PLEASANTON, Calif.,
Feb. 28, 2022 /PRNewswire/ --
Workday, Inc. (NASDAQ: WDAY), a leader in enterprise cloud
applications for finance and human resources, today announced
results for the fiscal 2022 fourth quarter and full year ended
January 31, 2022.
Fiscal 2022 Fourth Quarter Results
- Total revenues were $1.38
billion, an increase of 21.6% from the fourth quarter of
fiscal 2021. Subscription revenues were $1.23 billion, an increase of 22.2% from the same
period last year.
- Operating loss was $101.0
million, or negative 7.3% of revenues, compared to an
operating loss of $73.3 million, or
negative 6.5% of revenues, in the same period last year. Non-GAAP
operating income for the fourth quarter was $237.1 million, or 17.2% of revenues, compared to
a non-GAAP operating income of $211.0
million, or 18.6% of revenues, in the same period last
year.1
- Basic and diluted net loss per share was $0.29, compared to a basic and diluted net loss
per share of $0.30 in the fourth
quarter of fiscal 2021. Non-GAAP basic and diluted net income per
share was $0.82 and $0.78, respectively, compared to a non-GAAP basic
and diluted net income per share of $0.77 and $0.73,
respectively, in the same period last year.2
Fiscal Year 2022 Results
- Total revenues were $5.14
billion, an increase of 19.0% from fiscal 2021. Subscription
revenues were $4.55 billion, an
increase of 20.0% from the prior year.
- Operating loss was $116.5
million, or negative 2.3% of revenues, compared to an
operating loss of $248.6 million, or
negative 5.8% of revenues, in fiscal 2021. Non-GAAP operating
income was $1.15 billion, or 22.4% of
revenues, compared to a non-GAAP operating income of $867.2 million, or 20.1% of revenues, in the
prior year.1
- Basic and diluted net income per share was $0.12, compared to a basic and diluted net loss
per share of $1.19 in fiscal 2021.
Non-GAAP basic and diluted net income per share was $4.20 and $3.99,
respectively, compared to a non-GAAP basic and diluted net income
per share of $3.06 and $2.93, respectively, in the same period last
year.2
- Operating cash flows were $1.65
billion compared to $1.27
billion in the prior year.
- Cash, cash equivalents, and marketable securities were
$3.64 billion as of January 31, 2022.
Comments on the News
"We closed out the year with another strong quarter that saw
continued acceleration of our business, including a growing global
workforce and a relentless focus on employees, customers, and
innovation," said Aneel Bhusri,
co-founder, co-CEO, and chairman, Workday. "We continue to see
increasing demand for our broad suite of finance and HR solutions,
as we help some of the world's largest organizations – and more
than 60 million users – navigate the changing world of work. This
momentum, along with our employees' continued commitment, gives me
great confidence in the opportunity ahead."
"Our solid fourth quarter results demonstrate our global
momentum with new Fortune 500 customer wins, growing
interest in our expanding portfolio of solutions, and the closing
of several strategic deals across multiple industries," said
Chano Fernandez, co-CEO, Workday.
"Looking ahead, the pipeline for fiscal 2023 is strong, as we look
to continue investing in our people and go-to-market strategies to
deliver on our customers' future needs."
"Our exceptional fourth quarter and full-year fiscal 2022
results reflect the broad-based momentum that we see across the
business," said Barbara Larson,
chief financial officer, Workday. "Given the strength in our fourth
quarter and our optimism that the environment will remain robust
for finance and HR transformation initiatives, we are raising our
guidance for fiscal 2023 subscription revenue to be in a range of
$5.530 billion to $5.550 billion, representing year-over-year
growth of 22%. We are also raising our fiscal 2023 non-GAAP
operating margin guidance to 18.5%. Our market position has never
been stronger, and investing to support long-term growth remains
our priority."
Recent Highlights
- Workday increased its workforce by more than 20% in fiscal year
2022, which brings its total employee count to more than 15,200
global employees.
