I think we'll go ahead and get started here. Kevin Kumar, I cover software at Goldman. With me, I have David Ossip, CEO and Chairman of Dayforce. Thank you so much for being here. Oh, thanks a lot, Kevin. Appreciate it. Yeah. So I thought maybe a place to start would be a brief intro on Dayforce, the products you offer, and kind of the evolution of the firm over the last couple of years. Oh, great. So, we're a human capital management provider, so core HR, talent, and compliance modules, payroll, benefits, and time. We play effectively in the probably 500-employee and above range. We break that up into three different segments. We call it major markets, 500-3,000, enterprise, 3,000-12,000, and then large enterprise, 12,000 and beyond. The company was started probably about 15 years ago. At that time, I did kind of a lot of field research, trying to analyze if there was an opportunity in human capital management. What the research showed back at that time was that the typical organization that we spoke to had twelve different components of HR, and each of those twelve different systems would have its own database, its own user experience, authentication. We believe that there was an opportunity to simplify that by bringing it all together into one. The company today, I think we've given guidance to the street of about $1.75 billion for this year. We've spoken about $2 billion for next year. In two thousand and twelve, two thousand and thirteen, we launched the product. Obviously, revenue on the Dayforce platform would have been, at that time, just $200,000. We've got about 6,700 customers that are live on the platform. We go right across industry. We go quite nicely globally as well. The way that we sell today is that we go into organizations, and we help them identify and workflow out their HR stack, which typically has, as our research showed, about 12 different types of components with different databases. Then we quantify for them how much they pay in terms of subscription, maintenance, and licensing fees for each of those components. We show them how many full-time people they have maintaining each of those different systems, and then we show them a Dayforce application, where they typically get a reduction of software subscription as they go from 12 systems to one. They drastically reduce the number of full-time equivalents that are required to support and maintain those systems. From that, we can typically show a cash IRR of about 200%-400% over the initial life of the actual contract. We find that that resonates exceptionally well in the current macro. Yeah. No, I think that's an interesting point on the ROI and how that's resonating. You think that's how much of that has been kind of changes in kind of how the sales force communicates with the customer? How much do you think it's, you know, because of the macro? And is it resonating kind of across the customer or, you know, different customer cohorts? You know, we've started off on the compliance modules, which were payroll, benefits, and time. And, we did that because when we did the field research and we looked at the life of a customer, we felt that there were two ways that you could lock in a customer for ten plus years. One was to start with the payroll and time side, or you could start with the Core HR side. Once we had the compliance modules really working well, and if you go to Gartner or such, we're ranked number one by Gartner for compliance, total cost of ownership and kind of product satisfaction. We then began to extend into the Core HR, into the talent component side. So today, the salespeople are able to offer the 12-to-1 simplification message- Right ... because the basis of it is the strength of the actual product, right? So if you look at it, five years ago, we were number one for compliance. Today, we're in Gartner's Magic Quadrant as a leader for human capital management. Yeah. So they're able to basically go out to the twelve to one, as opposed to just compliance approach. Right. You know, one question that comes up often is, you know, just labor trends, demand environment. I guess, what are you seeing in terms of labor market trends? How sensitive is the business to that, maybe, as you move up more up market, and then just general willingness of organizations to modernize HR systems? What are you seeing right now? So there are three components. So the first is the overall employment trends, and they're coming in what we had forecasted for the year. We obviously have access to very good data. If you look at the guide we give to the street, you'll see it's actually very, very narrow, and so when I look at the current quarter, I would say that there have been no surprises, either positive or negative. The second part is that there has been a shift in labor markets, I would say, between full-time people to more of a mix of full-time and part-time people. We benefit from that trend. You can think of it simply, if you have a company that has two full-time equivalents, and they are paying 80 hours a week, and they move to three part-timers, each doing 20. So they go