Workday, Inc. (NASDAQ: WDAY), a leader in enterprise cloud
applications for finance and human resources, today announced
results for the fiscal fourth quarter and full year ended
January 31, 2021.
Fiscal Fourth Quarter 2021 Results
- Total revenues were $1.13 billion, an increase of 15.9% from
the fourth quarter of fiscal 2020. Subscription revenue was $1.01
billion, an increase of 19.8% from the same period last year.
- Operating loss was $73.3 million, or negative 6.5% of revenues,
compared to an operating loss of $146.1 million, or negative 15.0%
of revenues, in the same period last year. Non-GAAP operating
income for the fourth quarter was $211.0 million, or 18.6% of
revenues, compared to a non-GAAP operating income of $116.6
million, or 11.9% of revenues, in the same period last year.1
- Net loss per basic and diluted share was $0.30, compared to a
net loss per basic and diluted share of $0.56 in the fourth quarter
of fiscal 2020. Non-GAAP net income per diluted share was $0.73,
compared to a non-GAAP net income per diluted share of $0.50 in the
same period last year.2
Fiscal Year 2021 Results
- Total revenues were $4.32 billion, an increase of 19.0% from
fiscal 2020. Subscription revenue was $3.79 billion, an increase of
22.4% from the prior year.
- Operating loss was $248.6 million, or negative 5.8% of
revenues, compared to an operating loss of $502.2 million, or
negative 13.8% of revenues, in fiscal 2020. Non-GAAP operating
income was $867.2 million, or 20.1% of revenues, compared to a
non-GAAP operating income of $484.5 million, or 13.4% of revenues,
in the prior year.1
- Net loss per basic and diluted share was $1.19, compared to a
net loss per basic and diluted share of $2.12 in fiscal 2020.
Non-GAAP net income per diluted share was $2.93, compared to a
non-GAAP net income per diluted share of $1.88 last year.2
- Operating cash flows were $1.27 billion compared to $864.6
million in the prior year.
- Cash, cash equivalents, and marketable securities were $3.54
billion as of January 31, 2021.
Comments on the News
“I couldn’t be prouder of how we closed out this extraordinary
year and how we as a company and community – including employees,
customers, and partners – responded, innovated, and supported one
another,” said Aneel Bhusri, co-founder and co-CEO, Workday. “As we
look ahead, I’m inspired by the incredible opportunity we have as
we continue to serve as the backbone of digital transformation for
the world’s largest organizations as they embrace new ways to
engage employees and manage finances in today’s rapidly changing
environment.”
“We had a very strong close to the year, as more organizations
accelerate their HR and finance technology investments and adopt
cloud-based systems to respond to an evolving world,” said Chano
Fernandez, co-CEO, Workday. “Reflecting on this year, I’m so
pleased with the way our employees were able to respond during such
a dynamic time and in turn, create great experiences and results
for our customers and each other. Our customer community now
represents more than 50 million workers and as we head into next
fiscal year, we’re hoping to build on that great momentum with
significant pipeline improvement, helping position us well
for accelerated new bookings growth.”
“Our solid fourth quarter and full-year fiscal 2021 results are
a testament to the strategic, mission-critical nature of our
solutions and the resiliency of our business,” said Robynne Sisco,
president and chief financial officer, Workday. “We currently
expect fiscal 2022 subscription revenue to be in a range of
$4.38 billion to $4.40 billion, representing year-over-year growth
of 16%, and we expect non-GAAP operating margins of 17%. Our focus
this year is on driving accelerated bookings growth, which we
expect will ultimately result in a faster pace of future
subscription revenue growth.”
Recent Highlights
- Workday announced its intent to acquire Peakon ApS, an employee
success platform that converts feedback into actionable insights.
With Peakon, Workday will provide organizations with a continuous
listening platform to help drive employee engagement and improve
organizational performance.
- Workday has expanded its addressable market for the office of
the chief financial officer with the Workday Enterprise Finance
solution. This new offering provides customers – particularly those
in product-based industries such as retail or manufacturing with
on-premise enterprise resource planning and industry-specific
systems – the flexibility to accelerate their digital finance
transformation with as little friction as possible.
