Dayforce Announces $500 Million Share Repurchase Program

Rhea-AI Summary

Dayforce, Inc. (NYSE: DAY; TSX: DAY), a global human capital management leader, has announced a $500 million share repurchase program approved by its Board of Directors. The program, which has no expiration date, allows the company to repurchase its common stock through various means, including open market purchases and private transactions.

CFO Jeremy Johnson stated that Dayforce's strong results, improved profitability, and enhanced cash flow generation enable a comprehensive capital allocation strategy. This includes investments in technology innovation, strategic M&A, and now the share repurchase program. The initiative reflects the company's belief that its shares are undervalued and demonstrates confidence in the business.

Positive

• Authorization of a $500 million share repurchase program
• Strong financial results and profitability improvements
• Enhanced cash flow generation
• Flexible repurchase program with no expiration date

Negative

• Potential reduction in cash reserves for future investments or acquisitions
• Possible signal of growth opportunities if investing in own shares

Insights

Financial Analyst

Dayforce's announcement of a $500 million share repurchase program is a significant move that signals confidence in the company's financial health and future prospects. This decision reflects several key factors:

• Strong Financial Position: The ability to allocate such a substantial sum towards share repurchases indicates robust cash flow and a solid balance sheet. This is particularly noteworthy in the current economic climate, where many companies are conserving cash.
• Undervalued Stock Perception: Management's belief that the stock is undervalued suggests they see a disconnect between the company's intrinsic value and its market price. This could be an opportunity for investors if the market eventually recognizes this value gap.
• Flexible Capital Allocation: The company's approach to balancing investments in technology, strategic M&A and now share repurchases demonstrates a comprehensive capital allocation strategy. This diversified approach could potentially enhance shareholder value across multiple fronts.

However, investors should consider that while share repurchases can boost earnings per share and signal confidence, they also reduce cash reserves that could be used for other growth initiatives. The effectiveness of this program will largely depend on the execution timing and the actual stock price movements.

Market Research Analyst

Dayforce's $500 million share repurchase program is a strategic move that could have significant implications for both the company and the broader HCM market:

• Market Disruption: The CFO's statement about Dayforce "disrupting the HCM market" suggests that the company is gaining market share and potentially outperforming competitors. This could lead to increased pressure on other players in the space to innovate or consolidate.
• Industry Trends: The focus on technology innovation and strategic M&A aligns with broader trends in the HCM sector, where companies are increasingly leveraging advanced technologies like AI and machine learning to enhance their offerings.
• Investor Sentiment: This move could boost investor confidence in the HCM sector as a whole, particularly if Dayforce's performance is seen as indicative of broader industry strength.

It's worth noting that the program's open-ended nature, with no expiration date, provides Dayforce with significant flexibility to time its repurchases based on market conditions. This could be particularly advantageous in a volatile market environment.

Tech Expert

Dayforce's announcement of a share repurchase program, coupled with their commitment to maintaining technology innovation, presents an interesting dynamic for the HCM technology landscape:

• Innovation Focus: The explicit mention of "maintaining technology innovation" alongside the repurchase program suggests that Dayforce is not sacrificing R&D for short-term financial engineering. This is important in the fast-evolving HCM tech space.
• Scalable Business Model: The CFO's reference to a "robust, scalable business model" implies that Dayforce has likely achieved significant economies of scale in its technology infrastructure. This could provide a competitive advantage in terms of cost efficiency and ability to rapidly deploy new features.
• M&A Strategy: The mention of "ongoing strategic M&A" indicates that Dayforce is likely to continue acquiring complementary technologies or talent. This approach can be faster and more cost-effective than internal development for certain capabilities.

However, the challenge for Dayforce will be maintaining the right balance between returning capital to shareholders and investing in technology. The HCM market is highly competitive, with rapid technological advancements. Dayforce will need to ensure that this financial move doesn't come at the expense of staying at the forefront of HCM technology trends.

MINNEAPOLIS and TORONTO, July 31, 2024 (GLOBE NEWSWIRE) -- Dayforce, Inc. ("Dayforce" or the "Company") (NYSE: DAY; TSX: DAY), a global human capital management (HCM) leader that makes work life better, announced that its Board of Directors approved a share repurchase program with authorization to purchase up to $500 million of its common stock.

"Dayforce continues to disrupt the HCM market, allowing the Company to achieve strong results, profitability improvements, and enhanced cash flow generation," said Jeremy Johnson, Chief Financial Officer of Dayforce. "Our robust, scalable business model and improving cash flow metrics enable us to take a comprehensive view of capital allocation, balancing investments in maintaining technology innovation, ongoing strategic M&A, and now a share repurchase program. This program reflects our belief that our shares are currently undervalued and demonstrates our confidence in the business."

Dayforce may repurchase shares of common stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The share repurchase program has no expiration date, may be modified, suspended, or discontinued at any time at the Company’s discretion, and does not obligate the Company to acquire any amount of common stock.

About Dayforce

Dayforce makes work life better. Everything we do as a global leader in HCM technology is focused on improving work for thousands of customers and millions of employees around the world. Our single, global people platform for HR, payroll, talent, workforce management, and benefits equips Dayforce customers to unlock their full workforce potential and operate with confidence. To learn how Dayforce helps create quantifiable value for organizations of all sizes and industries, visit dayforce.com.

Source: Dayforce, Inc.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, and that are subject to the safe harbor created by those sections. Forward-looking statements, including, without limitation, statements concerning the Company’s operations, performance, and financial condition, and the amount, timing, and benefits of a share repurchase program, can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “assumes,” “projects,” “could,” “continues,” “likely,” “may,” “will,” “should,” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on the Company’s current expectations and assumptions regarding the Company’s business, the economy, and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Consequently, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements, including those more fully described under the caption “Risk Factors” and elsewhere in documents that the Company files with the Securities and Exchange Commission from time to time, including the Company’s Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q. Any forward-looking statement made by the Company in this press release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law.

For more information, contact:

David Niederman
Investor Relations
1-844-829-9499
investors@dayforce.com

FAQ

What is the size of Dayforce's newly announced share repurchase program?

Dayforce has announced a $500 million share repurchase program.

When does Dayforce's share repurchase program expire?

The share repurchase program has no expiration date and can be modified, suspended, or discontinued at any time at the company's discretion.

How will Dayforce (DAY) implement its share repurchase program?

Dayforce may repurchase shares through open market purchases, privately negotiated transactions, or other means, including trading plans under Rule 10b5-1.

Why has Dayforce (DAY) initiated a share repurchase program?

Dayforce believes its shares are currently undervalued and the program demonstrates confidence in the business, while also balancing capital allocation strategies.