10-QPeriod: Q1 FY2016

Workday, Inc. Quarterly Report for Q1 Ended Apr 30, 2015

Filed June 5, 2015For Securities:WDAY

Summary

Workday, Inc. reported strong revenue growth for the first quarter of fiscal year 2016, with total revenues increasing by 57% to $251 million. This growth was primarily driven by a 63% surge in subscription services revenue, reaching $201 million, indicating continued demand for their core cloud-based HCM and financial management solutions. Despite the impressive top-line performance, the company continues to operate at a loss, with a net loss of $61.6 million for the quarter. This loss is attributed to significant investments in product development, sales, and marketing to fuel future expansion and maintain a competitive edge in the fast-evolving enterprise cloud market. The company's cash position remains robust, with $1.9 billion in cash, cash equivalents, and marketable securities, and it generated positive operating cash flow of $94 million, demonstrating a healthy ability to fund its growth initiatives.

Financial Highlights

41 data points
Beta

Revenue

$250.96M

Net Income

-$61.56M

-24.5% Net Margin

EPS (Diluted)

$-0.33

Total Assets

$2.38B

Cash & Equivalents

$270.48M

Free Cash Flow

$92.20M

Financial Statements
Beta
Revenue$250.96M
R&D Expenses$99.33M
Operating Expenses$304.36M
Operating Income-$53.40M
Interest Expense$7.88M
Net Income-$61.56M
EPS (Basic)$-0.33
Shares Outstanding (Basic)187.39M

Key Highlights

  • 1Total revenues increased by a significant 57% year-over-year to $251 million, driven by robust subscription services revenue growth.
  • 2Subscription services revenue, the primary revenue driver, grew 63% year-over-year to $201 million.
  • 3The company reported a net loss of $61.6 million for the quarter, reflecting ongoing investments in growth initiatives.
  • 4Operating expenses rose 44% to $304.4 million, primarily due to increased investments in product development, sales, and marketing.
  • 5Workday generated positive cash flow from operating activities of $94 million, a substantial increase from the prior year's $21.7 million.
  • 6Total assets grew to $2.38 billion, with a strong liquidity position of $1.9 billion in cash, cash equivalents, and marketable securities.
  • 7Share-based compensation expenses increased significantly by 64% to $47.3 million, reflecting expanded employee equity grants.

Frequently Asked Questions

Workday's primary revenue source is subscription services, which contributed 80% of total revenues in the quarter ended April 30, 2015. This segment saw a substantial 63% year-over-year increase, reaching $201 million, indicating strong market demand for Workday's cloud-based applications.

Workday reported a net loss of $61.6 million for the quarter. The company is strategically investing heavily in product development, sales, and marketing to drive long-term growth and expand its market reach. While these investments contribute to current losses, Workday anticipates achieving economies of scale and eventual profitability as revenues grow.

Workday maintains a strong liquidity position with $1.9 billion in cash, cash equivalents, and marketable securities as of April 30, 2015. The company generated a healthy $94 million in cash flow from operating activities, demonstrating its ability to fund its growth strategies and operational needs.

Workday is significantly investing in product development to enhance its existing applications and develop new technologies. Additionally, substantial investments are being made in sales and marketing to expand its domestic and international presence, build brand awareness, and attract new customers. Investments in personnel are also crucial to support its growing customer base.