Workday Announces Fiscal 2024 Fourth Quarter and Full Year Financial Results

Workday, Inc.  announced its fiscal 2024 fourth quarter and full-year results, revealing significant growth. The company reported a 17% year-over-year increase in total revenues for the fourth quarter, reaching $1.9 billion, with subscription revenues up by 18% at $1.8 billion. The annual figures were similarly impressive, with total revenues for the fiscal year reaching $7.3 billion, a 17% increase from the previous year, and subscription revenues up by 19% at $6.6 billion. The company also noted a substantial increase in operating cash flows and a significant reduction in operating losses, turning to operating income. Additionally, Workday highlighted strategic moves including the acquisition of HiredScore, new customer wins, and a strategic partnership aimed at expanding its offerings in HR solutions for small and midsize businesses.

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 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.

• 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.

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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.

source:https://newsroom.workday.com/2024-02-26-Workday-Announces-Fiscal-2024-Fourth-Quarter-and-Full-Year-Financial-Results