Workday, Inc. WDAY reported solid fourth-quarter fiscal 2022 results (ended Jan 31, 2022) with a year-over-year increase in revenues and non-GAAP earnings, backed by healthy demand trends. The company expects this momentum to continue in fiscal 2023 with the gradual revival of business operations in the post-pandemic era.
Pleasanton, Calif.-based Workday reported fourth-quarter results after the market closed on Monday. WDAY stock climbed 6.6% to 244.24 in midday trading on the stock market today.
The company said the environment will remain robust for finance and HR transformation initiatives. It was thus expecting yearly subscription revenue to be $5.54 billion at the midpoint of its guidance range, up 22%.
Financial Highlights
Total quarterly revenues aggregated $1,376.1 million compared with $1,131.7 million in fourth-quarter fiscal 2021 and beat the consensus estimate of $1,364 million. Subscription services revenues (89.3% of total revenues) rallied 22.2% year over year to $1,229.2 million on the back of an expanding customer base.
Workday customer community now includes more than 50% of the Fortune 500, of which, roughly 90% are using its products regularly. Subscription revenue backlog was $12.81 billion, up 26.9% year over year. Professional services revenues (10.7% of total revenues) increased 17.2% to $147 million.
Net loss in the reported quarter was $73.3 million or a loss of 29 cents per share compared with $71.7 million or a loss of 30 cents per share in the year-earlier quarter. Despite top-line growth, the company recorded a wider loss on an absolute basis owing to higher operating expenses.
In fiscal 2022, Workday registered a net income of $29.4 million or 12 cents per share against a net loss of $282.4 million or a loss of $1.19 per share in fiscal 2021, primarily driven by higher revenues. Non-GAAP net income in fiscal 2022 improved to $1,038.7 million or $3.99 per share from $724.2 million or $2.93 per share in fiscal 2021.
Future Outlook
“Given the strength in our fourth quarter and our optimism that the environment will remain robust for finance and HR transformation initiatives”.
“We are raising our guidance for fiscal 2023 subscription revenue to be in a range of $5.530 billion to $5.550 billion, representing year-over-year growth of 22%,” Chief Financial Officer Barbara Larson said in a news release. “We are also raising our fiscal 2023 non-GAAP operating margin guidance to 18.5%.”
The company sells software for human capital management, such as payroll tools. Also, it has expanded into financial software.
“We closed out the year with another strong quarter that saw the continued acceleration of our business. It includes a growing global workforce and a relentless focus on employees, customers, and innovation,” said Aneel Bhusri, co-founder, co-CEO, and chairman of Workday.
“We continue to see increasing demand for our broad suite of finance and HR solutions, as we help some of the world’s largest organizations. More than 60 million users – navigate the changing world of work.”