from eighty hours to sixty hours. Our headcount and our licensing goes from two to three. So we actually benefit from that trend of the movement into the part-time. Our focus always has been on organizations that have a very high percentage of frontline workers. So the industries we typically focus on would be hospitality, retail, light manufacturing, process manufacturing, distribution centers, extended healthcare. And those industries have remained, you know, robust, I would say, during this macro. One area that we have obviously been investing in over the last probably four or five years has been government. Mm-hmm. Obviously, we've seen tremendous headcount in government organizations as well. We're benefiting from that private to public employment trend as well that's going on at the moment. Yeah. In terms of large organizations, again, most of our customers are 1,000 and above. The 12-to-one simplification message is a very strong message, especially when it gets to the CFO, CEO, president level of the organization. Just being able to show how you can reduce the amount that they're paying in terms of subscription, how you can drastically reduce the number of FTEs you have to maintain, which historically has been quite a mess of different systems. How when you move to a single database, you can actually do reporting, so you can actually use the data for decision making, and also, when you go from 12 systems to one, the experience, whether it be the executive or the frontline manager or the frontline worker, it becomes what you would expect. It becomes a simple system that you can actually use. And that's resonating, I would say, right across- Yeah ... the industry. Yeah, that's great. Another common question we get is around maybe the U.S. market and kind of the runway left. Like, how do you think about kind of there's a lot of participants in the U.S. market. Obviously, Dayforce is going more global now. But how do you think about maybe the U.S. market dynamics, the runway left, when you think about your solution, both, I guess, in mid-market and enterprise? So first, I would say I think our product is the strongest. And I think if you do field research, the evidence comes back that we've got the strongest product in market. The second is that our market penetration in the U.S. is probably under 3%. So we've got a ton of white space, both in terms of acquiring new customers, and there's a lot of white space across our 6,700 live customers, because we started with compliance, and now we've got talent. Right. So we're focusing a lot now as well on the back to the base. The other area that we have is obviously global. That, if I look at our global TAM, it's probably $45-$50 billion. We now cover 75% of that global TAM. And by coverage, I mean where we can do not only the Core HR and the workforce management, but where we can actually do the payroll calculation as well. When we look at our own payroll engines, we cover, I think it's now well over 40 countries. And that really allows us to target those 1,000 and above companies that typically have global populations. As well, we can also target companies in their local markets with very competitive technology that does, you know, more than what they typically see. Yeah. Yeah, I guess on global, you know, you're in, like you said, over forty countries now, I think. I think some are native payroll, some are, I think, what you call unified. What's kind of the... Does it matter to the end customer at the end of the day? Can you maybe walk through kind of the market in terms of where you're native, where you have this unified approach, and what that means for the end customer? Yeah, it's a good question. It probably needs a bit of clarification. So when we talk about native, we talk about the payroll engine running within Dayforce. And when that happens, it's effectively a microservice that we've created that runs in the Azure cloud, that does the payroll calculation. Our differentiation relative to the others in the market is we don't say it's payroll. We actually say anytime a core HR record changes or time record changes, we're going to calculate the net earnings immediately. And we call that a continuous calculation engine. The benefit for the client is that you don't have to wait until the end of the payroll cycle to start your busy work. Instead, you can start auditing the data at the very onset of the payroll period, so that when it ends, you're done. That saves the payroll team about 80%-90% of their busy work. It's a significant benefit. Over time, we started acquiring different engines in different geos. We did acquisitions of Excelity in Asia, Ascender, mostly in Australia- Mm-hmm ADAM, that was in Mexico. We first started off with a unified approach, which was, we'll use the Global Payroll Interface to communicate with those engines in their hosting environment. Today, we're actually moving those unified engines into Dayforce. So moving them into the Azure cloud, into the same hosting environment, leveraging the same microservices that we use throughout the other- Mm ... native