- Workday announced a COVID-19 vaccine management solution that
combines real-time HR data with immunization information, providing
customers with the insight and resources needed to help foster
healthier workforces and safer workplaces.
- Workday announced that Lynne Doughtie, former U.S. chairman and
CEO of KPMG, has been elected to its board of directors as an
independent director.
- Workday announced it has promoted Doug Robinson to executive
vice president of global sales, reporting to Co-CEO Chano
Fernandez.
- Workday was positioned as a Leader in the 2020 Gartner Magic
Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises3, for
the fifth year in a row.
- Workday was recognized, for the fourth year in a row, as Best
in KLAS in enterprise resource planning for Workday Financial
Management, Workday Human Capital Management, and Workday Supply
Chain Management solutions for healthcare. Workday was also honored
with Best in KLAS for Talent Management.
- Workday welcomed its
newest brand ambassador, Naomi Osaka, a globally recognized tennis
champion, recent Australian Open winner, and leading voice of the
social justice movement.
Earnings Call Details
Workday plans to host a conference call today to review its
fiscal fourth quarter and full year 2021 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
HCM Suites for 1,000+ Employee Enterprises,” by Jason Cerrato,
Chris Pang, Jeff Freyermuth, Ron Hanscome, Helen Poitevin, Sam
Grinter, Ranadip Chandra, Amanda Grainger, November 9, 2020. |
Required 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.
About Workday
Workday is a leading provider of enterprise cloud applications
for finance and human resources, helping customers adapt and thrive
in a changing world. Workday applications for financial management,
human resources, planning, spend management, and analytics have
been adopted by thousands of organizations around the world and
across industries – from medium-sized businesses to more than 45
percent of the Fortune 500. For more information about Workday,
visit workday.com.
© 2021 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 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.
Forward-Looking Statements
This press release contains forward-looking statements
including, among other things, statements regarding Workday’s
full-year fiscal 2022 subscription revenue and non-GAAP operating
margins, growth metrics, opportunities, pipeline, and positioning.
The words “believe,” “may,” “will,” “estimate,” “continue,”
“anticipate,” “intend,” “expect,” “seek,” “plan,” “project,”
“looking ahead,” “look to,” “move into,” 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) the impact of the ongoing COVID-19 pandemic on
our business, as well as our customers, prospects, partners, and
service providers; (ii) the risk that the pending acquisition of
Peakon may not be completed in a timely manner or at all, that we
may not be able to achieve the expected benefits of the
transaction, or that we may incur unanticipated costs or other
negative effects in connection with the transaction; (iii) our
ability to implement our plans, objectives, and other expectations
with respect to Peakon or any other of our acquired companies; (iv)
breaches in our security measures, unauthorized access to our
customers’ or other users’ personal data, or disruptions in our
data center or computing infrastructure operations; (v) service
outages, delays in the deployment of our applications, and the
failure of our applications to perform properly; (vi) our ability
to manage our growth effectively; (vii) competitive factors,
including pricing pressures, industry consolidation, entry of new
competitors and new applications, advancements in technology, and
marketing initiatives by our competitors; (viii) the development of
the market for enterprise cloud applications and services; (ix)
acceptance of our applications and services by customers and
individuals, including any new features, enhancements, and
modifications, as well as the acceptance of any underlying
technology such as machine learning, artificial intelligence, and
blockchain; (x) adverse changes in general economic or market
conditions; (xi) the regulatory, economic, and political risks
associated with our domestic and international operations; (xii)
the regulatory risks related to new and evolving technologies such
as machine learning, artificial intelligence, and blockchain;
(xiii) delays or reductions in information technology spending; and
(xiv) 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 Form 10-Q for the fiscal quarter ended
October 31, 2020, 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.
