures EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted operating profit, Adjusted net loss, and Adjusted Cloud recurring gross margin for all periods presented. Refer to the Use of Non-GAAP Financial Measures below for further discussion.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(Dollars in millions) | ||||||||||||||||
Net loss | $ | (21.0 | ) | $ | (20.9 | ) | $ | (68.2 | ) | $ | (65.9 | ) | ||||
Interest expense, net | 7.4 | 10.0 | 19.9 | 25.5 | ||||||||||||
Income tax expense (benefit) | 4.0 | (8.5 | ) | 7.8 | (13.9 | ) | ||||||||||
Depreciation and amortization | 21.9 | 21.0 | 64.4 | 59.3 | ||||||||||||
EBITDA | 12.3 | 1.6 | 23.9 | 5.0 | ||||||||||||
Foreign exchange loss | 4.5 | 1.5 | 7.3 | 8.5 | ||||||||||||
Share-based compensation (a) | 39.4 | 31.0 | 113.8 | 85.9 | ||||||||||||
Severance charges (b) | 4.3 | 2.1 | 28.6 | 5.8 | ||||||||||||
Restructuring consulting fees (c) | 1.4 | 1.8 | 5.1 | 13.9 | ||||||||||||
Other non-recurring items (d) | 1.6 | 1.4 | 4.0 | 4.7 | ||||||||||||
Adjusted EBITDA | $ | 63.5 | $ | 39.4 | $ | 182.7 | $ | 123.8 | ||||||||
Net profit margin (e) | (6.7 | )% | (8.1 | )% | (7.5 | )% | (8.9 | )% | ||||||||
Adjusted EBITDA margin | 20.1 | % | 15.3 | % | 20.1 | % | 16.7 | % |
(a) Represents share-based compensation expense and related employer taxes.
(b) Represents costs for severance compensation paid to employees whose positions have been eliminated or who have been terminated not for cause. During the three and nine months ended September 30, 2022, Ceridian incurred severance charges in conjunction with the re-balancing of the workforce across its global footprint in the amount of $2.5 million and $18.6 million, respectively, within cost of recurring revenue.
(c) Represents consulting fees and expenses incurred during the periods presented in connection with any acquisition, investment, disposition, recapitalization, equity offering, issuance or repayment of debt, issuance of equity interests, or refinancing.
(d) Represents (1) the impact of the fair value adjustment for the DataFuzion HCM, Inc. (DataFuzion) contingent consideration in 2022, (2) the difference between the historical five-year average pension expense and the current period actuarially determined pension expense associated with the planned termination of the frozen U.S. pension plan and related changes in investment strategy associated with protecting the now fully funded status, and (3) the net impact of the abandonment of certain leased facilities.
(e) Net profit margin is determined by calculating the percentage that net income (loss) is of total revenue.
Three Months Ended September 30, 2022 | ||||||||||||||||||||
As reported | Share-based compensation | Severance charges | Other (a) | Adjusted (b) | ||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Cost of revenue: | ||||||||||||||||||||
Recurring | ||||||||||||||||||||
Cloud | $ | 64.3 | $ | 3.9 | $ | 2.3 | $ | | $ | 58.1 | ||||||||||
Bureau | 12.8 | 0.3 | 0.3 | | 12.2 | |||||||||||||||
Total recurring | 77.1 | 4.2 | 2.6 | | 70.3 | |||||||||||||||
Professional services and other | 61.0 | 3.8 | | | 57.2 | |||||||||||||||
Product development and management | 44.8 | 6.7 | 0.3 | | 37.8 | |||||||||||||||
Depreciation and amortization | 13.7 | | | | 13.7 | |||||||||||||||
Total cost of revenue | 196.6 | 14.7 | 2.9 | | 179.0 | |||||||||||||||
Sales and marketing | 62.6 | 7.4 | 0.8 | | 54.4 | |||||||||||||||
General and administrative | 60.1 | 17.3 | 0.6 | 10.1 | 32.1 | |||||||||||||||
Operating (loss) profit | (3.7 | ) | 39.4 | 4.3 | 10.1 | 50.1 | ||||||||||||||
Other expense, net | 5.9 | | | 4.9 | 1.0 | |||||||||||||||
Depreciation and amortization | 21.9 | | | (7.5 | ) | 14.4 | ||||||||||||||
EBITDA | 12.3 | 39.4 | 4.3 | 7.5 | 63.5 | |||||||||||||||
Interest expense, net | 7.4 | | | | 7.4 | |||||||||||||||
Income tax expense (c) | 4.0 | | | (6.6 | ) | 10.6 | ||||||||||||||
Depreciation and amortization | 21.9 | | | 7.5 | 14.4 | |||||||||||||||
