Shares of Dayforce Inc. (DAY) plunged 9.55% in pre-market trading on Wednesday following the release of the company's first-quarter 2025 earnings report. The significant drop in stock price came despite solid Q1 results, as investors focused on weaker-than-expected second-quarter revenue guidance.

Dayforce, a global leader in human capital management (HCM) technology, reported strong first-quarter results with total revenue of $481.8 million, up 11.7% year-over-year, and adjusted earnings per share of $0.58. The company's Dayforce recurring revenue, excluding float, grew by 14.4% to $323.1 million, or 15.9% on a constant currency basis.

However, the positive Q1 performance was overshadowed by Dayforce's second-quarter revenue guidance, which fell short of analysts' expectations. The company projected Q2 revenue between $454 million and $460 million, below the consensus estimate of $465.5 million according to LSEG IBES data. This discrepancy appears to be the primary driver behind the stock's pre-market decline.

Despite the near-term concerns, Dayforce maintained its full-year 2025 revenue guidance of $1,929 million to $1,944 million, suggesting confidence in its long-term growth prospects. The company's CEO, David Ossip, emphasized strong sales momentum and the continued resonance of Dayforce's value proposition across various industries and organization sizes.

The market's sharp negative reaction to the Q2 guidance indicates that investors are prioritizing short-term performance expectations over the company's full-year projections. This sell-off may present an opportunity for long-term investors who believe in Dayforce's growth potential and its position as a leader in the HCM technology sector.