Workday, Inc.Condensed
Consolidated Balance Sheets(in thousands)(unaudited)
|
January 31, |
|
2021 |
|
2020 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
1,384,181 |
|
|
$ |
731,141 |
|
Marketable securities |
2,151,472 |
|
|
1,213,432 |
|
Trade and other receivables, net |
1,032,484 |
|
|
877,578 |
|
Deferred costs |
122,764 |
|
|
100,459 |
|
Prepaid expenses and other current assets |
111,160 |
|
|
172,012 |
|
Total current assets |
4,802,061 |
|
|
3,094,622 |
|
Property and equipment, net |
972,403 |
|
|
936,179 |
|
Operating lease right-of-use
assets |
414,143 |
|
|
290,902 |
|
Deferred costs, noncurrent |
271,796 |
|
|
222,395 |
|
Acquisition-related intangible
assets, net |
248,626 |
|
|
308,401 |
|
Goodwill |
1,819,625 |
|
|
1,819,261 |
|
Other assets |
189,757 |
|
|
144,605 |
|
Total
assets |
$ |
8,718,411 |
|
|
$ |
6,816,365 |
|
Liabilities and
stockholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
75,596 |
|
|
$ |
57,556 |
|
Accrued expenses and other current liabilities |
169,266 |
|
|
130,050 |
|
Accrued compensation |
285,061 |
|
|
248,154 |
|
Unearned revenue |
2,556,624 |
|
|
2,223,178 |
|
Operating lease liabilities |
93,000 |
|
|
66,147 |
|
Debt, current |
1,103,101 |
|
|
244,319 |
|
Total current liabilities |
4,282,648 |
|
|
2,969,404 |
|
Debt, noncurrent |
691,913 |
|
|
1,017,967 |
|
Unearned revenue, noncurrent |
80,111 |
|
|
86,025 |
|
Operating lease liabilities,
noncurrent |
350,051 |
|
|
241,425 |
|
Other liabilities |
35,854 |
|
|
14,993 |
|
Total liabilities |
5,440,577 |
|
|
4,329,814 |
|
Stockholders’ equity: |
|
|
|
Common stock |
242 |
|
|
231 |
|
Additional paid-in capital |
6,254,936 |
|
|
5,090,187 |
|
Treasury stock |
(12,384 |
) |
|
— |
|
Accumulated other comprehensive income (loss) |
(54,970 |
) |
|
23,492 |
|
Accumulated deficit |
(2,909,990 |
) |
|
(2,627,359 |
) |
Total stockholders’ equity |
3,277,834 |
|
|
2,486,551 |
|
Total liabilities and
stockholders’ equity |
$ |
8,718,411 |
|
|
$ |
6,816,365 |
|
|
Workday, Inc.Condensed
Consolidated Statements of Operations(in thousands, except
per share data)(unaudited)
|
Three Months Ended January 31, |
|
Year Ended January 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues: |
|
|
|
|
|
|
|
Subscription services |
$ |
1,006,251 |
|
|
$ |
839,694 |
|
|
$ |
3,788,452 |
|
|
$ |
3,096,389 |
|
Professional services |
125,433 |
|
|
136,605 |
|
|
529,544 |
|
|
530,817 |
|
Total revenues |
1,131,684 |
|
|
976,299 |
|
|
4,317,996 |
|
|
3,627,206 |
|
Costs and
expenses (1): |
|
|
|
|
|
|
|
Costs of subscription services |
169,246 |
|
|
132,578 |
|
|
611,912 |
|
|
488,513 |
|
Costs of professional services |
143,798 |
|
|
152,197 |
|
|
586,220 |
|
|
576,745 |
|
Product development |
439,095 |
|
|
422,211 |
|
|
1,721,222 |
|
|
1,549,906 |
|
Sales and marketing |
335,249 |
|
|
306,618 |
|
|
1,233,173 |
|
|
1,146,548 |
|
General and administrative |
117,607 |
|
|
108,792 |
|
|
414,068 |
|
|
367,724 |
|
Total costs and expenses |
1,204,995 |
|
|
1,122,396 |
|
|
4,566,595 |
|
|
4,129,436 |
|
Operating income (loss) |
(73,311 |
) |
|
(146,097 |
) |
|
(248,599 |
) |
|
(502,230 |
) |
Other income (expense), net |
4,737 |
|
|
16,884 |
|
|
(26,535 |
) |
|
19,783 |
|
Loss before provision for
(benefit from) income taxes |
