- Total revenue of $202.3million, up 13.6% year-over-year, and
$203.4 million, up 14.0% year-over-year, on a constant currency
basis
- Dayforce recurring revenue of $109.4 million, up 32.6%
year-over-year, and $109.6 million, up 33.0% year-over-year, on a
constant currency basis
- Dayforce revenue of $143.7 million, up 30.2% year-over-year,
and $144.1 million, up 30.5% year-over-year, on a constant currency
basis
- Cloud revenue of $165.5million, up 25.7% year-over-year, and
$166.4 million, up 26.2% year-over-year, on a constant currency
basis
- Recurring services gross margin of 70.5%, an increase of 330
basis points year-over-year, driven by Cloud recurring services
gross margin of 70.2%, an increase of 440 basis points
year-over-year
- Operating profit of $6.5 million, compared to third quarter
2018 operating profit of $16.2 million
- Adjusted EBITDA of $46.4 million, up 27.5%
year-over-year
- Live Dayforce customers as of September 30, 2019, were
4,169, and Dayforce revenue per customer was $127,201 for the
trailing twelve months ended September 30, 2019, up 7.0% year-over
year, on a constant currency basis
Ceridian HCM Holding Inc. (“Ceridian” or the “Company”)
(NYSE:CDAY) (TSX:CDAY), a global human capital management (“HCM”)
software company, announced today its financial results for the
third quarter ended September 30, 2019. All financial results are
reported in U.S. dollars unless otherwise stated. A reconciliation
of U.S. generally accepted accounting principles (“GAAP”) to
non-GAAP financial measures has been provided in this press
release, including the accompanying tables. An explanation of these
measures is also included below under the heading “Use of Non-GAAP
Financial Measures.”
“During the third quarter, we continued to see strong market
demand for our solutions” said David Ossip, Chairman and Chief
Executive Officer of Ceridian. “Dayforce recurring revenue grew
32.6%, to $109.4 million, and was up 33.0% on a constant currency
basis. Including revenue from Dayforce professional services and
other, total Dayforce revenue grew 30.2%, to $143.7 million, which
was above 30% growth for the first time since the third quarter of
2018. For the fourth quarter, we expect an acceleration of Dayforce
revenue, primarily driven by Dayforce recurring revenue. We added
163 net new Dayforce customers during the quarter for a total of
4,169 customers live on the Dayforce platform, and Cloud revenue
represented 82% of total revenue.”
Arthur Gitajn, Chief Financial Officer of Ceridian, added,
“Adjusted EBITDA of $46.4 million, was up 27.5% year-over-year,
driven by a 440 basis point improvement in Cloud recurring gross
margin.”
The average U.S. dollar to Canadian dollar foreign exchange rate
was $1.32, with a daily range of $1.30 to $1.33, for the three
months ended September 30, 2019, compared to $1.31, with a daily
range of $1.29 to $1.33, for the three months ended September 30,
2018. As of September 30, 2019, the U.S. dollar to Canadian dollar
foreign exchange rate was $1.32. To present the performance of the
business excluding the effect of foreign currency rate
fluctuations, the Company presents revenue on a constant currency
basis, which we believe is useful to management and investors. We
calculate revenue on a constant currency basis by applying a fixed
rate of $1.30 Canadian dollar to $1.00 U.S. dollar foreign exchange
rate to revenues originally booked in Canadian dollars for all
applicable historical periods. Both the GAAP and non-GAAP revenue
results are displayed in the tables accompanying this press
release.
Financial Highlights for the Third Quarter 2019
Revenue
- Total revenue, which includes revenue from both our Cloud and
Bureau solutions, increased 13.6% to $202.3 million for the third
quarter of 2019, compared with the third quarter of 2018. On a
constant currency basis, total revenue increased 14.0% to $203.4
million for the third quarter of 2019, compared with the third
quarter of 2018.
- Dayforce recurring revenue increased 32.6% to $109.4 million
for the third quarter of 2019, compared with the third quarter of
2018. On a constant currency basis, Dayforce recurring revenue
increased 33.0% to $109.6 million for the third quarter of 2019,
compared with the third quarter of 2018.
- Dayforce revenue increased 30.2% to $143.7 million for the
third quarter of 2019, compared with the third quarter of 2018. On
a constant currency basis, Dayforce revenue increased 30.5% to
$144.1 million for the third quarter of 2019, compared with the
third quarter of 2018.
- Cloud revenue, which includes both Dayforce and Powerpay,
increased 25.7% to $165.5 million for the third quarter of 2019,
compared with the third quarter of 2018. On a constant currency
basis, Cloud revenue increased 26.2% to $166.4 million for the
third quarter of 2019, compared with the third quarter of
2018.
Net Income and Net Income Per
Share
- Net income was $62.7 million for the third quarter of 2019,
compared to $4.2 million for the third quarter of 2018. Net income
for the third quarter of 2019, included a tax benefit of $65.8
million related to the release of our valuation allowance. Adjusted
net income was $17.0 million for the third quarter of 2019,
compared to $13.8 million for the third quarter of 2018.
