Ceridian HCM Holding Inc. (CDAY) Q2 2021 Earnings Call Transcript

Ceridian HCM Holding Inc. (CDAY 0.71%)
Q2 2021 Earnings Call
Aug 04, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Jeremy Johnson

I'd like to welcome everyone to the Ceridian second-quarter 2021 earnings call. [Operator instructions] As a reminder, this conference is being recorded. On the call today, we have Ceridian's CEO, David Ossip; and CFO, Noemie Heuland. Before I hand the call over to David for some brief remarks, allow me to provide a disclaimer regarding forward-looking statements.

This call may include forward-looking statements about our current and future outlook, guidance, plans, expectations and intentions, results, levels of activities, performance, goals or achievements, or any other future events or developments. These statements are based on management's reasonable assumptions and beliefs in light of information currently available to us. Listeners are cautioned not to place undue reliance on such statements. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those set forth in such statements.

We refer you to our previous filings with the SEC for information regarding the significant assumptions underlying forward-looking statements and certain risks and other factors that could affect our future performance and ability to deliver on those statements. We undertake no obligation to update or to revise any forward-looking statements made on this call, except as may be required by law. The second quarter stockholder letter, earnings release, and Form 10-Q have been furnished or filed with the SEC and will be available on the SEC's EDGAR database in the U.S. and the SEDAR database in Canada as well as on the Ceridian Investor Relations website at investors.ceridian.com.

With that, I will turn the call over to David.

David Ossip -- Chief Executive Officer

Thanks, Jeremy, and good evening, everyone. Thank you for joining the call today. Before we go into Q&A, I want to spend a few minutes on some key points from the quarter. First, we had strong financial performance in the second quarter.

Our results were meaningfully above guidance across all metrics. Dayforce recurring revenue, excluding float revenue, grew by 30%. Total revenue, including Powerpay and Bureau, also grew by 30%. Cloud recurring gross margin was 72%, up 130 basis points year over year and up 200 basis points, excluding float revenue.

Based on our solid execution and increased confidence in employment levels at our customers, we are raising our guidance, and we now expect third-quarter Dayforce recurring revenue, excluding float revenue, to grow 31% to 32%; fourth-quarter Dayforce recurring revenue, excluding float revenue, to grow 32% to 33%; full-year total revenue between $1.008 billion and $1.018 billion; adjusted EBITDA between $155 million and $165 million. We were also pleased with our second-quarter sales performance, which was both above 2019 and 2020. We continue to see success in the enterprise and large enterprise segments, and we also saw solid traction in the major market segments. Our pipeline is strong, and we expect healthy sales performance to continue into the second half of 2021.

Second, employee count at our Dayforce customers began to show improvement compared to the last quarter. The average employee count per Dayforce customer is now larger than pre-pandemic levels, reflective of our move into enterprise and also better employment levels. This is expected to positively benefit our second-half revenue. Finally, we have seen strong market momentum for Dayforce Wallet.

We now have more than 600 customers signed with over 200 customers live on the Dayforce Wallet. Inside our top quartile of live customers, registration rates are averaging about 40% of eligible users. We are now seeing impressive traction and spending patterns further positioning the Dayforce card as top-of-wallet, go-to card for spending earned money. The average active wallet holder loads money onto their wallet five to six times per month at an average of approximately $120 below.

And in addition, an average active user transacts with the card approximately 24 times per month, almost every day. In summary, our execution was strong across segments and geographies, and our financial performance exceeded expectations. We are seeing significant momentum across all areas of the company. We also have reopened our offices in the U.S.

And I've been thrilled to see the level of engagement from our employees whom I have met in various town halls across the country. I have also been busy visiting our customers at their offices throughout the U.S. And some consistent themes have emerged: first, their desire to improve the well-being and productivity of their workforce; second, their challenges to maintain and unify the company culture in an environment where employees expect and do work from anywhere in a hybrid fashion; and finally, their difficulties attracting and retaining talent in a very competitive talent market. I left each of these in-person conversations with the conviction that we are uniquely positioned to address these challenges and help our customers be more competitive.

I would now like to hand it back to Jeremy to open the call up for questions.

Jeremy Johnson

Thanks, David. [Operator instructions] Thank you. The first question comes from the line of Siti Panigrahi from Mizuho. Siti, please go ahead.

Siti Panigrahi -- Mizuho Securities -- Analyst

Hey. Thanks for taking my question. It's really nice to see this 30% recurring revenue growth. You're back to the 30%, even guiding 30%-plus in the second half.

So I want to dig a little bit into your confidence level, mainly what's your expectation in terms of employment going into the second half, Q3, Q4. And also, specifically on the enterprise segment traction, what are you seeing there, mainly how are SIs helping you? And how does that change your activation or revenue recognition in the enterprise deals?

David Ossip -- Chief Executive Officer

Sure. So in terms of employee headwinds, in the quarter, we saw employee headwinds of $6 million in Q2, which was in line of what we had expected. For Q3, we expect a $3 million headwind, so an improvement of $3 million. And in Q4, we expect it to only be $1.5 million.

That's on the Dayforce side. On the Powerpay side, in Q2, we saw a headwind of $1.5 million. In Q3, we expect it to improve to a headwind of $1 million and, in Q4, a headwind of $0.5 million. Our traction, Siti, in the enterprise segment and as well in what we call major market two, which is the upper segment of the major market, remains very strong.

