Workday Announces Fiscal 2025 First Quarter Financial Results

Fiscal First Quarter Total Revenues of $1.990 Billion, Up 18.1% Year Over Year

Subscription Revenues of $1.815 Billion, Up 18.8% Year Over Year

PLEASANTON, Calif., May 23, 2024 /PRNewswire/ — Workday, Inc. (NASDAQ: WDAY), a leading provider of solutions to help organizations manage their people and money, today announced results for the fiscal 2025 first quarter ended April 30, 2024.

Fiscal 2025 First Quarter Results

• Total revenues were $1.990 billion, an increase of 18.1% from the first quarter of fiscal 2024. Subscription revenues were $1.815 billion, an increase of 18.8% from the same period last year.
• Operating income was $64 million, or 3.2% of revenues, compared to an operating loss of $20 million, or negative 1.2% of revenues, in the same period last year. Non-GAAP operating income for the first quarter was $515 million, or 25.9% of revenues, compared to a non-GAAP operating income of $396 million, or 23.5% of revenues, in the same period last year.¹
• Diluted net income per share was $0.40, compared to diluted net income per share of $0.00 in the first quarter of fiscal 2024. Non-GAAP diluted net income per share was $1.74, compared to non-GAAP diluted net income per share of $1.33 in the same period last year.¹
• 12-month subscription revenue backlog was $6.60 billion, up 17.9% from the same period last year. Total subscription revenue backlog was $20.68 billion, increasing 24.2% year-over-year.
• Operating cash flows were $372 million compared to $277 million in the prior year. Free cash flows were $291 million compared to $218 million in the prior year.¹
• Workday repurchased approximately 0.5 million shares of Class A common stock for $134 million as part of its share repurchase programs.
• Cash, cash equivalents, and marketable securities were $7.18 billion as of April 30, 2024.

Comments on the News

“Q1 was another solid quarter of revenue growth and non-GAAP operating margin expansion for Workday, as we drive toward long-term, durable growth,” said Workday CEO Carl Eschenbach. “With the emergence of Generative AI, the shifting talent landscape, and pressure to realize operational efficiencies, Workday has never been more relevant. Our strong value proposition, investments in key growth initiatives, and leadership in AI are paying off as more organizations turn to Workday to manage their two most important assets – their people and money.”

“Our first quarter performance was in line with our expectations across our key financial metrics,” said Zane Rowe, CFO, Workday. “We were pleased with our progress across key growth initiatives in Q1, which help build a foundation for long-term growth. Our updated subscription revenue guidance reflects the elevated sales scrutiny and lower customer headcount growth we experienced during the quarter. At the same time, we are increasing our margin outlook as we focus on driving increased efficiencies across the company.”

Recent Highlights

• Workday is used by more than 60% of the Fortune 500, including HPE, Keybank, Salesforce, and Unum.
• Workday added several full platform customers for Workday Financial Management and Workday Human Capital Management (HCM), including City of Milwaukee, H. Lee Moffitt Cancer Center, and The Onin Group.
• Workday announced that the Defense Intelligence Agency (DIA), the key intelligence agency for national defense in the United States, has selected Workday Government Cloud to support DIA on its mission to rapidly accelerate recruitment and onboarding efforts.
• Workday completed its acquisition of HiredScore, giving the company a comprehensive AI-powered talent acquisition and internal mobility solution.
• Workday now has more than 50 AI use cases in production and 25 generative AI use cases on its roadmap.
• Workday expanded its relationship with AWS to include co-innovation across industries and enhanced go-to-market investments, and formed a new partnership with Google Cloud, providing GCP customers access to purchase Workday products through the Google Cloud Marketplace.
• Workday’s native Payroll solution for customers in Australia became generally available.
• Workday received the Gartner^® Peer Insights™ Customers’ Choice distinction for Cloud HCM Suites for 1,000+ Employee Enterprises¹ for the seventh consecutive year.
• The company was recognized as one of the 2024 World’s Most Ethical Companies^® by Ethisphere for the fourth consecutive year.
• Forbes named Workday as one of America’s Best Employers For Diversity.

Financial Outlook

Workday is updating its guidance for the fiscal 2025 full year ending January 31, 2025 as follows:

• Subscription revenue between $7.700 billion to $7.725 billion, representing growth of approximately 17%
• Non-GAAP operating margin of 25.0%¹

Workday is providing guidance for the fiscal 2025 second quarter ending July 31, 2024 as follows:

• Subscription revenue of $1.895 billion, representing growth of approximately 17%
• Non-GAAP operating margin of 24.5%¹

Earnings Call Details

Workday plans to host a conference call today to review its fiscal 2025 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.

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 10,500 organizations around the world and across industries – from medium-sized businesses to more than 60% 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.

Forward-Looking Statements

This press release contains forward-looking statements including, among other things, statements regarding Workday’s full-year and second quarter fiscal 2025 subscription revenue and non-GAAP operating margin, growth, 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; (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 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.

Workday, Inc.

Reconciliations of GAAP to Non-GAAP Data

Reconciliations of our GAAP to non-GAAP operating results are included in the following table (in millions, except percentages and per share data). See the section titled “About Non-GAAP Financial Measures” below for further details.