Fiscal Fourth Quarter Total Revenues of
$1.9 Billion, Up 17% Year Over
Year
Subscription Revenues of $1.8
Billion, Up 18% Year Over Year
Fiscal Year 2024 Total Revenues of
$7.3 Billion, Up 17% Year Over
Year
Subscription Revenues of $6.6
Billion, Up 19% Year Over Year
Operating Cash
Flows of $2.1 Billion, Up 30% Year
Over Year
PLEASANTON, Calif., Feb. 26,
2024 /PRNewswire/ -- Workday, Inc. (NASDAQ:
WDAY), a leading provider of solutions to help organizations manage
their people and money, today announced results for the fiscal
2024 fourth quarter and full year ended January 31, 2024.
Fiscal 2024 Fourth Quarter Results
- Total revenues were $1.9 billion,
an increase of 17% from the fourth quarter of fiscal 2023.
Subscription revenues were $1.8
billion, an increase of 18% from the same period last
year.
- Operating income was $79 million,
or 4.1% of revenues, compared to an operating loss of $89 million, or negative 5.4% of revenues, in the
same period last year. Non-GAAP operating income for the fourth
quarter was $461 million, or 23.9% of
revenues, compared to a non-GAAP operating income of $305 million, or 18.5% of revenues, in the same
period last year.1,2
- Basic and diluted net income per share was $4.52 and $4.42,
respectively, compared to basic and diluted net loss per share of
$0.49 in the fourth quarter of fiscal
2023. Non-GAAP basic and diluted net income per share was
$1.60 and $1.57, respectively, compared to non-GAAP basic
and diluted net income per share of $1.00 and $0.99,
respectively, in the same period last year.2,3 GAAP
basic and diluted net income per share benefited from the
$1.1 billion release of our valuation
allowance related to all U.S. federal and state deferred tax
assets, excluding certain state tax credits, in the fourth quarter
of fiscal 2024.
Fiscal Year 2024 Results
- Total revenues were $7.3 billion,
an increase of 17% from fiscal 2023. Subscription revenues were
$6.6 billion, an increase of 19% from
the prior year.
- Operating income was $183
million, or 2.5% of revenues, compared to an operating loss
of $222 million, or negative 3.6% of
revenues, in fiscal 2023. Non-GAAP operating income was
$1.7 billion, or 24.0% of revenues,
compared to a non-GAAP operating income of $1.2 billion, or 19.5% of revenues, in the prior
year.1,2
- Basic and diluted net income per share was $5.28 and $5.21,
respectively, compared to basic and diluted net loss per share of
$1.44 in fiscal 2023. Non-GAAP basic
and diluted net income per share was $5.93 and $5.84,
respectively, compared to non-GAAP basic and diluted net income per
share of $3.73 and $3.64, respectively, in the prior
year.2,3 As noted above, GAAP basic and diluted net
income per share benefited from the $1.1
billion release of our valuation allowance related to all
U.S. federal and state deferred tax assets, excluding certain state
tax credits, in fiscal 2024.
- Total subscription revenue backlog was $20.9 billion, up 27% from the same period last
year. 12-month subscription revenue backlog was $6.6 billion, and 24-month subscription revenue
backlog was $11.7 billion, both
increasing 20% year over year.
- Operating cash flows were $2.1
billion compared to $1.7
billion in the prior year. Free cash flows were $1.9 billion compared to $1.3 billion in the prior year.4
- Workday repurchased approximately 1.8 million shares of Class A
common stock for $423 million as part
of its share repurchase program.
- Cash, cash equivalents, and marketable securities were
$7.8 billion as of January 31, 2024.
Comments on the News
"Workday's results this quarter are a testament to the strength
of our value proposition and the durability of our business," said
Carl Eschenbach, CEO, Workday.
"We're seeing continued momentum with full platform customer wins
and expansions within our base, strengthening international
performance, growth of our partner ecosystem, and the seamless
execution of nearly 19,000 Workmates across the globe – all setting
us up for an incredible fiscal year 2025."
