Artificial Intelligence
Workday Announces Fiscal 2022 Third Quarter Financial Results
Fiscal Third Quarter Total Revenues of $1.33 Billion, Up 20.0% Year Over Year
Subscription Revenue of $1.17 Billion, Up 21.0% Year Over Year
24-Month Subscription Revenue Backlog of $7.12 Billion, Up 19.7% Year Over Year
Total Subscription Revenue Backlog of $10.97 Billion, Up 23.7% Year Over Year
PLEASANTON, Calif., Nov. 18, 2021 (GLOBE NEWSWIRE) — Workday, Inc. (NASDAQ: WDAY), a leader in enterprise cloud applications for finance and human resources, today announced results for the fiscal 2022 third quarter ended October 31, 2021.
Fiscal 2022 Third Quarter Results
- Total revenues were $1.33 billion, an increase of 20.0% from the third quarter of fiscal 2021. Subscription revenue was $1.17 billion, an increase of 21.0% from the same period last year.
- Operating income was $23.9 million, or 1.8% of revenues, compared to an operating loss of $14.1 million, or negative 1.3% of revenues, in the same period last year. Non-GAAP operating income for the third quarter was $332.2 million, or 25.0% of revenues, compared to a non-GAAP operating income of $268.1 million, or 24.2% of revenues, in the same period last year.1
- Basic and diluted net income per share was $0.17, compared to a basic and diluted net loss per share of $0.10 in the third quarter of fiscal 2021. Non-GAAP basic and diluted net income per share was $1.15 and $1.10, respectively, compared to a non-GAAP basic and diluted net income per share of $0.92 and $0.86, respectively, in the same period last year.2
- Operating cash flows were $384.7 million compared to $293.8 million in the prior year.
- Cash, cash equivalents, and marketable securities were $3.55 billion as of October 31, 2021.
Comments on the News
“We delivered another strong quarter as we continue to expand our addressable market through our diverse product portfolio and multiple go-to-market levers, helping to support our sustained growth,” said Aneel Bhusri, co-founder, co-CEO, and chairman, Workday. “I continue to remain optimistic about the great opportunity in front of us, supported by our employees’ incredible efforts, our relentless focus on innovation, and our growing customer community – which consists of some of the world’s largest organizations that are making long-term investments in their future with Workday.”
“In the third quarter, we continued to see increased demand exceed our expectations, with more global organizations selecting our products to manage their people and finances and existing customers expanding their Workday footprint,” said Chano Fernandez, co-CEO, Workday. “As we look to the future, we will continue to accelerate our investments in our go-to-market efforts and our people, who are so critical to our success. We are well positioned with a strong foundation heading into fiscal 2023.”
“We reported a strong third quarter, once again accelerating subscription revenue growth, as organizations across the globe look to Workday as their strategic partner in driving their Finance and HR digital transformations,” said Robynne Sisco, co-president and chief financial officer, Workday. “As a result, we are raising our fiscal 2022 guidance for subscription revenue to a range of $4.533 billion to $4.535 billion, growth of 20%. We expect fourth-quarter subscription revenue of $1.216 billion to $1.218 billion, growth of 21%. We are also raising our fiscal 2022 non-GAAP operating margin guidance to 22%.”
Recent Highlights
- As part of its continued investment in proven leaders, Workday announced the promotion of Doug Robinson to co-president – effective immediately, and Barbara Larson to chief financial officer – effective Feb. 1, 2022. With these changes, Robynne Sisco will continue as co-president alongside Doug. In addition, Workday appointed Pete Schlampp to chief strategy officer and Sayan Chakraborty to executive vice president of Product and Technology.
- Workday announced its intent to acquire VNDLY, an industry leader in cloud-based external workforce and vendor management technology. With VNDLY, Workday will provide organizations with a unified workforce optimization solution that will help organizations manage all types of workers and support a holistic talent strategy.
- Workday acquired Zimit, one of the only configure price quote (CPQ) solutions built specifically for services industries, further expanding the Workday product portfolio that is enabling the office of the CFO to digitally transform.
- Workday announced Workday Scheduling and Labor Optimization, an intelligent, worker-first scheduling solution that matches labor demands with worker preferences so that organizations can better optimize shift schedules and empower frontline workers with flexibility and control for when and how they work.
