Workday (WDAY) Misses Q1 EPS by 3c, Revenues Beat; Raises FY21 Operating Margin Guidance

Workday (NASDAQ: WDAY) reported Q1 EPS of $0.44, $0.03 worse than the analyst estimate of $0.47. Revenue for the quarter came in at $1.02 billion versus the consensus estimate of $1 billion.

First Quarter Fiscal 2021 Results

• Total revenues were $1.02 billion, an increase of 23.4% from the first quarter of fiscal 2020. Subscription revenue was $882.0 million, an increase of 25.8% from the same period last year.
• Operating loss was $144.5 million, or negative 14.2% of revenues, compared to an operating loss of $123.4 million, or negative 15.0% of revenues, in the same period last year. Non-GAAP operating income for the first quarter was $130.5 million, or 12.8% of revenues, compared to a non-GAAP operating income of $107.7 million, or 13.1% of revenues, in the same period last year.1
• Net loss per basic and diluted share was $0.68, compared to a net loss per basic and diluted share of $0.52 in the first quarter of fiscal 2020. Non-GAAP net income per diluted share was $0.44, compared to a non-GAAP net income per diluted share of $0.43 in the same period last year.2
• Operating cash flows were $263.7 million compared to $209.2 million in the prior year.
• Cash, cash equivalents, and marketable securities were $2.60 billion as of April 30, 2020.

Comments on the News

“The cloud is playing a critical role in today’s climate, with organizations leaning on Workday to pivot – whether it’s helping employees learn virtually, closing books remotely, or scenario planning to determine what path to take. In many of these situations, our customers are running essential businesses, which we are incredibly grateful for,” said Aneel Bhusri, co-founder and CEO, Workday. “Amidst the current environment, we are pleased with our strong Q1 results, which include several new Fortune 500 customers as well as many virtual go-lives. Our employees never cease to amaze me and despite this entirely new way of remote working, they delivered our most recent release with more than 400 new features and moved Workday Extend to general availability.”

“Despite a challenging environment, we reported solid first-quarter results, which we believe are a direct reflection of the mission-critical nature of our solutions,” said Robynne Sisco, co-president and chief financial officer, Workday. “While we believe we remain well-positioned for the long term, we are reducing our fiscal 2021 subscription revenue guidance to account for the near-term impact from COVID-19. We now expect fiscal 2021 subscription revenue in a range of $3.67 billion to $3.69 billion. We expect second-quarter subscription revenue of $913.0 million to $915.0 million. We are raising our fiscal 2021 non-GAAP operating margin guidance to 16.0%. We remain confident in the fundamental strength of our business model, and we plan to operate with agility while continuing to drive innovation to support sustainable, long-term growth.”

For earnings history and earnings-related data on Workday (WDAY) click here.

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