Summary
Workday, Inc. reported strong revenue growth for the second quarter and first half of fiscal year 2021, driven by its core subscription services. Total revenues increased by 20% and 21% year-over-year for the respective periods, with subscription services showing a 23% and 24% increase. Despite this top-line growth, the company reported a net loss for both periods, consistent with its strategy of investing heavily in product development and sales and marketing for long-term expansion. The company highlighted a favorable impact on operating margins due to revenue growth outpacing headcount growth and reduced operating expenses stemming from the COVID-19 pandemic, particularly in travel and event spending. Financially, Workday ended the quarter with a robust cash and cash equivalents balance of over $1.2 billion, bolstered by significant cash generated from operations. The company also successfully refinanced its debt obligations, with the conversion of its 2020 Notes and the addition of a new $750 million term loan facility. Looking ahead, Workday continues to focus on expanding its customer base and investing in innovation, anticipating further revenue growth while managing expenses for long-term profitability.
Financial Highlights
48 data points| Revenue | $1.06B |
| R&D Expenses | $418.68M |
| Operating Expenses | $1.08B |
| Operating Income | -$16.75M |
| Interest Expense | $19.30M |
| Net Income | -$28.02M |
| EPS (Basic) | $-0.12 |
| EPS (Diluted) | $-0.12 |
| Shares Outstanding (Basic) | 236.00M |
| Shares Outstanding (Diluted) | 236.00M |
Key Highlights
- 1Total revenues increased by 20% to $1.06 billion for Q2 FY21 and by 21% to $2.08 billion for the first half of FY21 compared to the prior year periods.
- 2Subscription services revenue, the primary revenue driver, grew by 23% to $932 million for Q2 FY21 and by 24% to $1.81 billion for the first half of FY21.
- 3Despite revenue growth, Workday reported a net loss of $28 million for Q2 FY21 and $186 million for the first half of FY21, consistent with ongoing strategic investments.
- 4Cash flow from operations remained strong, showing $157 million for Q2 FY21 and $421 million for the first half of FY21, demonstrating effective cash generation.
- 5The company ended the period with a healthy liquidity position, with cash and cash equivalents and marketable securities totaling $2.8 billion.
- 6Workday's operating margins showed improvement, with GAAP operating margins increasing from -13.8% to -1.6% for Q2 FY21, and non-GAAP operating margins improving significantly from 13.2% to 24.3% for the same period.
- 7The company successfully managed its debt, completing the conversion of its 2020 Notes and securing a new $750 million term loan facility.