Workday(US:WDAY)2024-08-22 20:02Revenue Performance - Total revenues for Q2 FY2025 were $2.085 billion, up 16.7% year-over-year, with subscription revenues of $1.903 billion, an increase of 17.2% from the same period last year[1]. - Total revenues for the three months ended July 31, 2024, increased to $2,085 million, up 16.7% from $1,787 million in the same period last year[12]. - Subscription services revenue reached $1,903 million for the three months ended July 31, 2024, compared to $1,624 million for the same period in 2023, reflecting a growth of 17.1%[12]. - For Q3 FY2025, Workday expects subscription revenue of $1.955 billion, representing growth of 16%[5]. Profitability Metrics - Operating income was $111 million, or 5.3% of revenues, compared to $36 million, or 2.0% of revenues, in the same period last year; non-GAAP operating income was $518 million, or 24.9% of revenues[1]. - Net income for the three months ended July 31, 2024, was $132 million, a significant increase from $79 million in the same period last year, representing a growth of 67.1%[12]. - Non-GAAP operating income for the three months ended July 31, 2024, was $518 million, compared to $421 million for the same period in 2023, representing a 23% increase[17]. - Workday's diluted net income per share was $0.49, compared to $0.30 in Q2 FY2024; non-GAAP diluted net income per share was $1.75, up from $1.43[1]. - The company reported a diluted net income per share of $0.49 for the three months ended July 31, 2024, compared to $0.30 for the same period in 2023, marking a growth of 63.3%[12]. Cash Flow and Financial Position - Workday's cash, cash equivalents, and marketable securities totaled $7.37 billion as of July 31, 2024[1]. - Cash provided by operating activities for the three months ended July 31, 2024, was $571 million, compared to $425 million in the same period last year, showing an increase of 34.4%[14]. - Free cash flows for the six months ended July 31, 2024, were $807 million, compared to $579 million for the same period in 2023, indicating a 39% increase[19]. - Cash, cash equivalents, and restricted cash at the end of the period were $1,649 million, compared to $1,448 million at the end of the same period last year, indicating an increase of 13.9%[14]. Subscription Backlog - 12-month subscription revenue backlog reached $6.80 billion, up 16.1% year-over-year, while total subscription revenue backlog was $21.58 billion, increasing 20.9% year-over-year[1]. Market Position and Shareholder Actions - Workday's market share for ERP Worldwide SaaS revenue was reported at 19.6% in 2023, the largest in the industry according to Gartner[4]. - The company announced a new share repurchase program to buy back up to an additional $1.0 billion of its Class A common stock[4]. - Workday now has over 70 million users under contract and more than 2,000 Workday Financial Management customers[3]. Cost and Expense Management - Total costs and expenses for the three months ended July 31, 2024, were $1,974 million, an increase from $1,751 million in the same period last year, reflecting a rise of 12.8%[12]. - Total share-based compensation expenses for the six months ended July 31, 2024, were $755 million, up from $722 million in the same period last year, reflecting a growth of 4.6%[13]. - Share-based compensation expenses for the three months ended July 31, 2024, were $370 million, compared to $352 million for the same period in 2023, reflecting a 5% increase[17]. - Capital expenditures for the three months ended July 31, 2024, were $55 million, down from $65 million in the same period last year, indicating a 15% decrease[19]. Future Guidance - The company updated its FY2025 subscription revenue guidance to between $7.700 billion and $7.725 billion, representing approximately 17% growth[5]. - The projected non-GAAP tax rate for fiscal 2024 and 2025 is set at 19%[23]. - Workday plans to exclude certain acquisition-related costs and realignment costs from its non-GAAP results starting fiscal 2025[20].