We saw both a nice increase in ACV year over year, and we also saw a significant increase in the volume of deals coming through the system as well.

Siti Panigrahi -- Mizuho Securities -- Analyst

OK. And then quick follow-up on the Dayforce Wallet side. It's good to see the traction there, now 200 customer live. So what could you do further to drive registration? Like, you talked about 40% in some instances, so what else -- what have we learned in last one year to drive further penetration? Do you have to rely on the HR of your customer, the HR department of your customer? Or can you do something else?

David Ossip -- Chief Executive Officer

Yes. It's a great question. There are two parts to that. The first is when we look at the top quartile of our customers, it's largely the customers who have been live the longest.

So what we're seeing is month over month, the registration rates of eligible employees at our customers go up. And as I mentioned, the top quartile, we're seeing numbers about 40%. The second piece that we actually see as well is that we do have specific initiatives on the product side that we're adding, things like referrals, so I can refer a friend, give $10, get $10, and that will come online in the next few months. We also have added a messaging component into the actual system that will allow us to, again, encourage people to use the system.

We've added enhancements on the direct deposit side to help people set up the Dayforce Wallet as their primary direct deposit account. And there are various other initiatives we're doing on the product side that we believe will continue to drive not only registration but usage of the card.

Siti Panigrahi -- Mizuho Securities -- Analyst

That's great. Thank you.

David Ossip -- Chief Executive Officer

Thank you.

Jeremy Johnson

Our next question comes from the line of Jared Levine, who's in place for Bryan Bergin, of Cowen. Jared, please go ahead.

Jared Levine -- Cowen and Company -- Analyst

Thank you. Has there been any change in the competitive environment, particularly against ADP or UKG this past quarter?

David Ossip -- Chief Executive Officer

Not really, Jared. I would say that it's been largely consistent since we've actually IPO-ed. As you know, we have two prime competitors in major markets. When we go upmarket into the enterprise and large enterprise segment, it shifts a bit more to the ERP side.

Jared Levine -- Cowen and Company -- Analyst

Gotcha. And then in terms of Dayforce Wallet, can you provide an update in terms of that revenue you're seeing per active user? Is it still pretty much an effective doubling of that PEPM with those active registered users?

David Ossip -- Chief Executive Officer

That's about right. Jeremy, have we provided the actual ARPU per account? I don't think so. Right?

Jeremy Johnson

We have not.

David Ossip -- Chief Executive Officer

But generally, it's in line that we can effectively see a doubling of the recurring revenue per active user.Jared LevineOK. Great. Thank you.

Jeremy Johnson

The next question comes from Daniel Jester at Citi. Dan, please go ahead.

Dan Jester -- Citi -- Analyst

Yes. Thanks, Jeremy. Good afternoon, everyone. I noticed that wallet was launched in Canada earlier this month.

Can you just help us think about the market in Canada versus the U.S.? I think there's clearly other competitors that are trying to do on-demand pay in the U.S. But help us think about what the opportunity in Canada could look like, please?

David Ossip -- Chief Executive Officer

Dan, it's looking at various similar. Right out of the gate, we've got very good traction with the wallet in Canada, which is really tremendous to see. We're seeing registration rates follow those what we're seeing inside the actual U.S. It's a slight difference in that, in the U.S., you do have an unbanked or low-banked population that's smaller in Canada.

But surprisingly, the registration, the desire to use the wallet doesn't seem to be any different in Canada versus the U.S. We had some great coverage with the actual launch. If you haven't seen, there's a piece on CTV News that I encourage you to look at. What was great about that is that they interviewed random people on the street to test the value of the actual wallet, and the results were really great.

Dan Jester -- Citi -- Analyst

Great. And then in the shareholder letter, there's a metric that incremental Dayforce recurring revenue per customer was up 8% year over year. If I go back a few quarters, I think that was like 13% or higher. So maybe just help me think about sort of what's driving the deceleration here because client growth, sort of live Dayforce customers, has been pretty steady.

But that metric seems to have come down. Sort of what's driving that, please? Thank you.

David Ossip -- Chief Executive Officer

It's mostly, Dan, overlapping. So we started to move into the enterprise segment. So we got a nice lift-up into the enterprise segment. So when we look at it at the moment, I think you need to look at it kind of on an ex float basis.

The number is actually 11% inside the quarter. So if I look at Q2 of 2021 to Q2 of 2020, it went from $93,656 to $103,757, which is up about 11% year over year.

Dan Jester -- Citi -- Analyst

I'll follow up off-line. Thank you.

David Ossip -- Chief Executive Officer

Thanks.

Jeremy Johnson

Next question comes from Mark Marcon of Baird. Mark, please go ahead.

Mark Marcon -- Baird -- Analyst

Hey. Good afternoon, and congrats on the strong results. I'm wondering, can you talk a little bit about some of the wins that you ended up having during the quarter. And I'm particularly interested in the international wins.

In particular, Coupa, can you talk a little bit about where you're seeing the international wins come from, what the pace of momentum is like and how you're feeling about international just in terms of being able to drive new sales?

David Ossip -- Chief Executive Officer

First, the growth on the global side is tremendous year over year, both in the number of deals that we're doing, the number of deals we're doing with the actual SIs, and the revenue side has gone up quite significantly year over year. In terms of the particular types of wins, obviously, we had Coupa, which is just a tremendous software company, I think everyone knows about that, operating on a global basis. What I love about that one is that it's great evidence that we are very competitive in the software industry as well. We had a great fitness company that I think everyone knows, everyone uses.

