Summary
This 10-Q filing for Workday, Inc. (WDAY), covering the period ending October 30, 2012, marks a significant post-initial public offering (IPO) disclosure. The company highlights its status as an "emerging growth company" and its intention to leverage exemptions from certain reporting requirements. While this may appeal to some investors, it could also reduce the attractiveness of its Class A common stock for others, potentially impacting market liquidity and stock price volatility. A key concern for investors is the company's substantial net operating loss (NOL) and tax credit carryforwards, which may not be fully utilized due to potential "ownership changes" under Section 382 of the Internal Revenue Code. This could adversely affect future profitability. Additionally, evolving tax laws related to electronic services and potential adverse interpretations of existing tax regulations could increase costs for Workday and its customers, impacting operating results and cash flows.
Financial Highlights
41 data points| Revenue | $72.62M |
| Cost of Revenue | $30.19M |
| Gross Profit | $42.42M |
| R&D Expenses | $28.07M |
| Operating Expenses | $113.49M |
| Operating Income | -$40.87M |
| Interest Expense | $431K |
| Net Income | -$41.47M |
| EPS (Basic) | $-0.67 |
| Shares Outstanding (Basic) | 61.96M |
Key Highlights
- 1Workday is operating as an "emerging growth company" and intends to utilize exemptions from certain reporting requirements.
- 2The company possesses significant net operating loss (NOL) and research tax credit carryforwards that may be limited in their future utilization due to potential "ownership changes."
- 3Potential changes or adverse interpretations of tax laws related to electronic services could increase costs and negatively impact revenue and cash flows.
- 4The company's Class A common stock has experienced historical volatility, and future price fluctuations are expected due to various market and company-specific factors.
- 5A substantial number of shares (held by directors, officers, and significant stockholders) will become available for sale in the market on April 10, 2013, following the expiration of lock-up agreements, which could lead to price declines.
- 6The co-founders and co-CEOs, through their significant holdings of Class B common stock, maintain control over key decision-making and the outcome of stockholder votes due to a dual-class stock structure.
- 7Workday recently completed its IPO on October 17, 2012, raising approximately $684.6 million in net proceeds, which are being invested in short-term, investment-grade securities.