- Diluted net income per share was $0.42 for the third quarter of
2019, compared to $0.03 for the third quarter of 2018. Adjusted
diluted net income per share was $0.11 for the third quarter of
2019, compared to $0.10 for the third quarter of 2018. Diluted
weighted average common shares outstanding were 149.2 million and
145.1 million for the third quarter 2019 and 2018,
respectively.
Gross Margin, Operating Profit, and
Adjusted EBITDA
- Gross margin improved to 43.9% for the third quarter of 2019,
compared to 41.3% in the third quarter of 2018.
- Recurring services gross margin improved to 70.5% for the third
quarter of 2019, compared to 67.2% in the third quarter of 2018.
Professional services and other gross margin improved to (7.7)%for
the third quarter of 2019, compared to (13.6)% in the third quarter
of 2018.
- Operating profit was $6.5 million for the third quarter of
2019, compared to $16.2 million in the third quarter of 2018.
Operating profit for the third quarter of 2019, included a $12.6
million loss for an isolated service incident.
- Adjusted EBITDA increased 27.5% to $46.4 million for the third
quarter of 2019, compared to $36.4 million in the third quarter of
2018.
Balance Sheet
- Cash and equivalents were $270.9 million as of September 30,
2019, an increase of $53.1million compared to $217.8 million as of
December 31, 2018.
- Total debt was $666.1 million as of September 30, 2019, a
reduction of $4.2 million compared to $670.3 million as of December
31, 2018.
Dayforce Live Customer Count
- 4,169 Dayforce customers were live on the Dayforce platform as
of September 30, 2019, a net increase of 704 customers compared to
3,465 Dayforce customers as of September 30, 2018, and a net
increase of 163 customers compared to 4,006 as of June 30,
2019.
- On a constant currency basis, Dayforce revenue per customer was
$127,201 for the trailing twelve months ended September 30, 2019,
an increase of 7.0% from $118,903 for the trailing twelve months
ended September 30, 2018.
Business Outlook
Based on information available as of November 7, 2019, Ceridian
is issuing guidance for the full year of 2019 as indicated below.
The guidance below reflects a $1.30 Canadian dollar to $1.00 U.S.
dollar foreign exchange rate. In addition, the guidance below
reflects the 25 basis point Federal Reserve discount rate reduction
which occurred at the Federal Open Market Committee meeting on
October 29-30, 2019. Our full year 2019 guidance had previously
assumed no changes to the Federal Reserve discount rate in the
fourth quarter.
Full Year 2019
Due to our strong revenue results, we are increasing our full
year fiscal 2019 revenue guidance for Cloud and total revenue, as
follows:
- Cloud revenue is expected to be in the range of $659.0 million
to $662.0 million. Assuming Powerpay revenue of approximately $92.5
million, Dayforce revenue is expected to be in the range of $566.5
million to $569.5 million.
- Total revenue is expected to be in the range of $822.0 million
to $825.0 million.
We are reaffirming our outlook for Adjusted EBITDA, which is
expected to be in the range of $182.0 million to $187.0
million.
For each $0.01 change in the U.S. dollar to Canadian dollar
foreign exchange rate, we estimate it would affect our fourth
quarter 2019 guidance ranges for Cloud revenue by approximately
$1.6 million, total revenue by approximately $2.0 million, and
Adjusted EBITDA by approximately $0.6 million.
Based on current market conditions, portfolio composition and
investment practices, each 100 basis point change in market
investment rates would result in approximately $18 million of
change in float revenue over the ensuing twelve month period.
We have not reconciled the Adjusted EBITDA range for the full
fiscal year of 2019 to the directly comparable GAAP financial
measure because applicable information for the future period, on
which this reconciliation would be based, is not readily available
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.
Conference Call Details
Ceridian will host a conference call on November 7, 2019 at 5:00
p.m. Eastern Time to discuss the financial results for the third
quarter of 2019. Those wishing to participate via the webcast
should access the call through Ceridian’s Investor Relations
website at https://investors.ceridian.com. Those wishing to
participate via the telephone may dial in at 877-701-0459 (USA) or
647-689-5466 (International). The conference call replay will be
available via webcast through Ceridian’s Investor Relations website
at https://investors.ceridian.com.
About Ceridian HCM Holding Inc.
Ceridian. Makes Work Life Better™.
Ceridian is a global human capital management software company.
Dayforce, our flagship cloud HCM platform, provides human
resources, payroll, benefits, workforce management, and talent
management functionality. Our 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.