Everyone probably has a subscription to them on a global basis. I know that my wife and family have been supporting them for quite a long time. D&B also, obviously, a great win as well in financial services. And then we have the typical -- we had a great, I want to call them, environmental resourcing company out of Europe, which is a great name that we got, and typical retail and veterinarian types of clinics.

So we had a very nice and strong quarter when it came to winning globally and in the domestic markets.

Mark Marcon -- Baird -- Analyst

Who do you win Coupa from? Can you say?

David Ossip -- Chief Executive Officer

It was against the big ERP that you would expect.

Mark Marcon -- Baird -- Analyst

OK. Great. And then just in terms of the guidance, can you talk a little bit about some of the drivers with regards to the EBITDA guidance? You're obviously investing, there's obviously all sorts of different opportunities, where is the incremental investment coming?

David Ossip -- Chief Executive Officer

Yes. So let me just start by talking about EBITDA in the quarter because, as you can see, it came in meaningfully above the actual guide. In fact, we came in about $9 million I think, above the high end of our guide for the quarter on EBITDA. If you look at it from a dollar perspective, it was up 6.4% year over year.

We've kept the EBITDA number conservative because we are investing quite heavily in product. And if you read through the shareholder letter, we've highlighted a lot of the number of initiatives that we're actually doing. We're obviously doing a tremendous amount of investment in the Dayforce wallets as well. And we also are investing heavily in in-person marketing events, which we didn't have in the prior quarters.

We have the World Tour that's coming up that is really exciting. We're starting that in Vegas and New York, and then we'll follow up as soon as possible in the U.K. and in Singapore. We've been doing some smaller sales events and customer events in New York.

We'll have one coming up in L.A. in about two weeks' time as well. So a little bit more on the marketing spend. Noemie, anything that you would want to comment on?

Noemie Heuland -- Chief Financial Officer

I think you've covered it well. In Q2, we had obviously a beat in our adjusted EBITDA versus what we had guided, which is primarily as a result of the revenue beat that we saw. But we've continued to invest consistently, as we said before, in the areas that David just covered. Product and technology is a significant area of spend for us, as David mentioned, for the wallet as well as for the global expansion and native payroll capabilities.

So you would expect that to continue throughout the year as well as investments in sales and marketing to support the effort to the upmarket.

Mark Marcon -- Baird -- Analyst

Great. Thank you so much.

Jeremy Johnson

Our next question comes from Matt Coss at J.P. Morgan, who's in place for Mark Murphy. Matt, please go ahead.

Matt Coss -- J.P. Morgan -- Analyst

Hi. Good afternoon. David, in the shareholder letter, you mentioned core delivery metrics remained strong, and continued improvement with customer satisfaction scores was something that you saw. I assume things like no starts are probably smaller or perhaps nonexistent to begin with.

But to the extent that they do exist, can you talk about any headway you've made there and then perhaps, along with that, the trajectory of things like NPS scores, overall customer sets, growth in the number of customers willing to do references? Thank you.

David Ossip -- Chief Executive Officer

Yes. So, Matt, I'm going to have to ask you for clarity in the first part of your question. But the second part of your question, we've seen NPS scores go up materially year over year both on the implementation side and on the customer support side. We've got exceptionally strong scores now on both of those metrics.

In fact, I doubt that there's anyone in the industry who is as strong as we are when it comes to NPS scores. And as you know, NPS is a very honest metric. What was the first part? Did it have to do -- do you think -- did you use the word no starts?

Matt Coss -- J.P. Morgan -- Analyst

Yes. No starts. Just -- like I mentioned -- I assume you probably don't have any customers who sign and then just never end up going live. But I just wanted to see if that had been --

David Ossip -- Chief Executive Officer

It would be the absolute rarity for us to see that going. When I look at the service organization and when I look in the actual number of kickoffs and go-lives, they've done very, very nicely. And when I look at the accuracy of our services team, being able to predict when a customer is going to go live, it's very, very strong. I think most of you know that every other week, I meet with the services team.

We go through the company by different segments. Any account that has a potential, pushing more than 30%, we go deep into it. And if I look at it quarter over quarter, we're seeing tremendous accuracy coming out of the service team.

Matt Coss -- J.P. Morgan -- Analyst

OK. Great.

Noemie Heuland -- Chief Financial Officer

Can I add something on the services? I think we've seen the PS and other line coming back in growth territory this quarter after a couple of quarters of decline. So that's a pretty good evidence of them getting also more efficient in taking customer live. We have seen some increase in the professional services margin as well. And we had a higher share now of value-added services, which is customers purchasing our services post go-live, where we also have significant value add to help those customers taking the best ROI of the development and the implementation of the solution.

Matt Coss -- J.P. Morgan -- Analyst

OK. That's helpful color. And then maybe just on the better employment levels at your customers. If you think about the jobs lost at the peak of COVID and in March and April last year, what percentage of those jobs do you think are back? And then maybe if they're not all back, when do they come back?

David Ossip -- Chief Executive Officer

Matt, as I actually mentioned, when I look at the average employee count across our customer base, it's actually higher now than it was pre-COVID levels, both in Canada and in the U.S. So I would actually argue that the jobs have actually come back into the actual market. And when I look at the growth in employment levels, over the last 90 days alone, we're seeing tremendous growth, 4%, 5% employment growth across inactive and active employees at our customers.

