Fiscal First Quarter Total Revenues of
$1.43 Billion, Up 22.1% Year Over
Year
Subscription Revenues of $1.27 Billion, Up 23.2% Year Over Year
24-Month Subscription Revenue Backlog of
$7.97 Billion, Up 20.9% Year Over
Year
Total Subscription Revenue Backlog of
$12.65 Billion, Up 25.5% Year Over
Year
PLEASANTON, Calif., May 26, 2022
/PRNewswire/ -- Workday, Inc. (NASDAQ: WDAY), a leader in
enterprise cloud applications for finance and human resources,
today announced results for the fiscal 2023 first quarter ended
April 30, 2022.
Fiscal 2023 First Quarter Results
- Total revenues were $1.43
billion, an increase of 22.1% from the first quarter of
fiscal 2022. Subscription revenues were $1.27 billion, an increase of 23.2% from the same
period last year.
- Operating loss was $72.8 million,
or negative 5.1% of revenues, compared to an operating loss of
$38.3 million, or negative 3.3% of
revenues, in the same period last year. Non-GAAP operating income
for the first quarter was $288.6
million, or 20.1% of revenues, compared to a non-GAAP
operating income of $288.5 million,
or 24.6% of revenues, in the same period last
year.1
- Basic and diluted net loss per share was $0.41, compared to basic and diluted net loss per
share of $0.19 in the first quarter
of fiscal 2022. Non-GAAP basic and diluted net income per share was
$0.86 and $0.83, respectively, compared to non-GAAP basic
and diluted net income per share of $0.93 and $0.87,
respectively, in the same period last year.2
- Operating cash flows were $439.7
million compared to $452.4
million in the prior year.
- Cash, cash equivalents, and marketable securities were
$6.26 billion as of April 30,
2022.
Comments on the News
"Workday had a strong first quarter, building on the fiscal 2022
acceleration of our business," said Aneel
Bhusri, co-founder, co-CEO, and chairman, Workday. "I'm
confident in our opportunity ahead and the enduring growth of
Workday. Our focus remains on cultivating our culture, while
driving innovation across finance and HR, and expanding the value
we bring to some of the world's largest organizations."
"Our continued global momentum and a healthy deal pipeline
position us well to deliver a strong fiscal 2023," said
Chano Fernandez, co-CEO, Workday.
"As we look ahead, we will continue to remain focused on our
people, who are so critical to our success, as well as driving high
rates of customer satisfaction through our industry investments, as
well as our expanded innovation efforts with our partner
ecosystem."
"We had a solid start to the year, as organizations across the
globe continue to choose Workday as their strategic finance and HR
partner," said Barbara Larson, chief
financial officer, Workday. "As a result, we are raising our fiscal
2023 subscription revenue to be in the range of $5.537 billion to $5.557
billion, representing year-over-year growth of 22%. We
expect second quarter subscription revenue of $1.353 billion to $1.355
billion, representing year-over-year growth of 22%. We are
maintaining our fiscal 2023 non-GAAP operating margin guidance of
18.5%, as we invest to capitalize on the long-term opportunity we
see ahead."
Recent Highlights
- Workday intends to create 1,000 new jobs at its European
headquarters in Dublin over the
next two years. In addition, the company plans to build new
European headquarters at Grangegorman in Dublin.
- Workday completed the issuance and sale of $3.0 billion aggregate principal amount of senior
notes in an underwritten, registered public offering.
- Building on its long-standing support of ESG, Workday shared
its commitments to ESG as well as announced two new ESG solutions
to help customers drive social and sustainability initiatives as
they navigate evolving ESG regulations and corporate accountability
standards.
- Workday was named one of the World's Most Ethical Companies by
Ethisphere, which recognizes companies with a commitment to
advancing business integrity.