"Our relentless focus on innovation continues to fuel Workday's
success while helping to enable our customers to transform how they
manage their two most important assets – their people and money,"
said Aneel Bhusri, co-founder and
executive chair, Workday. "As I step into my new role as executive
chair, I look forward to working closely with Carl, the rest of our
leadership team, and our product and technology organization to
push the Workday platform to even greater heights and capitalize on
the growth opportunity in front of us."
"Our fourth quarter and full-year fiscal 2024 results reflect
the momentum building across our key investment initiatives,"
said Zane Rowe, CFO, Workday. "We are reiterating our
fiscal year 2025 subscription revenue guidance of $7.725 billion to $7.775
billion, representing growth of 17% to 18%. We expect fiscal
year 2025 non-GAAP operating margin of approximately 24.5%. Our
outlook contemplates incremental investments to support enduring
growth, while at the same time calls for continued margin expansion
as we scale and optimize the business."
Recent Highlights
- Workday
officially named Carl
Eschenbach CEO effective February 1,
2024. Aneel Bhusri remains
integral to the organization as co-founder and executive
chair.
- Workday announced it has entered into a definitive agreement to
acquire HiredScore, a leading provider of AI-powered talent
orchestration solutions.
- Workday announced that its Board of Directors approved a new
share repurchase program, with a term of 18 months, to repurchase
up to an additional $500 million of
shares of its Class A common stock.
- Workday announced new full platform customers for Workday
Financial Management and Workday Human Capital Management (HCM),
including HHS, Randstad, UHS of Delaware, and VXI Global Solutions.
- Workday and Insperity announced an exclusive strategic
partnership and plans to jointly develop, brand, market, and sell a
preeminent full-service HR solution for small and midsize
businesses.
- Workday continued to build its global leadership bench, naming
David Somers Chief Product Officer,
Chikara Furuichi President of Japan, and Lynn
Martin head of the Workday Federal business.
- Workday was named a Leader in the 2023 Gartner® Magic Quadrant™
for Financial Planning Software5 for the second time
since the category's inception last year.
- KLAS Research named Workday as Best in KLAS 2024 in enterprise
resource planning (ERP) for the seventh consecutive year.
Earnings Call Details
Workday plans to host a conference call today to review its
fiscal 2024 fourth quarter and full year 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 and non-GAAP operating margin
exclude 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
Operating margin and net income (loss) per share are calculated
based upon the respective underlying, non-rounded data.
|
3
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, and income tax effects. See
the section titled "About Non-GAAP Financial Measures" in the
accompanying financial tables for further details.
|
4 Free
cash flows are defined as net cash provided by (used in) operating
activities minus total capital expenditures. See the section titled
"About Non-GAAP Financial Measures" in the accompanying financial
tables for further details.
|
5
Gartner Magic Quadrant for Financial Planning Software, Regina
Crowder, Matthew Mowrey, Vaughan D Archer, 5 December
2023.
|
Gartner Disclaimer
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, expressed or
implied, with respect to this research, including any warranties of
merchantability or fitness for a particular purpose.
GARTNER is a registered trademark and service mark, and MAGIC
QUADRANT is a registered trademark of Gartner, Inc., and/or its
affiliates in the U.S. and internationally and are used herein with
permission. All rights reserved.
About Workday
Workday is a leading enterprise platform that helps
organizations manage their most important assets – their people and
money. The Workday platform is built with AI at the core to help
customers elevate people, supercharge work, and move their business
forever forward. Workday is used by more than 10,000 organizations
around the world and across industries – from medium-sized
businesses to more than 50% of the Fortune 500. For more
information about Workday, visit workday.com.
© 2024 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.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to Workday's
financial results as determined in accordance with U.S. generally
accepted accounting principles are included at the end of this
press release following the accompanying financial tables. For a
description of these non-GAAP financial measures, including the
reasons management uses each measure, please see the section titled
"About Non-GAAP Financial Measures." The Company has not provided a
reconciliation of its forward outlook for non-GAAP operating margin
with its forward-looking GAAP operating margin in reliance on the
unreasonable efforts exception provided under Item 10(e)(1)(i)(B)
of Regulation S-K. The Company is unable, without unreasonable
efforts, to quantify share-based compensation expense, which is
excluded from our non-GAAP operating margin, as it requires
additional inputs such as the number of shares granted and market
prices that are not ascertainable.