Matt Coss -- J.P. Morgan -- Analyst

Got it. Thank you.

Jeremy Johnson

The next question comes from Michael Turrin at Wells Fargo. Michael, please go ahead.

Michael Turrin -- Wells Fargo Securities -- Analyst

Hey there. Thanks. Appreciate the time as always. On the international side, I want to just spend some time on Ascender.

Was that, the $23 million you reported, just for level-setting in line with what you're expecting? And then I think you've said the migration is expected to kick off here in the second half of the year. Can you just talk about the expectations? I know it's a multi-year journey but how we should think about the start there and the trajectory as you kick off those efforts.

David Ossip -- Chief Executive Officer

Yes. So I'll start, and I'll hand it to Noemie for a bit more color. The Ascender line was $22.9 million, broken down into Dayforce recurring revenue, which came in at $5 million versus $4.5 million that we had expected. Dayforce professional services came in at $1.2 million versus the $1.5 million that we had expected.

And Bureau came in at $16.7 million versus $15 million, but there were some purchase accounting adjustments that were inside that particular number. When you look at Q3 and Q4, we would expect, and included in our guidance, $4.5 million per quarter on Dayforce recurring revenue, $1.5 million on Dayforce professional services, and $15 million on the actual Bureau side. The migration begins, as we mentioned, in the second half of the year. But remember that it will take time to activate those accounts, so you aren't going to see the impact of that really until 2022.

One other data point that we did call out inside the shareholders' letter is that when we look at RITEQ, which we purchased about two years ago, the Dayforce revenue that we have sold to those accounts now exceeds the total revenue of RITEQ at the time of purchase. So it's really a great data point about the strategy that we can position Dayforce. And as we do that, we get the upsell of the talent modules, the workforce management modules, which obviously increase the revenue that we can expect from those customers. Noemie, anything you would add?

Noemie Heuland -- Chief Financial Officer

No. I think that's -- you covered it well.

Michael Turrin -- Wells Fargo Securities -- Analyst

And just the wallet engagement stats, those are tremendous. We keep seeing the bread crumbs of progress there. Any color you can add on the types of transactions you're seeing? That average load metric also looks like a pretty compelling value proposition. So can we just talk about the engagement levels you're seeing and the potential for monetization there as we think about potential impacts to the model going forward?

David Ossip -- Chief Executive Officer

Yes. So the engagement numbers are great. As I mentioned, in the top quartile, about 40% registration rates across the clients which, I would argue, is a bit ahead of what we had expected. The second part is the loads that we're seeing have gone up slightly, but they're effectively 6x per month and at over $120 per load.

And then on the spend time, we're seeing the cards be used almost daily. The average usage of the card is in excess of 24 times per month. The typical types of transactions is what you would expect. They are grocery purchases, convenience stores, gas, ATM withdrawals, which is the majority of the transactions.

In terms of further ways of monetizing that, we are going to launch a cash-back program with a particular partner where there is a revenue share. And we believe that could add about 0.9% of the actual spend, if you like, into revenue. There are other programs that we are looking at, things like pay now -- sorry, buy now, pay later programs that I think were further added. And then as we get into more of the financial wellness side, is really a tremendous opportunity for us.

Thanks, Mike. You're actually muted. I'm not sure if you're aware.

Michael Turrin -- Wells Fargo Securities -- Analyst

No. That's great. Thank you very much. I appreciate the color.

David Ossip -- Chief Executive Officer

Great. Thanks.

Jeremy Johnson

The next question comes from Brad Clark, who's in for Keith Bachman, at BMO.

Brad Clark -- BMO Capital Markets -- Analyst

Hi. Thank you for taking my question. I wanted to follow up on the international trends. And specifically, could you talk more broadly about the size of the opportunity that exist now in the ANZ, greater APAC area with Ascender beyond the installed base? And then broader than that, is there any differences in demand appetite for HCM deployment between the international market, including Europe versus U.S.

and Canada? Any comment you could make on sort of more global trends that you're seeing. Thank you.

David Ossip -- Chief Executive Officer

So, Brad, right of the bat, we're seeing very strong growth on the global side. If I look at the number of deals that we have in pipe today for global deals versus last year, or if I look at from a deployment perspective, the number of countries we currently are deploying in now versus what we were deploying in about a year ago, they're up in double digits. So we're talking really tremendous growth and tremendous opportunity coming through. In terms of ANZ, which is actually APJ as well, there are 1,500 customers we have between Excelity and between Ascender.

All of them, obviously, will lead to Dayforce. When we move to Dayforce, we obviously position the entire talent suite as well as the workforce management and payroll, which does give us a nice lift in revenue. And as I mentioned, with RITEQ, I think we've been able to prove that out that, as we migrate, a single application, like in RITEQ's case, it's workforce management only, so we sell payroll, we sell talent to the workforce management accounts. In the case of Excelity and in the case of Ascender, it's now selling workforce management, core HR, and talent components onto that.

We see a nice lift in revenue. We also are seeing tremendous benefit from having the APJ assets on our -- on how attractive we are on a global basis to sell with companies that have operations around the world. So we're very optimistic about global. And we also do believe it is a differentiation of us relative to both the ERPs and the other HCM providers.

Brad Clark -- BMO Capital Markets -- Analyst

Great. Thank you.

Jeremy Johnson

Our next question comes from Matthew Pfau of William Blair. Go ahead, Matthew.

