10-KPeriod: FY2021

Workday, Inc. Annual Report, Year Ended Jan 31, 2021

Filed March 2, 2021For Securities:WDAY

Summary

Workday, Inc. (WDAY) filed its Annual Report on Form 10-K for the fiscal year ended January 31, 2021. The company continued its growth trajectory, with total revenues reaching $4.3 billion, a 19% increase year-over-year, primarily driven by a 22% rise in subscription services revenue. Despite strong revenue growth, Workday reported a GAAP operating loss of $249 million, an improvement from the prior year's loss of $502 million. This improvement was partly attributed to operational efficiencies and cost moderations implemented in response to the COVID-19 pandemic, including reduced travel expenses. The company highlighted its continued investment in product development and expansion into global markets. Workday also noted its strong balance sheet with $3.5 billion in cash, cash equivalents, and marketable securities as of January 31, 2021, providing ample liquidity. Key risk factors highlighted include the ongoing impact of the COVID-19 pandemic on economic conditions and business operations, cybersecurity threats, competition, and the ability to retain key employees.

Financial Highlights

50 data points
Beta

Revenue

$4.32B

Net Income

-$282.43M

-6.5% Net Margin

EPS (Diluted)

$-1.19

Total Assets

$8.72B

Cash & Equivalents

$1.39B

Free Cash Flow

$1.27B

Financial Statements
Beta
Revenue$4.32B
R&D Expenses$1.72B
Operating Expenses$4.57B
Operating Income-$248.60M
Interest Expense$68.81M
Net Income-$282.43M
EPS (Basic)$-1.19
EPS (Diluted)$-1.19
Shares Outstanding (Basic)237.02M
Shares Outstanding (Diluted)237.02M

Key Highlights

  • 1Total revenues increased by 19% to $4.3 billion in fiscal year 2021.
  • 2Subscription services revenue, the primary revenue driver, grew by 22% to $3.8 billion.
  • 3The company reported a GAAP operating loss of $249 million, an improvement from $502 million in the prior year, indicating progress in managing expenses.
  • 4Workday's non-GAAP operating margin improved significantly to 20.1% from 13.4% in the previous year, demonstrating enhanced operational efficiency.
  • 5The company maintained a strong liquidity position with $3.5 billion in cash, cash equivalents, and marketable securities.
  • 6Workday continues to invest heavily in product development, with R&D expenses growing 11% year-over-year.
  • 7The report acknowledges the ongoing impact of the COVID-19 pandemic on business operations and economic conditions, while expressing confidence in long-term growth.

Frequently Asked Questions

In fiscal year 2021, Workday reported total revenues of $4.3 billion, a 19% increase compared to the previous year, driven mainly by a 22% rise in subscription services revenue. The company also showed an improvement in its operating loss, narrowing it to $249 million from $502 million in the prior year. The non-GAAP operating margin also saw a substantial improvement, reaching 20.1%.

The COVID-19 pandemic created uncertainty and impacted Workday's ability to generate new business. However, demand for its products remained strong, and the company experienced favorable impacts on its operating margins due to revenue growth outpacing headcount growth and moderation of operating expenses, such as reduced travel. Workday has implemented precautionary measures, including remote work policies and virtual events, and acknowledges that the pandemic could continue to affect new business, renewals, and overall financial metrics.

Workday continues to invest heavily in product development to enhance its existing applications and develop new ones, addressing evolving customer needs. The company is also focused on expanding its global sales and marketing presence, particularly in Europe and Asia, and investing in its data center capacity and infrastructure to support growth. Acquisitions are also a part of its strategy to expand its product and service offerings.

As of January 31, 2021, Workday maintained a strong liquidity position with $3.5 billion in cash, cash equivalents, and marketable securities. The company believes its existing cash and cash equivalents, combined with cash provided by operating activities, will be sufficient to meet its working capital, capital expenditure, and debt repayment needs for the next 12 months.