Summary
Workday, Inc.'s 10-Q filing for the period ending October 30, 2013, highlights several key risk factors and financial considerations for investors. The company, operating as an emerging growth company under the JOBS Act, utilizes certain exemptions from reporting requirements, which could lead to a less active trading market and increased stock price volatility. Significant risks include the potential inability to utilize Net Operating Loss (NOL) and research tax credit carryforwards, which could impact future profitability. Furthermore, evolving tax laws for electronic services and potential changes in accounting principles could adversely affect financial results and customer costs. The company has also incurred substantial indebtedness through the issuance of convertible senior notes totaling $600 million in 2013, with maturities in 2018 and 2020. The conversion of these notes or related hedging and warrant transactions could dilute existing stockholders' ownership and impact the stock price. Investors should also note the dual-class stock structure, which concentrates voting control with the co-CEOs and other insiders, potentially limiting the influence of minority shareholders on corporate matters.
Financial Highlights
42 data points| Revenue | $127.87M |
| Cost of Revenue | $48.59M |
| Gross Profit | $79.28M |
| R&D Expenses | $49.35M |
| Operating Expenses | $168.27M |
| Operating Income | -$40.40M |
| Interest Expense | $7.66M |
| Net Income | -$47.53M |
| EPS (Basic) | $-0.27 |
| Shares Outstanding (Basic) | 174.38M |
Key Highlights
- 1Workday is utilizing exemptions as an Emerging Growth Company under the JOBS Act, potentially affecting market liquidity and stock price volatility.
- 2Significant tax-related risks include the potential non-utilization of Net Operating Loss (NOL) and research tax credit carryforwards, impacting future profitability.
- 3The company has issued $600 million in convertible senior notes (2018 and 2020 maturities), introducing significant debt obligations and potential dilution risks upon conversion.
- 4The dual-class stock structure grants substantial voting control to co-founders/co-CEOs and insiders, limiting the influence of non-affiliate shareholders on corporate decisions.
- 5The company has not paid dividends and intends to retain future earnings for business operations and expansion, meaning investors must rely on stock appreciation for returns.
- 6Volatility in the stock price is a notable risk, influenced by various market, company-specific, and industry factors.
- 7Workday has broad discretion in the use of IPO and convertible note proceeds, and their effectiveness could impact business performance and investor returns.