WDAY Q3 2024 Earnings

Call Details

• Call Title: Workday, Inc. Q3 2024 Earnings Call
• Date: November 28, 2023 at 9:30 PM UTC
• Management Team:
  • Justin Furby (Vice President of Investor Relations)
  • Carl Eschenbach (Chief Executive Officer)
  • Aneel Bhusri (Co-CEO)
  • Zane Rowe (CFO)
  • Doug Robinson (Co-President)

Call Summary

Financial Performance

• Subscription revenue in Q3 was $1.69B, up 18% year-over-year.
• Professional services revenue in Q3 was $175M, bringing total revenue to $1.87B, growth of 17% year-over-year.
• U.S. revenue in Q3 was $1.4B, growing 17% year-over-year, and international revenue was $462M, growing at the same rate.
• Non-GAAP operating income for Q3 was $462M, resulting in a non-GAAP operating margin of 24.8%.
• Q3 operating cash flow was $451M, growing 10% year-over-year.
• The company ended the quarter with $6.9B in cash and marketable securities.
• Backlog disclosure showed total subscription revenue backlog of $18.45B, up 31% year-over-year.
• The quarter featured notable product go-lives across HCM and Financials that supported revenue recognition and services activity.

Guidance

• FY24 subscription revenue guidance was raised to $6.598B, representing 19% year-over-year growth.
• Q4 subscription revenue is expected to be $1.755B, representing 17% year-over-year growth.
• Q4 professional services revenue is expected to be $158M, and FY24 professional services revenue is expected to be $652M.
• FY24 non-GAAP operating margin guidance was raised to 23.8%, and Q4 non-GAAP operating margin is expected to be approximately 23.5%.
• FY24 operating cash flow outlook was raised to $1.975B, representing 19% year-over-year growth.
• FY24 capital expenditures were increased to approximately $250M.
• The company expects 12-month backlog to grow approximately 19% in Q4 and will continue disclosing 12-month backlog going forward.
• FY25 subscription revenue is currently expected to be approximately $7.725B to $7.775B, representing growth of 17% to 18% year-over-year.