- Workday announced continued investment in leadership with the
appointments of Sheri Rhodes to
chief customer officer and Patrick
Blair to president of the Americas, helping support the
company's growing momentum on the path to $10 billion in revenue.
- Workday completed its acquisition of VNDLY, which will give
customers a unified workforce optimization solution for managing
all types of workers—salaried, hourly, contingent, and
outsourced—and support a holistic talent strategy.
- Workday continues to see growing industry momentum within the
financial services and retail industries. More than 70% of
financial services companies in the Fortune 500 have
selected Workday, and over 50% of the 2021 NRF Top 100 Retailers
have selected Workday to manage and optimize their retail
operations.
- Workday was listed on Corporate Knights' index of the world's
most sustainable firms, which is based on an assessment of nearly
7,000 public companies with revenue over US$1 billion.
Earnings Call Details
Workday plans to host a conference call today to review its
fiscal 2022 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 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.
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 50% of the Fortune 500. For more
information about Workday, visit workday.com.
© 2022 Workday, Inc. All rights reserved. VNDLY, 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 2023 subscription revenues and non-GAAP operating
margin, growth, innovation, opportunities, customer demand and
momentum, acceleration potential, pipeline, 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) our ability to implement our plans, objectives, and
other expectations with respect to VNDLY or any other of our
acquired companies; (ii) the impact of the ongoing COVID-19
pandemic on our business, as well as our customers, prospects,
partners, and service providers; (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, and artificial intelligence
(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,
and artificial intelligence (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-K for the fiscal year ended January 31,
2022, 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)
|
|
|
As of January
31,
|
|
2022
|
|
2021
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
1,534,273
|
|
$
1,384,181
|
Marketable
securities
|
2,109,888
|
|
2,151,472
|
Trade and other
receivables, net
|
1,242,545
|
|
1,032,484
|
Deferred
costs
|
152,957
|
|
122,764
|
Prepaid expenses and
other current assets
|
174,402
|
|
111,160
|
Total current
assets
|
5,214,065
|
|
4,802,061
|
Property and
equipment, net
|
1,123,075
|
|
972,403
|
Operating lease
right-of-use assets
|
247,808
|
|
414,143
|
Deferred costs,
noncurrent
|
341,259
|
|
271,796
|
Acquisition-related
intangible assets, net
|
391,002
|
|
248,626
|
Goodwill
|
2,840,044
|
|
1,819,625
|
Other
assets
|
341,252
|
|
189,757
|
Total
assets
|
$
10,498,505
|
|
$
8,718,411
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
55,487
|
|
$
75,596
|
Accrued expenses and
other current liabilities
|
195,590
|
|
169,266
|
Accrued
compensation
|
402,885
|
|
285,061
|
Unearned
revenue
|
3,110,947
|
|
2,556,624
|
Operating lease
liabilities
|
80,503
|
|
93,000
|
Debt,
current
|
1,222,443
|
|
1,103,101
|
Total current
liabilities
|
5,067,855
|
|
4,282,648
|
Debt,
noncurrent
|
617,354
|
|
691,913
|
Unearned revenue,
noncurrent
|
71,533
|
|
80,111
|
Operating lease
liabilities, noncurrent
|
182,456
|
|
350,051
|
Other
liabilities
|
24,225
|
|
35,854
|
Total
liabilities
|
5,963,423
|
|
5,440,577
|
Stockholders'
equity:
|
|
|
|
Common
stock
|
251
|
|
242
|
Additional paid-in
capital
|
7,284,174
|
|
6,254,936
|
Treasury
stock
|
(12,467)
|
|
(12,384)
|
Accumulated other
comprehensive income (loss)
|
7,709
|
|
(54,970)
|
Accumulated
deficit
|
(2,744,585)
|
|
(2,909,990)
|
Total stockholders'
equity
|
4,535,082
|
|
3,277,834
|
Total liabilities
and stockholders' equity
|
$
10,498,505
|
|
$
8,718,411
|
Workday,
Inc.