Forward-Looking Statements
This press release contains forward-looking statements
including, among other things, statements regarding Workday's
planned acquisition of HiredScore, Workday's partnership with
Insperity and expected offerings, our intended share repurchases,
Workday's full-year fiscal 2025 subscription revenues and non-GAAP
operating margin, growth and expansion, momentum, demand, strategy,
and investments. These forward-looking statements are based only on
currently available information and our current beliefs,
expectations, and assumptions. Because forward-looking statements
relate to the future, they are subject to risks, uncertainties,
assumptions, and changes in circumstances that are difficult to
predict and many of which are outside of our control. If the risks
materialize, assumptions prove incorrect, or we experience
unexpected changes in circumstances, actual results could differ
materially from the results implied by these forward-looking
statements, and therefore you should not rely on any
forward-looking statements. Risks include, but are not limited to:
(i) breaches in our security measures or those of our third-party
providers, unauthorized access to our customers' or other users'
personal data, or disruptions in our data center or computing
infrastructure operations; (ii) service outages, delays in the
deployment of our applications, and the failure of our applications
to perform properly; (iii) privacy concerns and evolving domestic
or foreign laws and regulations; (iv) the impact of continuing
global economic and geopolitical volatility on our business, as
well as on our customers, prospects, partners, and service
providers; (v) any loss of key employees or the inability to
attract, train, and retain highly skilled employees; (vi)
competitive factors, including pricing pressures, industry
consolidation, entry of new competitors and new applications,
advancements in technology, and marketing initiatives by our
competitors; (vii) our reliance on our network of partners to drive
additional growth of our revenues; (viii) the regulatory, economic,
and political risks associated with our domestic and international
operations; (ix) adoption of our applications and services by
customers and individuals, including any new features,
enhancements, and modifications, as well as our customers' and
users' satisfaction with the deployment, training, and support
services they receive; (x) the regulatory risks related to new and
evolving technologies such as AI and our ability to realize a
return on our development efforts; (xi) our ability to realize the
expected business or financial benefits of any acquisitions of or
investments in companies, including HiredScore; (xii) the risk that
the HiredScore transaction may not be completed in a timely manner
or at all; (xiii) negative effects of the announcement or
consummation of the HiredScore transaction on Workday's business
operations, operating results, or share price; (xiv) delays or
reductions in information technology spending; and (xv) changes in
sales, which may not be immediately reflected in our results due to
our subscription model. Further information on these and
additional risks that could affect Workday's results is included in
our filings with the Securities and Exchange Commission ("SEC"),
including our most recent report on Form 10-Q or Form 10-K and
other reports that we have filed and will 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, except as required by law.
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.
Workday,
Inc.
Condensed
Consolidated Balance Sheets
(in
millions)
(unaudited)
|
|
|
As of January
31,
|
|
2024
|
|
2023
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
2,012
|
|
$
1,886
|
Marketable
securities
|
5,801
|
|
4,235
|
Trade and other
receivables, net
|
1,639
|
|
1,570
|
Deferred
costs
|
232
|
|
191
|
Prepaid expenses and
other current assets
|
255
|
|
226
|
Total current
assets
|
9,939
|
|
8,108
|
Property and equipment,
net
|
1,234
|
|
1,201
|
Operating lease
right-of-use assets
|
289
|
|
249
|
Deferred costs,
noncurrent
|
509
|
|
421
|
Acquisition-related
intangible assets, net
|
233
|
|
306
|
Deferred tax
assets
|
1,065
|
|
13
|
Goodwill
|
2,846
|
|
2,840
|
Other assets
|
337
|
|
348
|
Total
assets
|
$
16,452
|
|
$
13,486
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
78
|
|
$
154
|
Accrued expenses and
other current liabilities
|
287
|
|
260
|
Accrued
compensation
|
544
|
|
564
|
Unearned
revenue
|
4,057
|
|
3,559
|
Operating lease
liabilities
|
89
|
|
91
|
Total current
liabilities
|
5,055
|
|
4,628
|
Debt,
noncurrent
|
2,980
|
|
2,976
|
Unearned revenue,
noncurrent
|
70
|
|
75
|
Operating lease
liabilities, noncurrent
|
227
|
|
182
|
Other
liabilities
|
38
|
|
40
|
Total
liabilities
|
8,370
|
|
7,901
|
Stockholders'
equity:
|
|
|
|
Additional paid-in
capital
|
10,400
|
|
8,829
|
Treasury
stock
|
(608)
|
|
(185)
|
Accumulated other
comprehensive income (loss)
|
21
|
|
53
|
Accumulated
deficit
|
(1,731)
|
|
(3,112)
|
Total stockholders'
equity
|
8,082
|
|
5,585
|
Total liabilities
and stockholders' equity
|
$
16,452
|
|
$
13,486
|
Workday,
Inc.