engines. So by next year, the majority of those engines will now be native inside Dayforce, and that's well over 40 different countries. Yeah. I guess maybe a question on competitive dynamics. You know, Dayforce is now really targeting those global multinational companies. You've moved up market significantly. What you know, what's changed from a competitive dynamic standpoint, given those two vectors where you're really focused on? There's been another change as well. So about four years ago, when I looked at the product, we were number one for compliance, but I felt we could do lift up the organization in terms of experience, in terms of data, and in terms of the talent modules. And so we brought in a individual named Joe Korngiebel. Joe was the CTO at Workday. And Joe's mandate was just that: build out talent, improve the user experience, and make sure that we can really leverage the single data model for things like AI and such. And Joe's done just a spectacular job of that. As we've done that, that means the markets that we play in has changed. We no longer just compete against the ADPs and the UKGs of the world, but nowadays, we compete more often than not against the ERPs as well, because we sell that full twelve to one simplification. In terms of the competitors, in the 500-3,000 market, we typically would see UKG, ADP- Yeah. - in that market. We may see a Workday. If it is a utility type of company, we might run into a SuccessFactors. When we go into the enterprise space, the three thousand to twelve thousand, usually it becomes more of an ERP competitive situation, competing for a replacement of an ADP or a UKG type of product. And when we go into the large enterprise space, which is above the twelve thousand, today, we mostly still sell the compliance module. So it would still be, payroll, benefits, and time workforce management. If the organization is frontline, so you can think about retail, hospitality, maybe transportation, there we would sell the full suite. Yeah. But there, we typically are competing against the ERPs. Yeah, that's really helpful color. I guess, you know, there's a question on kind of, as you brought on the platform, kinda how do you think about the core growth drivers of the business? Obviously, Dayforce recurring revenue is kind of a key metric for the firm. Mm-hmm. So maybe if you can walk through the durability of that, you know, of growth in Dayforce, and how you think about maybe the three or four kinda core growth drivers of the business right now? Yeah. So, we have five growth vectors of the actual business. The first is we acquire new customers each year. As I mentioned, our market share is below 3% in North America, and probably less than 1% globally, so tons of area to grow. The second is we continually extend the platform, which means we add additional modules, which allows us to sell more upfront and allows us to go back to our existing clients and drive additional revenue. This year, probably just under 40% of our sales will come from sales back to the base. The third area has been the move-up market. When Joe joined the organization four years ago, our largest live customer would have been about 50,000 employees. Today, our largest live customer is about 500,000 employees. We've moved up really nicely in that area. Yeah. And if you look at the average annual recurring revenue per client, it's up about 18% year-over-year, so it's turned out nicely. The fourth growth factor has been to move globally. So when we looked at the overall TAM for the business, about half of it was in the U.S. and Canada, the other half of it was abroad. So we built out the platform to be global. We built out native payroll capability, we did some acquisitions, replatformed those acquisitions into Dayforce natively, and that obviously allows us to continue growing. It also helps us move upmarket, because most of those large customers are global in nature. Yeah. And the last growth vector is what we call adjacent markets, which is we have close to about seven million people live on the platform, just on the Dayforce side, many more on the other platforms as well, and looking at ways to drive recurring revenue from that. Examples of that would be like the Dayforce Wallet. Yeah. The Dayforce Wallet is, as we calculate payroll continuously, we allow employees on our platform to ask to get paid when they want to. And when they do that, we do an off-cycle payroll for the individual, we generate a payslip for them, we do the remittances within twenty-four hours, and we do the funding currently of a DDA account or debit card immediately. And, you know, that, that's growing. It's last year, that was about $12.5 million of revenue. Mm-hmm. This year, it'll be slightly above $30 million, so it's growing quite nicely. We're adding some new capability, which things like BYOC, bring your own card, which will probably continue the growth of that. Yeah. We have the new Dayforce Flex product, which we just launched a few months ago, so Dayforce Flex is, I'm a Dayforce customer. I'm building out my schedules. I don't have a person to fill a