Workday, Inc. Quarterly Report for Q1 Ended Apr 30, 2014

Summary

Workday, Inc. reported its first quarter results for fiscal year 2015, ending April 30, 2014. The company demonstrated robust revenue growth of 74% year-over-year, reaching $159.7 million, driven by a significant 80% increase in subscription services revenue. Despite this strong top-line performance, Workday continued to operate at a net loss, reporting a net loss of $59.4 million for the quarter, an increase from the $33.0 million net loss in the same period last year. This widening loss is largely attributable to substantial investments in product development, sales, and marketing to support its growth strategy, with total operating expenses increasing by 70% year-over-year. Financially, Workday maintained a strong liquidity position with approximately $1.9 billion in cash, cash equivalents, and marketable securities. The company also completed a strategic acquisition of Identified, Inc. to enhance its analytics capabilities. While the company is prioritizing revenue growth and market expansion, investors should note the continued unprofitability and the significant investment in growth initiatives, which are expected to weigh on near-term profitability. The company also disclosed ongoing efforts to manage its substantial share-based compensation expenses and presented its financial results with a focus on 'core operating expenses' as a non-GAAP measure to highlight ongoing operational performance.

Key Highlights

• 1Total revenues increased by 74% year-over-year to $159.7 million, driven by strong subscription services revenue growth of 80%.
• 2Workday reported a net loss of $59.4 million, an increase from $33.0 million in the prior year's quarter, reflecting continued investment in growth.
• 3Operating expenses rose significantly by 70% year-over-year, with substantial increases in product development, sales and marketing, and cost of professional services.
• 4The company's liquidity remains strong, with $1.9 billion in cash, cash equivalents, and marketable securities as of April 30, 2014.
• 5Workday acquired Identified, Inc. on February 20, 2014, for $26.4 million to enhance its analytics capabilities.
• 6Share-based compensation expenses increased significantly to $28.9 million from $7.4 million in the prior year quarter.
• 7The company continued to invest heavily in its workforce, with employee compensation being a primary driver of increased operating expenses.

Frequently Asked Questions