Matthew Pfau -- William Blair -- Analyst

Yes. Thanks. Just wanted to ask on the partner ecosystem. So you now have relationships with some very large partners.

How do you go about building on and expanding these relationships specifically to get them to start influencing more deals? And then the second one on the partner ecosystem is that you did mention in the shareholder letter that you saw continued growth in partner prime deals. But are these a meaningful component of the pipeline yet?

David Ossip -- Chief Executive Officer

So, Matthew, to answer your first question, I think there are three stages that I've discussed beforehand. The first is you have to train the SIs, so they have resources available. The second is you have to allow them to prime the actual implementation so that they can take the customers live and get references. And once you do that, I think you do get the lift in pipeline.

So the majority of pipeline lift, I think we're still probably a quarter or two away as we need to complete the implementations -- or the SIs have to complete the implementations. We are seeing some benefit already in terms of deals where we are seeing a positive impact of the SI influence coming through. But another point that I think I'd like to make as well is that we are operating in a tight talent market. And the fact that we now have 19 SIs that have capability to implement is helping us because it does allow us to continue to grow and scale the company without having to hire people directly.

And I think that in retrospect, it was a fantastic move to be able to build out a bench of very capable people across a range of very accomplished organizations.

Matthew Pfau -- William Blair -- Analyst

Thanks. That's all I have. Thank you.

Jeremy Johnson

All right. The next question comes from Samad Samana of Jefferies.

Samad Samana -- Jefferies -- Analyst

Hi, David. Good to see you. Thanks for taking my questions. So as you can see, I'm no longer in my own home.

I would love to ask a couple of questions. Maybe first, just that 0.9% rev share that you mentioned for wallet, was that when you start to rebate back? Or were you saying 0.9% -- or sorry, 90 basis points, is that the take rate that you're getting on Dayforce Wallet transactions today? Just curious what you're saying.

David Ossip -- Chief Executive Officer

Yes, so we still are about to launch the actual partnership. But generally, the way it works is that the employee gets a cash-back of about 4%, 5%. The network gets about 4%. We get about 40% to 50% of that revenue share.

And so that's where that 90 basis points come from.

Samad Samana -- Jefferies -- Analyst

OK. Great. And then maybe just one more housekeeping question. The Ideal acquisition, I don't know if that contributed into revenue in the quarter.

I know it closed in April. I'm curious if that contributed to 2Q and, if so, which revenue segment it falls into.

David Ossip -- Chief Executive Officer

Sure. I'll give that one to Noemie.

Noemie Heuland -- Chief Financial Officer

Yes. It's a small contribution for the second quarter. Remember, it was primarily an acqui-hire where we got a lot of talented individuals, various experts in machine learning development capabilities as well as artificial intelligence. So that's the priority reason why we made this acquisition, but there's a slight -- a couple of hundred thousand dollars in the Q2 number, to be precise.

Samad Samana -- Jefferies -- Analyst

Great. And then maybe zooming out a little bit, David, it sounds like the bookings in 2Q were nicely up over the prior two years' second quarters. I'm curious, when you think about the new customers that you've been adding, how many of those were in the pipeline prior to COVID? And I guess as I think about the current pipeline, how many are just new to sort of from a pipeline perspective where they're just completely new leads? And how is the new pipeline generation looking?

David Ossip -- Chief Executive Officer

So I don't actually have a number of the company we're in there prior to -- pre-COVID. Largely, I would think it actually depends on the actual segment. So if you're talking about the large enterprise, then it's likely that they were around before because it takes a while to go through those. Now if I'm talking about enterprise, major market 2 or major market one, so it goes large enterprise, enterprise -- sorry, MM1, MM2, the major market deals typically move much quicker.

Most of what we are seeing, I would argue, is relatively new. As you know, we've done a tremendous number of virtual events that really have led to the build-out of the pipeline. As we've been saying for the last number of quarters, the pipeline is strong. As I mentioned in the very opening, we've seen an increase in volume of deals as well.

So if I look at major market two, and I look at the enterprise space, those particular markets seem to be moving very, very quickly relative to last year, and we've seen really, really healthy growth in those segments.

Samad Samana -- Jefferies -- Analyst

Great. Very helpful. And then I apologize for the housekeeping questions, but maybe just one last one. I know that, historically, the company has invoiced on go-live, and I think that the goal is to get more customers to start invoicing on activation.

I was just wondering maybe, Noemie, how that trend is going and if -- how should we think about that flowing through the Dayforce recurring line over time?

Noemie Heuland -- Chief Financial Officer

Yes. We've seen a significant attach rate on what we call PEPM at provisioning for our new sales. It's actually in line with what we had expected and modeled ahead of the year, which is great because it was a new business model for us. And I think we're pleased with what we're seeing in terms of execution and customer appetite to go and sign those contracts with PEPM at provisioning.

We expect that number to be significantly higher next year. So it's still ramping up as any new program. And the benefit of it is -- actually, what we've observed is customers with paying recurring revenue before go-live actually getting more passionate about getting live on time, as you would expect, and actually it helps our professional services delivery team as well. So that's -- to answer your question, it's really been a program that's aligned with what we expected.

The attach rate is strong, and we expect that revenue to be more material next year, and we'll start disclosing more of that.

Samad Samana -- Jefferies -- Analyst

Great. Thank you. As always, great to see you all and nice to see the strong numbers. Take care.

Jeremy Johnson

Thanks, Samad. Next question comes from Alex Zukin at Wolfe.