Earnings Call Details
Workday plans to host a conference call today to review its
fiscal 2023 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 and
non-GAAP operating margin exclude 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, 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. 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, second quarter subscription revenue, growth, innovation,
opportunities, customer satisfaction 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 any 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-Q for the
fiscal quarter ended April 30, 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)
|
|
|
April 30, 2022
|
|
January 31, 2022
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash equivalents
|
$ 2,776,336
|
|
$ 1,534,273
|
Marketable securities
|
3,479,019
|
|
2,109,888
|
Trade and other receivables, net
|
778,076
|
|
1,242,545
|
Deferred costs
|
156,806
|
|
152,957
|
Prepaid expenses and other current assets
|
252,989
|
|
174,402
|
Total current
assets
|
7,443,226
|
|
5,214,065
|
Property and equipment,
net
|
1,186,004
|
|
1,123,075
|
Operating lease
right-of-use assets
|
252,236
|
|
247,808
|
Deferred costs,
noncurrent
|
339,712
|
|
341,259
|
Acquisition-related
intangible assets, net
|
369,387
|
|
391,002
|
Goodwill
|
2,840,044
|
|
2,840,044
|
Other assets
|
368,497
|
|
341,252
|
Total assets
|
$
12,799,106
|
|
$
10,498,505
|
Liabilities and stockholders'
equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
|
$
123,361
|
|
$
55,487
|
Accrued expenses and other current liabilities
|
246,939
|
|
195,590
|
Accrued compensation
|
362,269
|
|
402,885
|
Unearned revenue
|
2,820,119
|
|
3,110,947
|
Operating lease liabilities
|
80,573
|
|
80,503
|
Debt, current
|
1,148,126
|
|
1,222,443
|
Total current
liabilities
|
4,781,387
|
|
5,067,855
|
Debt,
noncurrent
|
2,973,068
|
|
617,354
|
Unearned revenue,
noncurrent
|
59,308
|
|
71,533
|
Operating lease
liabilities, noncurrent
|
182,237
|
|
182,456
|
Other
liabilities
|
22,299
|
|
24,225
|
Total
liabilities
|
8,018,299
|
|
5,963,423
|
Stockholders'
equity:
|
|
|
|
Common stock
|
253
|
|
251
|
Additional paid-in capital
|
7,596,787
|
|
7,284,174
|
Treasury stock
|
(12,584)
|
|
(12,467)
|
Accumulated other comprehensive income (loss)
|
43,109
|
|
7,709
|
Accumulated deficit
|
(2,846,758)
|
|
(2,744,585)
|
Total stockholders'
equity
|
4,780,807
|
|
4,535,082
|
Total liabilities and stockholders'
equity
|
$
12,799,106
|
|
$
10,498,505
|
Workday,
Inc.
Condensed
Consolidated Statements of Operations
(in thousands, except
per share data)
(unaudited)
|
|
|
Three Months Ended April 30,
|
|
2022
|
|
2021
|
Revenues:
|
|
|
|
Subscription services
|
$ 1,272,076
|
|
$ 1,032,169
|
Professional services
|
162,581
|
|
142,864
|
Total
revenues
|
1,434,657
|
|
1,175,033
|
Costs and expenses
(1):
|
|
|
|
Costs of subscription services
|
232,922
|
|
182,208
|
Costs of professional services
|
169,899
|
|
150,845
|
Product development
|
541,509
|
|
441,616
|
Sales and marketing
|
429,301
|
|
326,494
|
General and administrative
|
133,869
|
|
112,183
|
Total costs and
expenses
|
1,507,500
|
|
1,213,346
|
Operating income
(loss)
|
(72,843)
|
|
(38,313)
|
Other income (expense),
net
|
(20,163)
|
|
(9,051)
|
Income (loss) before
provision for (benefit from) income taxes
|
(93,006)
|
|
(47,364)
|
Provision for (benefit
from) income taxes
|
9,167
|
|
(842)
|
Net income (loss)
|
$
(102,173)
|
|
$
(46,522)
|
Net income (loss) per
share, basic and diluted
|
$
(0.41)
|
|
$
(0.19)
|
Weighted-average shares
used to compute net income (loss) per share, basic and
diluted
|
251,743
|
|
243,739
|
|
(1) Costs and expenses
include share-based compensation expenses as follows:
|
|
Three Months Ended April 30,
|
|
2022
|
|
2021
|
Costs of subscription services
|
$
26,230
|
|
$
20,717
|
Costs of professional services
|
27,584
|
|
27,692
|
Product development
|
153,304
|
|
129,862
|
Sales and marketing
|
59,169
|
|
50,308
|
General and administrative
|
45,219
|
|
36,056
|
Total share-based compensation expenses
|
$
311,506
|
|
$
264,635
|
Workday,
Inc.