Condensed
Consolidated Statements of Operations
(in millions, except
number of shares which are reflected in thousands and per share
data)
(unaudited)
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Revenues:
|
|
|
|
|
|
|
|
Subscription
services
|
$
1,760
|
|
$
1,496
|
|
$
6,603
|
|
$
5,567
|
Professional
services
|
162
|
|
150
|
|
656
|
|
649
|
Total
revenues
|
1,922
|
|
1,646
|
|
7,259
|
|
6,216
|
Costs and expenses
(1):
|
|
|
|
|
|
|
|
Costs of subscription
services
|
272
|
|
274
|
|
1,031
|
|
1,011
|
Costs of professional
services
|
189
|
|
180
|
|
740
|
|
704
|
Product
development
|
635
|
|
615
|
|
2,464
|
|
2,271
|
Sales and
marketing
|
558
|
|
490
|
|
2,139
|
|
1,848
|
General and
administrative
|
189
|
|
176
|
|
702
|
|
604
|
Total costs and
expenses
|
1,843
|
|
1,735
|
|
7,076
|
|
6,438
|
Operating income
(loss)
|
79
|
|
(89)
|
|
183
|
|
(222)
|
Other income (expense),
net
|
59
|
|
11
|
|
173
|
|
(38)
|
Income (loss) before
provision for (benefit from) income taxes
|
138
|
|
(78)
|
|
356
|
|
(260)
|
Provision for (benefit
from) income taxes
|
(1,050)
|
|
48
|
|
(1,025)
|
|
107
|
Net income
(loss)
|
$
1,188
|
|
$
(126)
|
|
$
1,381
|
|
$
(367)
|
Net income (loss) per
share, basic
|
$
4.52
|
|
$
(0.49)
|
|
$
5.28
|
|
$
(1.44)
|
Net income (loss) per
share, diluted
|
$
4.42
|
|
$
(0.49)
|
|
$
5.21
|
|
$
(1.44)
|
Weighted-average shares
used to compute net income (loss) per share, basic
|
263,102
|
|
257,322
|
|
261,344
|
|
254,819
|
Weighted-average shares
used to compute net income (loss) per share, diluted
|
268,843
|
|
257,322
|
|
265,285
|
|
254,819
|
|
|
|
|
|
(1) Costs and expenses
include share-based compensation expenses as follows:
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Costs of subscription
services
|
$
31
|
|
$
29
|
|
$
120
|
|
$
106
|
Costs of professional
services
|
28
|
|
30
|
|
116
|
|
111
|
Product
development
|
159
|
|
169
|
|
653
|
|
619
|
Sales and
marketing
|
70
|
|
69
|
|
282
|
|
249
|
General and
administrative
|
58
|
|
64
|
|
245
|
|
210
|
Total share-based
compensation expenses
|
$
346
|
|
$
361
|
|
$
1,416
|
|
$
1,295
|
Workday,
Inc.
