Okay, welcome everyone. I am Mark Murphy, Head of Software Research with JP Morgan. Thank you for joining us, and it is a great privilege to be here with Jeremy Johnson, who is the CFO of Dayforce. First off, Jeremy, I just want to thank you for taking the time out of your schedule to travel here, and it is great to be here with you. Thank you for having me. Good set of quality meetings here today, so thank you very much. Great, great to hear. Maybe you can briefly introduce yourself and Dayforce, just for the benefit of anyone out there who's not already familiar. That's good. Yeah, so I'm Jeremy Johnson, I'm the CFO of Dayforce. I've been with Dayforce collectively for, gosh, probably 11, 11.5 years. I am technically a boomerang employee back to Dayforce. I was with Dayforce from 2012 all the way to 2020. I left to be the CFO and interim CEO of another HR tech private company, and then boomeranged back to Dayforce to be CFO. I've been here in seat for now about a year and a half. Dayforce itself, for those of you who don't know, is a Human Capital Management software company. We're about $1.95 billion in revenue. We've got about 7,000 customers and 7 million users on our global people platform. We kind of cover everything from hire to retire and a full HCM talent suite. I was thinking there must have been some very smart recruiting that got you to leave and then come back here. No pun intended. So Jeremy, we've always held a very, very, very positive opinion, especially of the technology at Dayforce. I think what stands out is it's a company that's willing to take on these super hardcore engineering projects and trying to make these deep transformations of the way the HR industry works. I think a lot of your competitors would rather not try to be up for those big challenges. The continuous real-time calculation engine is a big one. You have all these innovations in the wallet, in the way you've architected to build that product. How would you explain the vision here and the core differentiators of Dayforce to try to distinguish it from the rest of the competitive set? Yeah, it's a great question. Look, it starts with product. The vision of Dayforce has always been to have a heart and a soul in compliance, but to have a full talent suite that accompanies that compliance in a single application across the whole human capital management suite. It started in 2012 when Dayforce and Ceridian were brought together. Ceridian had that core in compliance, and they had the tax engine, and Dayforce had the software. From 2012 until kind of our IPO, we focused on really building that pay and time core that we had. We were selling what we call the continuous calculation of net pay. The differentiation right there is that we have pay and time in a single application, so you don't have to wait for the time system to close in order to do your payroll. With every other company, you have to, right? You are stuck with this short window where you have to run around like crazy and do your audits and do your checks, and eventually you just do your payroll, not when you're ready to do your payroll, but when you run out of time. With Dayforce, the continuous calculation allows you to do those checks during the active pay period. Pay and time are in the same system. That sold really well from 2012 until our probably IPO or just after our IPO. The plan has always been beyond payroll and time. It has been the full HCM suite. Post-IPO, we brought a guy named Joe Korngiebel in from Workday. Joe was, I don't know, employee less than 10, I think, at Workday. His remit was really kind of basic. It was, let's go level up our talent capabilities inside of the suite. We really want to get to the ability where we can sell full suite Dayforce on a single application. Joe's been here now for four, four and a half years and has done a fantastic job. We are now Gartner Magic Quadrant leader for talent enterprise solutions. I think in Q1 this past quarter, we had in our major market segment, which we sell to as the 500 employees-3,500 employees space, almost 90% of our deals were full suite deals. In our enterprise segment, which is 3,500 employees- 12,000 employees, it was all deals were full suite deals. We really leveled up our ability to sell into that pay, beyond that pay and time, and into that full talent HCM suite. On top of that, we've got this product that we call Managed. Managed for us is where Dayforce is the payroll department for your company. It's not a full PEO type solution, but it is where we actually act as the quality check, the control check. We commit the payroll on your behalf, and we are essentially your payroll department. For us, you think about this and what that does for us is the pay and time at about 1,000 employees gets you about $10-$12 per employee per month. The talent suite, when you add it all, gets you, again, at that same level, about $10-$12 per employee per month. Managed can get us another $10-$12 per employee per month. We're really leaning in on managed because the margin profile, it's a recurring revenue stream. We build it on a per employee per month, but the margin profile is now equal to that of our software profile. So near 80% recurring gross margins on that business. We can not only get a lift on the recurring revenue, but make sure that it is really solid recurring revenue with high margins. In Q1, we had 70% growth in our managed services revenue, or our managed services ACV, which is beyond anything we have done. We are really leaning in there. The last piece of this puzzle and the vision here that we have had is around the data. With a single application, you can really imagine that we have an advantage. We have a data advantage that it is all in one, it is all formatted nicely, it is