01—Abstract
Summary
Summary of the 10-K filed March 14, 2018. Cited figures are marked; the original filing is the authoritative source.
Workday, Inc.'s 2018 10-K report highlights a company experiencing substantial growth in its cloud-based enterprise applications for finance and human resources.
The company's strategy centers on continuous innovation and customer satisfaction, delivering major feature releases twice yearly. Workday's cloud architecture and multi-tenant approach enable rapid deployment of new features, offering customers the latest technology without significant upgrade costs. The company has successfully expanded its customer base to over 2,100 organizations, with no single customer accounting for more than 10%a of revenue, indicating a diversified client portfolio.
Financially, Workday reported significant year-over-year revenue growth, driven primarily by its subscription services. Despite this growth, the company continues to invest heavily in product development and sales and marketing, leading to operating losses.
However, the company demonstrates strong operational cash flow and is focused on long-term growth and market expansion, particularly in international markets. The report also touches upon significant financing activities, including the issuance of convertible senior notes, and details the company's market position and competitive landscape, acknowledging strong competition from established players like SAP and Oracle.
02—Key points
Key Highlights
- Workday reported total revenues of $2.14 billion for fiscal year 2018, a 36% increase over the previous year, driven primarily by subscription services revenue growth of 39%.
- The company maintains a diversified customer base, with over 2,100 customers and no single customer representing more than 10% of revenues in fiscal 2018.
- Workday is heavily investing in product development, with expenses totaling $911 million in fiscal 2018, underscoring its commitment to innovation and expanding its application suite.
- The company generated positive operating cash flow of $466 million, demonstrating the underlying strength of its business model.
- Despite revenue growth, Workday reported an operating loss of $303 million for fiscal 2018, reflecting significant investments in sales, marketing, and product development.
- Workday raised $1.15 billion through the issuance of convertible senior notes in September 2017, strengthening its financial position.
- The company's strategy involves continuous innovation with bi-annual major feature releases and weekly updates to its cloud applications.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed March 14, 2018Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $2.14B$1.57B | +36.1% |
| R&D Expenses | $910.58M$680.53M | +33.8% |
| Operating Expenses | $2.45B$1.93B | +26.9% |
| Operating Income | -$303.22M-$353.09M | +14.1% |
| Interest Expense | $44.55M$30.10M | +48.0% |
| Net Income | -$321.22M-$384.70M | +16.5% |
| EPS (Basic) | $-1.55$-1.94 | +20.1% |
| Shares Outstanding (Basic) | 207.77M198.21M | +4.8% |
05—Questions
Frequently Asked Questions
What is Workday's core business and strategy?
Workday provides cloud-based enterprise applications for finance and human capital management (HCM). Its strategy focuses on delivering innovative, adaptable, and user-friendly applications through a cloud delivery model, emphasizing customer satisfaction and continuous feature updates.
How did Workday perform financially in fiscal year 2018?
Workday experienced significant revenue growth, reaching $2.14 billion, a 36% increase from fiscal year 2017, largely due to a 39% rise in subscription services revenue. However, the company reported an operating loss of $303 million, reflecting substantial investments in growth initiatives.
What are the key risks facing Workday, according to the filing?
Key risks include cybersecurity threats and data breaches, reliance on third-party data center providers, intense competition from established software vendors, the need to manage rapid growth effectively, and potential disruptions from product development delays or failures. The company also faces risks related to its dual-class stock structure and potential volatility in its stock price.
How does Workday manage its debt obligations?
Workday has outstanding convertible senior notes totaling $1.49 billion as of January 31, 2018. The company has entered into related note hedge and warrant transactions to mitigate potential dilution from conversions. The majority of these notes are due in 2020 and 2022.
06—Continue