Alex Zukin -- Wolfe Research -- Analyst

Hey, guys. Thanks for taking the question. So, David, first, maybe for you, if you think about the bookings mix, you just talked about bookings growth being pretty solid in Q2. I want to ask the question around if you think -- if you take the demand environment that you're seeing in the market right now and you look at the proportion of bookings first half versus second half and compare that to kind of traditional pre-COVID-19 periods, is there any more or less concentration of bookings? Like, is it a more back-end loaded year this year than usual kind of coming out from the pandemic, seeing some of these normalizations take time? I want to start there.

David Ossip -- Chief Executive Officer

Alex, generally, the linearity in our business is that you are more swayed toward H2, in particular Q4. So I think you'll see something similar again in this particular year. In terms of the recovery, it's happening quicker in certain segments, particularly in the enterprise segment and in the major market two segment. That's where we've seen the highest volume of actual deals coming through.

When I look at the pipeline, it's strong across the board.

Alex Zukin -- Wolfe Research -- Analyst

Got it. And then for Noemie, if I think about the numbers themselves, if I look at Dayforce recurring, ex float, constant currency, ex-Ascender, ex-employee tailwinds, what's the right way to think about that growth, both not in just the second half guide that you're putting up but the durability given the bookings strength, the durability? Like, what's the right way for us to think about that net new normal now that the base has roughly started to normalize?

Noemie Heuland -- Chief Financial Officer

I think if you start to -- I mean, there's different ways you could slice and dice the number. I would argue that Ascender contribution is actually key. We've acquired those customers, and there's a plan to start cross-selling to those customers and upselling and migrating them to Dayforce. So I think that's a real -- I wouldn't necessarily back those numbers out of the normalized growth going forward.

I think we continue to see employment levels coming up. We expect to end the year pretty close to what we were pre-COVID. And Powerpay also has been significantly improving over the past few months, and we expect that to continue as well. So I think we'll communicate guidance for next year and expect growth rates for Dayforce recurring in due course.

But I wouldn't necessarily back out Ascender and the like because that's really part of our overall strategy. And we start to see customers of the existing Ascender base actually buying some other modules, and we expect that to continue going forward.

Alex Zukin -- Wolfe Research -- Analyst

Understood. And then, David, maybe finally, one for you. I mean we've seen both some commentary around competition. Paycom is moving upmarket increasingly on their call yesterday.

You've had a new IPO. And there's -- UKG is still in the market. What's the right way to think about the competitive dynamics in the market right now, how they're different, similar and where you're either seeing incremental opportunity for share gains or sales cycles taking longer?

David Ossip -- Chief Executive Officer

We don't really see a lot of Paycom inside the market. And I think we rarely, if ever, see the guys at Paycom. So I don't think we've seen any particular change. Obviously, as we have gone upmarket, we do see the ERPs more than we have beforehand.

They're probably up the most. In terms of competitive win rates, they are still very healthy. They haven't changed. And I think when you look at the actual product, we're quite differentiated in so many different ways that the value prop that we can offer the market causes the win rates.

Alex Zukin -- Wolfe Research -- Analyst

OK. Thank you, guys. I'll pass the line.

Jeremy Johnson

Thank you. Next question comes from Arvind Ramnani from Piper Sandler. Arvind, please go ahead.

Arvind Ramnani -- Piper Sandler -- Analyst

Hi. Thanks for taking my question. I had a broader-level question. With the expected stimulus sort of looking to expire in September, it feels like hiring is going to ramp up quite aggressively because I see a lot more kind of openings for jobs as opposed to kind of people willing to get back to work.

Do you expect revenue to really kind of accelerate as you exit this year and into next year, assuming the stimulus basically expires?

David Ossip -- Chief Executive Officer

Look. We've given guidance for the remainder of the year. And you can see that the pattern is Q3 goes up and then Q4 goes up on Q3 as well. We haven't completed our SRP yet for 2022, but I would argue there are still tailwinds when it comes to employment.

When we look across our customer base, and we can obviously monitor the number of open job postings that they have and the time to close those postings, we definitely are seeing that go up. One other data point that I'll probably refer you to, if you look at the average float balance of our customers, the average float balance is up 27% year over year, which is usually indicative of the size of the payrolls across our customers. So another good kind of data point that the economy is coming back very strong.

Arvind Ramnani -- Piper Sandler -- Analyst

Terrific. And then if I look at the float balance last year, are you able to share, at least kind of ballpark, like how much of it was down? I mean, you're up 27% this year versus last year. But last year versus the year before was --

David Ossip -- Chief Executive Officer

Sure. So if I actually look at the float balances, if I go to Q2 of 2019, it was $3.4 billion. In Q2, it obviously came down to $2.98 billion. In this year, it is $3.8 billion.

So it is still quite significantly ahead of the volumes that we saw in Q2 of '19. And you can further go back a year before. If you look at Q2 of '18, it was $3.35 billion. So there is definitely a significant increase in the float balance in Q2.

And we also saw, if you remember, an increase in the float balance in Q1. So it's a very good sign that the economy is coming back strong.

Arvind Ramnani -- Piper Sandler -- Analyst

Thank you very much.

Jeremy Johnson

Next question comes from Stephanie Price at CIBC. Stephanie, go ahead.

Stephanie Price -- CIBC -- Analyst

Hi. Good evening. After selling virtually for about 18 months, it sounds like you're moving back to a little bit in-person. Just curious about how you're thinking about sales and marketing and if you're looking at any changes in the sales structure, just given remote work over the last little bit.

