WDAY Q3 2023 Earnings

Call Details

• Call Title: Workday, Inc. Q3 2023 Earnings Call
• Date: November 29, 2022 at 9:30 PM UTC
• Management Team:
  • Justin Furby (Vice President of Investor Relations)
  • Aneel Bhusri (Co-CEO)
  • Chano Fernandez (Co-CEO)
  • Barbara Larson (Chief Financial Officer)
  • Pete Schlampp (Executive Vice President of Product Development)
  • Doug Robinson (Co-President)

Call Summary

Financial Performance

• Subscription revenue in Q3 was $1.43B, representing 22% year-over-year growth.
• Professional services revenue in Q3 was $167M, representing 7% year-over-year growth.
• Total revenue outside the U.S. in Q3 was $394M, representing 25% of total revenue.
• Non-GAAP operating income in Q3 was $314M, resulting in a non-GAAP operating margin of 19.7%.
• Q3 operating cash flow was $409M, representing growth of 6% year-over-year.
• Total subscription revenue backlog at the end of Q3 was $14.10B, up 28% year-over-year.

Guidance

• FY23 subscription revenue guidance is $5.555B to $5.557B, implying 22% year-over-year growth for the year.
• Q4 subscription revenue guidance is $1.483B to $1.485B, implying 21% year-over-year growth for the quarter.
• FY23 professional services revenue is now expected to be $645M, with Q4 expected at $147M.
• Q4 non-GAAP operating margin is expected to be approximately 17.5%, and FY23 non-GAAP operating margin is expected to be 19.2%.
• GAAP operating margins for both Q4 and FY23 are expected to be approximately 23 percentage points lower than non-GAAP margins.
• Preliminary FY24 subscription revenue range is approximately $6.5B to $6.6B, implying 17% to 19% year-over-year growth.