|
Condensed
Consolidated Statements of Operations
|
(in thousands, except
per share data)
|
(unaudited)
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues:
|
|
|
|
|
|
|
|
Subscription
services
|
$
1,229,173
|
|
$
1,006,251
|
|
$
4,546,313
|
|
$
3,788,452
|
Professional
services
|
146,968
|
|
125,433
|
|
592,485
|
|
529,544
|
Total
revenues
|
1,376,141
|
|
1,131,684
|
|
5,138,798
|
|
4,317,996
|
Costs and expenses
(1):
|
|
|
|
|
|
|
|
Costs of subscription
services
|
220,208
|
|
169,246
|
|
795,854
|
|
611,912
|
Costs of professional
services
|
169,589
|
|
143,798
|
|
632,241
|
|
586,220
|
Product
development
|
537,738
|
|
439,095
|
|
1,879,220
|
|
1,721,222
|
Sales and
marketing
|
410,947
|
|
335,249
|
|
1,461,921
|
|
1,233,173
|
General and
administrative
|
138,621
|
|
117,607
|
|
486,012
|
|
414,068
|
Total costs and
expenses
|
1,477,103
|
|
1,204,995
|
|
5,255,248
|
|
4,566,595
|
Operating income
(loss)
|
(100,962)
|
|
(73,311)
|
|
(116,450)
|
|
(248,599)
|
Other income
(expense), net
|
17,141
|
|
4,737
|
|
132,632
|
|
(26,535)
|
Income (loss) before
provision for (benefit from) income taxes
|
(83,821)
|
|
(68,574)
|
|
16,182
|
|
(275,134)
|
Provision for
(benefit from) income taxes
|
(10,568)
|
|
3,133
|
|
(13,191)
|
|
7,297
|
Net income
(loss)
|
$
(73,253)
|
|
$
(71,707)
|
|
$
29,373
|
|
$
(282,431)
|
Net income (loss) per
share, basic
|
$
(0.29)
|
|
$
(0.30)
|
|
$
0.12
|
|
$
(1.19)
|
Net income (loss) per
share, diluted
|
$
(0.29)
|
|
$
(0.30)
|
|
$
0.12
|
|
$
(1.19)
|
Weighted-average
shares used to compute net income (loss) per share,
basic
|
250,043
|
|
240,992
|
|
247,249
|
|
237,019
|
Weighted-average
shares used to compute net income (loss) per share,
diluted
|
250,043
|
|
240,992
|
|
254,032
|
|
237,019
|
|
|
|
|
|
(1) Costs and
expenses include share-based compensation expenses as
follows:
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Costs of subscription
services
|
$
23,235
|
|
$
17,769
|
|
$
85,713
|
|
$
63,253
|
Costs of professional
services
|
30,112
|
|
27,402
|
|
113,443
|
|
101,869
|
Product
development
|
147,790
|
|
126,426
|
|
543,135
|
|
505,376
|
Sales and
marketing
|
57,571
|
|
51,938
|
|
215,692
|
|
202,819
|
General and
administrative
|
43,225
|
|
33,579
|
|
154,422
|
|
131,537
|
Total share-based
compensation expenses
|
$
301,933
|
|
$
257,114
|
|
$
1,112,405
|
|
$
1,004,854
|
Workday,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(in
thousands)
|
(unaudited)
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(73,253)
|
|
$
(71,707)
|
|
$
29,373
|
|
$
(282,431)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
88,750
|
|
75,101
|
|
343,723
|
|
293,657
|
Share-based
compensation expenses
|
292,235
|
|
257,114
|
|
1,100,584
|
|
1,004,854
|
Amortization of
deferred costs
|
37,953
|
|
30,506
|
|
138,797
|
|
112,647
|
Amortization of debt