David Ossip -- Chief Executive Officer

So, Stephanie, I've started actually traveling quite a bit. We did a client event in New York a few weeks ago. And to kind of give you an idea, normally, when you do these client dinners, they go from like 6:00 to 8:39. This went from 6:00 to 12:30 a.m.

So I would say there's just a huge pent-up demand for people to get out and to interact again. I did two town halls. I did one in Tampa, and I did one in Minneapolis. And the energy inside the town halls was just wonderful to see, just people smiling and happy to be together.

Next week, I'm in Chicago, doing another kind of departmental town hall, and then I'm going off to visit two clients as well in kind of the Midwest West area. And I'm obviously very eager for that. And then a week or so after that, I'm in the West Coast, going to San Fran and LA. In L.A., we have a nice client event.

I also participated in a recent user group. And so the user group is a group that's run outside of Ceridian. They run it from base camp. I was asked to kind of just join in the Q&A section.

And at the end of that, I asked the question. I asked if the user group would like to get together in person if we were to help sponsor it as part of the World Tour. And we had 141 customers respond that they'd like to attend in person. So the world is definitely moving to getting out in front of people, developing relationships, building on interactions.

But I would say that we are still going to be operating in a hybrid world where we can get kind of the best of virtual types of events, virtual types of selling. So a lot of digital types of programs and such mixed together with the right experiences for in-person events and such.

Stephanie Price -- CIBC -- Analyst

That's helpful color. And then maybe a bit about the international strategy in EMEA and how we should think about the build-out there and how that should translate into larger global wins.

David Ossip -- Chief Executive Officer

So EMEA is going really tremendously. As I did mention, two metrics that we do track internally is just the bookings year over year and also just the number of active projects, the number of countries that we're active in, and they both are up really considerably year over year. In EMEA, we've got a very good sales team. In terms of kind of major countries, as you know, we have the U.K.

and we have Ireland and we're also about to launch in Germany. We have resources on the ground now in Germany in the products and technology side, the services side, and the sales side. So we're making quite a lot of traction over there. We're actually very encouraged not only by the sales but by the go-live traction.

In the quarter, we had two nice go-lives of very large global accounts headquartered out of EMEA as well.

Stephanie Price -- CIBC -- Analyst

Great. Thank you very much.

Jeremy Johnson

Great. The next question comes from Raimo Lenschow of Barclays. Raimo, go ahead.

Raimo Lenschow -- Barclays Investment Bank -- Analyst

Hey. Thanks for squeezing me in, and congrats from me as well. Two quick questions. First on, if I look at the client wins you had this quarter and discussed, it looks really impressive.

It looks like you're moving nicely upmarket. Can you talk a little bit about -- like, the pandemic almost helped you a little bit because it gave you more time to build out and kind of get kind of more visibility higher up, and it's kind of -- sorry to say that, but I see that in the accounts that you're seeing there with Coupa, et cetera. Can you talk a little bit of what you see in terms of pipeline building there and how the vendors are seeing you against the competitors? And then I had one follow-up on the wallet, please.

David Ossip -- Chief Executive Officer

Look, Raimo, it's not by chance. We put in place a strategy to go upmarket starting in 2018. We made changes to the way that we actually sell. As you know, we verticalized.

We brought in value advisory people who are able to kind of communicate the ROI and get ahead of the RFI/RFP process. We have invested and continue to invest very heavily in the SI channels who do influence those particular types of deals. And we brought in great people into the organization, particularly in sales leadership, that know how to communicate with the SIs and know how to communicate as well with the large enterprises. One of the areas that's driving the wins we're seeing upmarket is our global capability that, if you compare us with the big core HR, workforce management payroll on a global basis, we have a lot more to offer and the solution is much better architected than others in market.

And so that does help us. When I look at the enterprise segment, in the upper end or major market, we're also seeing tremendous success in the talent side. So when we brought in Joe and we brought in a number of other people, also very, very strong in talent and in data and in AI, that's now begin to show through the actual product and show through the product road map, which further has allowed us to move upmarket and to also continue selling to the base.

Raimo Lenschow -- Barclays Investment Bank -- Analyst

Yes. And do you see -- the second question is, do you see an increased priority now post-pandemic that people realized, OK, the front office was probably kind of already a lot more cloud-native, more modernized where the back office are still sitting in kind of old processes, old payroll. Do you think that now post-pandemic, we will see an extra push of people starting to modernize a little bit more?

David Ossip -- Chief Executive Officer

Well, there are a couple of things. A partially modernized system doesn't work. If I have five different talent components and each is on a different cloud platform, the chances are I can't have the correct experiences or get access to data, which I need to run the business. So the fact that we now have very strong talent, and you see that reflected through some of the acquisitions like Ideal that we've done, which really allow us to do things in a very -- I don't like using the word modern anymore because I think modern is overplayed.

But it's really making use of data and user experience to do it correctly. And so that is driving a lot of it. On the compliance side, that's still a -- it drives a lot of business because it's not so much as whether it's back office or front office, it's really can you do the calculations correctly, can you pay people correctly, are you off-site from a regulatory perspective. And there, we remain very, very strong.

And especially when you start to work with global workforces, it gets even more complicated and we can simplify that for customers.

Raimo Lenschow -- Barclays Investment Bank -- Analyst

OK. Congratulations.

David Ossip -- Chief Executive Officer

Thank you.