Condensed
Consolidated Statements of Cash Flows
(in
thousands)
(unaudited)
|
|
|
Three Months Ended April 30,
|
|
2022
|
|
2021
|
Cash flows from operating
activities:
|
|
|
|
Net income
(loss)
|
$
(102,173)
|
|
$
(46,522)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
Depreciation and amortization
|
89,846
|
|
82,463
|
Share-based compensation expenses
|
311,506
|
|
264,635
|
Amortization of deferred costs
|
39,427
|
|
31,614
|
Non-cash lease expense
|
22,048
|
|
22,230
|
(Gains) losses on investments
|
8,080
|
|
6,018
|
Other
|
709
|
|
(1,624)
|
Changes in operating
assets and liabilities, net of business combinations:
|
|
|
|
Trade and other receivables, net
|
462,964
|
|
392,119
|
Deferred costs
|
(41,729)
|
|
(26,270)
|
Prepaid expenses and other assets
|
(23,997)
|
|
(35,566)
|
Accounts payable
|
6,910
|
|
(170)
|
Accrued expenses and other liabilities
|
(30,873)
|
|
(10,920)
|
Unearned revenue
|
(303,001)
|
|
(225,579)
|
Net cash provided by
(used in) operating activities
|
439,717
|
|
452,428
|
Cash flows from investing
activities:
|
|
|
|
Purchases of marketable
securities
|
(2,010,619)
|
|
(765,395)
|
Maturities of
marketable securities
|
601,475
|
|
857,408
|
Sales of marketable
securities
|
5,130
|
|
12,457
|
Owned real estate
projects
|
(20)
|
|
(171,423)
|
Capital expenditures,
excluding owned real estate projects
|
(58,750)
|
|
(69,796)
|
Business combinations,
net of cash acquired
|
—
|
|
(679,220)
|
Purchases of
non-marketable equity and other investments
|
(15,023)
|
|
(45,767)
|
Sales and maturities of
non-marketable equity and other investments
|
7,066
|
|
25
|
Other
|
—
|
|
(5)
|
Net cash provided by
(used in) investing activities
|
(1,470,741)
|
|
(861,716)
|
Cash flows from financing
activities:
|
|
|
|
Proceeds from issuance
of debt, net of debt discount
|
2,978,077
|
|
—
|
Repayments and
extinguishment of debt
|
(693,953)
|
|
(9,426)
|
Payments for debt
issuance costs
|
(7,220)
|
|
—
|
Proceeds from issuance
of common stock from employee equity plans, net of taxes paid for
shares
withheld
|
990
|
|
(1,357)
|
Other
|
(192)
|
|
(225)
|
Net cash provided by
(used in) financing activities
|
2,277,702
|
|
(11,008)
|
Effect of exchange rate
changes
|
(685)
|
|
186
|
Net increase (decrease) in cash, cash equivalents,
and restricted cash
|
1,245,993
|
|
(420,110)
|
Cash, cash equivalents, and restricted cash at the
beginning of period
|
1,540,745
|
|
1,387,921
|
Cash, cash equivalents, and restricted cash at the
end of period
|
$
2,786,738
|
|
$
967,811
|
Workday,
Inc.