discount and issuance costs
|
997
|
|
12,227
|
|
3,988
|
|
53,693
|
Non-cash lease
expense
|
21,529
|
|
23,987
|
|
86,235
|
|
84,376
|
(Gains) losses on
investments
|
(20,366)
|
|
(16,914)
|
|
(145,845)
|
|
(16,558)
|
Other
|
(6,997)
|
|
(3,437)
|
|
(14,213)
|
|
4,247
|
Changes in operating
assets and liabilities, net of business combinations:
|
|
|
|
|
|
|
|
Trade and other
receivables, net
|
(379,190)
|
|
(286,903)
|
|
(207,933)
|
|
(159,240)
|
Deferred
costs
|
(108,695)
|
|
(82,629)
|
|
(238,453)
|
|
(184,353)
|
Prepaid expenses and
other assets
|
(14,106)
|
|
15,379
|
|
(35,153)
|
|
52,117
|
Accounts
payable
|
13,531
|
|
5,837
|
|
9,414
|
|
(3,476)
|
Accrued expenses and
other liabilities
|
74,780
|
|
27,906
|
|
50,671
|
|
(18,472)
|
Unearned
revenue
|
687,981
|
|
567,279
|
|
529,516
|
|
327,380
|
Net cash provided by
(used in) operating activities
|
615,149
|
|
553,746
|
|
1,650,704
|
|
1,268,441
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of
marketable securities
|
(541,689)
|
|
(768,641)
|
|
(2,858,729)
|
|
(2,731,885)
|
Maturities of
marketable securities
|
500,625
|
|
520,010
|
|
2,804,103
|
|
1,802,334
|
Sales of marketable
securities
|
171,730
|
|
5,348
|
|
199,016
|
|
10,627
|
Owned real estate
projects
|
(3)
|
|
(793)
|
|
(171,501)
|
|
(6,116)
|
Capital expenditures,
excluding owned real estate projects
|
(73,355)
|
|
(48,688)
|
|
(264,267)
|
|
(253,380)
|
Business
combinations, net of cash acquired
|
(450,334)
|
|
—
|
|
(1,190,199)
|
|
—
|
Purchase of other
intangible assets
|
(8,007)
|
|
(2,950)
|
|
(8,007)
|
|
(2,950)
|
Purchases of
non-marketable equity and other investments
|
(38,485)
|
|
(4,264)
|
|
(123,011)
|
|
(67,482)
|
Sales and maturities
of non-marketable equity and other investments
|
—
|
|
1,005
|
|
5,169
|
|
7,228
|
Other
|
(1)
|
|
—
|
|
—
|
|
—
|
Net cash provided by
(used in) investing activities
|
(439,519)
|
|
(298,973)
|
|
(1,607,426)
|
|
(1,241,624)
|
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
|
(34)
|
|
(66)
|
|
(114)
|
|
(250,012)
|
Payments on Term
Loan
|
(9,375)
|
|
(9,375)
|
|
(37,500)
|
|
(18,750)
|
Proceeds from
issuance of common stock from employee equity plans, net of taxes
paid for shares withheld
|
71,947
|
|
70,506
|
|
148,328
|
|
148,673
|
Other
|
(54)
|
|
(221)
|
|
(463)
|
|
(2,657)
|
Net cash provided by
(used in) financing activities
|
62,484
|
|
60,844
|
|
110,251
|
|
625,049
|
Effect of exchange
rate changes
|
(620)
|
|
788
|
|
(705)
|
|
1,334
|
Net increase
(decrease) in cash, cash equivalents, and restricted
cash
|
237,494
|
|
316,405
|
|
152,824
|
|
653,200
|
Cash, cash
equivalents, and restricted cash at the beginning of
period
|
1,303,251
|
|
1,071,516
|
|
1,387,921
|
|
734,721
|
Cash, cash
equivalents, and restricted cash at the end of
period
|
$
1,540,745
|
|
$
1,387,921
|
|
$
1,540,745
|
|
$
1,387,921
|
Workday,
Inc.
