Summary
Workday, Inc. reported strong revenue growth in the third quarter of fiscal year 2024, with total revenues increasing by 17% year-over-year to $1.87 billion. Subscription services, the company's primary revenue driver, saw an 18% increase, reaching $1.69 billion. This growth was attributed to new customer acquisition, expansion of product offerings to existing customers, and high customer retention rates, with gross and net retention rates exceeding 95% and 100%, respectively. The company also demonstrated significant improvement in profitability, with GAAP operating income turning positive at $87.9 million, a substantial increase from a loss of $26.3 million in the prior year period. Non-GAAP operating income also saw robust growth of 47% to $462.1 million, with a non-GAAP operating margin of 24.8%, up from 19.7% in the prior year. This improvement was driven by revenue growth, expense management, and a favorable change in depreciation expense due to updated useful lives for data center equipment. Financially, Workday maintains a strong liquidity position with $6.9 billion in cash, cash equivalents, and marketable securities as of October 31, 2023. Operating cash flow increased by 10% to $450.8 million for the quarter, and free cash flow grew by 12% to $390.8 million, indicating healthy cash generation from operations. The company also reported a substantial subscription revenue backlog of $18.4 billion, providing good visibility into future revenue. Significant investments continue in product development and sales, signaling a focus on long-term growth.
Financial Highlights
52 data points| Revenue | $1.87B |
| R&D Expenses | $619.00M |
| Operating Expenses | $1.78B |
| Operating Income | $88.00M |
| Interest Expense | $29.00M |
| Net Income | $114.00M |
| EPS (Basic) | $0.43 |
| EPS (Diluted) | $0.43 |
| Shares Outstanding (Basic) | 262.15M |
| Shares Outstanding (Diluted) | 266.38M |
Key Highlights
- 1Total revenues increased by 17% year-over-year to $1.87 billion.
- 2Subscription services revenues grew by 18% year-over-year to $1.69 billion, driven by new customer acquisition and high retention rates.
- 3GAAP operating income turned positive at $87.9 million, a significant improvement from a loss of $26.3 million in the prior year.
- 4Non-GAAP operating income increased by 47% to $462.1 million, with non-GAAP operating margin expanding to 24.8%.
- 5Strong liquidity position with $6.9 billion in cash, cash equivalents, and marketable securities.
- 6Subscription revenue backlog reached $18.4 billion, reflecting strong future revenue potential.
- 7Operating cash flow increased by 10% to $450.8 million, and free cash flow grew by 12% to $390.8 million.