v3.25.1
Revenue and Revenue-Related Activity
 3 Months Ended
Mar. 31, 2025
Revenue from Contract with Customer [Abstract]  
Revenue and Revenue-Related Activity

10. Revenue and Revenue-Related Activity

Disaggregation of Revenue

 

 

 

Three Months Ended March 31,

 

 

 

2025

 

 

2024

 

 

 

(In millions)

 

Revenue:

 

 

 

 

 

 

Recurring services:

 

 

 

 

 

 

Dayforce recurring

 

$

323.1

 

 

$

282.4

 

Powerpay recurring

 

 

19.0

 

 

 

20.5

 

Other recurring

 

 

13.1

 

 

 

19.1

 

Float

 

 

55.3

 

 

 

60.7

 

Total recurring services

 

 

410.5

 

 

 

382.7

 

Professional services

 

 

71.3

 

 

 

48.8

 

Total revenue

 

$

481.8

 

 

$

431.5

 

Prior year amounts presented in the table above have been reclassified to conform to the current year presentation. The presentation was changed to enhance comparability with our peers and to better align reporting with how management assesses performance.

Contract Balances

In accordance with ASC 606, a contract asset is generally recorded when revenue recognized for professional service performance obligations exceed the contractual amount of billings for implementation related professional services. Additions to contract assets generally represent increases to professional services revenues, and reductions to contract assets generally represent reductions to recurring services revenue during the initial contract term. Contract assets expected to be recognized in revenue within twelve months are included within prepaid expenses and other current assets, with the remaining contract assets included within other assets on our condensed consolidated balance sheets. The changes in total contract assets were as follows:

 

 

 

Three Months Ended March 31,

 

 

 

2025

 

 

2024

 

 

 

(In millions)

 

Contract assets, beginning of period

 

$

100.2

 

 

$

89.0

 

Additions

 

 

22.9

 

 

 

22.4

 

Reductions

 

 

(22.6

)

 

 

(19.5

)

Foreign currency translation

 

 

0.5

 

 

 

(0.6

)

Contract assets, end of period

 

$

101.0

 

 

$

91.3

 

Deferred Revenue

Deferred revenue primarily consists of payments received in advance of revenue recognition. The changes in deferred revenue were as follows:

 

 

 

Three Months Ended March 31,

 

 

 

2025

 

 

2024

 

 

 

(In millions)

 

Deferred revenue, beginning of period

 

$

42.3

 

 

$

40.2

 

New billings

 

 

285.4

 

 

 

213.0

 

Acquired billings

 

 

—

 

 

 

8.6

 

Revenue recognized

 

 

(286.7

)

 

 

(215.4

)

Effect of exchange rate

 

 

(0.9

)

 

 

(0.9

)

Deferred revenue, end of period

 

$

40.1

 

 

$

45.5

 

Deferred Sales Commissions

In accordance with ASC 606, sales commissions paid based on the annual contract value of a signed customer contract are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions paid based on the annual contract value are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be ten years. Amortization expense for deferred sales commissions was $8.0 million and $6.3 million for the three months ended March 31, 2025, and 2024, respectively.

Transaction Price for Remaining Performance Obligations

As of March 31, 2025, approximately $1.28 billion of revenue is expected to be recognized over the next three years from remaining performance obligations, which represents contracted revenue for recurring services and fixed price professional services, primarily implementation services, that has not yet been recognized, including deferred revenue and unbilled amounts that will be recognized as revenue in future periods. Performance obligations that are billed and recognized as they are delivered, primarily professional services contracts that are on a time and materials basis, are excluded from the transaction price for remaining performance obligations disclosed above.