in one single application. You can do some nice analytics, you can do dashboarding, you can do things like Co-Pilot, our AI assistant on top of there. The hub experience, which is really the landing page of Dayforce, you log into Dayforce, and it is kind of a Wix type experience where administrators can go in and put content in and add different things and take it off really easily without the need for IT. We think that can get us another, over time, $10-$12 per employee per month when we combine that with the agentic approach that we are taking across the platform. It is a building block that currently, I think if you look at our total revenue and you divide it by the number of users we have, we are at about $12-$13 per employee per month. We have got a nice runway up of continued growth. That's where our customer-based sales team comes in, and we're having great success on customer-based sales. Okay, so it led to pretty robust bookings growth. Thinking back on Q4, that also happened in Q1. I think your comment was new sales bookings growth of close to 40%. I do not think we are seeing that across the rest of the landscape. There is also a comment that win rates had nearly doubled year- over- year. How do you think the stars are aligning to basically drive such robust bookings growth, especially when in the backdrop of this environment, you have had the threat of a trade war? Yeah, it's really phenomenal sales performance. Just the specific numbers in Q4 of last year, we grew at about 40%. Our bookings are a recurring ACV number, and so a recurring Annual Contract Value. 40% in Q4, and we think first half we're going to have very similar growth, around 40% through the first half of this year. Great success. The messaging seems to be really resonating with our customers, and our sales execution is phenomenal. That's probably where I would dive in there a little bit, Mark, is on our sales approach. I mean, you think about that in the story that I told about going from pay and time all the way to this full HCM suite. Initially, our approach to sales was pretty simple. It was, we've got a single application that allows you to do a continuous calculation, and you can realize a benefit to that. It was something that a salespeople could deliver really cleanly, really nicely, and it resonated with customers nice. It resulted in sales. Around the COVID time, we probably made a little bit of a misstep. We transitioned our messaging in the sales side of things to, there is a complexity crisis in the world right now. We're going to address that with our technology that will help you address the boundless workforce. It was a difficult sales pitch to give. It didn't resonate quite so well with customers. This last year, we actually pivoted. Now that we have the full suite, we pivoted to a messaging that I think is really working well. It's a 12- to-1 simplification, right? We're selling ROI. What we mean when we say 12- to- 1 simplification is we can replace approximately 12 different HCM solutions with one single Dayforce. By doing that, we can replace 12 subscriptions. We can replace 12 teams that are supporting those technologies. We can replace 12 integrations with those systems into other technologies. We actually show the math to the customers and the prospects so that they can see their true ROI on the system. That seems to be resonating really well with our customers. Our sellers can sell it and pitch that easily. Our customers can understand it, and we can deliver quantifiable value to those customers. I think the other two things that I'd say that are going well is our approach to these sales summits seem to be going pretty nicely. We have a sales summit pretty consistently throughout the year, and it culminates with what we call our annual user event, Dayforce Discover. We were in L.A. and then New York. Right now, David and team are in the U.K. doing a London summit. We'll go to Australia and do a Melbourne summit. We'll come back, we'll do Dallas. We do Chicago, and then we finish it off in Vegas with our annual customer conference. What happens at these summits is a pretty cool thing. We bring customers and prospects together. They are all pretty similar. We get a customer that starts it off up on stage and says, "I was you, prospects, about a year ago. Let me tell you why I chose Dayforce and what my experience with Dayforce is. What happens throughout the event is we get customers and prospects talking to each other, and they share stories and they share pain points and they share why I do this and what do I do there. It really creates a pretty nice community. A lot of our customers end up doing a lot of the selling on our behalf, and it's a really nice thing. It builds a nice bond. David gets up on stage and does a nice demo, and there are very few CEOs that can do a demo like David can of their product. That works really nicely. The last thing I'll say is the sales execution. We brought Sam Alkharrat in, again, from Workday. Sam has just leveled up this sales team, I think, quite a bit. He's brought in the right leaders from across the industry. He's put in the right discipline. The deal review is the deal scoring. Every Friday, we have a call with our product team, our customer team, myself and David, along with the sellers. We really go through deal by deal, and we've done a nice job there. Sam's put in a lot of that discipline. He's put the pipeline into a spot where we really have a right to win this pipeline. That's what's ultimately helped our win rates. The last thing I'll say about the win rates, I think our win rates are improving because we're convincing customers to yes, if that makes sense. You think about a win rate and it's, "I'm going to go with Dayforce, I'm going to go with a