PLEASANTON, CA—(Marketwired – May 26, 2015) – Workday, Inc. (
NYSE
:
WDAY
), a leader in enterprise cloud applications for finance and human resources, today announced results for the fiscal first quarter ended April 30, 2015.
Total revenues were $251.0 million, an increase of 57% from the first quarter of fiscal 2015. Subscription revenues were $201.0 million, an increase of 63% from same period last year.
Operating loss was $53.4 million, or negative 21.3% of revenues, compared to an operating loss of $52.1 million, or negative 32.6% of revenues, in the same period last year. Non–GAAP operating loss for the first quarter was $2.1 million, or negative 0.8% of revenues, compared to a non–GAAP operating loss of $22.5 million last year, or negative 14.1% of revenues.1
Net loss per basic and diluted share was $0.33, compared to a net loss per basic and diluted share of $0.32 in the first quarter of fiscal 2015. The non–GAAP net loss per basic and diluted share for the first quarter was $0.02, compared to a non–GAAP net loss per basic and diluted share of $0.13 during the same period last year.1
Operating cash flows for the first quarter were $94.1 million and free cash flows were $63.9 million. For the trailing twelve months, operating cash flows were $174.4 million and free cash flows were $50.4 million.2
Cash, cash equivalents and marketable securities were approximately $1.9 billion as of April 30, 2015. Unearned revenues were $653.4 million, a 41% increase from last year.
“We had a strong first quarter and welcomed a record number of new customers to the Workday community,” said Aneel Bhusri, co–founder and CEO, Workday. “We delivered Workday Talent Insights, the first Workday Insight Application from our new product suite that's starting the next era of enterprise applications. We also announced the availability of Workday Professional Services Automation and Workday Payroll for the UK, continuing our focus on rapid innovation to help our customers grow their businesses.”
“We are very pleased with our solid first quarter results,” said Mark Peek, chief financial officer, Workday. “We generated record quarterly revenues and trailing twelve month operating cash flows. Looking ahead, we anticipate second quarter total revenues to be within a range of $270 and $274 million, or growth of 45% to 47% as compared to the prior year.”
Recent Highlights
In its latest feature release, Workday 24, Workday announced the general availability of Workday Talent Insights, the first application available as part of Workday Insight Applications. Workday Talent Insights helps customers address talent–related challenges such as identifying a top performer at risk of leaving the company or pinpointing issues with hiring initiatives that could impact business performance.
Additionally, in Workday 24, Workday announced the general availability of Workday Professional Services Automation (PSA). Blending Workday Financial Management and Workday Human Capital Management (HCM) functionality, Workday PSA sets a new standard in professional services automation for organizations that manage client–facing billable projects.
The company also announced the general availability of Workday Payroll for the UK as part of Workday 24 and increased momentum for the Workday Global Payroll Cloud partner program. Partners in 85 countries are now certified to deliver integrations between Workday HCM and other payroll systems to provide customers with a comprehensive view of global payroll data.
Workday was named one of the 100 Best Companies to Work For by Fortune magazine, ranking #22 in its inaugural appearance on the list. Workday also ranked #1 for the largest companies by the San Francisco Business Times and the Silicon Valley / San Jose Business Journal on the annual list of Best Places to Work in the Bay Area.
Workday plans to host a conference call today to review its first quarter financial results and to discuss its financial outlook. The call is scheduled to begin at 2:00 p.m. PT/ 5:00 p.m. ET and can be accessed via webcast or through the company's Investor Relations website at www.workday.com/investorrelations. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 45 days.
1Non–GAAP operating loss and net loss per share for the fiscal first quarters of 2016 and 2015 exclude share–based compensation expenses, employer payroll tax–related items on employee stock transactions, amortization expense for acquisition–related intangible assets and debt discount and issuance costs associated with convertible notes. See the section titled “About Non–GAAP Financial Measures” in the accompanying financial tables for further details.
2Free cash flows are defined as operating cash flows minus purchased property and equipment, property and equipment acquired under capital leases and purchased other intangible assets. See the section titled “About Non–GAAP Financial Measures” in the accompanying financial tables for further details.
