Summary
Workday, Inc. (WDAY) reported its financial results for the quarter and six months ended July 31, 2016. The company demonstrated strong revenue growth, particularly in its subscription services, which increased by 37% and 38% year-over-year for the three and six-month periods, respectively. This growth was driven by an expanding customer base. Despite the revenue acceleration, Workday continued to operate at a net loss, which widened slightly in dollar terms but improved as a percentage of revenue on a non-GAAP basis. Key financial metrics show continued investment in growth, with operating expenses increasing across all major categories, primarily due to higher employee-related costs resulting from increased headcount. The company's cash position remains robust, supported by a significant amount of cash and marketable securities. Management remains focused on long-term growth initiatives, indicating continued investment in product development, sales, and marketing, which is expected to drive future revenue expansion.
Financial Highlights
42 data points| Revenue | $373.66M |
| R&D Expenses | $161.89M |
| Operating Expenses | $460.34M |
| Operating Income | -$86.69M |
| Interest Expense | $7.91M |
| Net Income | -$107.81M |
| EPS (Basic) | $-0.55 |
| Shares Outstanding (Basic) | 197.22M |
Key Highlights
- 1Total revenues grew by 34% to $377.7 million for the three months ended July 31, 2016, and by 36% to $723.2 million for the six months ended July 31, 2016, compared to the prior year periods.
- 2Subscription services revenue, a key driver of the business, increased by 37% to $306.2 million for the quarter and 38% to $586.2 million for the six months.
- 3The company reported a net loss of $108.0 million for the quarter and $188.6 million for the six months, representing an increase in dollar terms compared to the prior year.
- 4Operating expenses increased by 33% for the quarter and 35% for the six months, largely driven by increased employee-related costs due to higher headcount.
- 5Workday maintained a strong liquidity position, with cash and cash equivalents and marketable securities totaling $2.1 billion as of July 31, 2016.
- 6Non-GAAP operating margin showed improvement, moving from (0.3)% to 1.6% for the quarter and from (0.5)% to 2.3% for the six months, indicating progress towards profitability on a non-GAAP basis.
- 7The company continued to invest heavily in product development and sales & marketing, with expenses increasing by 41% and 31% (33% for six months) respectively, reflecting a focus on long-term growth.