WDAY Q4 2021 Earnings

Call Details

• Call Title: Workday, Inc. Q4 2021 Earnings Call
• Date: February 25, 2021 at 9:30 PM UTC
• Management Team:
  • Justin Furby (Vice President of Investor Relations)
  • Chano Fernandez (Co-CEO)
  • Aneel Bhusri (Co-CEO)
  • Robynne Sisco (President and CFO)
  • Pete Schlampp (Executive Vice President of Product Development)

Call Summary

Financial Performance

• Subscription revenue was $1.01 billion in Q4, representing growth of 20% year-over-year on a non-GAAP basis as presented on the call.
• Full-year subscription revenue was $3.79 billion, representing growth of 22% year-over-year on a non-GAAP basis.
• Professional services revenue was $125 million in Q4 and $530 million for the full year.
• Revenue outside the U.S. was $283 million in Q4, representing 25% of total revenue.
• Non-GAAP operating income for Q4 was $211 million, resulting in a non-GAAP operating margin of 19%.
• Full-year non-GAAP operating income was $867 million, or 20% of total revenue, which the company stated was up more than 650 basis points from FY20.
• Operating cash flow for Q4 was $554 million, representing growth of 86%, and full-year operating cash flow was $1.27 billion, representing growth of 47%.
• Total workforce at year-end was more than 12,500 employees and hiring ramp-up for FY22 was announced.

ARR / Recurring Revenue Growth

• Subscription revenue backlog was $10.09 billion at quarter-end, representing growth of 22% versus the prior year.
• Subscription revenue backlog expected to be recognized within the next 24 months was $6.53 billion, representing growth of 19% year-over-year.
• The company explicitly moved to guide to 24-month backlog to reduce variability from changing contract durations.
• The FY22 subscription revenue guide range is $4.38 billion to $4.40 billion, representing 16% year-over-year growth and includes the pending Pecan acquisition.
• The company expects sequential subscription revenue increases of just under 6% in Q2, approximately 4% in Q3, and 4.5% in Q4 of FY22.
• Q1 FY22 subscription revenue is guided to $1.018 billion to $1.020 billion, with a stated nearly $12 million headwind from having one less day versus the prior year due to the leap year.