(68,574 |
) |
|
(129,213 |
) |
|
(275,134 |
) |
|
(482,447 |
) |
Provision for (benefit from)
income taxes |
3,133 |
|
|
(1,255 |
) |
|
7,297 |
|
|
(1,773 |
) |
Net loss |
$ |
(71,707 |
) |
|
$ |
(127,958 |
) |
|
$ |
(282,431 |
) |
|
$ |
(480,674 |
) |
Net loss per share, basic
and diluted |
$ |
(0.30 |
) |
|
$ |
(0.56 |
) |
|
$ |
(1.19 |
) |
|
$ |
(2.12 |
) |
Weighted-average shares
used to compute net loss per share, basic and diluted |
240,992 |
|
|
230,491 |
|
|
237,019 |
|
|
227,185 |
|
(1) Costs and
expenses include share-based compensation expenses as follows: |
|
|
|
|
|
|
Three Months Ended January 31, |
|
|
Year Ended January 31, |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
Costs of subscription services |
$ |
17,769 |
|
|
$ |
13,869 |
|
|
$ |
63,253 |
|
|
$ |
49,919 |
|
Costs of professional services |
27,402 |
|
|
|
23,011 |
|
|
|
101,869 |
|
|
|
80,401 |
|
Product development |
126,426 |
|
118,978 |
|
|
|
505,376 |
|
|
|
434,188 |
|
Sales and marketing |
51,938 |
|
48,072 |
|
|
|
202,819 |
|
|
|
176,758 |
|
General and administrative |
33,579 |
|
30,492 |
|
|
|
131,537 |
|
|
|
118,614 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workday, Inc.Condensed
Consolidated Statements of Cash Flows(in
thousands)(unaudited)
|
Three Months Ended January 31, |
|
Year Ended January 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Cash flows from operating
activities: |
|
|
|
|
|
|
|
Net loss |
$ |
(71,707 |
) |
|
$ |
(127,958 |
) |
|
$ |
(282,431 |
) |
|
$ |
(480,674 |
) |
Adjustments to reconcile net loss
to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
75,101 |
|
|
75,126 |
|
|
293,657 |
|
|
276,278 |
|
Share-based compensation expenses |
257,114 |
|
|
234,422 |
|
|
1,004,854 |
|
|
859,571 |
|
Amortization of deferred costs |
30,506 |
|
|
24,744 |
|
|
112,647 |
|
|
90,641 |
|
Amortization of debt discount and issuance costs |
12,227 |
|
|
14,634 |
|
|
53,693 |
|
|
54,034 |
|
Non-cash lease expense |
23,987 |
|
|
18,170 |
|
|
84,376 |
|
|
67,325 |
|
Other |
(20,351 |
) |
|
(26,110 |
) |
|
(12,311 |
) |
|
(35,063 |
) |
Changes in operating assets and
liabilities, net of business combinations: |
|
|
|
|
|
|
|
Trade and other receivables, net |
(286,903 |
) |
|
(262,280 |
) |
|
(159,240 |
) |
|
(176,141 |
) |
Deferred costs |
(82,629 |
) |
|
(68,061 |
) |
|
(184,353 |
) |
|
(149,168 |
) |
Prepaid expenses and other assets |
15,379 |
|
|
(18,413 |
) |
|
52,117 |
|
|
(17,736 |
) |
Accounts payable |
5,837 |
|
|
15,805 |
|
|
(3,476 |
) |
|
20,293 |
|
Accrued expenses and other liabilities |
27,906 |
|
|
(6,375 |
) |
|
(18,472 |
) |
|
220 |
|
Unearned revenue |
567,279 |
|
|
423,410 |
|
|
327,380 |
|
|
355,018 |
|
Net cash provided by (used in)
operating activities |
553,746 |
|
|
297,114 |
|
|
1,268,441 |
|
|
864,598 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
Purchases of marketable
securities |
(768,641 |
) |
|
(368,422 |
) |
|
(2,731,885 |
) |
|
(1,797,468 |
) |
Maturities of marketable
securities |
520,010 |
|
|
346,813 |
|
|
1,802,334 |
|
|
1,686,643 |
|
Sales of marketable
securities |
5,348 |
|
|
1,009 |
|
|
10,627 |
|
|
56,508 |
|
Owned real estate projects |
(793 |
) |
|
(3,693 |
) |
|
(6,116 |
) |
|
(99,308 |
) |
Capital expenditures, excluding
