Workday Announces Fiscal 2020 First Quarter Financial Results
Workday, Inc. announced their results for the fiscal 2020 first quarter ended April 30, 2019
Fiscal First Quarter Results
Total revenues were $825.1 million, an increase of 33.4% from the first quarter of fiscal year 2019. Subscription revenue was $701.0 million, an increase of 34.3% from the same period last year.
Operating loss was $123.4 million, or negative 15.0% of revenues, compared to an operating loss of $71.3 million, or negative 11.5% of revenues, in the same period last year. Non-GAAP operating income for the first quarter was $107.7 million, or 13.1% of revenues, compared to a non-GAAP operating income of $80.8 million, or 13.1% of revenues, in the same period last year.1
Net loss per basic and diluted share was $0.52, compared to a net loss per basic and diluted share of $0.35 in the first quarter of fiscal 2019. Non-GAAP net income per diluted share was $0.43 compared to a non-GAAP net income per diluted share of $0.33 in the same period last year.2
Operating cash flows were $209.2 million.
Cash, cash equivalents, and marketable securities were $1.89 billion as of April 30, 2019. Unearned revenues were $1.83 billion, a 29.3% increase from the same period last year.
Comments on the News
“Coming off the heels of an excellent fiscal year 2019, our momentum continued with a strong first quarter. We added many new customers across the globe – increasing our footprint across the Fortune 50 and 500 – and saw more existing customers expand their investment in Workday,” said Aneel Bhusri, co-founder and CEO, Workday.
“Looking ahead, we believe our ability to enable more organizations to plan, execute, and analyze in one system powered by machine learning, coupled with our commitment to employee and customer success, will further solidify our foundation for enduring growth.”
“Our fiscal year 2020 got off to a great start as we delivered strong top-line growth and record non-GAAP operating profit,” said Robynne Sisco, co-president and chief financial officer, Workday. “Based on our strong first quarter results, we are raising our fiscal year 2020 outlook for subscription revenue to $3.045 to $3.060 billion, or growth of 28%. We expect our second quarter subscription revenue to be $746 to $748 million, or growth of approximately 32%. Our focus remains centered on driving strong, durable growth as we continue to invest in the business to support our long-term aspirations.”
Workday welcomed Ann-Marie Campbell to its Board of Directors in April 2019. Ann-Marie currently serves as executive vice president of U.S. stores for The Home Depot.
Workday was positioned by Gartner, Inc. in the Leaders quadrant of the Magic Quadrant for Cloud Core Financial Management Suites for midsize, large, and global enterprises. Workday was acknowledged as a Leader for the third year in a row.3
As part of its latest feature release, Workday 32, Workday delivered more than 500 new features, including deeper investments in Workday Learning and Workday Recruiting, finance-focused machine learning capabilities to help resource managers align skills resources to projects, and even deeper integration between Workday and Adaptive Insights.
Workday, along with 10 leading federal government agencies and large corporations from the technology and financial services industries, launched The Cybersecurity Talent Initiative. The first-of-its-kind, public-private partnership is focused on developing the next generation of motivated, mission-driven technologists to ensure a world-class cybersecurity workforce for the future.
Workday was ranked #1 on San Francisco Business Times’ Best Places to Work in the Bay Area list. This is the seventh time Workday has been ranked #1 on the list. Workday also ranked #1 on the UK’s Best Large Workplaces list by Great Place to Work Institute.
Earnings Call Details
Workday plans to host a conference call today to review its fiscal 2020 first quarter financial results and to discuss its financial outlook. The call is scheduled to begin at 1:30 p.m. PT/ 4:30 p.m. ET and can be accessed via webcast. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 90 days.
Workday uses the Workday Blog as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
1 Non-GAAP operating income excludes share-based compensation expenses, employer payroll tax-related items on employee stock transactions, and amortization expense for acquisition-related intangible assets. See the section titled "About Non-GAAP Financial Measures" in the accompanying financial tables for further details.
2 Non-GAAP net income per share excludes share-based compensation expenses, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, non-cash interest expense related to our convertible senior notes, and income tax effects. See the section titled "About Non-GAAP Financial Measures" in the accompanying financial tables for further details.
3 Gartner, Magic Quadrant for Cloud Core Financial Management Suites for Midsize, Large and Global Enterprises, John Van Decker, Robert Anderson, and Greg Leiter, 13 May 2019. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
Workday is a leading provider of enterprise cloud applications for finance and human resources. Founded in 2005, Workday delivers financial management, human capital management, planning, and analytics applications designed for the world’s largest companies, educational institutions, and government agencies. Organizations ranging from medium-sized businesses to Fortune 50 enterprises have selected Workday.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to Workday's financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled “About Non-GAAP Financial Measures.” A reconciliation of our forward outlook for non-GAAP operating margin with our forward-looking GAAP operating margin is not available without unreasonable efforts as the quantification of share-based compensation expense, which is excluded from our non-GAAP operating margin, requires additional inputs such as the number of shares granted and market prices that are not ascertainable.
This press release contains forward-looking statements including, among other things, statements regarding Workday's ability to enable more organizations to plan, execute, and analyze in one system powered by machine learning, ability to solidify its foundation for enduring growth, employee and customer success, subscription revenue projections and growth, products, and investments in its business. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “seek,” “plans,” “project,” “looking ahead,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to:
(i) risks related to our ability to successfully integrate Adaptive Insights’ operations or failure to achieve the expected benefits of this or any other acquisition or transaction;
(ii) our ability to implement our plans, objectives, and other expectations with respect to the Adaptive Insights business or that of any other acquired company;
(iii) breaches in our security measures, unauthorized access to our customers' data or disruptions in our data center operations;
(iv) our ability to manage our growth effectively;
(v) competitive factors, including pricing pressures, industry consolidation, entry of new competitors and new applications, and marketing initiatives by our competitors;
(vi) the development of the market for enterprise cloud applications and services;
(vii) acceptance of our applications and services by customers;
(viii) adverse changes in general economic or market conditions;
(ix) the regulatory, economic, and political risks associated with our international operations;
(x) delays or reductions in information technology spending; and
(xi) changes in sales, which may not be immediately reflected in our results due to our subscription model. Further information on risks that could affect Workday's results is included in our filings with the Securities and Exchange Commission (SEC), including our Form 10-K for the fiscal year ended January 31, 2019 and our future reports that we may file with the SEC from time to time, which could cause actual results to vary from expectations. Workday assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.