- Workday announced that nearly 1,000 organizations are using Skills Cloud to effectively hire, engage, and retain their workforce amid the changing world of work. The company also announced a new packaged solution – skills foundation – to help customers accelerate and evolve their skills-based people strategies.
- Workday announced Workday Everywhere, packaged connectors that deliver a simple, connected, and more engaging employee experience by bringing Workday tasks and insights directly into digital workspaces.
- Workday was named a Leader in the 2021 Gartner® Magic Quadrant™ for Cloud HCM Suites for 1,000+ Employee Enterprises for the sixth consecutive year and positioned the highest for overall Ability to Execute.3
- Workday Financial Management received the Gartner Peer Insight Customers’ Choice 2021 Distinction for products in Cloud Core Financial Management Suites for Midsize, Large, and Global Enterprises based on feedback and ratings from end-user professionals.
- Workday announced that following its acquisition of Peakon ApS earlier this year, the leading employee engagement solution is now called Workday Peakon Employee Voice, marking a significant milestone in the integration of Peakon with Workday.
Earnings Call Details
Workday plans to host a conference call today to review its fiscal 2022 third 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.
- 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.
- 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.
- Gartner “Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises,” by Sam Grinter, Chris Pang, Jeff Freyermuth, Ron Hanscome, Helen Poitevin, Ranadip Chandra, John Kostoulas, October 19, 2021.
Required Disclaimer
GARTNER and MAGIC QUADRANT are registered trademarks and service marks of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
Gartner Peer Insights Customers’ Choice constitute the subjective opinions of individual end-user reviews, ratings, and data applied against a documented methodology; they neither represent the views of, nor constitute an endorsement by, Gartner or its affiliates.
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.
© 2021 Workday, Inc. All rights reserved. Workday, Peakon, Zimit, 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 2022 subscription revenue and non-GAAP operating margin, fourth-quarter subscription revenue, growth, innovation, opportunities, customer demand and momentum, acceleration potential, 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) the risk that the pending acquisition of VNDLY may not be completed in a timely manner or at all, that we may not be able to achieve the expected benefits of the transaction, or that we may incur unanticipated costs or other negative effects in connection with the transaction; (ii) our ability to implement our plans, objectives, and other expectations with respect to VNDLY or any other of our acquired companies; (iii) the impact of the ongoing COVID-19 pandemic on our business, as well as our customers, prospects, partners, and service providers; (iv) 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; (v) service outages, delays in the deployment of our applications, and the failure of our applications to perform properly; (vi) our ability to manage our growth effectively; (vii) competitive factors, including pricing pressures, industry consolidation, entry of new competitors and new applications, advancements in technology, and marketing initiatives by our competitors; (viii) the development of the market for enterprise cloud applications and services; (ix) 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, artificial intelligence, and blockchain; (x) adverse changes in general economic or market conditions; (xi) the regulatory, economic, and political risks associated with our domestic and international operations; (xii) the regulatory risks related to new and evolving technologies such as machine learning, artificial intelligence, and blockchain; (xiii) delays or reductions in information technology spending; and (xiv) 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 October 31, 2021, 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)