owned real estate projects |
(48,688 |
) |
|
(47,420 |
) |
|
(253,380 |
) |
|
(243,694 |
) |
Business combinations, net of
cash acquired |
— |
|
|
(460,718 |
) |
|
— |
|
|
(473,603 |
) |
Purchase of other intangible
assets |
(2,950 |
) |
|
(850 |
) |
|
(2,950 |
) |
|
(850 |
) |
Purchases of non-marketable
equity and other investments |
(4,264 |
) |
|
(8,100 |
) |
|
(67,482 |
) |
|
(25,393 |
) |
Sales and maturities of
non-marketable equity and other investments |
1,005 |
|
|
— |
|
|
7,228 |
|
|
252 |
|
Other |
— |
|
|
— |
|
|
— |
|
|
(9 |
) |
Net cash provided by (used in)
investing activities |
(298,973 |
) |
|
(541,381 |
) |
|
(1,241,624 |
) |
|
(896,922 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
Proceeds from borrowings on Term
Loan, net of debt discount and issuance costs |
— |
|
|
— |
|
|
747,795 |
|
|
— |
|
Payments on convertible senior
notes |
(66 |
) |
|
— |
|
|
(250,012 |
) |
|
(30 |
) |
Payments on Term Loan |
(9,375 |
) |
|
— |
|
|
(18,750 |
) |
|
— |
|
Proceeds from issuance of common
stock from employee equity plans |
70,506 |
|
|
62,353 |
|
|
148,673 |
|
|
125,673 |
|
Other |
(221 |
) |
|
(144 |
) |
|
(2,657 |
) |
|
(519 |
) |
Net cash provided by (used in)
financing activities |
60,844 |
|
|
62,209 |
|
|
625,049 |
|
|
125,124 |
|
Effect of exchange rate
changes |
788 |
|
|
(78 |
) |
|
1,334 |
|
|
(282 |
) |
Net increase (decrease)
in cash, cash equivalents, and restricted cash |
316,405 |
|
|
(182,136 |
) |
|
653,200 |
|
|
92,518 |
|
Cash, cash equivalents,
and restricted cash at the beginning of period |
1,071,516 |
|
|
916,857 |
|
|
734,721 |
|
|
642,203 |
|
Cash, cash equivalents,
and restricted cash at the end of period |
$ |
1,387,921 |
|
|
$ |
734,721 |
|
|
$ |
1,387,921 |
|
|
$ |
734,721 |
|
|
Workday,
Inc.Reconciliation of GAAP to Non-GAAP
DataThree Months Ended January 31, 2021 (in thousands,
except percentages and per share data)(unaudited)
|
GAAP |
|
Share-Based Compensation Expenses |
|
Other Operating
Expenses (2) |
|
Amortization of Convertible Senior Notes Debt Discount and
Issuance Costs |
|
Income Tax and Dilution Effects
(3) |
|
Non-GAAP |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Costs of subscription services |
$ |
169,246 |
|
|
$ |
(17,769 |
) |
|
$ |
(8,501 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
142,976 |
|
Costs of professional
services |
143,798 |
|
|
(27,402 |
) |
|
(1,643 |
) |
|
— |
|
|
— |
|
|
114,753 |
|
Product development |
439,095 |
|
|
(126,426 |
) |
|
(6,857 |
) |
|
— |
|
|
— |
|
|
305,812 |
|
Sales and marketing |
335,249 |
|
|
(51,938 |
) |
|
(8,956 |
) |
|
— |
|
|
— |
|
|
274,355 |
|
General and administrative |
117,607 |
|
|
(33,579 |
) |
|
(1,226 |
) |
|
— |
|
|
— |
|
|
82,802 |
|
Operating income (loss) |
(73,311 |
) |
|
257,114 |
|
|
27,183 |
|
|
— |
|
|
— |
|
|
210,986 |
|
Operating margin |
(6.5 |
)% |
|
22.7 |
% |
|
2.4 |
% |
|
— |
% |
|
— |
% |
|
18.6 |
% |
Other income (expense), net |
4,737 |
|
|
— |
|
|
— |
|
|
12,117 |
|
|
— |
|
|
16,854 |
|
Income (loss) before provision
for (benefit from) income taxes |
(68,574 |
) |
|
257,114 |
|
|
27,183 |
|
|
12,117 |
|
|
— |
|
|
227,840 |
|
Provision for (benefit from)
income taxes |
3,133 |
|
|
— |
|
|
— |
|
|
— |
|
|
40,157 |
|
|
43,290 |
|