Condensed
Consolidated Statements of Cash Flows
(in
millions)
(unaudited)
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
1,188
|
|
$
(126)
|
|
$
1,381
|
|
$
(367)
|
Adjustments to
reconcile net income (loss) to net cash
provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
72
|
|
89
|
|
282
|
|
364
|
Share-based
compensation expenses
|
346
|
|
361
|
|
1,416
|
|
1,295
|
Amortization of
deferred costs
|
57
|
|
48
|
|
213
|
|
175
|
Non-cash lease
expense
|
24
|
|
24
|
|
96
|
|
92
|
(Gains) losses on
investments
|
3
|
|
11
|
|
19
|
|
31
|
Accretion of discounts
on marketable debt securities, net
|
(38)
|
|
(26)
|
|
(149)
|
|
(42)
|
Deferred income
taxes
|
(1,063)
|
|
—
|
|
(1,058)
|
|
4
|
Other
|
7
|
|
29
|
|
(17)
|
|
57
|
Changes in operating
assets and liabilities, net of business
combinations:
|
|
|
|
|
|
|
|
Trade and other
receivables, net
|
(415)
|
|
(519)
|
|
(87)
|
|
(319)
|
Deferred
costs
|
(159)
|
|
(129)
|
|
(342)
|
|
(293)
|
Prepaid expenses and
other assets
|
(9)
|
|
17
|
|
69
|
|
(14)
|
Accounts
payable
|
(9)
|
|
65
|
|
(72)
|
|
86
|
Accrued expenses and
other liabilities
|
124
|
|
95
|
|
(95)
|
|
136
|
Unearned
revenue
|
868
|
|
755
|
|
493
|
|
452
|
Net cash provided by
(used in) operating activities
|
996
|
|
694
|
|
2,149
|
|
1,657
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of marketable
securities
|
(1,404)
|
|
(1,532)
|
|
(6,150)
|
|
(7,183)
|
Maturities of
marketable securities
|
923
|
|
1,181
|
|
4,519
|
|
4,949
|
Sales of marketable
securities
|
51
|
|
51
|
|
144
|
|
104
|
Owned real estate
projects
|
(2)
|
|
(4)
|
|
(4)
|
|
(4)
|
Capital expenditures,
excluding owned real estate projects
|
(46)
|
|
(73)
|
|
(228)
|
|
(360)
|
Business combinations,
net of cash acquired
|
—
|
|
—
|
|
(8)
|
|
—
|
Purchase of other
intangible assets
|
—
|
|
—
|
|
(10)
|
|
(1)
|
Purchases of
non-marketable equity and other investments
|
(5)
|
|
(3)
|
|
(16)
|
|
(23)
|
Sales and maturities of
non-marketable equity and other investments
|
2
|
|
—
|
|
2
|
|
12
|
Net cash provided by
(used in) investing activities
|
(481)
|
|
(380)
|
|
(1,751)
|
|
(2,506)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from issuance
of debt, net of debt discount
|
—
|
|
—
|
|
—
|
|
2,978
|
Repayments and
extinguishment of debt
|
—
|
|
—
|
|
—
|
|
(1,844)
|
Payments for debt
issuance costs
|
—
|
|
—
|
|
—
|
|
(7)
|
Repurchases of common
stock
|
(139)
|
|
(75)
|
|
(423)
|
|
(75)
|
Proceeds from issuance
of common stock from employee
equity plans, net of
taxes paid for shares withheld
|
72
|
|
67
|
|
155
|
|
152
|
Net cash provided by
(used in) financing activities
|
(67)
|
|
(8)
|
|
(268)
|
|
1,204
|
Effect of exchange rate
changes
|
—
|
|
1
|
|
(1)
|
|
(1)
|
Net increase
(decrease) in cash, cash equivalents, and
restricted
cash
|
448
|
|
307
|
|
129
|
|
354
|
Cash, cash
equivalents, and restricted cash at the
beginning of
period
|
1,576
|
|
1,588
|
|
1,895
|
|
1,541
|
Cash, cash
equivalents, and restricted cash at the end
of
period
|
$
2,024
|
|
$
1,895
|
|
$
2,024
|
|
$
1,895
|
Workday, Inc.