Net (loss) income | $ | (21.0 | ) | $ | 39.4 | $ | 4.3 | $ | 8.4 | $ | 31.1 | |||||||||
Net (loss) income per share – basic (d) | $ | (0.14 | ) | $ | 0.26 | $ | 0.03 | $ | 0.05 | $ | 0.20 | |||||||||
Net (loss) income per share – diluted (d) | $ | (0.14 | ) | $ | 0.25 | $ | 0.03 | $ | 0.05 | $ | 0.20 |
(a) Other includes amortization of acquisition-related intangible assets, foreign exchange loss, restructuring consulting fees, the impact of the fair value adjustment for the DataFuzion contingent consideration, the difference between the historical five-year average pension expense and the current period actuarially determined pension expense associated with the planned termination of the frozen U.S. pension plan and related changes in investment strategy associated with protecting the now fully funded status, and the net impact related to the abandonment of certain leased facilities.
(b) The Adjusted column is a non-GAAP financial measure, adjusted to exclude foreign exchange gains (losses), share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, amortization of acquisition-related intangible assets, and other non-recurring items, all of which are adjusted for the effect of income taxes.
(c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
(d) Both GAAP and Adjusted net income (loss) per share are calculated by dividing either GAAP or Adjusted net income by the basic or diluted weighted average common shares outstanding. When adjusted diluted net income per share is positive, diluted weighted average common shares outstanding incorporate the effect of dilutive equity instruments. GAAP basic and diluted net loss per share are calculated based upon 153,184,846 weighted-average shares of common stock and Adjusted basic and diluted net income per share are calculated based upon 153,184,846 and 155,601,415 weighted-average shares of common stock, respectively.
Three Months Ended September 30, 2021 | ||||||||||||||||||||
As reported | Share-based compensation | Severance charges | Other (a) | Adjusted (b) | ||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Cost of revenue: | ||||||||||||||||||||
Recurring | ||||||||||||||||||||
Cloud | $ | 49.4 | $ | 3.0 | $ | (0.1 | ) | $ | | $ | 46.5 | |||||||||
Bureau | 16.6 | 0.5 | 0.4 | | 15.7 | |||||||||||||||
Total recurring | 66.0 | 3.5 | 0.3 | | 62.2 | |||||||||||||||
Professional services and other | 48.9 | 2.5 | | | 46.4 | |||||||||||||||
Product development and management | 36.6 | 5.3 | 0.3 | | 31.0 | |||||||||||||||
Depreciation and amortization | 12.6 | | | | 12.6 | |||||||||||||||
Total cost of revenue | 164.1 | 11.3 | 0.6 | | 152.2 | |||||||||||||||
Sales and marketing | 56.1 | 3.6 | 0.6 | | 51.9 | |||||||||||||||
General and administrative | 53.0 | 16.1 | 0.9 | 9.1 | 26.9 | |||||||||||||||
Operating (loss) profit | (16.0 | ) | 31.0 | 2.1 | 9.1 | 26.2 | ||||||||||||||
Other expense, net | 3.4 | | | 2.9 | 0.5 | |||||||||||||||
Depreciation and amortization | 21.0 | | | (7.3 | ) | 13.7 | ||||||||||||||
EBITDA | 1.6 | 31.0 | 2.1 | 4.7 | 39.4 | |||||||||||||||
Interest expense, net | 10.0 | | | | 10.0 | |||||||||||||||
Income tax benefit (c) | (8.5 | ) | | | (8.4 | ) | (0.1 | ) | ||||||||||||
Depreciation and amortization | 21.0 | | | 7.3 | 13.7 | |||||||||||||||
Net (loss) income | $ | (20.9 | ) | $ | 31.0 | $ | 2.1 | $ | 3.6 | $ | 15.8 | |||||||||
Net (loss) income per share – basic (d) | $ | (0.14 | ) | $ | 0.21 | $ | 0.01 | $ | 0.02 | $ | 0.11 | |||||||||
Net (loss) income per share – diluted (d) | $ | (0.14 | ) | $ | 0.20 | $ | 0.01 | $ | 0.02 | $ | 0.10 |
(a) Other includes amortization of acquisition-related intangible assets, foreign exchange loss, restructuring consulting fees, the difference between the historical five-year average run rate and the current period actuarially determined pension expense resulting from the changes in investment strategy associated with protecting the now fully funded status of its largest U.S pension plan, and charges related to the abandonment of certain leased facilities.
