Dayforce Inc (DAY-N) on Wednesday beat Wall Street expectations for second-quarter revenue and raised its annual revenue forecast, benefiting from resilient spending on its cloud-based human capital management (HCM) software.
Demand for the company’s software services has been stable as more enterprises increased their use of artificial intelligence and cloud-based platforms to run day-to-day operations.
However, some analysts have warned that moderating employment trends and rising concerns about a deteriorating labour market could hit the HCM industry, as companies pull back spending due to the aggressive U.S. tariffs.
Dayforce’s shares have fallen more than 26 per cent this year, underperforming larger peers such as Paycom and Automatic Data Processing.
U.S. employment growth was weaker than expected in July, while the nonfarm payrolls count for the prior two months was revised down by a massive 258,000 jobs, suggesting a sharp decline in labour market conditions.
Dayforce’s second-quarter revenue of US$464.7-million surpassed analysts’ average estimate of US$457.8-million, according to data compiled by LSEG.
The company raised its annual revenue forecast to a range of US$1.94-billion to US$1.96-billion, from its prior expectation of US$1.93-billion to US$1.94-billion.
It expects third-quarter revenue of US$476- to US$486-million, compared with estimates of US$483.2-million.
The company reported net income of 13 US cents per share for the second quarter, compared with a loss of 1 US cent per share a year ago.