Reconciliations of
GAAP to Non-GAAP Data
Reconciliations of our GAAP to non-GAAP operating results are
included in the following tables (in millions, except percentages
and per share data; operating margin and net income (loss) per
share are calculated based upon the respective underlying,
non-rounded data). See the section titled "About Non-GAAP Financial
Measures" below for further details.
|
Three Months Ended
January 31, 2024
|
|
GAAP
|
|
Share-Based
Compensation
Expenses
|
|
Employer
Payroll Tax-
Related Items
on Employee
Stock
Transactions
|
|
Amortization
of
Acquisition-
Related
Intangible
Assets
|
|
Income Tax
Effects (2)
|
|
Non-GAAP
|
Operating income
(loss)
|
$
79
|
|
$
346
|
|
$
20
|
|
$
16
|
|
$
—
|
|
$
461
|
Operating
margin
|
4.1 %
|
|
18.0 %
|
|
1.0 %
|
|
0.8 %
|
|
— %
|
|
23.9 %
|
Net income
(loss)
|
$
1,188
|
|
$
346
|
|
$
20
|
|
$
16
|
|
$
(1,149)
|
|
$
421
|
Net income (loss) per
share, basic (1)
|
$
4.52
|
|
$
1.31
|
|
$ 0.07
|
|
$
0.06
|
|
$ (4.36)
|
|
$
1.60
|
Net income (loss) per
share, diluted (1)
|
$
4.42
|
|
$
1.29
|
|
$ 0.07
|
|
$
0.06
|
|
$ (4.27)
|
|
$
1.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
January 31, 2023
|
|
GAAP
|
|
Share-Based
Compensation
Expenses
|
|
Employer
Payroll Tax-
Related Items
on Employee
Stock
Transactions
|
|
Amortization
of
Acquisition-
Related
Intangible
Assets
|
|
Income Tax
Effects (2)
|
|
Non-GAAP
|
Operating income
(loss)
|
$
(89)
|
|
$
361
|
|
$
12
|
|
$
21
|
|
$
—
|
|
$
305
|
Operating
margin
|
(5.4) %
|
|
21.9 %
|
|
0.7 %
|
|
1.3 %
|
|
— %
|
|
18.5 %
|
Net income
(loss)
|
$
(126)
|
|
$
361
|
|
$
12
|
|
$
21
|
|
$
(12)
|
|
$
256
|
Net income (loss) per
share, basic (1)
|
$ (0.49)
|
|
$
1.40
|
|
$
0.05
|
|
$
0.08
|
|
$ (0.04)
|
|
$
1.00
|
Net income (loss) per
share, diluted (1)
|
$ (0.49)
|
|
$
1.40
|
|
$
0.05
|
|
$
0.08
|
|
$ (0.05)
|
|
$
0.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended January
31, 2024
|
|
GAAP
|
|
Share-Based
Compensation
Expenses
|
|
Employer
Payroll Tax-
Related Items
on Employee
Stock
Transactions
|
|
Amortization
of
Acquisition-
Related
Intangible
Assets
|
|
Income Tax
Effects (2)
|
|
Non-GAAP
|
Operating income
(loss)
|
$
183
|
|
$
1,416
|
|
$
66
|
|
$
75
|
|
$
—
|
|
$ 1,740
|
Operating
margin
|
2.5 %
|
|
19.5 %
|
|
0.9 %
|
|
1.1 %
|
|
— %
|
|
24.0 %
|
Net income
(loss)
|
$ 1,381
|
|
$
1,416
|
|
$
66
|
|
$
75
|
|
$
(1,389)
|
|
$ 1,549
|
Net income (loss) per
share, basic (1)
|
$
5.28
|
|
$
5.42
|
|
$
0.25
|
|
$
0.28
|
|
$ (5.30)
|
|
$
5.93
|
Net income (loss) per
share, diluted (1)
|
$
5.21
|
|
$
5.34
|
|
$
0.25
|
|
$
0.28
|
|
$ (5.24)
|
|
$
5.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended January
31, 2023
|
|
GAAP
|
|
Share-Based
Compensation
Expenses
|
|
Employer
Payroll Tax-
Related Items
on Employee
Stock
Transactions
|
|
Amortization
of
Acquisition-
Related
Intangible
Assets
|
|
Income Tax
and Dilution
Effects (2)
|
|
Non-GAAP
|
Operating income
(loss)
|
$
(222)
|
|
$ 1,295
|
|
$
52
|
|
$
85
|
|
$
—
|
|
$ 1,210
|
Operating
margin
|
(3.6) %
|
|
20.8 %
|
|
0.9 %
|
|
1.4 %
|
|
— %
|
|
19.5 %
|
Net income
(loss)
|
$
(367)
|
|
$ 1,295
|
|
$
52
|
|
$
85
|
|
$
(116)
|
|
$
949
|
Net income (loss) per
share, basic (1)
|
$ (1.44)
|
|
$
5.08
|
|
$
0.21
|
|
$
0.33
|
|
$ (0.45)
|
|
$
3.73
|
Net income (loss) per
share, diluted (1)
|
$ (1.44)
|
|
$
5.08
|
|
$
0.21
|
|
$
0.33
|
|
$ (0.54)
|
|
$
3.64
|
|
|
(1)
|
For the three months
ended January 31, 2024, GAAP and non-GAAP net income per share were
both calculated
based upon 263,102
basic and 268,843 diluted
weighted-average shares of common stock.