(b) The Adjusted column is a non-GAAP financial measure, adjusted to exclude foreign exchange gains (losses), share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, amortization of acquisition-related intangible assets, and other non-recurring items, all of which are adjusted for the effect of income taxes.
(c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
(d) Both GAAP and Adjusted net income (loss) per share are calculated by dividing either GAAP or Adjusted net income by the basic or diluted weighted average common shares outstanding. When adjusted diluted net income per share is positive, diluted weighted average common shares outstanding incorporate the effect of dilutive equity instruments. GAAP basic and diluted net loss per share are calculated based upon 150,450,595 weighted-average shares of common stock, and Adjusted basic and diluted net income per share are calculated based upon 150,450,595 and 156,861,973 weighted-average shares of common stock, respectively.
Nine Months Ended September 30, 2022 | ||||||||||||||||||||
As reported | Share-based compensation | Severance charges | Other (a) | Adjusted (b) | ||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Cost of revenue: | ||||||||||||||||||||
Recurring | ||||||||||||||||||||
Cloud | $ | 189.1 | $ | 11.4 | $ | 16.9 | $ | | $ | 160.8 | ||||||||||
Bureau | 45.3 | 1.0 | 2.4 | | 41.9 | |||||||||||||||
Total recurring | 234.4 | 12.4 | 19.3 | | 202.7 | |||||||||||||||
Professional services and other | 172.6 | 10.5 | 0.5 | | 161.6 | |||||||||||||||
Product development and management | 125.0 | 18.9 | 4.0 | | 102.1 | |||||||||||||||
Depreciation and amortization | 40.0 | | | | 40.0 | |||||||||||||||
Total cost of revenue | 572.0 | 41.8 | 23.8 | | 506.4 | |||||||||||||||
Sales and marketing | 183.4 | 18.9 | 3.3 | | 161.2 | |||||||||||||||
General and administrative | 183.8 | 53.1 | 1.5 | 31.2 | 98.0 | |||||||||||||||
Operating (loss) profit | (29.1 | ) | 113.8 | 28.6 | 31.2 | 144.5 | ||||||||||||||
Other expense, net | 11.4 | | | 8.1 | 3.3 | |||||||||||||||
Depreciation and amortization | 64.4 | | | (22.9 | ) | 41.5 | ||||||||||||||
EBITDA | 23.9 | 113.8 | 28.6 | 16.4 | 182.7 | |||||||||||||||
Interest expense, net | 19.9 | | | | 19.9 | |||||||||||||||
Income tax expense (c) | 7.8 | | | (28.9 | ) | 36.7 | ||||||||||||||
Depreciation and amortization | 64.4 | | | 22.9 | 41.5 | |||||||||||||||
Net (loss) income | $ | (68.2 | ) | $ | 113.8 | $ | 28.6 | $ | 10.4 | $ | 84.6 | |||||||||
Net (loss) income per share – basic (d) | $ | (0.45 | ) | $ | 0.75 | $ | 0.19 | $ | 0.07 | $ | 0.55 | |||||||||
Net (loss) income per share – diluted (d) | $ | (0.45 | ) | $ | 0.73 | $ | 0.18 | $ | 0.07 | $ | 0.54 |
(a) Other includes amortization of acquisition-related intangible assets, restructuring consulting fees, foreign exchange loss, the impact of the fair value adjustment for the DataFuzion contingent consideration, the difference between the historical five-year average pension expense and the current period actuarially determined pension expense associated with the planned termination of the frozen U.S. pension plan and related changes in investment strategy associated with protecting the now fully funded status, and the net impact of the abandonment of certain leased facilities.