Net income (loss) |
$ |
(71,707 |
) |
|
$ |
257,114 |
|
|
$ |
27,183 |
|
|
$ |
12,117 |
|
|
$ |
(40,157 |
) |
|
$ |
184,550 |
|
Net income (loss) per share
(1) |
$ |
(0.30 |
) |
|
$ |
1.07 |
|
|
$ |
0.11 |
|
|
$ |
0.05 |
|
|
$ |
(0.20 |
) |
|
$ |
0.73 |
|
(1) |
GAAP net loss per share is calculated based upon 240,992 basic and
diluted weighted-average shares of common stock. Non-GAAP net
income per share is calculated based upon 252,099 diluted
weighted-average shares of common stock. |
(2) |
Other operating expenses include
amortization of acquisition-related intangible assets of $14.0
million and total employer payroll tax-related items on employee
stock transactions of $13.2 million. |
(3) |
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 2021, we determined the projected non-GAAP tax
rate to be 19%. Included in this is a dilution impact of $0.03 from
the conversion of basic and diluted net loss per share to diluted
net income per share. |
Workday,
Inc.Reconciliation of GAAP to Non-GAAP
DataThree Months Ended January 31, 2020(in thousands,
except percentages and per share data)(unaudited)
|
GAAP |
|
Share-Based Compensation Expenses |
|
Other Operating
Expenses (2) |
|
Amortization of Convertible Senior Notes Debt Discount and
Issuance Costs |
|
Income Tax and Dilution Effects
(3) |
|
Non-GAAP |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Costs of subscription services |
$ |
132,578 |
|
|
$ |
(13,869 |
) |
|
$ |
(8,334 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
110,375 |
|
Costs of professional
services |
152,197 |
|
|
(23,011 |
) |
|
(1,179 |
) |
|
— |
|
|
— |
|
|
128,007 |
|
Product development |
422,211 |
|
|
(118,978 |
) |
|
(7,253 |
) |
|
— |
|
|
— |
|
|
295,980 |
|
Sales and marketing |
306,618 |
|
|
(48,072 |
) |
|
(9,671 |
) |
|
— |
|
|
— |
|
|
248,875 |
|
General and administrative |
108,792 |
|
|
(30,492 |
) |
|
(1,820 |
) |
|
— |
|
|
— |
|
|
76,480 |
|
Operating income (loss) |
(146,097 |
) |
|
234,422 |
|
|
28,257 |
|
|
— |
|
|
— |
|
|
116,582 |
|
Operating margin |
(15.0 |
)% |
|
24.0 |
% |
|
2.9 |
% |
|
— |
% |
|
— |
% |
|
11.9 |
% |
Other income (expense), net |
16,884 |
|
|
— |
|
|
— |
|
|
14,635 |
|
|
— |
|
|
31,519 |
|
Income (loss) before provision
for (benefit from) income taxes |
(129,213 |
) |
|
234,422 |
|
|
28,257 |
|
|
14,635 |
|
|
— |
|
|
148,101 |
|
Provision for (benefit from)
income taxes |
(1,255 |
) |
|
— |
|
|
— |
|
|
— |
|
|
26,432 |
|
|
25,177 |
|
Net income (loss) |
$ |
(127,958 |
) |
|
$ |
234,422 |
|
|
$ |
28,257 |
|
|
$ |
14,635 |
|
|
$ |
(26,432 |
) |
|
$ |
122,924 |
|
Net income (loss) per share
(1) |
$ |
(0.56 |
) |
|
$ |
1.02 |
|
|
$ |
0.12 |
|
|
$ |
0.06 |
|
|
$ |
(0.14 |
) |
|
$ |
0.50 |
|
(1) |
GAAP net loss per share is calculated based upon 230,491 basic and
diluted weighted-average shares of common stock. Non-GAAP net
income per share is calculated based upon 247,819 diluted
weighted-average shares of common stock. |
(2) |
Other operating expenses include
amortization of acquisition-related intangible assets of $17.0
million and total employer payroll tax-related items on employee
stock transactions of $11.2 million. |
(3) |
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 2020, the projected non-GAAP tax rate was 17%.