October 31, 2021 | January 31, 2021 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,297,259 | $ | 1,384,181 | |||
Marketable securities | 2,257,722 | 2,151,472 | |||||
Trade and other receivables, net | 865,040 | 1,032,484 | |||||
Deferred costs | 135,829 | 122,764 | |||||
Prepaid expenses and other current assets | 137,858 | 111,160 | |||||
Total current assets | 4,693,708 | 4,802,061 | |||||
Property and equipment, net | 1,120,196 | 972,403 | |||||
Operating lease right-of-use assets | 269,687 | 414,143 | |||||
Deferred costs, noncurrent | 287,645 | 271,796 | |||||
Acquisition-related intangible assets, net | 371,658 | 248,626 | |||||
Goodwill | 2,428,481 | 1,819,625 | |||||
Other assets | 269,508 | 189,757 | |||||
Total assets | $ | 9,440,883 | $ | 8,718,411 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 47,928 | $ | 75,596 | |||
Accrued expenses and other current liabilities | 196,331 | 169,266 | |||||
Accrued compensation | 311,819 | 285,061 | |||||
Unearned revenue | 2,423,305 | 2,556,624 | |||||
Operating lease liabilities | 83,452 | 93,000 | |||||
Debt, current | 1,212,215 | 1,103,101 | |||||
Total current liabilities | 4,275,050 | 4,282,648 | |||||
Debt, noncurrent | 635,994 | 691,913 | |||||
Unearned revenue, noncurrent | 70,606 | 80,111 | |||||
Operating lease liabilities, noncurrent | 202,969 | 350,051 | |||||
Other liabilities | 40,448 | 35,854 | |||||
Total liabilities | 5,225,067 | 5,440,577 | |||||
Stockholders’ equity: | |||||||
Common stock | 249 | 242 | |||||
Additional paid-in capital | 6,919,963 | 6,254,936 | |||||
Treasury stock | (12,437 | ) | (12,384 | ) | |||
Accumulated other comprehensive income (loss) | (20,627 | ) | (54,970 | ) | |||
Accumulated deficit | (2,671,332 | ) | (2,909,990 | ) | |||
Total stockholders’ equity | 4,215,816 | 3,277,834 | |||||
Total liabilities and stockholders’ equity | $ | 9,440,883 | $ | 8,718,411 |
Workday, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenues: | |||||||||||||||
Subscription services | $ | 1,171,517 | $ | 968,547 | $ | 3,317,140 | $ | 2,782,201 | |||||||
Professional services | 155,746 | 137,413 | 445,517 | 404,111 | |||||||||||
Total revenues | 1,327,263 | 1,105,960 | 3,762,657 | 3,186,312 | |||||||||||
Costs and expenses (1): | |||||||||||||||
Costs of subscription services | 200,700 | 152,396 | 575,646 | 442,666 | |||||||||||
Costs of professional services | 159,024 | 142,785 | 462,652 | 442,422 | |||||||||||
Product development | 455,615 | 419,962 | 1,341,482 | 1,282,127 | |||||||||||
Sales and marketing | 366,323 | 302,870 | 1,050,974 | 897,924 | |||||||||||
General and administrative | 121,656 | 102,024 | 347,391 | 296,461 | |||||||||||
Total costs and expenses | 1,303,318 | 1,120,037 | 3,778,145 | 3,361,600 | |||||||||||
Operating income (loss) | 23,945 | (14,077 | ) | (15,488 | ) | (175,288 | ) | ||||||||
Other income (expense), net | 21,557 | (8,846 | ) | 115,491 | (31,272 | ) | |||||||||
Income (loss) before provision for (benefit from) income taxes | 45,502 | (22,923 | ) | 100,003 | (206,560 | ) | |||||||||
Provision for (benefit from) income taxes | 2,090 | 1,417 | (2,623 | ) | 4,164 | ||||||||||
Net income (loss) | $ | 43,412 | $ | (24,340 | ) | $ | 102,626 | $ | (210,724 | ) | |||||
Net income (loss) per share, basic | $ | 0.17 | $ | (0.10 | ) | $ | 0.42 | $ | (0.89 | ) | |||||
Net income (loss) per share, diluted | $ | 0.17 | $ | (0.10 | ) | $ | 0.40 | $ | (0.89 | ) | |||||
Weighted-average shares used to compute net income (loss) per share, basic | 248,468 | 238,059 | 246,348 | 235,685 | |||||||||||
Weighted-average shares used to compute net income (loss) per share, diluted | 254,760 | 238,059 | 253,917 | 235,685 |
