Workday Inc. (NYSE: WDAY) released impressive fiscal first-quarter 2018 results on Thursday after the market closed, highlighting accelerated revenue growth, company record-adjusted profits, and an increase to its full-year guidance as the business continues to scale.
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Let's dive deeper to see what drove the human capital management specialist's results as it kicked off the new fiscal year, as well as what investors can expect going forward.
IMAGE SOURCE: WORKDAY.
Workday results: The raw numbers
Data source: Workday, Inc.
What happened with Workday this quarter?
- Within the top line, subscription revenue increased 42.7%, to $399.7 million, and professional services revenue rose 18.7%, to $67.5 million.
- For perspective, three months ago, Workday told investors to expectlower revenue of $467 million to $468 million, assuming more modest 40% growth in subscription revenue.
- On an adjusted (non-GAAP) basis, which excludes items like stock-based compensation, Workday generated net income of $0.29 per share, up from $0.06 per share in the same year-ago period.
- The company generated quarterly operating cash flow of $180 million and free cash flow of $149.4 million.
- Workday ended the quarter with with cash, cash equivalents, and marketable securities of $2.1 billion, up from $2.0 billion last quarter.
- The company announced the availability of Workday Financial Performance Management, which helps customers perform financial reporting, analytics, and planning without replacing their existing general ledgers or accounting systems.
- Announced that Workday Prism Analytics -- a platform allowing customers to blend Workday and non-Workday data to visualize and analyze critical business information -- will be available later this year.
What management had to say
"Workday delivered a strong first quarter and achieved our highest net new [annual contract value] growth in nearly three years," stated Workday co-founder and CEO, Aneel Bhusri."As we look to the rest of fiscal 2018 and beyond, we believe our relentless focus on innovation and customer satisfaction will continue to be the differentiators that drive further momentum for our growing family of applications."
Workday CFO Robynne Sisco added, "Our business model clearly demonstrates strong economics and as we continue to scale, we are confident in our ability to deliver strong future operating margin and cash flow growth."
Workday increased its full fiscal-year guidance and now expects fiscal 2018 total revenue of $2.038 billion to $2.053 billion (compared to $2.005 billion to $2.025 billion previously), including subscription revenue of $1.705 billion to $1.720 billion (up from $1.68 billion to $1.70 billion previously). For the current fiscal second quarter, Workday anticipates revenue of $505 million to $508 million, including subscription revenue between $420 million and $423 million.
In the end, this was another strong quarter from Workday as it continues to grow the business and inch toward GAAP profitability. Given Workday's increased full-year guidance, investors should be more than happy with these results.
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