Summary
Workday, Inc.'s Form 10-Q for the period ending April 30, 2019, reveals a company experiencing significant revenue growth, driven primarily by its subscription services, which saw a 34% increase year-over-year. Despite this top-line growth, the company reported a net loss of $116.3 million for the quarter, an increase from the $74.4 million net loss in the prior year period. This widening net loss is largely attributable to increased operating expenses, particularly in product development and sales and marketing, as Workday continues to invest heavily in innovation and global expansion. Key financial metrics indicate continued investment in growth. Total revenues grew by 33% to $825.1 million. The company maintained a strong cash position with $1.9 billion in cash, cash equivalents, and marketable securities. A notable accounting change this quarter was the adoption of the new lease accounting standard (ASC 842), which resulted in the recognition of significant operating lease right-of-use assets and liabilities on the balance sheet. Investors should note Workday's ongoing strategy of reinvesting heavily in its platform and sales efforts, which contributes to reported losses but is intended to fuel long-term market leadership and revenue expansion.
Financial Highlights
42 data points| Revenue | $825.05M |
| R&D Expenses | $347.83M |
| Operating Expenses | $948.44M |
| Operating Income | -$123.39M |
| Interest Expense | $15.79M |
| Net Income | -$116.28M |
| EPS (Basic) | $-0.52 |
| Shares Outstanding (Basic) | 223.31M |
Key Highlights
- 1Total revenues increased by 33% to $825.1 million for the three months ended April 30, 2019, compared to $618.6 million in the prior year period.
- 2Subscription services revenue grew by 34% to $701.0 million, indicating strong customer adoption and expansion of the core cloud-based offerings.
- 3The company reported a net loss of $116.3 million for the quarter, compared to a net loss of $74.4 million in the same period last year, reflecting continued investment in growth.
- 4Operating expenses increased by 37% to $948.4 million, driven by higher employee-related costs due to increased headcount and investments in product development and sales/marketing.
- 5Workday maintained a healthy liquidity position with $1.9 billion in cash, cash equivalents, and marketable securities as of April 30, 2019.
- 6The company adopted the new lease accounting standard (ASC 842) effective February 1, 2019, resulting in the recognition of $279 million in operating lease right-of-use assets and $307 million in operating lease liabilities.
- 7Remaining performance obligations for subscription contracts stood at approximately $6.8 billion, indicating significant future contracted revenue.