10-QPeriod: Q1 FY2025

Workday, Inc. Quarterly Report for Q1 Ended Apr 30, 2024

Filed May 29, 2024For Securities:WDAY

Summary

Workday, Inc. (WDAY) reported strong financial results for the quarter ended April 30, 2024, showcasing continued revenue growth and a significant improvement in profitability. Total revenues increased by 18% year-over-year to $1.99 billion, driven primarily by a 19% surge in subscription services revenue, which now constitutes 91% of total revenue. The company has successfully transitioned from a GAAP operating loss to a GAAP operating income of $64 million, with a GAAP operating margin of 3.2%, a substantial improvement from a loss in the prior year period. Key to this turnaround is the company's ability to grow revenue faster than expenses. While total costs and expenses increased by 13%, this was outpaced by revenue growth, leading to improved profitability metrics. Non-GAAP operating income also saw a healthy increase of 30% to $515 million, with a non-GAAP operating margin of 25.9%, up from 23.5% in the prior year. The company also demonstrated robust cash flow generation, with operating cash flow increasing by 34% to $372 million and free cash flow up 33% to $291 million.

Financial Highlights

50 data points
Beta

Revenue

$1.99B

Net Income

$107.00M

5.4% Net Margin

EPS (Diluted)

$0.40

Total Assets

$15.94B

Cash & Equivalents

$1.77B

Free Cash Flow

$291.00M

Financial Statements
Beta
Revenue$1.99B
R&D Expenses$656.00M
Operating Expenses$1.93B
Operating Income$64.00M
Interest Expense$29.00M
Net Income$107.00M
EPS (Basic)$0.40
EPS (Diluted)$0.40
Shares Outstanding (Basic)264.44M
Shares Outstanding (Diluted)270.30M

Key Highlights

  • 1Total revenues increased 18% year-over-year to $1.99 billion.
  • 2Subscription services revenue grew 19% year-over-year to $1.815 billion, representing 91% of total revenues.
  • 3Achieved GAAP operating income of $64 million, a significant improvement from a $20 million loss in the prior year quarter.
  • 4Non-GAAP operating income increased 30% to $515 million, with a non-GAAP operating margin of 25.9%.
  • 5Operating cash flow increased 34% to $372 million.
  • 6Free cash flow increased 33% to $291 million.
  • 7The company completed its $500 million share repurchase program authorized in November 2022 and initiated a new $500 million repurchase program in February 2024.

Frequently Asked Questions

Workday reported total revenues of $1.99 billion for the three months ended April 30, 2024, an 18% increase compared to $1.684 billion in the same period last year. Subscription services revenue, the primary driver, grew 19% to $1.815 billion.

Workday demonstrated significant improvement in profitability. GAAP operating income swung from a loss of $20 million in the prior year period to an income of $64 million in the current period. The GAAP operating margin improved from -1.2% to 3.2%. Non-GAAP operating income also increased by 30% to $515 million, with the non-GAAP operating margin expanding to 25.9% from 23.5%.

Workday generated strong cash flows. Operating cash flow increased by 34% to $372 million, and free cash flow, defined as operating cash flow minus capital expenditures, increased by 33% to $291 million. The company's cash, cash equivalents, and marketable securities totaled $7.2 billion as of April 30, 2024.

Yes, Workday acquired HiredScore, Inc., a provider of AI-powered talent orchestration solutions, on March 29, 2024, for $530 million in cash. The acquisition-date fair value of consideration was $530 million, with $411 million allocated to goodwill.