schedule. I can post that unfilled shift to effectively the Talent Cloud, and then people inside the Talent Cloud get notified about it. They can say, "Yes, I'd like to work the shift." They show up, they clock in, clock out with the app. When they clock out, they get paid through the Dayforce Wallet. We act as employer of record for that particular person, so the company doesn't have to onboard or off-board them. We launched it a few months ago. We probably have over 20 customers that we now have signed up onto it. Where we're actually focusing it is at our seven thousand customers that are live on the Dayforce platform, and their employees or their alumni are the employees that we typically notify. So if a person leaves an organization, as they're off-boarded, they're onboarded into our Talent Cloud. And then when an organization would like to fill that vacancy, they can post it to their alumni, and they don't have to bring the alumni back in. And we're seeing that take off quite nicely, and so we think that could actually be a very, you know, sizable revenue stream in the actual future. Yeah. No, that's great. Maybe touching on the selling back into the base. I know that that's been a focus area. I know Dayforce has done some operational changes, I think, to kind of improve that motion. Mm-hmm. I guess, what was the impetus for that? Kind of maybe talk about the progress you've had there. And I guess, a broader question on kind of module density, and I think Dayforce is at maybe $13-$14 a PEPPM. You know, how do you think about the evolution of that as you kind of, you know, get more module density within the enterprise base? So there's a lot in that question. So the first part is, we needed the product to be a full suite product before we could really start investing in client-based sales. As I mentioned, we're in Gartner's Magic Quadrant as a HCM leader now. We hired a gentleman by the name of Barnes, actually also joined us from Workday. He ran client-based sales there, about last year, and he's been building out a client-based sales motion within Dayforce. It's gone very nicely. The long-term target would be about 50% of our ACB to come back from the client base. As I mentioned, this year will be slightly below 40%. Last quarter was about 40%, but included in that was a lift in the Government of Canada contract, so a slight kind of anomaly on that. There are actually three different revenue streams in client-base sales. The first is we sell more modules back into the base. You can think about the clients buying things like learning management, performance management, succession, document management, the like. Yes. That obviously drives the PEPPM up. The second area is our customers grow. They grow through acquisition, and because of our geo footprint, we can go into new countries with them. It could be a company that might be live in the U.S., and they take the product into the U.K., or they take it into Germany, or they take it into Australia. We get additional lives on the actual product as they expand. The third is an area around managed services. Managed services, you can think of almost as a cloud type of service to replace, which historically would have been called a BPO or a type of operation. With managed services, our gross margin on managed services is about 77%, and it's going up quite nicely. I think on a long-term basis, it'll be the same gross margin that we get for cloud. You can get there because it's only done on Dayforce software with a lot of automation, and we don't have to leverage our customer support department for the managed account, so there's an offsetting of costs. Mm-hmm. There's a very large opportunity in our client base to offer managed services. In other words, we come in and we take over the payroll function, or we take over the benefit function for the customer. If you ask me, I don't think any customer should run their own payroll. It's almost impossible to do that today. You typically are on a learning curve of one. You normally are very reliant on an individual, and if that person leaves, you're in problems. It's very hard for any individual to stay compliant with the way that the jurisdictional rules change. If a company is global in nature, it's impossible for that individual to understand HR, payroll, time, benefits on a global basis, whereas this is what we do. And so we've got really a great team of professionals who understand that. We've got a legal compliance team that remains current all the time. We run all the customers on the same platform, so a lot of automation versus bums in seats type of approach, which means you get a much better service with a higher degree of compliance, lowers the liability for the customer. So there's a big opportunity there, too. Yeah. No, that's great. Maybe an obligatory question on AI. You know, maybe talk through kind of the opportunity there. How much of it is improving efficiency and automation versus maybe, you know, concrete new product opportunities? How does Dayforce think about kind of the evolution of AI into HR and payroll? So we have AI properly