Reconciliation of
GAAP to Non-GAAP Data
Three Months Ended
April 30, 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
|
$
232,922
|
|
$
(26,230)
|
|
$
(16,326)
|
|
$
—
|
|
$
190,366
|
Costs of professional
services
|
169,899
|
|
(27,584)
|
|
(3,899)
|
|
—
|
|
138,416
|
Product
development
|
541,509
|
|
(153,304)
|
|
(13,011)
|
|
—
|
|
375,194
|
Sales and
marketing
|
429,301
|
|
(59,169)
|
|
(14,046)
|
|
—
|
|
356,086
|
General and
administrative
|
133,869
|
|
(45,219)
|
|
(2,613)
|
|
—
|
|
86,037
|
Operating income
(loss)
|
(72,843)
|
|
311,506
|
|
49,895
|
|
—
|
|
288,558
|
Operating
margin
|
(5.1)%
|
|
21.7%
|
|
3.5%
|
|
—%
|
|
20.1%
|
Other income (expense),
net
|
(20,163)
|
|
—
|
|
—
|
|
—
|
|
(20,163)
|
Income (loss) before
provision for (benefit from)
income taxes
|
(93,006)
|
|
311,506
|
|
49,895
|
|
—
|
|
268,395
|
Provision for (benefit
from) income taxes
|
9,167
|
|
—
|
|
—
|
|
41,828
|
|
50,995
|
Net income
(loss)
|
$
(102,173)
|
|
$
311,506
|
|
$
49,895
|
|
$
(41,828)
|
|
$
217,400
|
Net income (loss) per
share, basic (1)
|
$
(0.41)
|
|
$
1.24
|
|
$
0.20
|
|
$
(0.17)
|
|
$
0.86
|
Net income (loss) per
share, diluted (1)
|
$
(0.41)
|
|
$
1.24
|
|
$
0.20
|
|
$
(0.20)
|
|
$
0.83
|
|
|
(1)
|
GAAP net loss per share
is calculated based upon 251,743 basic and diluted weighted-average
shares of common
stock. Non-GAAP
net income per share is calculated based
upon 251,743 basic and 263,473 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 employer payroll tax-related items on employee
stock transactions of $28.3 million
and
amortization of
acquisition-related intangible assets of $21.6 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 2023, the non-GAAP tax rate is 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
Three Months Ended
April 30, 2021
(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
|
$
182,208
|
|
$
(20,717)
|
|
$
(14,204)
|
|
$
—
|
|
$
147,287
|
Costs of professional
services
|
150,845
|
|
(27,692)
|
|
(6,953)
|
|
—
|
|
116,200
|
Product
development
|
441,616
|
|
(129,862)
|
|
(19,542)
|
|
—
|
|
292,212
|
Sales and
marketing
|
326,494
|
|
(50,308)
|
|
(17,106)
|
|
—
|
|
259,080
|
General and
administrative
|
112,183
|
|
(36,056)
|
|
(4,386)
|
|
—
|
|
71,741
|
Operating income
(loss)
|
(38,313)
|
|
264,635
|
|
62,191
|
|
—
|
|
288,513
|
Operating
margin
|
(3.3)%
|
|
22.5%
|
|
5.4%
|
|
—%
|
|
24.6%
|
Other income (expense),
net
|
(9,051)
|
|
—
|
|
—
|
|
—
|
|
(9,051)
|
Income (loss) before
provision for (benefit from)
income taxes
|
(47,364)
|
|
264,635
|
|
62,191
|
|
—
|
|
279,462
|
Provision for (benefit
from) income taxes
|
(842)
|
|
—
|
|
—
|
|
53,940
|
|
53,098
|
Net income
(loss)
|
$
(46,522)
|
|
$
264,635
|
|
$
62,191
|
|
$
(53,940)
|
|
$
226,364
|
Net income (loss) per
share, basic (1)
|
$
(0.19)
|
|
$
1.09
|
|
$
0.26
|
|
$
(0.23)
|
|
$
0.93
|
Net income (loss) per
share, diluted (1)
|
$
(0.19)
|
|
$
1.09
|
|
$
0.26
|
|
$
(0.29)
|
|
$
0.87
|
|
|
(1)
|
GAAP net loss per share
is calculated based upon 243,739 basic and diluted weighted-average
shares of common
stock.
Non-GAAP net income per share
is calculated based upon 243,739 basic and 260,416 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 employer payroll tax-related items on employee
stock transactions of $44.3 million
and amortization
of acquisition-related intangible assets
of $17.9 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 $0.07 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),
non-GAAP operating margin, 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) and non-GAAP operating margin differ from GAAP in
that they exclude 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, 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.
- 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), non-GAAP operating
margin, 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.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/workday-announces-fiscal-2023-first-quarter-financial-results-301556068.html
SOURCE Workday Inc.