(b) The Adjusted column is a non-GAAP financial measure, adjusted to exclude foreign exchange gains (losses), share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, amortization of acquisition-related intangible assets, and other non-recurring items, all of which are adjusted for the effect of income taxes.
(c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
(d) Both GAAP and Adjusted net income (loss) per share are calculated by dividing either GAAP or Adjusted net income by the basic or diluted weighted average common shares outstanding. When adjusted diluted net income per share is positive, diluted weighted average common shares outstanding incorporate the effect of dilutive equity instruments. GAAP basic and diluted net loss per share are calculated based upon 152,691,008 weighted-average shares of common stock and Adjusted basic and diluted net income per share are calculated based upon 152,691,008 and 155,506,326 weighted-average shares of common stock, respectively.
Nine Months Ended September 30, 2021 | ||||||||||||||||||||
As reported | Share-based compensation | Severance charges | Other (a) | Adjusted (b) | ||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Cost of revenue: | ||||||||||||||||||||
Recurring | ||||||||||||||||||||
Cloud | $ | 143.4 | $ | 8.2 | $ | 0.1 | $ | | $ | 135.1 | ||||||||||
Bureau | 47.7 | 1.5 | 1.5 | | 44.7 | |||||||||||||||
Total recurring | 191.1 | 9.7 | 1.6 | | 179.8 | |||||||||||||||
Professional services and other | 140.9 | 7.1 | 0.1 | | 133.7 | |||||||||||||||
Product development and management | 94.2 | 13.2 | 0.5 | | 80.5 | |||||||||||||||
Depreciation and amortization | 37.5 | | | | 37.5 | |||||||||||||||
Total cost of revenue | 463.7 | 30.0 | 2.2 | | 431.5 | |||||||||||||||
Sales and marketing | 154.5 | 10.1 | 1.6 | | 142.8 | |||||||||||||||
General and administrative | 162.0 | 45.8 | 2.0 | 33.6 | 80.6 | |||||||||||||||
Operating (loss) profit | (38.1 | ) | 85.9 | 5.8 | 33.6 | 87.2 | ||||||||||||||
Other expense, net | 16.2 | | | 12.8 | 3.4 | |||||||||||||||
Depreciation and amortization | 59.3 | | | (19.3 | ) | 40.0 | ||||||||||||||
EBITDA | 5.0 | 85.9 | 5.8 | 27.1 | 123.8 | |||||||||||||||
Interest expense, net | 25.5 | | | | 25.5 | |||||||||||||||
Income tax (benefit) expense (c) | (13.9 | ) | | | (21.8 | ) | 7.9 | |||||||||||||
Depreciation and amortization | 59.3 | | | 19.3 | 40.0 | |||||||||||||||
Net (loss) income | $ | (65.9 | ) | $ | 85.9 | $ | 5.8 | $ | 24.6 | $ | 50.4 | |||||||||
Net (loss) income per share – basic (d) | $ | (0.44 | ) | $ | 0.58 | $ | 0.04 | $ | 0.17 | $ | 0.34 | |||||||||
Net (loss) income per share – diluted (d) | $ | (0.44 | ) | $ | 0.58 | $ | 0.04 | $ | 0.16 | $ | 0.32 |
(a) Other includes amortization of acquisition-related intangible assets, foreign exchange loss, restructuring consulting fees, the difference between the historical five-year average run rate and the current period actuarially determined pension expense resulting from the changes in investment strategy associated with protecting the now fully funded status of its largest U.S pension plan, and charges related to the abandonment of certain leased facilities.