(1) Costs and expenses include share-based compensation expenses as follows: | |||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Costs of subscription services | $ | 21,340 | $ | 16,767 | $ | 62,478 | $ | 45,484 | |||||||
Costs of professional services | 29,105 | 27,349 | 83,331 | 74,467 | |||||||||||
Product development | 135,591 | 128,423 | 395,345 | 378,950 | |||||||||||
Sales and marketing | 55,645 | 54,077 | 158,121 | 150,881 | |||||||||||
General and administrative | 39,437 | 33,216 | 111,197 | 97,958 |
Workday, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | 43,412 | $ | (24,340 | ) | $ | 102,626 | $ | (210,724 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||||
Depreciation and amortization | 87,127 | 73,864 | 254,973 | 218,556 | |||||||||||
Share-based compensation expenses | 278,995 | 259,832 | 808,349 | 747,740 | |||||||||||
Amortization of deferred costs | 35,482 | 28,732 | 100,844 | 82,141 | |||||||||||
Amortization of debt discount and issuance costs | 997 | 12,098 | 2,991 | 41,466 | |||||||||||
Non-cash lease expense | 21,407 | 22,141 | 64,706 | 60,389 | |||||||||||
(Gains) losses on investments | (25,222 | ) | (143 | ) | (125,479 | ) | 356 | ||||||||
Other | 3,411 | (8,617 | ) | (7,216 | ) | 7,684 | |||||||||
Changes in operating assets and liabilities, net of business combinations: | |||||||||||||||
Trade and other receivables, net | 6,649 | (53,923 | ) | 171,257 | 127,663 | ||||||||||
Deferred costs | (50,654 | ) | (41,823 | ) | (129,758 | ) | (101,724 | ) | |||||||
Prepaid expenses and other assets | 18,050 | 25,898 | (21,047 | ) | 36,738 | ||||||||||
Accounts payable | (12,007 | ) | 3,762 | (4,117 | ) | (9,313 | ) | ||||||||
Accrued expenses and other liabilities | 2,498 | (5,037 | ) | (24,109 | ) | (46,378 | ) | ||||||||
Unearned revenue | (25,491 | ) | 1,358 | (158,465 | ) | (239,899 | ) | ||||||||
Net cash provided by (used in) operating activities | 384,654 | 293,802 | 1,035,555 | 714,695 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Purchases of marketable securities | (722,275 | ) | (806,713 | ) | (2,317,040 | ) | (1,963,244 | ) | |||||||
Maturities of marketable securities | 674,246 | 427,910 | 2,303,478 | 1,282,324 | |||||||||||
Sales of marketable securities | — | — | 27,286 | 5,279 | |||||||||||
Owned real estate projects | (4 | ) | (1,072 | ) | (171,498 | ) | (5,323 | ) | |||||||
Capital expenditures, excluding owned real estate projects | (33,335 | ) | (78,197 | ) | (190,912 | ) | (204,692 | ) | |||||||
Business combinations, net of cash acquired | (60,645 | ) | — | (739,865 | ) | — | |||||||||
Purchases of non-marketable equity and other investments | (26,720 | ) | (4,618 | ) | (84,526 | ) | (63,218 | ) | |||||||
Sales and maturities of non-marketable equity and other investments | 1,874 | 24 | 5,169 | 6,223 | |||||||||||
Other | — | — | 1 | — | |||||||||||
Net cash provided by (used in) investing activities | (166,859 | ) | (462,666 | ) | (1,167,907 | ) | (942,651 | ) | |||||||
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 | (9 | ) | — | (80 | ) | (249,946 | ) | ||||||||
Payments on Term Loan | (9,375 | ) | (9,375 | ) | (28,125 | ) | (9,375 | ) | |||||||
Proceeds from issuance of common stock from employee equity plans, net of taxes paid for shares withheld | 1,894 | 3,650 | 76,381 | 78,167 | |||||||||||
Other | (33 | ) | (181 | ) | (409 | ) | (2,436 | ) | |||||||
Net cash provided by (used in) financing activities | (7,523 | ) | (5,906 | ) | 47,767 | 564,205 | |||||||||
Effect of exchange rate changes | 50 | 40 | (85 | ) | 546 | ||||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 210,322 | (174,730 | ) | (84,670 | ) | 336,795 | |||||||||
Cash, cash equivalents, and restricted cash at the beginning of period | 1,092,929 | 1,246,246 | 1,387,921 | 734,721 | |||||||||||
Cash, cash equivalents, and restricted cash at the end of period | $ | 1,303,251 | $ | 1,071,516 | $ | 1,303,251 | $ | 1,071,516 |
Workday, Inc.