About Workday
Workday is a leading provider of enterprise cloud applications for finance and human resources. Founded in 2005, Workday delivers financial management, human capital management, and analytics applications designed for the world's largest companies, educational institutions, and government agencies. Hundreds of 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.”
Forward–Looking Statements
This press release contains forward–looking statements including, among other things, statements regarding Workday's second quarter revenue projections. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” 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) breaches in our security measures, unauthorized access to our customers' data or disruptions in our data center operations; (ii) our ability to manage our growth effectively; (iii) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications and marketing initiatives by our competitors; (iv) the development of the market for enterprise cloud services; (v) acceptance of our applications and services by customers; (vi) adverse changes in general economic or market conditions; (vii) delays or reductions in information technology spending; (viii) our limited operating history, which makes it difficult to predict future results; and (ix) changes in sales 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 year ended January 31, 2015 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.
Any unreleased services, features, or functions referenced in this document, our website or other press releases or public statements that are not currently available are subject to change at Workday's discretion and may not be delivered as planned or at all. Customers who purchase Workday services should make their purchase decisions based upon services, features, and functions that are currently available.
© 2015. Workday, Inc. All rights reserved. Workday and the Workday logo are registered trademarks of Workday, Inc. All other brand and product names are trademarks or registered trademarks of their respective holders.
Workday, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
April 30,
January 31,
2015
2015(1)
Assets
Current assets:
Cash and cash equivalents
$
270,484
$
298,192
Marketable securities
1,651,051
1,559,517
Accounts receivable, net
128,493
188,357
Deferred costs
20,364
20,471
Prepaid expenses and other current assets
50,601
42,502
Total current assets
2,120,993
2,109,039
Property and equipment, net
154,537
140,136
Deferred costs, noncurrent
19,981
20,998
Goodwill and acquisition–related intangible assets, net
34,479
34,779
Other assets
52,571
53,681
Total assets
$
2,382,561
$
2,358,633
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
13,320
$
10,623
Accrued expenses and other current liabilities
31,336
24,132
Accrued compensation
47,927
56,152
Capital leases
1,759
3,207
Unearned revenue
572,212
547,151
Total current liabilities
666,554
641,265
Convertible senior notes, net
496,230
490,501
Unearned revenue, noncurrent
81,211
85,593
Other liabilities
22,539
15,299
Total liabilities
1,266,534
1,232,658
Stockholders' equity:
Common stock
188
186
Additional paid–in capital
2,000,047
1,948,300
Accumulated other comprehensive loss
(279
)
(140
)
Accumulated deficit
(883,929
)
(822,371
)
Total stockholders' equity
1,116,027
1,125,975
Total liabilities and stockholders' equity
$
2,382,561
$
2,358,633
(1) Amounts as of January 31, 2015 were derived from the January 31, 2015 audited financial statements.
Workday, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended
April 30,
2015
2014
Revenues:
Subscription services
$
200,993
$
123,407
Professional services
49,964
36,330
Total revenues
250,957
159,737
Costs and expenses(1):
Costs of subscription services
31,782
21,459
Costs of professional services
46,132
35,960
Product development
99,335
65,171
Sales and marketing
94,895
68,167
General and administrative
32,217
21,063
Total costs and expenses
304,361
211,820
Operating loss
(53,404
)
(52,083
)
Other expense, net
(7,236
)
(6,999
)
Loss before provision for income taxes
(60,640
)
(59,082
)
Provision for income taxes
918
307
Net loss
$
(61,558
)
$
(59,389
)
Net loss per share, basic and diluted
$
(0.33
)
$
(0.32
)
Weighted–average shares used to compute net loss per share, basic and diluted
187,390
183,084
(1) Costs and expenses include share–based compensation expenses as follows:
Costs of subscription services
$
2,048
$
1,055
Costs of professional services
3,454
2,198
Product development
20,811
10,868
Sales and marketing
8,365
6,752
General and administrative
12,596
8,001
Workday, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
April 30,
2015
2014
Cash flows from operating activities
Net loss
$
(61,558
)
$
(59,389
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
18,569
12,523
Share–based compensation expenses
47,274
28,874
Amortization of deferred costs
4,625
3,952
Amortization of debt discount and issuance costs
6,250
5,920
Other
737
604
Changes in operating assets and liabilities, net of business combinations:
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