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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ceridian HCM Holding Inc | TSX:CDAY | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 93.38 | 93.07 | 93.76 | 0 | 00:00:00 |
“I am very pleased with our performance in the first quarter – as Dayforce recurring revenue grew 44% or 46% on a constant currency basis and we exceeded our profitability objectives,” said David Ossip, Chair and Co-CEO of Ceridian. “Looking ahead, I continue to be confident in our ability to execute and take market share as demand for our global people platform remains resilient.”
“The strength of the Ceridian community continues to grow – with 6,179 Dayforce customers live and continued expansion of our partner ecosystem,” said Leagh Turner, Co-CEO of Ceridian. “In this dynamic environment, we are seeing more global enterprise organizations choose Ceridian to manage their people operations and drive their transformations given our breadth and depth of product and relentless focus on customer experience.”
“Our first quarter results exceeded guidance across all metrics," said Noemie Heuland, CFO of Ceridian. “We start the year with strong Dayforce recurring revenue growth and continued operating profit expansion. This gives us confidence to raise our Dayforce recurring revenue, excluding float and profitability targets for the year as we progress towards our mid-term commitment of profitable growth.”
Financial Highlights for the First Quarter 20231
Supplemental Detail
1 The financial highlights are on a year-over-year basis, unless otherwise stated. All financial results are reported in United States ("U.S.") dollars unless otherwise stated. 2 Excluding float revenue, the impact of lower employment levels in 2021 due to the Coronavirus disease 2019 ("COVID-19") pandemic, Ascender and ADAM HCM revenue and on a constant currency basis. Please refer to the “Non-GAAP Financial Measures” section for discussion of revenue on a constant currency basis.
Business Highlights
Sales Highlights
Customer Highlights
Platform and Roadmap Highlights
Ceridian continues to advance the breadth and depth of the Dayforce platform, with new innovations delivered in Q1 including:
Business Outlook
Based on information available as of May 3, 2023, Ceridian is issuing the following guidance for the second quarter and full year of 2023 as indicated below. Comparisons are on a year-over-year basis, unless stated otherwise.
Second Quarter 2023 Guidance
Full Year 2023 Guidance
Supplemental guidance details
Second Quarter 2023 Guidance | Supplemental Commentary and Factors | |||
Total Revenue | $356 million to $360 million, an increase of 18% to 20% or 20% to 22% on a constant currency basis. | Ceridian expects Other recurring revenue, excluding float1 to decline approximately 36% to 38% or 33% to 35% on a constant currency basis as a result of tax modernization and the sunsetting of certain legacy solutions. Ceridian expects PowerPay recurring revenue, excluding float to decline low single digits on a GAAP basis and to increase low single digits on a constant currency basis. | ||
Dayforce recurring revenue, excluding float | $223 million to $225 million, an increase of 22% to 23% or 23% to 24% on a constant currency basis. | Ceridian expects employment levels to reflect a normalized seasonal cadence.Ceridian expects tax modernization and migration to contribute approximately 400 basis points of growth in the second quarter. | ||
Float revenue | $38 million | Float guidance reflects the near-term rate environment and the rolling maturity of the laddered core portfolio. | ||
Adjusted EBITDA | $87 million to $90 million | Ceridian continues to make investments to expand its global HCM footprint. |
(1) | Other recurring revenue, previously described as Bureau, primarily consists of Asia Pacific Japan ("APJ") region and legacy North American solutions. |
Fiscal Year 2023 Guidance | Supplemental Commentary and Factors | |||
Total Revenue | $1,480 million to $1,500 million, an increase of 19% to 20% or 20% to 21% on a constant currency basis. | Ceridian expects Other recurring revenue, excluding float1 to decline approximately 35% to 38% or 34% to 37% on a constant currency basis as a result of tax modernization and the sunsetting of certain legacy solutions. Ceridian expects PowerPay recurring revenue, excluding float to decline low single digits on a GAAP basis and to increase low single digits on a constant currency basis. | ||
Dayforce recurring revenue, excluding float | $939 million to $949 million, an increase of 25% to 26% or 26% to 27% on a constant currency basis. | Ceridian expects employment levels to reflect a normalized seasonal cadence.Ceridian expects tax modernization and migration to contribute approximately 460 basis points of growth in fiscal year 2023. | ||
Float revenue | $150 million | Float guidance reflects the near-term rate environment and the rolling maturity of the laddered core portfolio. | ||
Adjusted EBITDA | $366 million to $379 million | Ceridian continues to make investments to expand its global HCM footprint. |
(1) | Other recurring revenue, previously described as Bureau, primarily consists of APJ region and legacy North American solutions. |
Ceridian has not reconciled the Adjusted EBITDA range for the second quarter or full year of 2023 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. The probable significance of certain of these reconciling items is high and, based on historical experience, could be material.