competitor, or I'm going to do nothing." In the past, that slice of the pie that was do nothing was a little bit bigger than we'd like it to be. We're convincing folks, I think through a lot of the messaging and the discipline and all these things that we've just talked about, to say yes. That's ultimately what's helping our win rates. That's a great and very comprehensive flow. I think there's a couple of new learnings in there for us. When we think about everything, Jeremy, that you just described, which is giving you this kind of a surge in bookings above that of the rest of the industry, at the same time, when we look at the growth of the recurring revenue, it was a little less robust in Q1. I think the Q2 guidance for recurring is falling a little below the kind of multi-year trend line that we're looking for. What is the underlying dynamic? I'm wondering if it goes back to, could it go back to prior sales periods? You mentioned coming off of COVID, there was a bit of a sales step up. What is driving the spread between bookings and recurring revenue? It is a, we bill on a per employee per month basis at Go Live, right? We are implementing today what we sold nine months, 12 months, 18 months ago, 24 months ago sometimes. I guess you can flip that around to say what we're selling today is expected to go live in September, October timeframe for the beginning of it, December, January timeframe, and then a little bit probably a year from now. We are getting through those bookings. I guess what I'd call it is just we're implementing things that were probably from some of that messaging that we just talked about, where I think two things were happening. One, that messaging really wasn't resonating. We had a bit of a pocket on the sales side of things, and we're working through that now. The other side of it is we also were pushing up really quite a bit up market at that same time. You end up with these large, complex, global deals that take a long time to implement. As we work through that, I'm not surprised that the growth rate is kind of where it is right now. I do think that what we're selling today, the largest success we're having is in major markets and in customer-based sales, which tend to convert to revenue a lot more predictably, a lot quicker, and they're a lot more simplistic sale. I feel very confident in our ability to get the revenue numbers, see these bookings translate into revenue in the future. Okay, so said differently, it's a temporary lull in a lagging metric. And given the way that what you just said right there at the end, I do want to ask you the thought of having confidence in where that's going to head. If you do end up having a few quarters in a row where it seems like you probably will of growing the new sales bookings about 40%, how would that then translate into future revenue growth? Because I think the proportionality between the two things matters a lot when we're trying to run that math, right? That's right. Yeah, I mean, I wouldn't expect that sales or revenue grows at 40% because bookings grow at 40%. The denominators are different on those. Certainly, you should see a step function change there where it does translate into some better growth in the future. I think you start to see that towards, again, the back half of this year and into next year. What I feel like right now is we're just getting a lot more confidence in our 2026 and 2027 kind of path to revenue here that we've set out. Okay. Okay. So recurring revenue is not going to start growing 40%, but it is going to be, it would be kind of lifting off this trough level. And maybe one way to think about it is gaining comfort in the longer-term guidance ranges that you have given. That's exactly right. Okay. I would be interested in how you're perceiving the macro environment because the volatility has been incredible around the trade and tariff situation, the DOGE. It changed a day or two ago, right? A tweet can really impact things. When we look at Dayforce customers, most of them would be pretty heavily on the hourly worker side. We believe you would have some exposure to tariff-impacted industries like airlines and retailers and energy, et cetera. I should mention manufacturers too. Do you see any change in those, maybe the tip of the spear types of industries? What I can tell you is we haven't seen any real impact to the employment levels from the tariffs, any direct impact. I will say we expected this year to be relatively modest from an employment growth perspective, and that's exactly what we're seeing. Typically, in any given year, you can say we get kind of 2%-3%, maybe sometimes higher, maybe just a little lower, but from employment growth tailwind. And this year, we modeled it at kind of 1% or a little bit below that. And that's exactly what we're seeing from a growth perspective. So things are still growing employment levels on average year- over- year at our customers, but very, very slow. And it's a headwind to our overall revenue growth year- over- year. 1%, I mean, if you tie that in with, I think the ADP data that we saw recently was sort of less encouraging. There have been other employment updates that feel like nothing has really changed. Are you in more should we kind of read it as you're more in that latter camp? Like this 1%, you think that's the zone we're going to be in maybe between now and year end? That's what we've modeled, is at the same levels that they continue. I'm not an economist, and I don't claim to know, but I'll. Economists don't know either. I'll tell you what, that's how we've thought about it. Outside of that, I'm not sure. The data is showing me that that's where it's at right now, though. Okay. Let's talk about HCM expansion for a moment. When we think back, Jeremy, from