Jeremy Johnson

The next question comes from Scott Berg at Needham. Scott, go ahead.

Scott Berg -- Needham & Company -- Analyst

Hi, everyone. Congrats on the good quarter, and thanks for taking my questions. I have two here. I guess, first of all, David, I'd like to follow up with the question -- or follow up on the question, Raimo, just asked about your upmarket activities and success.

Our industry work over the last quarter has pretty consistently talked about, how the down market activity is really robust in line with pre-pandemic levels. But kind of that mid-market customers with, I don't know, a couple of thousand employees and larger to the enterprise, is a little bit more sluggish than that downmarket opportunity. I guess help us understand maybe what you're seeing there. Is your increased deal flow maybe as a result of you just getting involved with more deals with some of the partners and other areas, like you just mentioned on Raimo's question? Or do you think the actual volume of deals is truly higher today than maybe it was a year ago?

David Ossip -- Chief Executive Officer

So, Scott, we actually haven't seen that. In fact, I think we've actually seen the reverse. And we don't really play in the small business in the U.S. So I can speak about the small business in Canada, and we have seen robust growth over there.

In fact, if I look at the Powerpay numbers, they're up quite significantly versus what we had expected. When I look at global, which includes obviously the U.S. and Canada as well as Europe and APJ, we've seen tremendous sales growth in major market 2 and in the enterprise segment. And so that's both on a dollar basis and on a volume of deal basis.

So it's a little bit different, I think, what we're seeing, I think, versus I think what your research is showing.

Scott Berg -- Needham & Company -- Analyst

Got it. That's helpful. And then kind of a housekeeping question for Noemie. Your guidance has Ascender revenues of $4.5 million, as you mentioned, in Q3 and Q4 in the Dayforce line item.

Maybe help us understand why you're guiding those revenues to be a little bit lower than what you actually realized in Q2? I know it's only $0.5 million, obviously, which isn't a big, material number. just trying to understand the dynamic by that. And then I guess the Bureau revenues are also guided a little bit less than what you saw in the quarter.

Noemie Heuland -- Chief Financial Officer

Yes. It's really pretty consistent. I mean, we said $4.5 million per quarter, and we had in Q2 a little bit of uptick due to purchase accounting adjustments as we talked about before. So that's really -- I think the message is consistent with what we've said before, both on the cloud recurring and on Bureau as well.

So what happened in Q2, you had a bit of a purchase accounting adjustments, but the rest of it is consistent with what we said before.

David Ossip -- Chief Executive Officer

Scott, one thing I would add is that Ascender also had a good sales quarter. So they came in really, really nicely with the Ascender products that we're still selling in market.

Scott Berg -- Needham & Company -- Analyst

Got it. Helpful. Thanks for taking my questions.

Jeremy Johnson

All right. Well, that was our final question for the evening. But before we close out the call, I'll hand it over to David for some final remarks.

David Ossip -- Chief Executive Officer

Great. Well, thanks, everyone, really, really appreciate it. It's with mixed emotion that I'm sharing with you that, after nearly 10 years, Jeremy is leaving Ceridian. He's taken a CFO role at a very fast-growing company that's IPO-bound.

From my perspective, a bit mixed. But what I would say, it's a great opportunity for a really, really great guy. And I really want to thank Jeremy because I, as you know, have really enjoyed working with Jeremy over the last number of years. Jeremy's last day is August 6.

And so over the past month, we transitioned his IR responsibilities to Erik Zimmer. He's someone that I know most of you are very familiar with. Erik and I have worked together for at least 10 years very, very closely. He's our EVP of corporate development.

Erik, do you want to say a few words to maybe introduce yourself?

Erik Zimmer -- Executive Vice President and Head of Mergers and Acquisitions

Yes. Sure. Thanks, David. I'll be short and sweet, but looking forward to working with all the folks that I already know that are out there and definitely looking forward to making new acquaintances and relationships and working on a new challenge.

So thanks, David.

David Ossip -- Chief Executive Officer

I appreciate it, Erik. And, Jeremy, just a huge thanks and, obviously, wishing you a tremendous success, which I'm sure you'll be very, very successful. And as you know, any organization is really lucky to get you. So just handing it back to Jeremy, any final words before we move on to the analyst calls later.

Jeremy Johnson

No. Thank you very much, and it's great working with everyone.

David Ossip -- Chief Executive Officer

Thanks, everyone.

Duration: 55 minutes

Call participants:

Jeremy Johnson

David Ossip -- Chief Executive Officer

Siti Panigrahi -- Mizuho Securities -- Analyst

Jared Levine -- Cowen and Company -- Analyst

Dan Jester -- Citi -- Analyst

Mark Marcon -- Baird -- Analyst

Noemie Heuland -- Chief Financial Officer

Matt Coss -- J.P. Morgan -- Analyst

Michael Turrin -- Wells Fargo Securities -- Analyst

Brad Clark -- BMO Capital Markets -- Analyst

Matthew Pfau -- William Blair -- Analyst

Samad Samana -- Jefferies -- Analyst

Alex Zukin -- Wolfe Research -- Analyst

Arvind Ramnani -- Piper Sandler -- Analyst

Stephanie Price -- CIBC -- Analyst

Raimo Lenschow -- Barclays Investment Bank -- Analyst

Scott Berg -- Needham & Company -- Analyst

Erik Zimmer -- Executive Vice President and Head of Mergers and Acquisitions

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