Foreign Exchange
The average U.S. dollar to Canadian dollar foreign exchange rate was $1.35, with a daily range of $1.33 to $1.39 for the three months ended March 31, 2023, compared to $1.27, with a daily range of $1.25 to $1.29 for the three months ended March 31, 2022. 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 full year and second quarter of 2023, Ceridian's guidance assumes an average U.S dollar to Canadian dollar foreign exchange rate of $1.34, compared to an average rate of $1.28 and $1.25 for the second quarter and full year of 2022, respectively.
Conference Call Details
Ceridian will host a conference call to discuss the first quarter 2023 earnings at 5:00 p.m. Eastern Time on May 3, 2023. 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_DXvw7KxXRMCoBaEHKgysNw. Alternatively, the event can be accessed from the Events & Presentations page on Ceridian’s Investor Relations website at https://investors.ceridian.com. A replay will be available on Ceridian’s Investor Relations website approximately two hours after the conclusion of the live event, accessible for approximately one year.
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 Ceridian’s 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 2023, 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 Ceridian’s future performance or results involve risks and uncertainties (many of which are beyond its control). In particular:
Although Ceridian has attempted to identify important risk factors, additional factors or events that could cause Ceridian’s 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 Ceridian’s 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; Ceridian’s 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 | |||||||
(Unaudited) | |||||||
March 31, | December 31, | ||||||
2023 | 2022 | ||||||
(Dollars in millions, except share data) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 428.6 | $ | 431.9 | |||
Restricted cash | 0.8 | 0.8 | |||||
Trade and other receivables, net | 204.6 | 180.1 | |||||
Prepaid expenses and other current assets | 122.3 | 98.0 | |||||
Total current assets before customer funds | 756.3 | 710.8 | |||||
Customer funds | 6,285.4 | 4,183.2 | |||||
Total current assets | 7,041.7 | 4,894.0 | |||||
Right of use lease assets, net | 20.1 | 24.3 | |||||
Property, plant, and equipment, net | 185.5 | 174.9 | |||||
Goodwill | 2,281.1 | 2,280.0 | |||||
Other intangible assets, net | 274.9 | 281.6 | |||||
Other assets | 258.2 | 262.4 | |||||
Total assets | $ | 10,061.5 | $ | 7,917.2 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 7.7 | $ | 7.8 | |||
Current portion of long-term lease liabilities | 7.7 | 10.0 | |||||
Accounts payable | 61.1 | 54.3 | |||||
Deferred revenue | 47.0 | 41.2 | |||||
Employee compensation and benefits | 58.2 | 97.4 | |||||
Other accrued expenses | 31.3 | 24.0 | |||||
Total current liabilities before customer funds obligations | 213.0 | 234.7 | |||||
Customer funds obligations | 6,378.4 | 4,298.8 | |||||
Total current liabilities | 6,591.4 | 4,533.5 | |||||
Long-term debt, less current portion | 1,212.4 | 1,213.4 | |||||
Employee benefit plans | 15.7 | 17.7 | |||||
Long-term lease liabilities, less current portion | 22.2 | 23.7 | |||||
Other liabilities | 25.6 | 19.5 | |||||
Total liabilities | 7,867.3 | 5,807.8 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.01 par, 500,000,000 shares authorized, 155,006,926 and 153,856,645 shares issued and outstanding, respectively | 1.6 | 1.5 | |||||