Included in the per share amount is a dilution impact of $0.03 from
the conversion of basic and diluted net loss per share to diluted
net income per share. |
Workday,
Inc.Reconciliation of GAAP to Non-GAAP
DataYear Ended January 31, 2021(in thousands, except
percentages and per share data)(unaudited)
|
GAAP |
|
Share-Based Compensation Expenses |
|
Other Operating
Expenses (2) |
|
Amortization of Convertible Senior Notes Debt Discount and
Issuance Costs |
|
Income Tax and Dilution Effects
(3) |
|
Non-GAAP |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Costs of subscription services |
$ |
611,912 |
|
|
$ |
(63,253 |
) |
|
$ |
(34,799 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
513,860 |
|
Costs of professional
services |
586,220 |
|
|
(101,869 |
) |
|
(6,486 |
) |
|
— |
|
|
— |
|
|
477,865 |
|
Product development |
1,721,222 |
|
|
(505,376 |
) |
|
(27,567 |
) |
|
— |
|
|
— |
|
|
1,188,279 |
|
Sales and marketing |
1,233,173 |
|
|
(202,819 |
) |
|
(35,797 |
) |
|
— |
|
|
— |
|
|
994,557 |
|
General and administrative |
414,068 |
|
|
(131,537 |
) |
|
(6,337 |
) |
|
— |
|
|
— |
|
|
276,194 |
|
Operating income (loss) |
(248,599 |
) |
|
1,004,854 |
|
|
110,986 |
|
|
— |
|
|
— |
|
|
867,241 |
|
Operating margin |
(5.8 |
)% |
|
23.3 |
% |
|
2.6 |
% |
|
— |
% |
|
— |
% |
|
20.1 |
% |
Other income (expense), net |
(26,535 |
) |
|
— |
|
|
— |
|
|
53,326 |
|
|
— |
|
|
26,791 |
|
Income (loss) before provision
for (benefit from) income taxes |
(275,134 |
) |
|
1,004,854 |
|
|
110,986 |
|
|
53,326 |
|
|
— |
|
|
894,032 |
|
Provision for (benefit from)
income taxes |
7,297 |
|
|
— |
|
|
— |
|
|
— |
|
|
162,569 |
|
|
169,866 |
|
Net income (loss) |
$ |
(282,431 |
) |
|
$ |
1,004,854 |
|
|
$ |
110,986 |
|
|
$ |
53,326 |
|
|
$ |
(162,569 |
) |
|
$ |
724,166 |
|
Net income (loss) per share
(1) |
$ |
(1.19 |
) |
|
$ |
4.24 |
|
|
$ |
0.47 |
|
|
$ |
0.22 |
|
|
$ |
(0.81 |
) |
|
$ |
2.93 |
|
(1) |
GAAP net loss per share is calculated based upon 237,019 basic and
diluted weighted-average shares of common stock. Non-GAAP net
income per share is calculated based upon 247,230 diluted
weighted-average shares of common stock. |
(2) |
Other operating expenses include
amortization of acquisition-related intangible assets of $59.8
million and total employer payroll tax-related items on employee
stock transactions of $51.2 million. |
(3) |
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 2021, we have determined the projected non-GAAP
tax rate to be 19%. Included in the per share amount is a dilution
impact of $0.12 from the conversion of basic and diluted net loss
per share to diluted net income per share. |
Workday,
Inc.Reconciliation of GAAP to Non-GAAP
DataYear Ended January 31, 2020(in thousands, except
percentages and per share data)(unaudited)
|
GAAP |
|
Share-Based Compensation Expenses |
|
Other Operating Expenses (2) |
|
Amortization of Convertible Senior Notes Debt Discount and
Issuance Costs |
|
Income Tax and Dilution Effects
(3) |
|
Non-GAAP |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Costs of subscription services |
$ |
488,513 |
|
|
$ |
(49,919 |
) |
|
$ |
(40,326 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
398,268 |
|
Costs of professional
services |
576,745 |
|
|
(80,401 |
) |
|
(6,440 |
) |
|
— |
|
|
— |
|
|
489,904 |
|
Product development |
1,549,906 |
|
|
(434,188 |
) |
|
(30,684 |
) |
|
— |
|
|
— |
|
|
1,085,034 |
|
Sales and marketing |
1,146,548 |
|
|
(176,758 |
) |
|
(40,774 |
) |
|
— |
|
|
— |
|
|
929,016 |
|
General and administrative |
367,724 |
|
|
(118,614 |
) |
|
(8,592 |
) |
|
— |
|
|
— |
|
|
240,518 |
|
Operating income (loss) |
(502,230 |
) |
|
859,880 |
|
|
126,816 |
|
|
— |
|
|
— |
|
|
484,466 |
|
Operating margin |
(13.8 |
)% |
|
23.7 |
% |
|
3.5 |
% |
|
— |
% |
|
— |
% |
|
13.4 |
% |
Other income (expense), net |
19,783 |
|
|
— |
|
|
— |
|
|
54,034 |
|
|
— |
|
|
73,817 |
|
Income (loss) before provision
for (benefit from) income taxes |
