(Reuters) – Human resources software provider Dayforce on Wednesday forecast second-quarter revenue below market estimates, anticipating reduced spending on its payroll and HR services amid macroeconomic uncertainty.
Shares of the Minneapolis, Minnesota-based company fell 10% following the results.
Job growth in the U.S. was choppy in the first quarter, slowing more than expected in January before picking up pace in February, at a time when the labor market outlook was clouded by the country’s trade policy changes.
The murky economic backdrop has been particularly hitting small- and medium-sized businesses, forcing them to reassess their budgets.
Dayforce expects its total second-quarter revenue to be between $454 million and $460 million, below analysts’ average estimate of $465.5 million, according to data compiled by LSEG.
It forecast full-year revenue between $1.93 billion and $1.94 billion, in line with estimates of $1.93 billion.
The projections come in contrast with those of larger rival ADP, which raised its annual revenue forecast last week on the back of resilient enterprise demand and recent acquisitions.
Dayforce, formerly known as Ceridian, provides cloud-based payroll, workforce and human capital management software to enterprise clients globally.
The company in February announced a workforce reduction of about 5%, aiming to streamline its operations and achieve annual cost savings of about $65 million.
It posted total revenue of $481.8 million for the quarter ended March 31, compared with expectations of $476.7 million. Excluding float, the total quarterly revenue was $426.5 million.
Float revenue refers to the earnings or interest a company generates from holding cash or other liquid assets for a period before using them for their intended purpose.
The company earned 58 cents per share on an adjusted basis in the first quarter, compared with estimates of 55 cents per share.
(Reporting by Meghana Khare; Editing by Shreya Biswas)
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