Use of Non-GAAP Financial Measures
We use certain non-GAAP financial measures in this release
including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net
income (loss), and revenue on a constant currency basis. We believe
that Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted net
income (loss), non-GAAP financial measures, are useful to
management and investors as supplemental measures to evaluate our
overall operating performance. Adjusted EBITDA is a component of
our management incentive plan and Adjusted EBITDA and Adjusted
EBITDA margin are used by management to assess performance and to
compare our operating performance to our competitors. We define
Adjusted EBITDA as net income (loss) before interest, taxes,
depreciation, and amortization, as adjusted to exclude net income
(loss) from discontinued operations, sponsor management fees,
non-cash charges for asset impairments, gain (loss) on assets and
liabilities held in a foreign currency other than the functional
currency of a company subsidiary, share-based compensation expense
and related employer taxes, severance charges, restructuring
consulting fees, transaction costs, and other non-recurring
charges. Adjusted EBITDA margin is determined by calculating the
percentage Adjusted EBITDA is of total revenue. Adjusted net income
(loss) is defined as net income (loss), as adjusted to exclude net
income (loss) from discontinued operations, release of the
valuation allowance, gain (loss) on extinguishment of debt, sponsor
management fees, non-cash charges for asset impairments, gain
(loss) on assets and liabilities held in a foreign currency other
than the functional currency of a company subsidiary, share-based
compensation expense and related employer taxes, severance charges,
restructuring consulting fees, transaction costs, and other
non-recurring charges, all of which are adjusted for the effect of
income taxes. Management believes that Adjusted EBITDA, Adjusted
EBITDA margin, and Adjusted net income (loss) are helpful in
highlighting management performance trends because Adjusted EBITDA,
Adjusted EBITDA margin, and Adjusted net income (loss) exclude the
results of decisions that are outside the normal course of our
business operations.
Our presentation of Adjusted EBITDA, Adjusted EBITDA margin, and
Adjusted net income (loss) are intended as supplemental measures of
our performance that are not required by, or presented in
accordance with, GAAP. Adjusted EBITDA, Adjusted EBITDA margin, and
Adjusted net income (loss) should not be considered as alternatives
to operating profit (loss), net income (loss), earnings per share,
or any other performance measures derived in accordance with GAAP,
or as measures of operating cash flows or liquidity. Our
presentation of Adjusted EBITDA, Adjusted EBITDA margin, and
Adjusted net income (loss) should not be construed to imply that
our future results will be unaffected by similar items to those
eliminated in this presentation. Adjusted EBITDA and Adjusted
EBITDA margin are included in this discussion because they are key
metrics used by management to assess our operating performance.
Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted net income
(loss) are not defined under GAAP, are not measures of net income
(loss), operating profit (loss), or any other performance measures
derived in accordance with GAAP, and are subject to important
limitations. Our use of the terms Adjusted EBITDA, Adjusted EBITDA
margin, and Adjusted net income (loss) may not be comparable to
similarly titled measures of other companies in our industry and
are not measures of performance calculated in accordance with
GAAP.
Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted net income
(loss) have important limitations as analytical tools, and you
should not consider them in isolation or as substitutes for
analysis of our results as reported under GAAP.
In evaluating Adjusted EBITDA, Adjusted EBITDA margin, and
Adjusted net income (loss), you should be aware that in the future
we may incur expenses similar to those eliminated in this
presentation.
We present revenue on a constant currency basis to assess how
our underlying businesses performed, excluding the effect of
foreign currency rate fluctuations, which we believe is useful to
management and investors. We calculate revenue on a constant
currency basis by applying a fixed rate of $1.30 Canadian dollar to
$1.00 U.S. dollar foreign exchange rate to revenues originally
booked in Canadian dollars for all applicable historical
periods.
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 our
current expectations and projections relating to our financial
condition, results of operations, plans, objectives, future
performance and business. You 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 full year fiscal 2019
total revenue, Cloud revenue and Adjusted EBITDA, 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 we have made in light of our
industry experience and our perceptions of historical trends,
current conditions, expected future developments and other factors
that we believe are appropriate under the circumstances. As you
consider this press release, you should understand that these
statements are not guarantees of performance or results. These
assumptions and our future performance or results involve risks and
uncertainties (many of which are beyond our control). These risks
and uncertainties include, but are not limited to, the
following:
- our inability to attain or to maintain profitability;
- significant competition for our solutions;
- our inability to continue to develop or to sell our existing
Cloud solutions;
- our inability to manage our growth effectively;
- the risk that we may not be able to successfully migrate our
Bureau customers to our Cloud solutions or to offset the decline in
Bureau revenue with Cloud revenue;
- the decline or slower than expected development of the market
for enterprise cloud;
- failure of our efforts to increase use of our Cloud solutions
and our other applications may not succeed;
- our failure to provide enhancements and new features and
modifications to our solutions;
- failure to comply the Federal Trade Commission’s (“FTC”)
ongoing consent order regarding data protection;
- system interruptions or failures, including cyber-security
breaches, identity theft, or other disruptions that could
compromise our information;
- our failure to comply with applicable privacy, security and
data laws, regulations and standards;
- changes in regulations governing privacy concerns and laws or
other domestic or foreign data protection regulations;
- our inability to successfully expand our current offerings into
new markets or further penetrate existing markets;
- our inability to meet the more complex configuration and
integration demands of our large customers;
- the impact of the material weakness related to the duplicative
payroll incident and our failure to maintain effective internal
controls in the future;
- the risk of our customers declining to renew their agreements
with us or renewing at lower performance fee levels;
- our failure to manage our technical operations
infrastructure;
- our inability to maintain necessary third party relationships,
and third party software licenses or there are errors in the
software we license;
- our inability to protect our intellectual property rights,
proprietary technology, information, processes, and know-how;
- our failure to keep pace with rapid technological changes and
evolving industry standards;
- changes in laws and regulations related to the Internet or
changes in the Internet infrastructure itself;
- general economic, political and market forces beyond our
control; and
- other risks and uncertainties described in our most recent
annual report on Form 10-K, subsequent quarterly reports on Form
10-Q, and other filings with the Securities and Exchange
Commission.