(482,447 |
) |
|
859,880 |
|
|
126,816 |
|
|
54,034 |
|
|
— |
|
|
558,283 |
|
Provision for (benefit from)
income taxes |
(1,773 |
) |
|
— |
|
|
— |
|
|
— |
|
|
96,681 |
|
|
94,908 |
|
Net income (loss) |
$ |
(480,674 |
) |
|
$ |
859,880 |
|
|
$ |
126,816 |
|
|
$ |
54,034 |
|
|
$ |
(96,681 |
) |
|
$ |
463,375 |
|
Net income (loss) per share
(1) |
$ |
(2.12 |
) |
|
$ |
3.78 |
|
|
$ |
0.56 |
|
|
$ |
0.24 |
|
|
$ |
(0.58 |
) |
|
$ |
1.88 |
|
(1) |
GAAP net loss per share is calculated based upon 227,185 basic and
diluted weighted-average shares of common stock. Non-GAAP net
income per share is calculated based upon 247,013 diluted
weighted-average shares of common stock. |
(2) |
Other operating expenses include
amortization of acquisition-related intangible assets of $71.8
million and total employer payroll tax-related items on employee
stock transactions of $55.0 million. |
(3) |
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 2020, the projected non-GAAP tax rate was 17%.
Included in the per share amount is a dilution impact of $0.15 from
the conversion of basic and diluted net loss per share to diluted
net income per share. |
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) and
non-GAAP net income (loss) per share. 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) differs from GAAP in
that it excludes 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, non-cash interest expense related to
our convertible senior notes, and income tax effects.
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.
- Other operating expenses. Other
operating expenses includes employer payroll tax-related items on
employee stock transactions and amortization of acquisition-related
intangible assets. The amount of employer payroll tax-related items
on employee stock transactions is dependent on our stock price and
other factors that are beyond our control and do not correlate to
the operation of the business. 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 its related amortization can vary significantly and are
unique to each acquisition and thus we do not believe it is
reflective of ongoing operations.
- Amortization of convertible senior
notes debt discount and issuance costs. Under GAAP, we are required
to separately account for liability (debt) and equity (conversion
option) components of the convertible senior notes that were issued
in private placements in June 2013 and September 2017. Accordingly,
for GAAP purposes we are required to recognize the effective
interest expense on our convertible senior notes and amortize the
issuance costs over the term of the notes. The difference between
the effective interest expense and the contractual interest
expense, and the amortization expense of issuance costs are
excluded from management’s assessment of our operating performance
because management believes that these non-cash expenses are not
indicative of ongoing operating performance. Management believes
that the exclusion of the non-cash interest expense provides
investors an enhanced view of Workday’s operational
performance.
- 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, amortization of
acquisition-related intangible assets, and amortization of debt
discount and issuance costs. 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 2021 and 2022, 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, based on our
ongoing analysis of the 2017 U.S. Tax Cuts and Jobs Act, relevant
tax law changes, material changes in the forecasted geographic
earnings mix, and any significant acquisitions.
The use of non-GAAP operating income (loss) and non-GAAP net
income (loss) per share measures have certain limitations as they
do not reflect all items of income and expense 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.
Investor Relations Contact:Justin
FurbyIR@Workday.com
Media Contact:Nina
OestlienMedia@Workday.com
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