Additional paid in capital | 3,020.4 | 2,965.5 | |||||
Accumulated deficit | (362.7 | ) | (372.6 | ) | |||
Accumulated other comprehensive loss | (465.1 | ) | (485.0 | ) | |||
Total stockholders’ equity | 2,194.2 | 2,109.4 | |||||
Total liabilities and stockholders' equity | $ | 10,061.5 | $ | 7,917.2 |
Ceridian HCM Holding Inc. | |||||||
Condensed Consolidated Statements of Operations | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, | |||||||
2023 | 2022 | ||||||
(Dollars in millions, except share and per share data) | |||||||
Revenue: | |||||||
Recurring | $ | 317.9 | $ | 247.9 | |||
Professional services and other | 52.7 | 45.4 | |||||
Total revenue | 370.6 | 293.3 | |||||
Cost of revenue: | |||||||
Recurring | 80.1 | 82.3 | |||||
Professional services and other | 63.9 | 54.5 | |||||
Product development and management | 51.0 | 40.4 | |||||
Depreciation and amortization | 15.3 | 13.0 | |||||
Total cost of revenue | 210.3 | 190.2 | |||||
Gross profit | 160.3 | 103.1 | |||||
Selling, general, and administrative | 121.9 | 122.0 | |||||
Operating profit (loss) | 38.4 | (18.9 | ) | ||||
Interest expense, net | 9.2 | 5.8 | |||||
Other expense (income), net | 0.8 | (0.3 | ) | ||||
Income (loss) before income taxes | 28.4 | (24.4 | ) | ||||
Income tax expense | 18.5 | 3.0 | |||||
Net income (loss) | $ | 9.9 | $ | (27.4 | ) | ||
Net income (loss) per share: | |||||||
Basic | $ | 0.06 | $ | (0.18 | ) | ||
Diluted | $ | 0.06 | $ | (0.18 | ) | ||
Weighted-average shares outstanding: | |||||||
Basic | 154,247,972 | 152,124,151 | |||||
Diluted | 157,700,701 | 152,124,151 |
Ceridian HCM Holding Inc. | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(Unaudited) | |||||||
Three Months Ended March 31, | |||||||
2023 | 2022 | ||||||
(Dollars in millions) | |||||||
Net income (loss) | $ | 9.9 | $ | (27.4 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Deferred income tax expense | 6.1 | 4.5 | |||||
Depreciation and amortization | 22.1 | 20.9 | |||||
Amortization of debt issuance costs and debt discount | 1.1 | 1.0 | |||||
Provision for doubtful accounts | 2.4 | 0.9 | |||||
Net periodic pension and postretirement cost | 0.4 | 1.2 | |||||
Share-based compensation | 40.2 | 35.5 | |||||
Change in fair value of contingent consideration | 3.5 | 0.8 | |||||
Other | 0.5 | — | |||||
Changes in operating assets and liabilities: | |||||||
Trade and other receivables | (26.9 | ) | 1.0 | ||||
Prepaid expenses and other current assets | (20.6 | ) | (14.1 | ) | |||
Accounts payable and other accrued expenses | 4.2 | (4.6 | ) | ||||
Deferred revenue | 6.0 | (1.1 | ) | ||||
Employee compensation and benefits | (40.1 | ) | (8.2 | ) | |||
Accrued interest | (0.5 | ) | (0.4 | ) | |||
Accrued taxes | 8.3 | (3.3 | ) | ||||
Other assets and liabilities | (5.3 | ) | (1.2 | ) | |||
Net cash provided by operating activities | 11.3 | 5.5 | |||||
Cash Flows from Investing Activities | |||||||
Purchase of customer funds marketable securities | (72.5 | ) | (276.9 | ) | |||
Proceeds from sale and maturity of customer funds marketable securities | 100.5 | 112.1 | |||||
Expenditures for property, plant, and equipment | (6.5 | ) | (2.1 | ) | |||
Expenditures for software and technology | (21.9 | ) | (17.8 | ) | |||
Other | (1.0 | ) | — | ||||
Net cash used in investing activities | (1.4 | ) | (184.7 | ) | |||
Cash Flows from Financing Activities | |||||||
Increase in customer funds obligations, net | 2,078.1 | 3,879.8 | |||||
