WDAY Q2 2022 Earnings

Call Details

• Call Title: Workday, Inc. Q2 2022 Earnings Call
• Date: August 26, 2021 at 8:30 PM UTC
• Management Team:
  • Justin Furby (Vice President of Investor Relations)
  • Aneel Bhusri (Co-CEO)
  • Chano Fernandez (Co-CEO)
  • Robynne Sisco (President and CFO)
  • Pete Schlampp (Executive Vice President of Product Development)

Call Summary

Financial Performance

• Subscription revenue in Q2 was $1.11B, up 20% year over year.
• Professional services revenue in Q2 was $147M, resulting in total revenue of $1.26B for the quarter.
• Revenue outside the U.S. was $318M, up 24% year over year, and represented 25% of total revenue.
• 24-month backlog at the end of Q2 was $6.88B, growth of 19% versus prior year.
• Total subscription revenue backlog was $10.58B, up 23% year over year.
• Non-GAAP operating income in Q2 was $292M, producing a non-GAAP operating margin of 23%.
• Operating cash flow in Q2 was $198M, growth of 26% year over year.
• The company recognized a nearly $100M mark-to-market gain in Q2 related to a Ventures portfolio IPO, and noted such gains will be rare.

Guidance

• FY22 subscription revenue guidance was raised to a range of $4.50B to $4.51B, representing 19% growth.
• Q3 subscription revenue guidance was provided at $1.156B to $1.158B, with '20% growth at the high end' of the range.
• The company expects 24-month backlog growth of 19% at the end of Q3.
• FY22 professional services revenue is expected to be $590M, with Q3 professional services revenue expected to be $150M.
• Non-GAAP operating margin is expected to be 21% in Q3, 16% in Q4, and 21% for the full year FY22.
• The GAAP operating margin is expected to be approximately 24 percentage points lower than non-GAAP in Q3 and about 25 percentage points lower in Q4 and for the full year.
• Operating cash flow guidance for FY22 was raised to $1.5B.
• Other capital investments supporting growth are expected to be $270M for FY22.