(b) The Adjusted column is a non-GAAP financial measure, adjusted to exclude foreign exchange gains (losses), share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, amortization of acquisition-related intangible assets, and other non-recurring items, all of which are adjusted for the effect of income taxes.
(c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
(d) Both GAAP and Adjusted net income (loss) per share are calculated by dividing either GAAP or Adjusted net income by the basic or diluted weighted average common shares outstanding. When adjusted diluted net income per share is positive, diluted weighted average common shares outstanding incorporate the effect of dilutive equity instruments. GAAP basic and diluted net loss per share are calculated based upon 149,083,666 weighted-average shares of common stock, and Adjusted basic and diluted net income per share are calculated based upon 149,083,666 and 155,444,668 weighted-average shares of common stock, respectively.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(Dollars in millions) | ||||||||||||||||
Cloud recurring revenue | $ | 230.4 | $ | 181.0 | $ | 657.2 | $ | 517.7 | ||||||||
Cost of revenue – Cloud recurring – as reported | $ | 64.3 | $ | 49.4 | $ | 189.1 | $ | 143.4 | ||||||||
Share-based compensation | 3.9 | 3.0 | 11.4 | 8.2 | ||||||||||||
Severance charges | 2.3 | (0.1 | ) | 16.9 | 0.1 | |||||||||||
Cost of revenue – Cloud recurring – as adjusted (a) | $ | 58.1 | $ | 46.5 | $ | 160.8 | $ | 135.1 | ||||||||
Gross margin – Cloud recurring – as reported | 72.1 | % | 72.7 | % | 71.2 | % | 72.3 | % | ||||||||
Gross margin – Cloud recurring – as adjusted (a) | 74.8 | % | 74.3 | % | 75.5 | % | 73.9 | % |
(a) The Adjusted figures are non-GAAP financial measures, adjusted to exclude share-based compensation expense and related employer taxes, and severance charges.
Use of Non-GAAP Financial Measures
Ceridian uses certain non-GAAP financial measures in this release including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted operating profit, Adjusted net income, Adjusted diluted net income per share, revenue on a constant currency basis, Dayforce recurring revenue per customer, and Adjusted Cloud recurring gross margin. Ceridian believes that these non-GAAP financial measures are useful to management and investors as supplemental measures to evaluate its overall operating performance including comparison across periods and with competitors. Ceridians management uses these non-GAAP financial measures to assess operating performance because these measures exclude the results of decisions that are outside the normal course of its business operations, and are used for internal budgeting and forecasting purposes both for short- and long-term operating plans. Additionally, Adjusted EBITDA and Adjusted EBITDA margin are components of Ceridians management incentive plan.
Ceridian defines its non-GAAP financial measures as follows:
Ceridians presentation of EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Cloud recurring gross margin, Adjusted operating profit, Adjusted net income, Adjusted diluted net income per share, revenue on a constant currency basis, and Dayforce recurring revenue per customer are intended as supplemental measures of its performance that are not required by, or presented in accordance with, GAAP. These non-GAAP financial measures should not be considered as alternatives to net income (loss), earnings (loss) per share, revenue, or any other performance measures derived in accordance with GAAP, or as measures of operating cash flows or liquidity. Ceridians presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by similar items to those eliminated in this presentation.
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Cloud recurring gross margin, Adjusted operating profit, Adjusted net income, Adjusted diluted net income per share, revenue on a constant currency basis, and Dayforce recurring revenue per customer are not defined under GAAP, are not measures of net income (loss) or any other performance measures derived in accordance with GAAP, and are subject to important limitations. Ceridians use of these terms may not be comparable to similarly titled measures of other companies in its industry and are not measures of performance calculated in accordance with GAAP. These non-GAAP financial measures have important limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of Ceridians results as reported under GAAP. In evaluating non-GAAP financial measures, users should be aware that in the future Ceridian may incur expenses similar to those eliminated in this presentation.
Source: Ceridian HCM Holding Inc.
For further information, please contact:
Investor Relations
1-844-829-9499
investors@ceridian.com
Public Relations
1-647-417-2117
teri.murphy@ceridian.com
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