What happened
Shares of Ceridian HCM Holding Inc. (CDAY -3.17%), a human capital management software company, fell today after its fourth-quarter results fell short of some analysts' estimates.
The tech stock fell by as much as 12.9% today and was down 10.1% as of 12:57 p.m. EST.
So what
Ceridian reported total revenue for the fourth quarter of $222.8 million, an increase of less than 1% from the year-ago quarter. But it was the company's earnings that likely disappointed investors. Ceridian's non-GAAP earnings per share of $0.09 fell short of the high end of analysts' consensus earnings estimate of $0.11 per share.
Image source: Getty Images.
Ceridian CEO David Ossip said in a press release, "Overall, despite the economic headwind from the pandemic, our execution and financial performance exceeded expectations."
The company said that its recurring cloud services gross margin increased to 70.9%, up from 68.8% in the year-ago quarter. Additionally, Ceridian ended 2020 with 4.2 million global active users on its Dayforce platform, up from 3.9 million in 2019.
Now what
Management issued revenue guidance for the first quarter of 2021 in the range of $220 million to $224 million, on a GAAP basis. If the company's sales hit the midpoint of guidance, Ceridian's revenue will be near breakeven compared to the first quarter of 2020.
The company's leadership also anticipates additional hurdles in the coming year, saying that "... there will be a continued COVID-19 pandemic employment headwind to our revenue" in 2021.