Reconciliation of GAAP to Non-GAAP Data
Three Months Ended October 31, 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 | $ | 200,700 | $ | (21,340 | ) | $ | (12,859 | ) | $ | — | $ | 166,501 | ||||||||||
Costs of professional services | 159,024 | (29,105 | ) | (1,043 | ) | — | 128,876 | |||||||||||||||
Product development | 455,615 | (135,591 | ) | (2,870 | ) | — | 317,154 | |||||||||||||||
Sales and marketing | 366,323 | (55,645 | ) | (9,642 | ) | — | 301,036 | |||||||||||||||
General and administrative | 121,656 | (39,437 | ) | (772 | ) | — | 81,447 | |||||||||||||||
Operating income (loss) | 23,945 | 281,118 | 27,186 | — | 332,249 | |||||||||||||||||
Operating margin | 1.8 | % | 21.2 | % | 2.0 | % | — | % | 25.0 | % | ||||||||||||
Other income (expense), net | 21,557 | — | — | — | 21,557 | |||||||||||||||||
Income (loss) before provision for (benefit from) income taxes | 45,502 | 281,118 | 27,186 | — | 353,806 | |||||||||||||||||
Provision for (benefit from) income taxes | 2,090 | — | — | 65,133 | 67,223 | |||||||||||||||||
Net income (loss) | $ | 43,412 | $ | 281,118 | $ | 27,186 | $ | (65,133 | ) | $ | 286,583 | |||||||||||
Net income (loss) per share, basic (1) | $ | 0.17 | $ | 1.13 | $ | 0.11 | $ | (0.26 | ) | $ | 1.15 | |||||||||||
Net income (loss) per share, diluted (1) | $ | 0.17 | $ | 1.10 | $ | 0.11 | $ | (0.28 | ) | $ | 1.10 |
(1) | GAAP net income per share is calculated based upon 248,468 basic and 254,760 diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 248,468 basic and 262,577 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 $19.7 million and total employer payroll tax-related items on employee stock transactions of $7.5 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, we determined the projected non-GAAP tax rate to be 19%. Included in the per share amount is a dilution impact of $0.02 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
Three Months Ended October 31, 2020
(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 | $ | 152,396 | $ | (16,767 | ) | $ | (7,811 | ) | $ | — | $ | — | $ | 127,818 | |||||||||||||
Costs of professional services | 142,785 | (27,349 | ) | (824 | ) | — | — | 114,612 | |||||||||||||||||||
Product development | 419,962 | (128,423 | ) | (4,006 | ) | — | — | 287,533 | |||||||||||||||||||
Sales and marketing | 302,870 | (54,077 | ) | (8,352 | ) | — | — | 240,441 | |||||||||||||||||||
General and administrative | 102,024 | (33,216 | ) | (1,355 | ) | — | — | 67,453 | |||||||||||||||||||
Operating income (loss) | (14,077 | ) | 259,832 | 22,348 | — | — | 268,103 | ||||||||||||||||||||
Operating margin | (1.3 | )% | 23.5 | % | 2.0 | % | — | % | — | % | 24.2 | % | |||||||||||||||
Other income (expense), net | (8,846 | ) | — | — | 11,988 | — | 3,142 | ||||||||||||||||||||
Income (loss) before provision for (benefit from) income taxes | (22,923 | ) | 259,832 | 22,348 | 11,988 | — | 271,245 | ||||||||||||||||||||
Provision for (benefit from) income taxes | 1,417 | — | — | — | 50,119 | 51,536 | |||||||||||||||||||||
Net income (loss) | $ | (24,340 | ) | $ | 259,832 | $ | 22,348 | $ | 11,988 | $ | (50,119 | ) | $ | 219,709 | |||||||||||||
Net income (loss) per share, basic (1) | $ | (0.10 | ) | $ | 1.09 | $ | 0.09 | $ | 0.05 | $ | (0.21 | ) | $ | 0.92 | |||||||||||||
Net income (loss) per share, diluted (1) | $ | (0.10 | ) | $ | 1.09 | $ | 0.09 | $ | 0.05 | $ | (0.27 | ) | $ | 0.86 |
(1) | GAAP net loss per share is calculated based upon 238,059 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 238,059 basic and 254,176 diluted weighted-average shares of common stock. |
(2) | Other operating expenses include amortization of acquisition-related intangible assets of $14.2 million and total employer payroll tax-related items on employee stock transactions of $8.1 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 projected non-GAAP tax rate was 19%. Included in the per share amount is a dilution impact of $0.06 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
Nine Months Ended October 31, 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 | $ | 575,646 | $ | (62,478 | ) | $ | (40,195 | ) | $ | — | $ | 472,973 | |||||||||||
Costs of professional services | 462,652 | (83,331 | ) | (9,211 | ) | — | 370,110 | ||||||||||||||||
