Dayforce Inc (NYSE:DAY) Reports Q3 2025 Earnings, Misses Revenue and EPS Estimates

Dayforce Inc (NYSE:DAY) reported its third-quarter 2025 financial results, delivering revenue that fell short of analyst expectations while demonstrating resilience in its core recurring revenue streams. The human capital management technology provider navigated a mixed quarter against the backdrop of a pending acquisition by Thoma Bravo.

Earnings Performance Versus Estimates

The company's financial results presented a nuanced picture when measured against Wall Street expectations. While Dayforce maintained solid revenue growth, it fell slightly short of analyst projections on both top and bottom-line metrics.

• Revenue: $481.6 million actual versus $486.3 million estimated
• Adjusted EPS: $0.37 actual versus $0.55 estimated

The revenue performance represented a 9.5% increase year-over-year, or 9.6% on a constant currency basis. Excluding float revenue, which comes from invested customer funds, total revenue reached $439.4 million, an increase of 11.4%. The company's core Dayforce recurring revenue, excluding float, showed particular strength at $333.0 million, climbing 14.0% from the same period last year.

Market Reaction and Price Action

Investors responded cautiously to the earnings release, with the stock showing minimal movement in after-hours trading. The subdued reaction suggests the market had largely priced in the mixed results, possibly due to the overshadowing effect of the pending Thoma Bravo acquisition announced in August. The transaction, valued at $70.00 per share in cash, establishes a clear valuation floor and likely mutes typical earnings-driven volatility as investors focus primarily on the deal's completion timeline.

Key Financial Highlights

Beyond the headline earnings figures, several operational metrics illustrated the company's underlying business trajectory:

• Operating profit improved to $30.5 million from $20.8 million in the prior year period
• Adjusted EBITDA reached $147.3 million with a margin of 30.6%, up from 28.7%
• Net cash provided by operating activities for the first nine months totaled $193.5 million
• Free cash flow for the nine-month period stood at $111.6 million

The company's customer base continued to expand, with 7,025 customers live on the Dayforce platform as of September 30, 2025, representing a 4.4% year-over-year increase. Dayforce recurring revenue per customer reached $175,172 for the trailing twelve months, growing 9.8% compared to the previous year.

Business Outlook and Strategic Context

In light of the pending Thoma Bravo transaction, Dayforce has suspended its practice of providing forward-looking guidance and will not host earnings conference calls for the remainder of the going-private process. This development makes direct comparison to analyst estimates for future quarters challenging, as the company's standalone future becomes less relevant to public market investors.

The company did note several positive business developments, including being named a Leader in the 2025 Gartner Magic Quadrant for Cloud HCM Suites for the sixth consecutive year and achieving record attendance at its annual customer conference. However, management also acknowledged that declining employment levels at customer organizations negatively impacted Dayforce recurring revenue, excluding float, during the quarter.

For investors seeking more detailed earnings analysis and future estimates, comprehensive data is available through the earnings estimates page for DAY.

Disclaimer: This article is not investment advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.