Summary
Workday, Inc. reported solid revenue growth for the third quarter and first half of fiscal year 2018, with total revenues increasing by 41% and 39% year-over-year, respectively. Subscription services, the company's primary revenue driver, saw a significant 42% increase in both periods, indicating continued strong demand for its cloud-based financial and human capital management applications. While the company continues to invest heavily in product development and sales/marketing to fuel future growth, leading to operating losses on a GAAP basis, non-GAAP operating margins showed improvement, increasing from 1.6% to 9.3% for the quarter and from 2.7% to 10.9% for the first half. The company also reported healthy cash flow from operations and an increase in cash and cash equivalents, demonstrating effective management of its financial resources amidst aggressive growth initiatives.
Financial Highlights
41 data points| Revenue | $525.32M |
| R&D Expenses | $221.10M |
| Operating Expenses | $606.95M |
| Operating Income | -$81.63M |
| Interest Expense | $6.84M |
| Net Income | -$82.53M |
| EPS (Basic) | $-0.40 |
| Shares Outstanding (Basic) | 207.03M |
Key Highlights
- 1Total revenues increased by 41% to $525.3 million for the three months ended July 31, 2017, and by 39% to $1.0 billion for the six months ended July 31, 2017.
- 2Subscription services revenue, a key growth driver, grew by 42% in both the three-month and six-month periods.
- 3The company continues to invest heavily in product development and sales & marketing, leading to increased operating expenses, but is showing improvements in non-GAAP operating margins.
- 4GAAP operating loss narrowed significantly, with the company moving from a loss of ($86.7 million) to ($81.6 million) for the quarter, and from ($158.2 million) to ($141.8 million) for the six-month period.
- 5Non-GAAP operating margin improved to 9.3% for the quarter and 10.9% for the six-month period, up from 1.6% and 2.7% respectively in the prior year.
- 6Cash and cash equivalents increased significantly to $748.6 million as of July 31, 2017, from $539.9 million as of January 31, 2017.
- 7Deferred revenue, representing future subscription revenue, stood at $1.12 billion for subscription services and $104 million for non-current subscription services as of July 31, 2017.