WDAY Q1 2024 Earnings

Call Details

• Call Title: Workday, Inc. Q1 2024 Earnings Call
• Date: May 25, 2023 at 8:30 PM UTC
• Management Team:
  • Justin Furby (Vice President of Investor Relations)
  • Aneel Bhusri (Co-CEO)
  • Carl Eschenbach (Chief Executive Officer)
  • Barbara Larson (Chief Financial Officer)
  • Doug Robinson (Co-President)
  • Zane Rowe (Chief Financial Officer (incoming))

Call Summary

Financial Performance

• Subscription revenue in Q1 was $1.53B, up 20% year-over-year.
• Professional services revenue in Q1 was $156M.
• Total revenue outside of the U.S. was $420M, representing 25% of total revenue in Q1.
• 24-month subscription revenue backlog was $9.79B, up 23% at the end of Q1.
• Total subscription revenue backlog at the end of Q1 was $16.65B, up 32% year-over-year.
• Non-GAAP operating income for Q1 was $396M, resulting in a non-GAAP operating margin of 23.5%.
• Operating cash flow for Q1 was $277M, which reflected the first full-year payout of the performance-based cash bonus program and a $55M interest payment.
• Workday ended Q1 with more than 17,800 global workmates.

Guidance

• Following Q1, FY24 subscription revenue guidance range was raised to $6.550B to $6.575B, representing 18% year-over-year growth.
• Q2 subscription revenue is expected to be $1.611B to $1.613B, representing 18% year-over-year growth.
• The company expects approximately 4% sequential subscription revenue growth in Q3.
• FY24 professional services revenue guidance was maintained at $630M to $650M, with Q2 professional services revenue expected to be $160M.
• 24-month backlog is expected to increase approximately 20% year-over-year in Q2.
• FY24 non-GAAP operating margin is expected to be 23%, with Q2 non-GAAP operating margin of approximately 22% due to compensation seasonality.
• GAAP operating margins are expected to be approximately 22 percentage points lower than non-GAAP margins, and GAAP operating income profitability is expected beginning in Q3 and for the full fiscal year.
• FY24 non-GAAP tax rate remains at 19%.