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10-QPeriod: Q2 FY2019

Workday, Inc. Quarterly Report for Q2 Ended Jul 31, 2018

Filed September 5, 2018For Securities:WDAY

Summary

Workday, Inc.'s (WDAY) 10-Q filing for the period ending July 31, 2018, reveals continued strong revenue growth, driven primarily by its subscription services. Total revenues increased by 28% year-over-year for both the three and six-month periods. While the company continues to invest heavily in product development and sales and marketing to fuel future growth, resulting in a GAAP operating loss, its non-GAAP operating margins showed improvement. The company also maintained a robust liquidity position with substantial cash, cash equivalents, and marketable securities. A significant event during the quarter was the conversion of the 0.75% convertible senior notes due July 15, 2018, and the company is preparing for the acquisition of Adaptive Insights, Inc., which closed shortly after the reporting period. Investors should note Workday's ongoing commitment to long-term growth through strategic investments, balanced by a focus on expanding its customer base and market reach.

Financial Highlights

43 data points
Beta

Revenue

$671.72M

Net Income

-$86.16M

-0.1% Net Margin

EPS (Diluted)

$-0.40

Total Assets

$4.77B

Cash & Equivalents

$1.69B

Free Cash Flow

$57.62M

Financial Statements
Beta
Revenue$671.72M
R&D Expenses$292.84M
Operating Expenses$760.70M
Operating Income-$88.98M
Interest Expense$17.52M
Net Income-$86.16M
EPS (Basic)$-0.40
Shares Outstanding (Basic)215.93M

Key Highlights

  • 1Total revenues grew 28% year-over-year to $671.7 million for the three months ended July 31, 2018, and to $1.29 billion for the six months ended July 31, 2018.
  • 2Subscription services revenue, the primary revenue driver, increased 30% year-over-year for both periods, reaching $565.7 million and $1.09 billion, respectively.
  • 3The company reported a GAAP operating loss of $89.0 million for the quarter and $160.2 million for the six months, reflecting continued investment in growth.
  • 4Non-GAAP operating margins improved to 10.1% for the quarter and 11.5% for the six months, indicating operating leverage as revenues grow.
  • 5Cash, cash equivalents, and marketable securities totaled $3.0 billion as of July 31, 2018, providing a strong liquidity position.
  • 6The 0.75% convertible senior notes due July 2018 were converted by note holders during the quarter.
  • 7Workday completed the acquisition of Adaptive Insights, Inc. for approximately $1.5 billion in cash shortly after the period end.

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