Proceeds from issuance of common stock under share-based compensation plans | 14.8 | 6.0 | |||||
Repayment of long-term debt obligations | (2.1 | ) | (2.1 | ) | |||
Net cash provided by financing activities | 2,090.8 | 3,883.7 | |||||
Effect of exchange rate changes on cash, restricted cash, and equivalents | (7.7 | ) | 1.7 | ||||
Net increase in cash, restricted cash, and equivalents | 2,093.0 | 3,706.2 | |||||
Cash, restricted cash, and equivalents at beginning of period | 2,604.9 | 1,952.8 | |||||
Cash, restricted cash, and equivalents at end of period | $ | 4,697.9 | $ | 5,659.0 | |||
Reconciliation of cash, restricted cash, and equivalents to the condensed consolidated balance sheets | |||||||
Cash and equivalents | $ | 428.6 | $ | 354.8 | |||
Restricted cash | 0.8 | 1.9 | |||||
Restricted cash and equivalents included in customer funds | 4,268.5 | 5,302.3 | |||||
Total cash, restricted cash, and equivalents | $ | 4,697.9 | $ | 5,659.0 |
Ceridian HCM Holding Inc. | |||||||||||||||||||
Revenue Financial Measures | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended March 31, | Percentage change in revenue as reported | Impact ofchanges inforeigncurrency (a) | Percentage change in revenue on a constant currency basis (a) | ||||||||||||||||
2023 | 2022 | 2023 vs. 2022 | 2023 vs. 2022 | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Revenue: | |||||||||||||||||||
Recurring revenue: | |||||||||||||||||||
Dayforce recurring, excluding float | $ | 229.6 | $ | 180.3 | 27.3 | % | (2.0 | )% | 29.3 | % | |||||||||
Dayforce float | 41.6 | 8.3 | 401.2 | % | (7.5 | )% | 408.7 | % | |||||||||||
Total Dayforce recurring | 271.2 | 188.6 | 43.8 | % | (2.2 | )% | 46.0 | % | |||||||||||
Powerpay recurring, excluding float | 19.5 | 19.4 | 0.5 | % | (7.0 | )% | 7.5 | % | |||||||||||
Powerpay float | 4.6 | 2.2 | 109.1 | % | (13.8 | )% | 122.9 | % | |||||||||||
Total Powerpay recurring | 24.1 | 21.6 | 11.6 | % | (7.7 | )% | 19.3 | % | |||||||||||
Total Cloud recurring | 295.3 | 210.2 | 40.5 | % | (2.8 | )% | 43.3 | % | |||||||||||
Other recurring (b) | 22.6 | 37.7 | (40.1 | )% | (2.8 | )% | (37.3 | )% | |||||||||||
Total recurring revenue | 317.9 | 247.9 | 28.2 | % | (2.8 | )% | 31.0 | % | |||||||||||
Professional services and other (c) | 52.7 | 45.4 | 16.1 | % | (3.5 | )% | 19.6 | % | |||||||||||
Total revenue | $ | 370.6 | $ | 293.3 | 26.4 | % | (2.9 | )% | 29.3 | % |
(a) | Ceridian has calculated revenue on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period. Please refer to the "Non-GAAP Financial Measures" section for discussion of revenue on a constant currency basis. | |
(b) | Other recurring contains solutions previously described as Bureau. Float attributable to this solution was $0.7 million and $0.9 million for the three months ended March 31, 2023, and 2022, respectively. | |
(c) | For the three months ended March 31, 2023, Professional services and other consisted of $49.4 million and $3.3 million associated with Dayforce and Other, respectively. For the three months ended March 31, 2022, Professional services and other consisted of $41.6 million, $3.6 million, and $0.2 million associated with Dayforce, Other, and Powerpay, respectively. |
Ceridian HCM Holding Inc. | |||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
The following tables reconcile our reported results to our non-GAAP financial measures: | |||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||
