10-QPeriod: Q2 FY2015

Workday, Inc. Quarterly Report for Q2 Ended Jul 31, 2014

Filed September 2, 2014For Securities:WDAY

Summary

Workday, Inc. (WDAY) reported its second-quarter fiscal year 2015 results for the period ending July 31, 2014. The company demonstrated strong revenue growth, with total revenues increasing by 74% year-over-year to $186.8 million. This growth was primarily driven by subscription services, which rose 77% to $143.7 million, indicating continued strong demand for Workday's core cloud-based HCM and financial management applications. Despite the robust top-line growth, Workday continued to operate at a net loss, reporting a net loss of $69.2 million for the quarter, compared to a net loss of $36.0 million in the prior year period. This widened loss is largely attributable to significant investments in product development and sales and marketing to fuel future growth. The company's cash position remains strong, with cash and cash equivalents and marketable securities totaling $1.8 billion, providing ample liquidity for ongoing operations and strategic initiatives.

Financial Highlights

40 data points
Beta

Revenue

$186.78M

Net Income

-$69.22M

-37.1% Net Margin

EPS (Diluted)

$-0.38

Total Assets

$2.19B

Cash & Equivalents

$262.63M

Free Cash Flow

-$9.01M

Financial Statements
Beta
Revenue$186.78M
R&D Expenses$77.46M
Operating Expenses$248.55M
Operating Income-$61.77M
Interest Expense$7.76M
Net Income-$69.22M
EPS (Basic)$-0.38
Shares Outstanding (Basic)184.32M

Key Highlights

  • 1Total revenues increased 74% year-over-year to $186.8 million.
  • 2Subscription services revenue grew 77% to $143.7 million, highlighting strong core business performance.
  • 3Professional services revenue increased 63% to $43.1 million, indicating robust customer adoption and deployment needs.
  • 4Net loss widened to $69.2 million from $36.0 million in the prior year, reflecting increased investment in growth initiatives.
  • 5Operating expenses grew significantly, with product development and sales & marketing expenses increasing by 60% and 68% respectively for the quarter.
  • 6Cash and cash equivalents and marketable securities totaled $1.8 billion, providing a strong liquidity position.
  • 7Workday completed the acquisition of Identified, Inc. for $26.4 million to enhance its analytics and machine learning capabilities.

Frequently Asked Questions

Workday reported strong revenue growth, with total revenues increasing by 74% year-over-year to $186.8 million for the quarter ended July 31, 2014. Subscription services revenue, the core of their business, grew by 77% to $143.7 million, indicating sustained demand for their cloud-based applications.

No, Workday is not currently profitable. The company reported a net loss of $69.2 million for the quarter ended July 31, 2014, an increase from the $36.0 million net loss reported in the same period last year. This loss is attributed to significant investments in research and development, sales, and marketing to support rapid growth.

Workday maintains a strong liquidity position, with cash and cash equivalents and marketable securities totaling $1.8 billion as of July 31, 2014. The company generated positive cash flow from investing activities and managed its financing activities to maintain this robust balance, suggesting ample resources for ongoing operations and strategic investments.

Workday highlighted its continued investment in product development to enhance its cloud applications and expand its sales and marketing organizations globally. Additionally, the company completed the acquisition of Identified, Inc. for $26.4 million to bolster its predictive analytics and machine learning capabilities.