Additional factors or events that could cause our actual
performance to differ from these forward-looking statements may
emerge from time to time, and it is not possible for us to predict
all of them. Should one or more of these risks or uncertainties
materialize, or should any of our assumptions prove incorrect, our
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; our 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; we will be able to
maintain our relationships with our employees, customers and
partners; we will continue to attract qualified personnel to
support our development requirements and the support of our new and
existing customers; and that the risk factors noted above,
individually or collectively, do not have a material impact on the
Company. Any forward-looking statement made by us in this press
release speaks only as of the date on which it is made. We
undertake no obligation to publicly update 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
(Dollars in millions, except
share data)
September 30, 2019
December 31, 2018
ASSETS
(unaudited)
Current assets:
Cash and equivalents
$
270.9
$
217.8
Trade and other receivables, net
69.5
63.9
Prepaids expenses and other current
assets
59.9
48.9
Total current assets before customer trust
funds
400.3
330.6
Customer trust funds
2,604.0
2,603.5
Total current assets
3,004.3
2,934.1
Right of use lease asset
36.8
—
Property, plant, and equipment, net
108.8
104.4
Goodwill
1,961.2
1,927.4
Other intangible assets, net
181.7
187.5
Other assets
143.4
94.4
Total assets
$
5,436.2
$
5,247.8
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
6.8
$
6.8
Short-term lease liabilities
13.3
—
Accounts payable
34.1
41.5
Deferred revenue
27.2
23.2
Employee compensation and benefits
57.4
54.5
Other accrued expenses
14.0
23.9
Total current liabilities before customer
trust funds obligations
152.8
149.9
Customer trust funds obligations
2,590.4
2,619.7
Total current liabilities
2,743.2
2,769.6
Long-term debt, less current portion
659.3
663.5
Employee benefit plans
129.1
153.3
Long-term lease liabilities
31.8
—
Other liabilities
19.7
45.9
Total liabilities
3,583.1
3,632.3
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par, 500,000,000
shares authorized, 143,835,394 and 139,453,710 shares issued and
outstanding as of September 30, 2019, and December 31, 2018,
respectively
1.4
1.4
Additional paid in capital
2,428.3
2,325.6
Accumulated deficit
(228.3
)
(335.6
)
Accumulated other comprehensive loss
(348.3
)
(375.9
)
Total stockholders’ equity
1,853.1
1,615.5
Total liabilities and equity
$
5,436.2
$
5,247.8
Ceridian HCM Holding
Inc.
Condensed Consolidated
Statements of Operations
(Unaudited, dollars in
millions, except share and per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
*As Adjusted
*As Adjusted
Revenue:
Recurring services
$
167.4
$
149.5
$
503.7
$
460.5
Professional services and other
34.9
28.6
98.6
85.4
Total revenue
202.3
178.1
602.3
545.9
Cost of revenue:
Recurring services
49.4
49.1
149.0
149.3
Professional services and other
37.6
32.5
107.1
98.7
Product development and management
17.5
14.5
49.1
43.3
Depreciation and amortization
9.0
8.5
26.7
25.7
Total cost of revenue
113.5
104.6
331.9
317.0
Gross profit
88.8
73.5
270.4
228.9
Selling, general, and administrative
expense
82.3
57.3
217.8
193.1
Operating profit
6.5
16.2
52.6
35.8
Interest expense, net
7.8
8.8
25.2
74.4
Other expense (income), net
1.6
0.9
4.7
(0.7
)
(Loss) income from continuing operations
before income taxes
(2.9
)
6.5
22.7
(37.9
)
Income tax (benefit) expense
(65.6
)
(0.7
)
(57.5
)
6.3
Income (loss) from continuing
operations
62.7
7.2
80.2
(44.2
)
Loss from discontinued operations
—
(3.0
)
—
(14.8
)
Net income (loss)
62.7
4.2
80.2
(59.0
)
Net loss attributable to noncontrolling
interest
—
—
—
(0.5
)
Net income (loss) attributable to
Ceridian
$
62.7
$
4.2
$
80.2
$
(58.5
)
Net income (loss) per share attributable
to Ceridian:
Basic
$
0.44
$
0.03
$
0.57
$
(0.63
)
Diluted
$
0.42
$
0.03
$
0.54
$
(0.63
)
Weighted average shares outstanding:
Basic
142,780,819
137,768,764
141,369,339
105,730,178
Diluted
149,153,227
145,064,698
148,279,943
105,730,178
*
Prior period information has been adjusted
to reflect the adoption of ASU No. 2014-09, “Revenue from Contracts
with Customers (Topic 606)” and ASU No. 2017-07,
“Compensation—Retirement Benefits,” which we adopted on January 1,
2019.