|
Reconciliation of
GAAP to Non-GAAP Data
|
Three Months Ended
January 31, 2022
|
(in thousands, except
percentages and per share data)
|
(unaudited)
|
|
|
GAAP
|
|
Share-Based
Compensation
Expenses
|
|
Other
Operating
Expenses (2)
|
|
Income Tax
and Dilution
Effects (3)
|
|
Non-GAAP
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
Costs of subscription
services
|
$
220,208
|
|
$
(23,235)
|
|
$
(14,356)
|
|
$
—
|
|
$
182,617
|
Costs of professional
services
|
169,589
|
|
(30,112)
|
|
(1,970)
|
|
—
|
|
137,507
|
Product
development
|
537,738
|
|
(147,790)
|
|
(7,362)
|
|
—
|
|
382,586
|
Sales and
marketing
|
410,947
|
|
(57,571)
|
|
(10,945)
|
|
—
|
|
342,431
|
General and
administrative
|
138,621
|
|
(43,225)
|
|
(1,534)
|
|
—
|
|
93,862
|
Operating income
(loss)
|
(100,962)
|
|
301,933
|
|
36,167
|
|
—
|
|
237,138
|
Operating
margin
|
(7.3)%
|
|
21.9%
|
|
2.6%
|
|
—%
|
|
17.2%
|
Other income
(expense), net
|
17,141
|
|
—
|
|
—
|
|
—
|
|
17,141
|
Income (loss) before
provision for (benefit from) income taxes
|
(83,821)
|
|
301,933
|
|
36,167
|
|
—
|
|
254,279
|
Provision for
(benefit from) income taxes
|
(10,568)
|
|
—
|
|
—
|
|
58,881
|
|
48,313
|
Net income
(loss)
|
$
(73,253)
|
|
$
301,933
|
|
$
36,167
|
|
$
(58,881)
|
|
$
205,966
|
Net income (loss) per
share, basic (1)
|
$
(0.29)
|
|
$
1.21
|
|
$
0.14
|
|
$
(0.24)
|
|
$
0.82
|
Net income (loss) per
share, diluted (1)
|
$
(0.29)
|
|
$
1.21
|
|
$
0.14
|
|
$
(0.28)
|
|
$
0.78
|
|
|
(1)
|
GAAP net loss per
share is calculated based upon 250,043 basic and diluted
weighted-average shares of common stock.
Non-GAAP net income
per share is calculated based upon 250,043 basic and 264,581
diluted weighted-average shares
of common stock. The
numerator used to compute non-GAAP diluted net income per share was
increased by $1.3 million
for after-tax
interest expense on our convertible senior notes in accordance with
the if-converted method.
|
(2)
|
Other operating
expenses include amortization of acquisition-related intangible
assets of $20.7 million and total employer
payroll tax-related
items on employee stock transactions of $15.5 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 2022, the non-GAAP tax rate was
19%. Included in the per share
amount is a dilution
impact of $0.04 from the conversion of GAAP diluted net loss per
share to non-GAAP diluted net income
per share.
|
Workday,
Inc.
|
Reconciliation of
GAAP to Non-GAAP Data
|
Three 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, basic (1)
|
$
(0.30)
|
|
$
1.07
|
|
$
0.11
|
|
$
0.05
|
|
$
(0.16)
|
|
$
0.77
|
Net income (loss) per
share, diluted
(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 240,992 basic and 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, the non-GAAP tax rate was
19%. Included in the per share
amount is a dilution
impact of $0.03 from the conversion of GAAP diluted net loss per
share to non-GAAP diluted net income
per share.
|
Workday,
Inc.
