Summary
Workday, Inc. (WDAY) reported its third-quarter fiscal year 2017 results for the period ending October 31, 2016. The company demonstrated robust revenue growth, with total revenues increasing by 34% year-over-year to $409.6 million, driven primarily by a 38% surge in subscription services revenue to $335.7 million. This strong top-line performance was achieved while the company continued to invest heavily in product development and sales & marketing, resulting in an operating loss. Despite the net loss reported, the company's cash position remained strong, with cash and cash equivalents, along with marketable securities, totaling $1.9 billion, and positive cash flow from operations. Financially, Workday continues to focus on growth, reflected in significant increases in operating expenses, particularly employee-related costs due to headcount expansion. The company made a strategic acquisition during the quarter for $144 million to enhance its analytics capabilities. While profitability on a GAAP basis remains a longer-term goal, the company's non-GAAP operating margins showed improvement, indicating underlying operational efficiencies. Investors should note the ongoing investments in infrastructure and personnel to support future expansion, which will likely continue to impact short-term profitability.
Financial Highlights
42 data points| Revenue | $413.52M |
| R&D Expenses | $185.31M |
| Operating Expenses | $519.45M |
| Operating Income | -$105.93M |
| Interest Expense | $7.21M |
| Net Income | -$110.11M |
| EPS (Basic) | $-0.55 |
| Shares Outstanding (Basic) | 199.48M |
Key Highlights
- 1Total revenues grew 34% year-over-year to $409.6 million, driven by a 38% increase in subscription services revenue to $335.7 million.
- 2Operating expenses increased by 38% year-over-year to $519.5 million, largely due to higher employee-related costs from increased headcount.
- 3The company reported a net loss of $114.1 million for the quarter, compared to a net loss of $77.8 million in the prior year period.
- 4Cash and cash equivalents and marketable securities stood at $1.9 billion as of October 31, 2016, providing ample liquidity.
- 5Cash flow from operating activities was positive at $71.5 million for the quarter.
- 6Workday completed a business combination for $144 million during the quarter to enhance its analytics offerings.
- 7Non-GAAP operating margins improved to 1.0% from 0.3% in the prior year period, indicating progress in operational leverage.