embedded in the product, in what I'd call useful cases for our customers. So right off the bat, we've got a single data model, very well formed. Our first approach of using AI was to reduce the inbound calls into our customers' HR business partners. And the way we did that was that the landing page for the app is something that we call the Hub. The Hub is a content management system, and for any document or any text that you load into the Hub, we index it, and we make that document available through GenAI queries. Think about it as ChatGPT, we call it Copilot, where someone can come in and ask questions, and you only get questions for the documents that you're in the audience from. So you can think about a customer loads up their employee handbook, they load up the benefits policy, they load a job-sharing policy. I, as an employee, can go into Copilot today, and I could say, "Hey, I'm having a baby. When can I take off? How do I get paid? When do I come back?" And it answers the question for you very, very nicely.... We're now extending the Copilot into more of an agent type, which is access to the data. Instead of going to a dashboard and looking at all of your locations from an overtime perspective or attrition perspective, or time to hire, you'll be able to go into Copilot and ask questions. Show me by location, in the form of a pie chart, my overtime." "Show me in a bar chart format, the locations that have the highest attrition rate," and it creates the actual chart. If you come to Discover, our conference in, I guess, about six weeks or so, you'll actually see that live within the system. The other area that we use a lot of copilots is around prediction. So we have a concept what we call measures, which is effectively we have the ISO 30414 HR measures inside the system for things like attrition, turnover, time to hire. We now are using kind of ML to basically forecast the direction of those particular measures, and then we're able to notify people where it trends out. From an ML perspective, on the workforce management side as well, historically, when we used to do the forecasting of labor, we used to use something called a trend of moving averages. We've now moved that over into a more kind of, wholesome, ML model, that takes into things like weather and different types of events into the prediction of it. We also leverage AI quite a lot on the recruiting side. So for example, when candidates apply, we have an ML model that basically does a grading of the candidates. We do the same for when candidates apply. We do job matching. So if you apply to one role, and there's another role that you might apply to nicely, we kind of notify you about that role, too. Mm-hmm. From an AI perspective, we also adhere to the ethical standards around AI. So we make sure we don't have unnecessary bias and things with inside the AI frameworks as well. What gives us a huge advantage is that, you have to remember that we probably are the most modern platform. We started building the platform in the cloud era. We leverage the Microsoft Azure services, and so that allows us to take advantage of the AI, things like large language models, sentiment analysis models, which we use for things like engagement surveys. We now read all the comments, and we categorize them. We're also moving into content and learning management. So for learning management, with the acquisition we did with eloomi, what we're doing over there is, "Hey, can you create a learning course for me based on this content? I'd like to have a quiz of ten questions with a passing grade of 75%," and it actually creates everything for you. So it's becoming- That's cool. It's moving very, very quickly. I think we're moving a lot quicker than others in industry, largely based on the fact that the data model and the technology stack is just very modern. That's great. That's really helpful color. Maybe one on just the SI ecosystem. I think there's been... You know, as you've moved up market, I think there's been a lot of work done kind of developing those relationships and building that ecosystem out. I guess what's left to be done there in terms of kind of rounding things out, and what are the implications maybe to kind of Dayforce's, you know, professional services revenue line item? So there are a few reasons we did the SI stuff, and it now extends beyond SIs. It goes into software providers as well that can leverage the Dayforce platform. The first part that we wanted to do was we needed to augment our implementation capability. It's just not viable to grow globally if you have to hire implementation people in every single geo. So leveraging the SIs to basically do the implementation of the systems was the first part. The second is that we are probably underinvested in brand, and the idea of having the SIs know about us, so they could refer us to their client base, and when they were doing the evaluations, they would be familiar with the actual technology, has proved to be very, very helpful. And probably about 50%, I would say, of our pipeline, at least 50%, is influenced by the actual SI channels