Ceridian HCM Holding
Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited, dollars in
millions)
Nine Months Ended September
30,
2019
2018
*As Adjusted
Net income (loss)
$
80.2
$
(59.0
)
Loss from discontinued operations
—
14.8
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Deferred income tax benefit
(75.9
)
(9.4
)
Depreciation and amortization
43.9
42.4
Amortization of debt issuance costs and
debt discount
0.8
1.9
Loss on debt extinguishment
—
25.7
Net periodic pension and postretirement
cost
3.9
1.8
Non-cash share-based compensation
26.0
18.0
Other
1.8
0.1
Changes in operating assets and
liabilities excluding effects of acquisitions and divestitures:
Trade and other receivables
(10.6
)
4.2
Prepaid expenses and other current
assets
(10.1
)
(6.4
)
Accounts payable and other accrued
expenses
(2.5
)
(8.4
)
Deferred revenue
2.6
4.8
Employee compensation and benefits
(18.5
)
(27.7
)
Accrued interest
—
(15.5
)
Accrued taxes
(10.4
)
5.2
Other assets and liabilities
(6.6
)
(7.3
)
Net cash provided by (used in) operating
activities - continuing operations
24.6
(14.8
)
Net cash used in operating activities -
discontinued operations
—
(3.3
)
Net cash provided by (used in) operating
activities
24.6
(18.1
)
Cash Flows from Investing
Activities
Purchase of customer trust funds
marketable securities
(335.1
)
(694.8
)
Proceeds from sale and maturity of
customer trust funds marketable securities
278.1
707.9
Expenditures for property, plant, and
equipment
(10.8
)
(6.8
)
Expenditures for software and
technology
(27.6
)
(21.9
)
Acquisition costs, net of cash
acquired
(29.4
)
—
Net cash used in investing activities
(124.8
)
(15.6
)
Cash Flows from Financing
Activities
Increase in customer trust funds
obligations, net
(54.5
)
(625.5
)
Net proceeds from issuance of common
stock
—
595.0
Proceeds from issuance of common stock
under share-based compensation plans
76.7
22.2
Proceeds from debt issuance
—
680.0
Repayment of long-term debt
obligations
(5.1
)
(1,132.3
)
Payment of debt refinancing costs
—
(23.3
)
Net cash provided by (used in) financing
activities
17.1
(483.9
)
Effect of exchange rate changes on
cash, restricted cash, and equivalents
7.2
(2.2
)
Net decrease in cash, restricted cash, and
equivalents
(75.9
)
(519.8
)
Elimination of cash from discontinued
operations
—
0.5
Cash, restricted cash, and equivalents at
beginning of period
1,106.3
2,411.8
Cash, restricted cash, and equivalents at
end of period
$
1,030.4
$
1,892.5
Reconciliation of cash, restricted
cash, and equivalents to the condensed consolidated balance
sheets
Cash and equivalents
$
270.9
$
188.0
Restricted cash and equivalents included
in customer trust funds
759.5
1,704.5
Total cash, restricted cash, and
equivalents
$
1,030.4
$
1,892.5
*
Prior period information has been adjusted
to reflect the adoption of ASU No. 2014-09, “Revenue from Contracts
with Customers (Topic 606)” and ASU No. 2016-18, “Restricted Cash,”
which we adopted on January 1, 2019.
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)
2019
2018
2019 vs. 2018
2019 vs. 2018
As Adjusted (b)
(Dollars in millions)
Revenue:
Cloud
Dayforce
Recurring services
$
109.4
$
82.5
32.6
%
(0.4
)%
33.0
%
Professional services and other
34.3
27.9
22.9
%
(0.3
)%
23.2
%
Total Dayforce revenue
143.7
110.4
30.2
%
(0.3
)%
30.5
%
Powerpay
Recurring services
21.6
21.0
2.9
%
(0.9
)%
3.8
%
Professional services and other
0.2
0.3
(33.3
)%
(33.3
)%
—
Total Powerpay revenue
21.8
21.3
2.3
%
(1.4
)%
3.7
%
Total Cloud revenue
165.5
131.7
25.7
%
(0.5
)%
26.2
%
Bureau
Recurring services
36.4
46.0
(20.9
)%
(0.3
)%
(20.6
)%
Professional services and other
0.4
0.4
—
—
—
Total Bureau revenue
36.8
46.4
(20.7
)%
(0.3
)%
(20.4
)%
Total revenue
$
202.3
$
178.1
13.6
%
(0.4
)%
14.0
%
(a)
Please refer to “Reconciliation of GAAP to
Non-GAAP Financial Measures” section for information on our
constant currency revenue, a Non-GAAP financial measure.
(b)
Prior period information has been adjusted
to reflect the adoption of ASU No. 2014-09, “Revenue from Contracts
with Customers (Topic 606),” which we adopted on January 1,
2019.