|
|
For the three months
ended January 31, 2023, GAAP net loss per share was calculated
based upon 257,322
basic and diluted
weighted-average shares of
common stock. Non-GAAP net income per share was
calculated
based upon 257,322
basic and 258,367 diluted weighted-average shares of common stock.
|
|
For the fiscal year
ended January 31, 2024, GAAP and non-GAAP net income per share were
both calculated
based upon 261,344
basic and 265,285 diluted
weighted-average shares of common stock.
|
|
For the fiscal year
ended January 31, 2023, GAAP net loss per share was calculated
based upon 254,819 basic
and diluted
weighted-average shares of
common stock. Non-GAAP net income per share was calculated
based
upon 254,819 basic and
261,641 diluted weighted-average shares of common stock. The numerator used
to
compute non-GAAP
diluted net income per share was increased by $3 million for
after-tax interest expense
on
our convertible senior
notes in accordance with the if-converted method.
|
(2)
|
We utilize a fixed
long-term projected tax rate in our computation of the non-GAAP
income tax provision to provide
better consistency
across the reporting periods.
For fiscal 2024 and 2023, the non-GAAP tax rate was 19%.
For
the year ended January
31, 2023, included in the per share amount was a dilution impact of $0.09 from
the
conversion of GAAP
diluted net loss per share to non-GAAP diluted net income per
share.
|
Reconciliation of our GAAP cash flows from operating activities
to non-GAAP free cash flow is as follows (in millions). See the
section titled "About Non-GAAP Financial Measures" below for
further details.
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net cash provided by
(used in) operating activities
|
$
996
|
|
$
694
|
|
$
2,149
|
|
$
1,657
|
Less: Total capital
expenditures (1)
|
(48)
|
|
(77)
|
|
(232)
|
|
(364)
|
Free cash
flows
|
$
948
|
|
$
617
|
|
$
1,917
|
|
$
1,293
|
|
|
(1)
|
For the three months
ended January 31, 2024, and 2023, total capital expenditures
consisted of Capital expenditures,
excluding
owned real estate projects of $46 million
and $73 million, respectively, and Owned real estate projects
of
$2 million and $4
million, respectively.
|
|
For the fiscal year
ended January 31, 2024, and 2023, total capital expenditures
consisted of Capital expenditures,
excluding
owned real estate projects of $228
million and $360 million, respectively, and Owned real estate
projects of
$4 million and
$4 million, respectively.
|
About Non-GAAP Financial Measures
To provide investors and others with additional information
regarding Workday's results, we have disclosed the following
non-GAAP financial measures: non-GAAP operating income (loss),
non-GAAP operating margin, non-GAAP net income (loss) per share,
and free cash flows. Workday has provided a reconciliation of each
non-GAAP financial measure used in this earnings release to the
most directly comparable GAAP financial measure.
Non-GAAP operating income (loss) and non-GAAP operating margin
differ from GAAP in that they exclude share-based compensation
expenses, employer payroll tax-related items on employee
stock transactions, and amortization expense for
acquisition-related intangible assets. Non-GAAP net
income (loss) per share differs from GAAP in that it excludes
share-based compensation expenses, employer
payroll tax-related items on employee stock transactions,
amortization expense for acquisition-related intangible assets, and
income tax effects. Free cash flows differ from GAAP cash flows
from operating activities in that it treats total capital
expenditures as a reduction to cash flows.