the time of the IPO and even prior, we think of the strength being the kind of product-level strength of Dayforce being in workforce management, right? In other words, you're going to be how do you manage the schedules of all these hourly workers? And then the core payroll engine obviously kind of goes without saying. How do you feel about the ability? If you think of Dayforce being on this long-term evolution, there's running the business, which is why I think we put all that in that category. Then there's going to be managing the business, especially pretty strategically. You start thinking about if I oversimplify it and just said talent management or talent management and beyond, how are you thinking about that trend line? Yeah, I think it's something that we've seen as an opportunity for Dayforce over a long period of time. As we started through in that compliance core of pay, time, benefits, and then expanded into the talent, I mean, that's exactly what we've done. We've built out recruiting. I think our recruiting, it's pretty close to some of the best in breeds and if not right there with some of our peers in market. We feel really good about where we're at there. You think about learning management, we just did an acquisition last year of eloomi and completely replatformed that onto Dayforce in a very short period of time. Now we're not only able to sell our own Dayforce learning solution, but also sell content alongside of that. You think about performance management, compensation management, all the data things that we talked about. That's really about managing the employee, right? It's attracting the right talent. It's making sure they stay and that they're engaged. You think about things like succession planning. Those are all the things that I think we've built out really nicely over the last few years. The benefits are starting to come through. You go into our add-on sales. I talked about the full suite sales, but the add-on sales were up 30% year- over- year. That's us going back to our existing customers and upselling those. We're feeling really good about our path there and the monetization of that, both through add-on sales and full suite sales at new. Just going back to an earlier comment, you said the full suite deals, you said every deal in enterprise was full suite? Every deal. In Q1, every single deal? That's right. Had that ever happened before? That's right. It wasn't happening a year or two ago. This is the first time. Okay. This is the first time. I think the major market deals were almost 100%. We are getting that traction. It is a good thing to see because it is going to translate through the financials. Yeah, it's a lot of peppum. If I step back and think about what you're describing on the talent management side of the equation in recruiting and succession and comp and that type of a thing, every company is always saying there's a shortage of skilled workers. We can't find the right people. We can't find enough of them. The talented candidates are always hard to find. Do you think that, I mean, in practical terms, can you make a difference for these companies in trying to sift through all that, attract the right candidates, and maybe retain them longer? I think we can. I think we've shown that our product allows customers to actually onboard and retain employees at a higher, at a better rate. The way we think about the onboarding and the recruiting and the onboarding of people, it's really high-volume onboarding. A lot of our customers have employee churn in the 20%, 25%, 30%, sometimes 40% range. If you think about hotels and retail, that means that you have to not only hire those people, but then think about replacing them almost the next day. You have this constant churn where you need to keep a talent pool of people ready to go. You're always hiring and you're always onboarding people. I think our product does really well there for that high-volume stuff. The other thing that I'd probably mention here is we do have the continuous calculation that allows us to do the Wallet. The Dayforce Wallet has proven to really engage and retain employees at a higher rate than if they did for companies that do not have the wallet. For those that do not know, the Dayforce Wallet is us allowing employees to not only calculate their earned wage during the active pay period, but then allow them to access those wages and then go spend on them. We started with the Dayforce Wallet by going with a plastic, saying, "Okay, download the Dayforce Wallet app. Now go request your plastic. Once you get your plastic, you can go and add money completely free and go spend." We earn money on the interchange associated with the dollars that are spent. It was a really unique approach to kind of earned wage access and something that nobody else was doing. What we've pivoted to more recently, actually this year, is what we call direct-to-bank. We launched direct-to-bank this year because we found that the approach that we had taken to earned wage access was really focused on it kind of highlighted folks around the unbanked population, those people that did not have a bank account that needed and wanted to access their earned wages. The direct-to-bank, we think, can open the aperture a bit and actually allow us to access and allow employees to access earned wages that are banked. What that does is it is not a separate app. It is right in the Dayforce app. You can either go through your regular Dayforce application or the website, and you click on, you see your earned wages, you click on, "I want my pay." Whenever you access those wages, it goes either to your bank account or to the debit card of your choosing, and we charge $3.50 for that. We have seen the adoption and the uptake in that go