As reported | As reported margins (a) | Share-basedcompensation | Amortization | Other (b) | As adjusted (b) | As adjusted margins (a) | |||||||||||||||||||||
(Dollars in millions, except per share data) | |||||||||||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||||||
Recurring | |||||||||||||||||||||||||||
Cloud | $ | 66.9 | 77.3 | % | $ | 4.0 | $ | — | $ | — | $ | 62.9 | 78.7 | % | |||||||||||||
Other | 13.2 | 0.3 | — | — | 12.9 | ||||||||||||||||||||||
Total recurring | 80.1 | 4.3 | — | — | 75.8 | ||||||||||||||||||||||
Professional services and other | 63.9 | 4.4 | — | — | 59.5 | ||||||||||||||||||||||
Product development and management | 51.0 | 8.1 | — | — | 42.9 | ||||||||||||||||||||||
Depreciation and amortization | 15.3 | — | — | — | 15.3 | ||||||||||||||||||||||
Total cost of revenue | 210.3 | 16.8 | — | — | 193.5 | ||||||||||||||||||||||
Sales and marketing | 54.2 | 5.2 | — | — | 49.0 | ||||||||||||||||||||||
General and administrative | 67.7 | 18.2 | 5.5 | 4.4 | 39.6 | ||||||||||||||||||||||
Operating profit | 38.4 | 10.4 | % | 40.2 | 5.5 | 4.4 | 88.5 | 23.9 | % | ||||||||||||||||||
Other expense (income), net | 0.8 | — | — | 1.1 | (0.3 | ) | |||||||||||||||||||||
Depreciation and amortization | 22.1 | — | (5.5 | ) | — | 16.6 | |||||||||||||||||||||
EBITDA | 59.7 | 40.2 | — | 5.5 | 105.4 | 28.4 | % | ||||||||||||||||||||
Interest expense, net | 9.2 | — | — | — | 9.2 | ||||||||||||||||||||||
Income tax expense (c) | 18.5 | — | — | (11.8 | ) | 30.3 | |||||||||||||||||||||
Depreciation and amortization | 22.1 | — | 5.5 | — | 16.6 | ||||||||||||||||||||||
Net income | $ | 9.9 | 2.7 | % | $ | 40.2 | $ | 5.5 | $ | (6.3 | ) | $ | 49.3 | 13.3 | % | ||||||||||||
Net income per share - basic (d) | $ | 0.06 | $ | 0.26 | $ | 0.04 | $ | (0.04 | ) | $ | 0.32 | ||||||||||||||||
Net income per share - diluted (d) | $ | 0.06 | $ | 0.25 | $ | 0.03 | $ | (0.04 | ) | $ | 0.31 |
(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. 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. | |
(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 including $3.5 million related to the fair value adjustment for the DataFuzion contingent consideration, $1.1 million of foreign exchange loss, $0.8 million of restructuring consulting fees, and $0.1 million related to the abandonment of certain leased facilities, along with a $11.8 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. | |
(d) | GAAP and Adjusted basic and diluted net income per share are calculated based upon 154,247,972 and 157,700,701 weighted-average shares of common stock, respectively. |
Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||
As reported | As reported margins (a) | Share-basedcompensation | Amortization | Other (b) | As adjusted (b) | As adjusted margins (a) | |||||||||||||||||||||
(Dollars in millions, except per share data) | |||||||||||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||||||
Recurring | |||||||||||||||||||||||||||
Cloud | $ | 64.6 | 69.3 | % | $ | 3.5 | $ | — | $ | 9.6 | $ | 51.5 | 75.5 | % | |||||||||||||
Other | 17.7 | 0.4 | — | 1.5 | 15.8 | ||||||||||||||||||||||
Total recurring | 82.3 | 3.9 | — | 11.1 | 67.3 | ||||||||||||||||||||||
Professional services and other | 54.5 | 2.9 | — | 0.2 | 51.4 | ||||||||||||||||||||||
Product development and management | 40.4 | 5.8 | — | 3.3 | 31.3 | ||||||||||||||||||||||
Depreciation and amortization | 13.0 | — | — | — | 13.0 | ||||||||||||||||||||||
Total cost of revenue | 190.2 | 12.6 | — | 14.6 | 163.0 | ||||||||||||||||||||||