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)
2019
2018
2019 vs. 2018
2019 vs. 2018
As Adjusted (b)
(Dollars in millions)
Revenue:
Cloud
Dayforce
Recurring services
$
314.7
$
237.9
32.3
%
(0.8
)%
33.1
%
Professional services and other
96.3
82.4
16.9
%
(0.7
)%
17.6
%
Total Dayforce revenue
411.0
320.3
28.3
%
(0.8
)%
29.1
%
Powerpay
Recurring services
64.0
64.7
(1.1
)%
(3.3
)%
2.2
%
Professional services and other
0.8
0.9
(11.1
)%
(11.1
)%
—
Total Powerpay revenue
64.8
65.6
(1.2
)%
(3.4
)%
2.2
%
Total Cloud revenue
475.8
385.9
23.3
%
(1.2
)%
24.5
%
Bureau
Recurring services
125.0
157.9
(20.8
)%
(0.7
)%
(20.1
)%
Professional services and other
1.5
2.1
(28.6
)%
—
(28.6
)%
Total Bureau revenue
126.5
160.0
(20.9
)%
(0.7
)%
(20.2
)%
Total revenue
$
602.3
$
545.9
10.3
%
(1.1
)%
11.4
%
(a)
Please refer to “Reconciliation of GAAP to
Non-GAAP Financial Measures” section for information on our
constant currency revenue, a Non-GAAP financial measure.
(b)
Prior period information has been adjusted
to reflect the adoption of ASU No. 2014-09, “Revenue from Contracts
with Customers (Topic 606),” which we adopted on January 1,
2019.
Ceridian HCM Holding
Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(Unaudited)
The following tables set forth certain
information regarding our revenue on a constant currency basis for
the three and nine months ended September 30, 2019, compared with
the three and nine months ended September 30, 2018. We present
revenue in constant currency to assess how our underlying business
performed excluding the effect of foreign currency rate
fluctuations. We calculate revenue on a constant currency basis by
applying a fixed planning rate of $1.30 Canadian dollar to $1.00
U.S. dollar foreign exchange rate to revenue originally booked in
Canadian dollars for all applicable periods.
Three Months Ended September
30,
Increase/ (Decrease)
2019
2018
Amount
%
(Dollars in millions)
Constant Currency Revenue:
Cloud
Dayforce
Recurring services
$
109.6
$
82.4
$
27.2
33.0
%
Professional services and other
34.5
28.0
6.5
23.2
%
Total Dayforce revenue
144.1
110.4
33.7
30.5
%
Powerpay
Recurring services
22.0
21.2
0.8
3.8
%
Professional services and other
0.3
0.3
—
—
Total Powerpay revenue
22.3
21.5
0.8
3.7
%
Total Cloud revenue
166.4
131.9
34.5
26.2
%
Bureau
Recurring services
36.6
46.1
(9.5
)
(20.6
%)
Professional services and other
0.4
0.4
—
0.0
%
Total Bureau revenue
37.0
46.5
(9.5
)
(20.4
%)
Total constant currency revenue
$
203.4
$
178.4
$
25.0
14.0
%
Nine Months Ended September
30,
Increase/ (Decrease)
2019
2018
Amount
%
(Dollars in millions)
Constant Currency Revenue:
Cloud
Dayforce
Recurring services
$
316.0
$
237.5
$
78.5
33.1
%
Professional services and other
96.8
82.3
14.5
17.6
%
Total Dayforce revenue
412.8
319.8
93.0
29.1
%
Powerpay
Recurring services
65.4
64.0
1.4
2.2
%
Professional services and other
0.9
0.9
—
—
Total Powerpay revenue
66.3
64.9
1.4
2.2
%
Total Cloud revenue
479.1
384.7
94.4
24.5
%
Bureau
Recurring services
125.8
157.4
(31.6
)
(20.1
%)
Professional services and other
1.5
2.1
(0.6
)
(28.6
%)
Total Bureau revenue
127.3
159.5
(32.2
)
(20.2
%)
Total constant currency revenue
$
606.4
$
544.2
$
62.2
11.4
%
The following tables present a
reconciliation of our reported results to our non-GAAP financial
measures Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted net
income (loss) basis for all periods presented:
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
As Adjusted (g)
As Adjusted (g)
(Dollars in millions)
Operating profit
$
6.5
$
16.2
$
52.6
$
35.8
Other (expense) income, net
(1.6
)
(0.9
)
(4.7
)
0.7
Depreciation and amortization
14.9
14.3
43.9
42.4
EBITDA from continuing operations (a)
19.8
29.6
91.8
78.9
Sponsorship management fees (b)
—
—
—
12.0
Intercompany foreign exchange loss
(gain)
0.3
0.3
0.8
(2.5
)
Share-based compensation
11.4
4.8
27.0
19.5
Severance charges (c)
0.8
1.1
4.4
4.1
Restructuring consulting fees (d)
1.5
0.6
3.6
3.1
Other non-recurring charges (e)
12.6
—
12.6
—
Transaction costs (f)
—
—
—
3.7
Adjusted EBITDA
$
46.4
$
36.4
$
140.2
$
118.8
Adjusted EBITDA margin
22.9
%
20.4
%
23.3
%
21.8
%
(a)
We define EBITDA from continuing
operations as net income (loss) before interest, taxes,
depreciation and amortization, and net income (loss) from
discontinued operations.