as well. The last part is we're now beginning to see the SIs actually build specific practices around Dayforce, which obviously go to pipeline generation as well. And so it's going, what has to happen, we have to still see maturity of the SIs. We've got quite a big presence. If you come to Insights, you'll see the number of partners is well above 100. You've got a lot of the big SIs, you know, whether it be PwC or EY, Deloitte, Accenture, the tier twos, like BDO and AXL and the others. Very big presence from a global perspective on the SI side. Yeah, that's great. Any questions from the audience? Maybe one just on kind of how you think about. You know, you've set some long-term growth targets for the business, how you think about kind of balancing growth and margins. And in particular, I think, you know, investors have focused a lot on kind of cash flow expansion. Mm-hmm. I know that's been a focus area for the firm more recently. Maybe talk through, you know, how you think about, kind of, the drivers of cash flow generation, particularly maybe in an environment where maybe interest rates are coming down and maybe that impacts float a little bit. So how are you thinking through kind of the sources of leverage there? Yeah, so, we're transitioning to really a free cash flow business, as opposed to saying Adjusted EBITDA or a revenue side. If I look at the longer-term targets, I'd like to see us move to about $1 billion of free cash flow coming from the business, and that'll take us into, you know, 2031 or so, to get to that type of level. You've seen improvements year over year, so if I look at last year, I think we were about 6.7%. This year will be about 9.5%, that's of total revenue, and I think that'll go into the 20s on a long-term basis. It'll go up by probably 1.5%-2% per year. Yes. To get there. In terms of float, the float yield for this year is probably about 4.1%. Last year, it was about 3.7%. It's a bit of a bogey over there. I think next year, if I look at 2025, it'll be between 3.7% and 4.1%. It won't be below 3.7%, it won't be above 4.1%. We have a bit of a buffer in that, is that when you look at the float, we divide the float into a core portfolio and liquidity portfolio. Liquidity portfolio goes into overnights, and the core portfolio goes into kind of laddered investments with an average maturity of about 2.5 years. We're still actually climbing up the yield curve on the core portfolio, so that will offset some of the Fed rate declines on the liquidity portfolio. So for next year, it'll be pretty similar, I think, to where we are this year. Yes. If I look on a longer term basis, I probably would look at more of the thirty-year Fed rate, which is probably around 3%, you know, about 3%. And so I think you could model the business somewhere around a 3% basis, which is what we've done. That's great. Maybe, maybe last one from me. Just a- Question. Is there a question there? Yeah. So you talked about competing against some of the ERPs as you move upmarket. How do you differentiate and how do you win versus those competitors in that sale? So when we compete against the ERPs, our focus are frontline worker organizations. So you can think of, say, a 50,000 hospitality company. Of those 50,000, probably about 95% of them would be frontline workers, and 5% would actually be desktop workers, knowledge-based workers. So when we compete against, say, a Workday or an SAP or an Oracle in that market, our user interface for the frontline worker and our capabilities in terms of compliance and the features that we can generate for them. So if I take a hospitality company, it'll come down to: How do we set the availability of the employee? How do we actually show the calendar? Can they do shift trading with one another? Can they get paid at end of shift through the Dayforce Wallet? The actual Hub experience, which allows the CHRO to create really a beautiful experience that renders on mobile and on the web for all the different brands that they might have, and the CHRO can do it without the IT department. So that resonates very nicely. Second part comes down to the total cost of ownership, and if you look at the Gartner quadrant, you'll find we're ranked number one for total cost of ownership, number one for product satisfaction. And when you're going into a frontline organization, where typically the margins for those types of organizations are very narrow, the fact that when a customer goes live with Dayforce, they'll be fully compliant on the actual product, and they're not gonna require an army of outside SIs, or they're not gonna have to hire an army of internal IT people to make it actually work. The other part is because we do the full HCM stack, including the very, very difficult compliance, all the way down to the tax calculations and tax remittances, means that the company doesn't have to act like its own internal SI organization. There's no need for any of that, and so that drives simplicity into the mix as well. Great. I think we're out of time. David, thank you so much. Thank you. Really appreciate it. Really appreciate it, guys.