|
Reconciliation of
GAAP to Non-GAAP Data
|
Year Ended January
31, 2022
|
(in thousands, except
percentages and per share data)
|
(unaudited)
|
|
|
GAAP
|
|
Share-Based
Compensation
Expenses
|
|
Other
Operating
Expenses (2)
|
|
Income Tax
and Dilution
Effects (3)
|
|
Non-GAAP
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
Costs of subscription
services
|
$
795,854
|
|
$
(85,713)
|
|
$
(54,551)
|
|
$
—
|
|
$
655,590
|
Costs of professional
services
|
632,241
|
|
(113,443)
|
|
(11,181)
|
|
—
|
|
507,617
|
Product
development
|
1,879,220
|
|
(543,135)
|
|
(32,935)
|
|
—
|
|
1,303,150
|
Sales and
marketing
|
1,461,921
|
|
(215,692)
|
|
(47,457)
|
|
—
|
|
1,198,772
|
General and
administrative
|
486,012
|
|
(154,422)
|
|
(7,625)
|
|
—
|
|
323,965
|
Operating income
(loss)
|
(116,450)
|
|
1,112,405
|
|
153,749
|
|
—
|
|
1,149,704
|
Operating
margin
|
(2.3)%
|
|
21.6%
|
|
3.1%
|
|
—%
|
|
22.4%
|
Other income
(expense), net
|
132,632
|
|
—
|
|
—
|
|
—
|
|
132,632
|
Income (loss) before
provision for (benefit from) income taxes
|
16,182
|
|
1,112,405
|
|
153,749
|
|
—
|
|
1,282,336
|
Provision for
(benefit from) income taxes
|
(13,191)
|
|
—
|
|
—
|
|
256,835
|
|
243,644
|
Net income
(loss)
|
$
29,373
|
|
$1,112,405
|
|
$
153,749
|
|
$
(256,835)
|
|
$1,038,692
|
Net income (loss) per
share, basic (1)
|
$
0.12
|
|
$
4.50
|
|
$
0.62
|
|
$
(1.04)
|
|
$
4.20
|
Net income (loss) per
shares, diluted (1)
|
$
0.12
|
|
$
4.38
|
|
$
0.61
|
|
$
(1.12)
|
|
$
3.99
|
|
|
(1)
|
GAAP net income per
share is calculated based upon 247,249 basic and 254,032 diluted
weighted-average shares of common stock.
Non-GAAP net income
per share is calculated based upon 247,249 basic and 261,849
diluted weighted-average shares of common
stock. The numerator
used to compute non-GAAP diluted net income per share was increased
by $5.2 million for after-tax interest
expense on our
convertible senior notes in accordance with the if-converted
method.
|
(2)
|
Other operating
expenses include amortization of acquisition-related intangible
assets of $78.1 million and total employer payroll
tax-related items on
employee stock transactions of $75.6 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 2022, the non-GAAP tax rate was 19%. Included
in the per share amount is a dilution impact
of $0.11 from the
conversion of GAAP diluted net income per share to non-GAAP diluted
net income per share.
|
Workday,
Inc.
|
Reconciliation of
GAAP to Non-GAAP Data
|
Year 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, basic (1)
|
$
(1.19)
|
|
$
4.24
|
|
$
0.47
|
|
$
0.22
|
|
$
(0.68)
|
|
$
3.06
|
Net income (loss) per
share, diluted
(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 237,019 basic and 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, the non-GAAP tax rate was
19%. Included in the per share
amount is a dilution
impact of $0.12 from the conversion of GAAP diluted net loss per
share to non-GAAP 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. 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.
- Amortization of convertible senior notes debt discount and
issuance costs. We adopted Accounting Standard Update No.
2020-06, Debt with Conversion and Other Options (Subtopic
470-20) and Derivatives and Hedging—Contracts in Entity's Own
Equity (Subtopic 815-40), on February 1,
2021, using a modified retrospective method, under which
financial results reported in prior periods were not adjusted.
Prior to the adoption, we were 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
were 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 were excluded from management's
assessment of our operating performance because management believed
that these non-cash expenses were not indicative of ongoing
operating performance. Management believed that the exclusion of
the non-cash interest expense provided investors an enhanced view
of Workday's operational performance. Upon adoption, we recombined
the liability and equity components of our outstanding convertible
senior notes, assuming the instrument was accounted for as a single
liability from inception to the date of adoption. We similarly
recombined the liability and equity components of the issuance
costs. Under this new guidance, we will no longer incur interest
expense related to the amortization of the debt discount associated
with the conversion option and therefore no longer consider this to
be a non-GAAP reconciling item.
- 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
2023 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.
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multimedia:https://www.prnewswire.com/news-releases/workday-announces-fiscal-2022-fourth-quarter-and-full-year-financial-results-301491903.html
SOURCE Workday Inc.