(b)
Represents expenses related to management,
monitoring, consulting, transaction, and advisory fees and related
expenses paid to the affiliates of our Sponsors pursuant to the
management agreement with THL Managers VI, LLC and Cannae Holdings,
LLC. In April 2018, the management agreements terminated upon
consummation of our IPO.
(c)
Represents costs for severance
compensation paid to employees whose positions have been eliminated
or who have been terminated not for cause.
(d)
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.
(e)
Represents loss on unrecovered duplicate
payments associated with an isolated service incident.
(f)
Represents expense related to the IPO and
refinancing of our debt that were not eligible for
capitalization.
(g)
Prior period information has been adjusted
to reflect the adoption of ASU No. 2014-09, “Revenue from Contracts
with Customers (Topic 606)” and ASU No. 2017-07,
“Compensation—Retirement Benefits,” which we adopted on January 1,
2019.
Three Months Ended September
30, 2019
As |Reported
Share-based
compensation
Severance charges
Other (a)
Income tax effects (b)
Adjusted
(Dollars in millions, except
per share data)
Cost of revenue:
Recurring services
$
49.4
$
0.9
$
0.3
$
—
$
—
$
48.2
Professional services and other
37.6
0.5
—
—
—
37.1
Product development and management
17.5
1.0
—
—
—
16.5
Depreciation and amortization
9.0
—
—
—
—
9.0
Total cost of revenue
113.5
2.4
0.3
—
—
110.8
Sales and marketing
35.5
1.3
0.5
—
—
33.7
General and administrative
46.8
7.7
—
14.1
—
25.0
Operating profit
6.5
11.4
0.8
14.1
—
32.8
Other expense, net
1.6
—
—
0.3
—
1.3
Depreciation and amortization
14.9
—
—
—
—
14.9
EBITDA from continuing operations
$
19.8
$
11.4
$
0.8
$
14.4
$
—
$
46.4
Net income
$
62.7
$
11.4
$
0.8
$
(51.4
)
$
(6.5
)
$
17.0
Net income per share- basic (c)
$
0.44
$
0.08
$
0.01
$
(0.37
)
$
(0.04
)
$
0.12
Net income per share- diluted (c)
$
0.42
$
0.08
$
0.01
$
(0.36
)
$
(0.04
)
$
0.11
(a)
Other includes intercompany foreign
exchange loss, restructuring consulting fees, loss on unrecovered
duplicate payments, and a tax benefit of $65.8 million related to
the release of our valuation allowance.
(b)
Income tax effects are calculated based on
the statutory tax rates in effect in the U.S. and foreign
jurisdictions during the quarter.
(c)
GAAP and Adjusted basic and diluted net
income per share are calculated based upon 142,780,819 and
149,153,227 weighted-average shares of common stock,
respectively.
Three Months Ended September
30, 2018
As Reported (d)
Share-based
compensation
Severance charges
Other (a)
Income tax effects (b)
Adjusted
(Dollars in millions, except
per share data)
Cost of revenue:
Recurring services
$
49.1
$
0.3
$
0.3
$
—
$
—
$
48.5
Professional services and other
32.5
0.2
0.1
—
—
32.2
Product development and management
14.5
0.3
—
—
—
14.2
Depreciation and amortization
8.5
—
—
—
—
8.5
Total cost of revenue
104.6
0.8
0.4
—
—
103.4
Sales and marketing
28.2
0.7
—
—
—
27.5
General and administrative
29.1
3.3
0.7
0.6
—
24.5
Operating profit
16.2
4.8
1.1
0.6
—
22.7
Other expense, net
0.9
—
—
0.3
—
0.6
Depreciation and amortization
14.3
—
—
—
—
14.3
EBITDA from continuing operations
$
29.6
$
4.8
$
1.1
$
0.9
$
—
$
36.4
Net income
$
4.2
$
4.8
$
1.1
$
3.9
$
(0.2
)
$
13.8
Net income per share- basic (c)
$
0.03
$
0.03
$
0.01
$
0.03
$
—
$
0.10
Net income per share- diluted (c)
$
0.03
$
0.03
$
0.01
$
0.03
$
—
$
0.10
(a)
Other includes sponsor management fees,
intercompany foreign exchange gain, restructuring consulting fees,
IPO transaction costs, and loss from discontinued operations of
$3.0 million.
(b)
We do not apply an income tax effect to
expenses incurred in the U.S. due to a full valuation allowance
against our deferred tax assets. Income tax effect in foreign
jurisdictions is calculated based on the statutory tax rates during
the quarter.
(c)
GAAP and Adjusted basic and diluted net
income per share are calculated based upon 137,768,764 and
145,064,698 weighted-average shares of common stock,
respectively.