Sales and marketing | 58.4 | 5.2 | — | 2.1 | 51.1 | ||||||||||||||||||||||
General and administrative | 63.6 | 17.7 | 7.8 | 3.3 | 34.8 | ||||||||||||||||||||||
Operating (loss) profit | (18.9 | ) | (6.4 | )% | 35.5 | 7.8 | 20.0 | 44.4 | 15.1 | % | |||||||||||||||||
Other (income) expense, net | (0.3 | ) | — | — | (0.4 | ) | 0.1 | ||||||||||||||||||||
Depreciation and amortization | 20.9 | — | (7.8 | ) | — | 13.1 | |||||||||||||||||||||
EBITDA | 2.3 | 35.5 | — | 19.6 | 57.4 | 19.6 | % | ||||||||||||||||||||
Interest expense, net | 5.8 | — | — | — | 5.8 | ||||||||||||||||||||||
Income tax expense (c) | 3.0 | — | — | (15.0 | ) | 18.0 | |||||||||||||||||||||
Depreciation and amortization | 20.9 | — | 7.8 | — | 13.1 | ||||||||||||||||||||||
Net (loss) income | $ | (27.4 | ) | (9.3 | )% | $ | 35.5 | $ | 7.8 | $ | 4.6 | $ | 20.5 | 7.0 | % | ||||||||||||
Net (loss) income per share - basic (d) | $ | (0.18 | ) | $ | 0.23 | $ | 0.05 | $ | 0.03 | $ | 0.13 | ||||||||||||||||
Net (loss) income per share - diluted (d) | $ | (0.18 | ) | $ | 0.23 | $ | 0.05 | $ | 0.03 | $ | 0.13 |
(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. 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. | |
(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 including $17.3 million of severance charges, $1.9 million of restructuring consulting fees, $0.8 million related to the impact of the fair value adjustment for the DataFuzion contingent consideration, $0.4 million related to 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 $0.8 million of foreign exchange gain, along with a $15.0 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. | |
(d) | GAAP basic and diluted net loss per share are calculated based upon 152,124,151 weighted-average shares of common stock, and Adjusted basic and diluted net income per share are calculated based upon 152,124,151 and 155,766,268 weighted-average shares of common stock, respectively. |
Non-GAAP Financial Measures
Ceridian uses certain non-GAAP financial measures in this release 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 | |
Revenue, including total revenue and revenue by solution, on a constant currency basis | Revenue, including total revenue and revenue by solution | |
Dayforce recurring revenue per customer | No directly comparable GAAP measure |
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. Ceridian's management team uses these non-GAAP financial measures to assess operating performance because these financial 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 is a component of its management incentive plan and Adjusted Cloud recurring gross margin is a component of certain performance based equity awards for its named executive officers. These non-GAAP financial measures are not required by, defined under, or presented in accordance with, GAAP, and should not be considered as alternatives to Ceridian's results as reported under GAAP, have important limitations as analytical tools, and its use of these terms may not be comparable to similarly titled measures of other companies in our industry. Ceridian's 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.
Ceridian defines its non-GAAP financial measures as follows:
Source: Ceridian HCM Holding Inc.
For further information, please contact:
Investor Relations1-844-829-9499investors@ceridian.com
Public Relations1-647-417-2117teri.murphy@ceridian.com
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