Workday's management uses these non-GAAP financial measures to
understand and compare operating results across accounting periods,
for internal budgeting and forecasting purposes, for short- and
long-term operating plans, and to evaluate Workday's financial
performance. Management believes these non-GAAP financial measures
reflect Workday's ongoing business in a manner that allows for
meaningful period-to-period comparisons and analysis of trends in
Workday's business. Management also believes that these non-GAAP
financial measures provide useful information to investors and
others in understanding and evaluating Workday's operating results
and prospects in the same manner as management and in comparing
financial results across accounting periods and to those of peer
companies.
Management believes excluding the following items from the GAAP
Condensed Consolidated Statements of Operations is useful to
investors and others in assessing Workday's operating performance
due to the following factors:
- Share-based compensation expenses. Although share-based
compensation is an important aspect of the compensation of our
employees and executives, management believes it is useful to
exclude share-based compensation expenses to better understand the
long-term performance of our core business and to facilitate
comparison of our results to those of peer companies. Share-based
compensation expenses are determined using a number of factors,
including our stock price, volatility, and forfeiture rates, that
are beyond our control and generally unrelated to operational
decisions and performance in any particular period. Further,
share-based compensation expenses are not reflective of the value
ultimately received by the grant recipients.
- Employer payroll tax-related items on employee stock
transactions. We exclude the employer payroll tax-related items
on employee stock transactions in order to show the full effect
that excluding share-based compensation expenses has on our
operating results. Similar to share-based compensation expenses,
this tax expense is dependent on our stock price and other factors
that are beyond our control and do not correlate to the operation
of the business.
- Amortization of acquisition-related intangible assets.
For business combinations, we generally allocate a portion of the
purchase price to intangible assets. The amount of the allocation
is based on estimates and assumptions made by management and is
subject to amortization. The amount of purchase price allocated to
intangible assets and the term of the related amortization can vary
significantly and are unique to each acquisition and thus we do not
believe it is reflective of ongoing operations. Although we exclude
the amortization of acquisition-related intangible assets from
these non-GAAP measures, management believes that it is important
for investors to understand that such intangible assets were
recorded as part of purchase accounting and contribute to revenue
generation.
- Income tax effects. We utilize a fixed long-term
projected tax rate in our computation of the non-GAAP income tax
provision to provide better consistency across the reporting
periods. In projecting this long-term non-GAAP tax rate, we utilize
a three-year financial projection that excludes the direct impact
of share-based compensation and related employer payroll taxes, and
amortization of acquisition-related intangible assets. The
projected rate considers other factors such as our current
operating structure, existing tax positions in various
jurisdictions, and key legislation in major jurisdictions where we
operate. For fiscal 2025 and 2024, we determined the projected
non-GAAP tax rate to be 19%, which reflects currently available
information, as well as other factors and assumptions. We will
periodically re-evaluate this tax rate, as necessary, for
significant events, relevant tax law changes, material changes in
the forecasted geographic earnings mix, and any significant
acquisitions.
Additionally, with regards to free cash flows, Workday's
management believes that reducing cash provided by (used in)
operating activities by capital expenditures is meaningful to
investors and others because it provides an enhanced view of cash
flow generation from the ongoing operations of our business, and it
balances operating results, cash management, and capital
efficiency.
The use of the non-GAAP measures of non-GAAP operating income
(loss), non-GAAP operating margin, non-GAAP net income (loss) per
share, and free cash flows have certain limitations as they do not
reflect all items of expense or cash that affect Workday's
operations. Workday compensates for these limitations by
reconciling the non-GAAP financial measures to the most comparable
GAAP financial measures. These non-GAAP financial measures should
be considered in addition to, not as a substitute for or in
isolation from, measures prepared in accordance with GAAP. Further,
these non-GAAP measures may differ from the non-GAAP information
used by other companies, including peer companies, and therefore
comparability may be limited. Management encourages investors and
others to review Workday's financial information in its entirety
and not rely on a single financial measure.
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SOURCE Workday Inc.