Workday announces fiscal 2022 first quarter financial results

Workday has reported a first quarter bookings outperformance, combined with ongoing strength in its pipeline.

Workday, a leader in enterprise cloud applications for finance and human resources, announced its results for the fiscal 2022 first quarter ended April 30, 2021.

Fiscal 2022 first quarter results

  • Total revenues were $1.18 billion, an increase of 15.4 percent from the first quarter of fiscal 2021. Subscription revenue was $1.03 billion, an increase of 17.0 percent from the same period last year.
  • Operating loss was $38.3 million, or negative 3.3 percent of revenues, compared to an operating loss of $144.5 million, or negative 14.2 percent of revenues, in the same period last year. Non-GAAP operating income for the first quarter was $288.5 million, or 24.6 percent of revenues, compared to a non-GAAP operating income of $130.5 million, or 12.8 percent of revenues, in the same period last year.
  • Net loss per basic and diluted share was $0.19, compared to a net loss per basic and diluted share of $0.68 in the first quarter of fiscal 2021. Non-GAAP net income per diluted share was $0.87, compared to a non-GAAP net income per diluted share of $0.44 in the same period last year.2
  • Operating cash flows were $452.4 million compared to $263.7 million in the prior year.
  • Cash, cash equivalents, and marketable securities were $2.99 billion as of April 30, 2021.

Comments on the news
“It was a strong start to the year as more organizations turn to Workday to accelerate their digital transformation efforts and meet the evolving finance and workforce demands for a post-pandemic world,” said Aneel Bhusri, co-founder, co-CEO, and chairman, Workday. “As we look to future growth and innovation, our values are stronger than ever with our employees' foundation to continued customer success, which is why we’re investing heavily in growing our workforce. In doing so, we can further embrace the opportunity in front of us to partner with more organizations globally.”

“Building on last year’s momentum, our first quarter bookings outperformance, combined with ongoing strength in our pipeline, demonstrates continued demand for our solutions and increased confidence in new bookings acceleration this fiscal year,” said Chano Fernandez, co-CEO, Workday. “A big thanks to our employees and partners around the world who play an important role in helping us achieve continued customer momentum. As we look ahead, we’ll be making investments across our organization and in new market opportunities so we can expand our efforts and build on this great start to the year.”

“We delivered solid first-quarter results driven by strong execution against an improving market backdrop,” said Robynne Sisco, president and CFO, Workday. “As a result, we are raising our fiscal 2022 guidance for subscription revenue to a range of $4.425 to $4.440 billion, growth of 17 percent. We expect second-quarter subscription revenue of $1.095 billion to $1.097 billion, growth of 18 percent. We are also raising our fiscal 2022 non-GAAP operating margin guidance to a range of 18 percent to 19 percent.”

Recent highlights
Workday announced that it completed its acquisition of Peakon ApS, an employee success platform that converts feedback into actionable insights. The company now operates as Peakon, a Workday company.

Workday announced it plans to increase its global headcount by more than 20% or more than 2,500 hires in fiscal 2022, which includes the creation of 400 new jobs at its European headquarters in Dublin as well as more than 250 new roles in Atlanta, Georgia.

Workday achieved a customer satisfaction rating of 97 percent as part of its latest customer survey of named support contacts – those who are closest to engaging with the Workday experience on a daily basis.

Workday delivered its latest feature release – Workday 2021 R1 – which included advancements across its product portfolio such as expanded functionality in spend and supplier management, more personalized experiences in Workday People Experience, and advances in Workday Extend to further support customers in creating and deploying new capabilities in their Workday environment.

Workday announced changes to its board of directors, including the appointment of Co-Founder and Co-CEO Aneel Bhusri as chairman, Co-CEO Chano Fernandez as a director, and Co-Founder and Director Dave Duffield as chairman emeritus.

For the fifth year in a row, Workday was named a Leader in the Gartner Magic Quadrant for Cloud Core Financial Management Suites for Midsize, Large, and Global Enterprises.

Workday was named one of Ethisphere’s 2021 World’s Most Ethical Companies, which recognizes companies with a commitment to advancing business integrity. In addition, Workday was recognized as part of Fast Company’s 2021 World Changing Ideas Awards for VIBE Index™, an offering that helps organizations measure and compare belonging, equity, diversity, and inclusion.

Earnings call details
Workday plans to host a conference call today to review its fiscal 2022 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,” by John Van Decker, Greg Leiter, Robert Anderson, 10 May 2021.

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, Peakon, VIBE Index, 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 margin, second-quarter subscription revenue, growth, innovation, opportunities, customer demand and momentum, acceleration potential, 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) the impact of the ongoing COVID-19 pandemic on our business, as well as our customers, prospects, partners, and service providers; (ii) our ability to implement our plans, objectives, and other expectations with respect to Peakon or any other of our acquired companies; (iii) 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; (iv) service outages, delays in the deployment of our applications, and the failure of our applications to perform properly; (v) our ability to manage our growth effectively; (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) the development of the market for enterprise cloud applications and services; (viii) 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; (ix) adverse changes in general economic or market conditions; (x) the regulatory, economic, and political risks associated with our domestic and international operations; (xi) the regulatory risks related to new and evolving technologies such as machine learning, artificial intelligence, and blockchain; (xii) delays or reductions in information technology spending; and (xiii) 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 April 30, 2021, 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.