Product development | 1,341,482 | (395,345 | ) | (25,573 | ) | — | 920,564 | ||||||||||||||||
Sales and marketing | 1,050,974 | (158,121 | ) | (36,512 | ) | — | 856,341 | ||||||||||||||||
General and administrative | 347,391 | (111,197 | ) | (6,091 | ) | — | 230,103 | ||||||||||||||||
Operating income (loss) | (15,488 | ) | 810,472 | 117,582 | — | 912,566 | |||||||||||||||||
Operating margin | (0.4 | )% | 21.5 | % | 3.2 | % | — | % | 24.3 | % | |||||||||||||
Other income (expense), net | 115,491 | — | — | — | 115,491 | ||||||||||||||||||
Income (loss) before provision for (benefit from) income taxes | 100,003 | 810,472 | 117,582 | — | 1,028,057 | ||||||||||||||||||
Provision for (benefit from) income taxes | (2,623 | ) | — | — | 197,954 | 195,331 | |||||||||||||||||
Net income (loss) | $ | 102,626 | $ | 810,472 | $ | 117,582 | $ | (197,954 | ) | $ | 832,726 | ||||||||||||
Net income (loss) per share, basic (1) | $ | 0.42 | $ | 3.29 | $ | 0.48 | $ | (0.81 | ) | $ | 3.38 | ||||||||||||
Net income (loss) per shares, diluted (1) | $ | 0.40 | $ | 3.19 | $ | 0.46 | $ | (0.85 | ) | $ | 3.20 |
(1) | GAAP net income per share is calculated based upon 246,348 basic and 253,917 diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 246,348 basic and 261,734 diluted weighted-average shares of common stock. The numerator used to compute non-GAAP diluted net income per share was increased by $3.9 million for after-tax interest expense on our convertible senior notes in accordance with the if-converted method. |
(2) | Other operating expenses include total employer payroll tax-related items on employee stock transactions of $60.1 million and amortization of acquisition-related intangible assets of $57.5 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, we determined the projected non-GAAP tax rate to be 19%. Included in the per share amount is a dilution impact of $0.07 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
Nine Months Ended October 31, 2020
(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 | $ | 442,666 | $ | (45,484 | ) | $ | (26,298 | ) | $ | — | $ | — | $ | 370,884 | |||||||||||||
Costs of professional services | 442,422 | (74,467 | ) | (4,843 | ) | — | — | 363,112 | |||||||||||||||||||
Product development | 1,282,127 | (378,950 | ) | (20,710 | ) | — | — | 882,467 | |||||||||||||||||||
Sales and marketing | 897,924 | (150,881 | ) | (26,841 | ) | — | — | 720,202 | |||||||||||||||||||
General and administrative | 296,461 | (97,958 | ) | (5,111 | ) | — | — | 193,392 | |||||||||||||||||||
Operating income (loss) | (175,288 | ) | 747,740 | 83,803 | — | — | 656,255 | ||||||||||||||||||||
Operating margin | (5.5 | )% | 23.5 | % | 2.6 | % | — | % | — | % | 20.6 | % | |||||||||||||||
Other income (expense), net | (31,272 | ) | — | — | 41,209 | — | 9,937 | ||||||||||||||||||||
Income (loss) before provision for (benefit from) income taxes | (206,560 | ) | 747,740 | 83,803 | 41,209 | — | 666,192 | ||||||||||||||||||||
Provision for (benefit from) income taxes | 4,164 | — | — | — | 122,412 | 126,576 | |||||||||||||||||||||
Net income (loss) | $ | (210,724 | ) | $ | 747,740 | $ | 83,803 | $ | 41,209 | $ | (122,412 | ) | $ | 539,616 | |||||||||||||
Net income (loss) per share, basic (1) | $ | (0.89 | ) | $ | 3.17 | $ | 0.36 | $ | 0.17 | $ | (0.52 | ) | $ | 2.29 | |||||||||||||
Net income (loss) per share, diluted (1) | $ | (0.89 | ) | $ | 3.17 | $ | 0.36 | $ | 0.17 | $ | (0.66 | ) | $ | 2.15 |
(1) | GAAP net loss per share is calculated based upon 235,685 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 235,685 basic and 251,517 diluted weighted-average shares of common stock. |
(2) | Other operating expenses include amortization of acquisition-related intangible assets of $45.8 million and total employer payroll tax-related items on employee stock transactions of $38.0 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 projected non-GAAP tax rate was 19%. Included in the per share amount is a dilution impact of $0.14 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.
- 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 2022 and 2021, 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.
