Shares of Dayforce (NYSE: DAY), a leading provider of human capital management (HCM) software, plummeted more than 11% in pre-market trading on Wednesday after the company reported mixed results for the fourth quarter and full year 2024.

While Dayforce posted solid revenue growth of 16.4% year-over-year to $465.2 million in the fourth quarter, driven by strength in its cloud recurring business, profitability took a hit due to higher costs and expenses, disappointing investors and leading to the sharp sell-off in the stock.

For the full year 2024, Dayforce's total revenue increased 16.3% to $1.76 billion, and cloud recurring revenue grew 19.1%. However, operating profit declined to $104.1 million from $133.1 million in fiscal 2023, and net income dropped to $18.1 million from $54.8 million a year earlier, weighed down by higher costs across various areas.

Adding to investor concerns, Dayforce's guidance for the first quarter and full year 2025 came in below Wall Street expectations. The company forecasted revenue between $421 million and $427 million for the first quarter, lower than analysts' estimates of $482.4 million. For the full year 2025, Dayforce projected revenue of $1.745 billion to $1.76 billion, missing analysts' expectations of $1.96 billion.

Despite the disappointing profit numbers and weak guidance, Dayforce highlighted strong customer wins and expansions during the quarter, including deals with a large retail cooperative, a global manufacturer, and a space exploration company. The company also emphasized its continued innovation in product offerings, including the launch of new AI-powered capabilities.