really, really well. It is all about financial wellness, allowing people to access those wages during the active pay period that really encourages those that are working paycheck to paycheck ultimately. It's a great reminder of Wallet, and I had wanted to go there anyway. Before we end, I may come back to that in a moment, but I wanted to make sure we don't miss the opportunity to talk about how you're putting your imprint on the company, which we applaud what you've been doing. You've been coming up on, I think, 18 months in the CFO role. Shifting focus from adjusted EBITDA to free cash flow, I've never been the biggest fan of adjusted EBITDA. The financial statements have been a little, there were a lot of line items in here. You've been cleaning that up. There's a 5% reduction in force. I'm not trying to give you credit for absolutely everything that happened, but you've been doing some of this. You put out some long-term targets on both growth rate and margin. There's been a lot going on. I want to ask you, what is your ultimate vision here for when you think about the business model and the financial presentation of Dayforce? Where do you want to get to with this? Because it feels like cleaner, simpler, more efficient, but I'd love to hear about it in your words. Yeah, I think you're right. I mean, when I first got back to Dayforce, I think almost the first thing I did was terminate the defined benefit pension plan. So we set the termination for that. That'll end this year, really about simplification of the business and something that should have been done, I think, a little bit ago. We hosted, as you mentioned, an Investor Day. We set out some long-term targets. The goal was durable revenue growth and increasing profitability and increasing cash flows. That's really the vision of Dayforce. This quarter, we did some simplification of the P&L. We removed a gross profit line. We moved depreciation into one line, really to try to make us a little bit more comparable and simplistic from a P&L perspective. We also simplified the disaggregation of revenue. It's these little things where it's small, but it actually, I think, makes a pretty good difference in users of the financial statements. You're going to save us one hour every time you report. That's hey, you know what? I can do that 18 times to each of our analysts. But I'll tell you what, the ultimate goal here is free cash flow expansion. We set this target for a billion dollars in free cash flow. And we kind of set it alongside a $5 billion revenue target. We feel really confident in our ability to get to that free cash flow expansion. If you look at this year alone, this is probably the most underappreciated thing I think right now in this year, is we're expanding free cash flow margins from 9.7% to 12%. It's pretty good expansion. It's 230 basis points year- over- year. But even inside of that number, so it is our three headwinds that are really key for us to think about. Number one is float revenue, which is almost pure profit. Went from $200 million to we expected to be $180 million. So there's $20 million that just got lopped off year- over- year. I also did, as you mentioned, the restructuring here, the 5% restructuring. That comes with a $25 million restructuring charge, cash restructuring charge. That's included in that expansion. The last thing is this pension that I talked about. There's a $25 million pension termination. That's a one-time charge inside of there. So you start to talk about each one of these things, that's $70 million that's non-recurring inside of there that's a headwind. So I'm feeling, I guess, the point is very positive about our ability to get to real free cash flow expansion in obviously this year in 2026 and 2027, such that I think we get to parity with the peers really quickly and then hopefully beyond that, feeling nice. Okay, that's a great reminder on the headwinds that are embedded in great margin expansion. In the last minute and a half, I'd love to get your take on what's happening across the industry in terms of layoffs because historically, I would say the last 20 years- 25 years of covering the software industry, a company wouldn't do layoffs unless it was really struggling. Growth was going sideways and a market was kind of saturated and tapped out. Recently, we've got very healthy companies. I'll give you three examples: Intuit, CrowdStrike, Dayforce. You can add Microsoft this morning. They're chugging right along with double-digit growth, but they're doing layoffs. I'd love to know what you think is changing in this cycle. To what extent would you look at Dayforce or other companies and just say, "Structurally, to run it, we don't need as many employees because of AI automation"? There is a lot of, I would actually point to automation and AI as a key driver in getting people more productive. And needing to hire less, maybe needing fewer people in certain roles. You talk about entry-level developers. You probably do not need entry-level developers right now or as many of them. You talk about, I mean, you can go to people on customer support teams. Yeah. We have set up our teams with AI and allow them to reduce the workload and get ahead. Same thing with the implementation side of things on productivity. There is, across the board, finance, HR, every person can be more efficient at their job, which means we can do more with less. I think that's what you're seeing. We're certainly pushing that. I think you'll see us continue to push that and other companies continue to push that. It's a great note to end on. I think it ties everything together with this whole efficiency move and the growth move that you've got. I want to thank you, Jeremy, for taking the time to be here with us. Thanks for having me, Mark.