Investor Relations Contact:
Justin Furby
[email protected]
Media Contact:
Sion Rogers
[email protected]
Artificial Intelligence
Wirex Executive Joins CryptoUK’s New Policy Committee
LONDON, May 21, 2024 /PRNewswire/ — Wirex, a leading Web3 money app, is proud to announce that Chet Shah, Global Chief Risk & Compliance Officer at Wirex, has joined CryptoUK’s newly established Policy Committee.
CryptoUK, the premier trade body representing the UK’s digital asset sector, formed its new Policy Committee which brings together industry-leading experts from the legal, regulatory, and compliance sectors. The committee’s mission is to provide strategic policy guidance, advocate for regulatory clarity, and foster innovation to support the growth of the UK’s digital assets industry.
This appointment underscores Wirex’s commitment to advancing regulatory clarity and innovation in the digital asset sector.
Chet brings a wealth of experience in risk and compliance. His background covers banking, auditing, and traditional finance, as well as solid expertise in the cryptocurrency space. At Wirex, Chet has been crucial in building and improving relationships with global regulators, including the Financial Conduct Authority, and authorities in countries including Singapore, Croatia, and Italy.
Chet’s approach prioritises commercially focused compliance and risk management, ensuring that Wirex operates smoothly at the intersection of traditional finance and Web3. His ability to balance regulatory requirements with innovation has been key to Wirex’s growth and success.
Commenting on his appointment, Chet said, “My experience aligns perfectly with the committee’s goals and together, we can advocate for policies that balance regulation with growth in the digital assets space.”
About Wirex
Wirex is a prominent UK-based digital payments platform with over 6 million customers spread across 130 countries. It offers secure accounts, making it easy for users to store, purchase, and exchange multiple currencies seamlessly. As a principal member of both Visa and Mastercard, Wirex goes beyond traditional services, embracing the evolving trends of Web3 to provide mainstream access to digital finance and wealth management.
Having processed transactions totalling $20 billion, Wirex aims to contribute to the adoption of a cashless society by facilitating straightforward transactions in various currencies worldwide. Wirex is simplifying digital payments, making it more accessible and convenient for people across the globe.
| wirexapp.com |
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View original content:https://www.prnewswire.co.uk/news-releases/wirex-executive-joins-cryptouks-new-policy-committee-302151185.html
Artificial Intelligence
Media Production Company Egg Is Coming Chooses Infortrend SAN Storage to Empower Content Creation Workflows
TAIPEI, May 21, 2024 /PRNewswire/ — Infortrend® Technology, Inc. (TWSE: 2495), the industry-leading enterprise storage provider, today announced that Korean media production company Egg is coming is leveraging Infortrend’s storage solution for M&E – EonStor DS enterprise SAN storage to empower content creation workflows and store the growing volume of UHD videos they produce.
Egg is coming is a media content production company operating as a spin-off from the South Korean entertainment giant CJ ENM Entertainment Division, the distributor of Oscar-winning movie “Parasite”. With the renowned producer Lee Myung-han as its CEO, Egg is coming specializes in production of popular entertainment content, including drama series, broadcast programs, music videos, etc. The team has successfully produced numerous renowned series, including “Hospital Playlist” which became the ninth highest-rated Korean drama in cable television history at the time.
As the company was established, they started looking for a high-speed shared storage solution. Infortrend’s EonStor DS SAN storage came highly recommended by a major media company that has been successfully using it with Tiger Technology’s SAN file sharing solution. Trusting this recommendation, Egg is coming adopted EonStor DS for video editing application. In total, four DS 4016 appliances, expanded with four units of JB 3060L expansion enclosure, were chosen for the initial deployment of the studio’s storage system. The solution provides 1.8 PB total capacity to store ever-expanding UHD video content and enables seamless workflows for 29 simultaneous post-production processes.
“Infortrend’s SAN storage EonStor DS was recommended to us by a major media production company, and we are happy that we adopted the same solution as DS enables fast and comfortable collaboration between 29 video editors,” – said Changmin Sim, the Team Leader of the Video Editing Team at Egg is coming.
Learn more about EonStor DS
About Infortrend
Infortrend (TWSE: 2495) has been developing and manufacturing storage solutions since 1993. With a strong emphasis on in-house design, testing, and manufacturing, Infortrend storage delivers performance and scalability with the latest standards, user friendly data services, personal after-sales support, and unrivaled value. For more information, please visit www.infortrend.com
Infortrend® and EonStor® are trademarks or registered trademarks of Infortrend Technology, Inc.; other trademarks are the property of their respective owners.
