While reporting solid earnings, Ceridian offered hints about its growth plans for the next several years.
Ceridian reported a year-on-year revenue increase of nearly 14 percent, to $202.3 million, during the third quarter. Dayforce recurring revenue grew 32.6 percent to $109.4 million.
During the company’s earnings call, CEO David Ossip said the Dayforce customer count rose by a net 163 during the quarter, bringing the total number of live organizations to 4,169. He said the company sees “strong demand” for its solutions and expects Dayforce revenue to continue growing..@Ceridian reported higher earnings, and sees itself expanding into 20 countries in 3 years. #HR #HRTech Click To Tweet
During the quarter, Ceridian invested $17.4 million in product development, a 21 percent increase from 2018’s period. The company also spent more on sales and marketing—26 percent more to be exact—or $35.5 million. According to Ossip, the increase represents a continued push for growth in the enterprise segment in new global territories.
Ceridian was particularly active in Australia during the quarter. It acquired enterprise workforce management solutions provider RITEQ and began making Dayforce solutions available to its customers. The acquisition gives Dayforce a solid presence and customer base on which to build, Ossip said.
Ceridian Sees Expansion in its Future
It also points toward Ceridian’s future. “We believe this type of acquisition strategy can be replicated across the globe and can be used to accelerate our global expansion,” Ossip said. He believes the company can expand into 20 countries within the next three years.
Ossip said the company was “particularly pleased” that its cloud recurring services gross margin rose by 440 basis points year-over-year, to 70.2 percent. Professional services and other gross margin activities rose from negative 13.6 percent to negative 7.7 percent. Adjusted EBITDA was $46.4 million, an increase of 27.5 percent compared to 2018’s third quarter.
Ceridian launched several enhancements to its HCM package during the quarter. They included new analytics, a new earned-wages tool and a simplified approach to customizing Dayforce. The analytics feature, Dayforce Intelligence, provides companies with predictive analytics designed to identify key metrics for each HCM process. The company said the tool will allow customers to review current scores, track metrics over time and compare their results to those of their peers.
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