(d)
Prior period information has been adjusted
to reflect the adoption of ASU No. 2014-09, “Revenue from Contracts
with Customers (Topic 606)” and ASU No. 2017-09, “Compensation-
Retirement Benefits,” which we adopted on January 1, 2019.
Nine Months Ended September
30, 2019
As Reported
Share-based
|compensation
Severance charges
Other (a)
Income tax effects (b)
Adjusted
(Dollars in millions, except
per share data)
Cost of revenue:
Recurring services
$
149.0
$
2.1
$
1.1
$
—
$
—
$
145.8
Professional services and other
107.1
1.2
0.4
—
—
105.5
Product development and management
49.1
2.2
0.1
—
—
46.8
Depreciation and amortization
26.7
—
—
—
—
26.7
Total cost of revenue
331.9
5.5
1.6
—
—
324.8
Sales and marketing
105.6
3.6
1.9
—
—
100.1
General and administrative
112.2
17.9
0.9
16.2
—
77.2
Operating profit
52.6
27.0
4.4
16.2
—
100.2
Other expense, net
4.7
—
—
0.8
—
3.9
Depreciation and amortization
43.9
—
—
—
—
43.9
EBITDA from continuing operations
$
91.8
$
27.0
$
4.4
$
17.0
$
—
$
140.2
Net income
$
80.2
$
27.0
$
4.4
$
(48.8
)
$
(7.1
)
$
55.7
Net income per share- basic (c)
$
0.57
$
0.19
$
0.03
$
(0.35
)
$
(0.05
)
$
0.39
Net income per share- diluted (d)
$
0.54
$
0.19
$
0.03
$
(0.33
)
$
(0.05
)
$
0.38
(a)
Other includes intercompany foreign
exchange loss and restructuring consulting fees, loss on
unrecovered duplicate payments, and a tax benefit of $65.8 million
related to the release of our valuation allowance.
(b)
Income tax effects are calculated based on
the statutory tax rates in effect in the U.S. and foreign
jurisdictions during the quarter. Prior to June 30, 2019, we did
not apply an income tax effect to expenses incurred in the U.S. due
to a full valuation allowance against our deferred tax assets.
(c)
GAAP and Adjusted basic and diluted net
income per share are calculated based upon 141,369,339 and
148,279,943 weighted-average shares of common stock,
respectively.
Nine Months Ended September
30, 2018
As Reported (d)
Share-based
compensation
Severance charges
Other (a)
Income tax effects (b)
Adjusted
(Dollars in millions, except
per share data)
Cost of revenue:
Recurring services
149.3
1.7
1.1
$
—
$
—
$
146.5
Professional services and other
98.7
1.0
0.7
—
—
97.0
Product development and management
43.3
0.9
0.1
—
—
42.3
Depreciation and amortization
25.7
—
—
—
—
25.7
Total cost of revenue
317.0
3.6
1.9
—
—
311.5
Sales and marketing
86.9
3.5
1.0
—
—
82.4
General and administrative
106.2
12.4
1.2
18.8
—
73.8
Operating profit
35.8
19.5
4.1
18.8
—
78.2
Other (income) expense, net
(0.7
)
—
—
(2.5
)
—
1.8
Depreciation and amortization
42.4
—
—
—
—
42.4
EBITDA from continuing operations
78.9
19.5
4.1
16.3
$
—
$
118.8
Net (loss) income attributable to
Ceridian
$
(58.5
)
$
19.5
$
4.1
$
56.8
$
(0.7
)
$
21.2
Net (loss) income per share attributable
to
Ceridian- basic (c)
$
(0.63
)
$
0.18
$
0.04
$
0.54
$
(0.01
)
$
0.12
Net (loss) income per share attributable
to
Ceridian- diluted (c)
$
(0.63
)
$
0.18
$
0.04
$
0.54
$
(0.01
)
$
0.12
(a)
Other includes sponsor management fees,
intercompany foreign exchange gain, restructuring consulting fees,
IPO transaction costs, loss from discontinued operations of $14.8
million, and loss on extinguishment of debt of $25.7 million.
(b)
We do not apply an income tax effect to
expenses incurred in the U.S. due to a full valuation allowance
against our deferred tax assets. Income tax effect in foreign
jurisdictions is calculated based on the statutory tax rates during
the quarter.
(c)
GAAP and Adjusted basic and diluted net
income per share are calculated based upon 105,730,178
weighted-average shares of common stock.
(d)
Prior period information has been adjusted
to reflect the adoption of ASU No. 2014-09, “Revenue from Contracts
with Customers (Topic 606)” and ASU No. 2017-09, “Compensation-
Retirement Benefits,” which we adopted on January 1, 2019.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191107006046/en/
Investor Relations: Jeremy Johnson Vice President, Finance and
Investor Relations Ceridian HCM Holding Inc. 1-844-829-9499
investors@ceridian.com
Public Relations: Teri Murphy Director, Corporate Communications
Ceridian HCM Holding Inc. 1-647-417-2117
teri.murphy@ceridian.com
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