View original content:https://www.prnewswire.co.uk/news-releases/media-production-company-egg-is-coming-chooses-infortrend-san-storage-to-empower-content-creation-workflows-302148602.html
Artificial Intelligence
Gcore And Xsolla Announce Partnership To Drive Global Game Distribution And Faster Downloads
Gcore’s edge network to deliver Xsolla Launcher, ensuring global reach, smoother game downloads and higher conversion rates
LUXEMBOURG, May 21, 2024 May 21, 2024 — Gcore, the global edge AI, cloud, network, and security solutions provider, announced its partnership with video game commerce company Xsolla. The alliance will enable Xsolla to provide game developers and publishers with new global distribution channels catering to gamers worldwide, regardless of their locations. With Gcore’s 180 global points of presence (PoPs), players will benefit from reduced time-to-play and smoother, more efficient game downloads.
Xsolla Launcher is a powerful tool for game development companies of all sizes to widen distribution and easily build communities. It streamlines game installation, enhances player communication, and boosts monetization, allowing developers to concentrate on creativity and business logic. By leveraging Gcore’s robust CDN, Xsolla Launcher ensures seamless, speedy game downloads for all players by efficiently fetching and caching game components and initiating rapid downloads upon player request.
“At Xsolla, we’re committed to elevating the gaming experience for developers and players globally,” said David Stelzer, President of Xsolla. “Our collaboration with Gcore’s cutting-edge CDN technology significantly narrows the gap between the game and its players by delivering assets at unparalleled speed. This integration into our new Xsolla Launcher sets the bar for high-performance service and empowers our customers to focus on what they do best: create captivating games.”
Xsolla engineers chose Gcore CDN for its global network of 180+ edge servers, ensuring uninterrupted delivery of game assets worldwide. With a network capacity exceeding 110 Tbps and connectivity to 14,000 peering partners, Gcore averts congestion and disruptions, even during major releases. Operating under strict security measures and meticulous server maintenance, Gcore guarantees exceptional availability. Additionally, Gcore’s CDN integration with its proprietary DNS services further minimizes the risk of service interruptions or outages.
“We’re thrilled to be part of Xsolla’s pioneering solution, driving the gaming industry forward,” commented Ilya Matveev, Business Development Director at Gcore. “Xsolla Launcher brings flexibility to the industry, allowing companies to implement a D2C approach – a way to monetize their existing game fan base without the burden of platform fees. Relying on the power of Gcore’s edge infrastructure, Xsolla Launcher is revolutionizing game distribution by eliminating market barriers, reducing development costs, and fostering creativity.”
Read more about the partnership via this link.
About Gcore
Gcore is a global edge AI, cloud, network, and security solutions provider. Headquartered in Luxembourg, with a staff of 600 operating from ten offices worldwide, Gcore provides solutions to global leaders in numerous industries. Gcore manages its global IT infrastructure across six continents, with one of the best network performances in Europe, Africa, and LATAM due to the average response time of 30 ms worldwide. Gcore’s network consists of 180 points of presence worldwide in reliable Tier IV and Tier III data centers, with a total capacity exceeding 110 Tbps.Website | Twitter | Facebook | LinkedIn
About Xsolla
Xsolla is a global video game commerce company with a robust and powerful set of tools and services designed specifically for the industry. Since its founding in 2005, Xsolla has helped thousands of game developers and publishers of all sizes fund, market, launch, and monetize their games globally and across multiple platforms. As an innovative leader in game commerce, Xsolla’s mission is to solve the inherent complexities of global distribution, marketing, and monetization to help our partners reach more geographies, generate more revenue, and create relationships with gamers worldwide. Headquartered and incorporated in Los Angeles, California, with offices in London, Berlin, Beijing, Guangzhou, Seoul, Tokyo, Kuala Lumpur, Raleigh, and cities around the world, Xsolla supports major gaming titles like Valve, Epic Games, Take-Two, KRAFTON, Nexters, NetEase, Playstudios, Playrix, miHoYo, and more.
Website | Twitter | Facebook | LinkedIn
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View original content:https://www.prnewswire.co.uk/news-releases/gcore-and-xsolla-announce-partnership-to-drive-global-game-distribution-and-faster-downloads-302150220.html
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