Summary
Workday, Inc.'s (WDAY) Form 10-Q for the period ending October 31, 2019, reveals a period of continued revenue growth, albeit with ongoing net losses. Total revenues increased by 26% year-over-year for the quarter and 30% for the first nine months, driven primarily by subscription services, which now represent 85% of total revenues. Despite revenue growth, the company reported net losses for both the quarter and the year-to-date period, consistent with its strategy of reinvesting in product development and global expansion. The adoption of ASC 842 (Leases) had a notable impact on the balance sheet, introducing significant operating lease right-of-use assets and liabilities. Financially, the company's liquidity remains robust with substantial cash and marketable securities. Operating cash flow improved year-over-year. However, investors should note the significant share-based compensation expenses, which impact GAAP profitability, though the company also presents non-GAAP metrics to offer a view of operational performance excluding these and other non-cash items. The company continues to manage a significant amount of remaining performance obligations for subscription contracts, indicating future revenue potential.
Financial Highlights
42 data points| Revenue | $938.10M |
| R&D Expenses | $401.74M |
| Operating Expenses | $1.05B |
| Operating Income | -$110.25M |
| Interest Expense | $16.12M |
| Net Income | -$115.73M |
| EPS (Basic) | $-0.51 |
| Shares Outstanding (Basic) | 228.46M |
Key Highlights
- 1Total revenues increased by 26% to $938.1 million for the three months ended October 31, 2019, and by 30% to $2.65 billion for the nine months ended October 31, 2019.
- 2Subscription services revenue, the primary revenue driver, grew 28% year-over-year for the quarter and 32% for the nine-month period.
- 3The company reported a net loss of $115.7 million for the three months ended October 31, 2019, and $352.7 million for the nine months ended October 31, 2019.
- 4Operating cash flow improved significantly, with $258.0 million provided in the three months ended October 31, 2019, compared to $114.3 million in the prior year.
- 5As of October 31, 2019, Workday had $2.1 billion in cash, cash equivalents, and marketable securities.
- 6The adoption of the new lease accounting standard (ASC 842) resulted in the recognition of approximately $279 million in operating lease right-of-use assets and $307 million in operating lease liabilities on the balance sheet as of February 1, 2019.
- 7The company has substantial remaining performance obligations of approximately $7.19 billion from subscription contracts as of October 31, 2019, indicating future revenue potential.