Workday Inc (NASDAQ: WDAY) stock lost over 2.3% on 27th May, 2021 (as of 11:50:00 UTC-4 · USD ; Source: Google finance) after the company posted better than expected results for the first quarter of FY 22.
The company has reported adjusted profit of $226.4 million compared to $108.7 million in the same period last year. In Q1, the company saw an increase in demand across all product areas while delivering strong non-GAAP operating margins of 25%, showing the strength inherent in our underlying business model. In Q1 the company ASM Global, Las Vegas Sands Corp. Mattel, Five Below Inc. and Cost Plus World Market to the Workday family along with many other new HCM customers.
Even with all the sales momentum, the company continues to have over 70% of the HCM customers in production with notable go-lives in Q1 including Fielmann AG, University of Sydney and Macquarie University, to name a few. There has been an acceleration in core financials bookings, the company also saw strength across the portfolio with offerings such as Workday Adaptive Planning, spend management, including Workday Strategic Sourcing, formerly known as Scout and the Enterprise Finance solutions. New customers in Q1 included Los Angeles Department of Water and Power, SACS and Saint Francis Health System Incorporated with add-on wins at FHI and Werner Enterprises.
WDAY in the first quarter of FY 22 has reported the adjusted earnings per share of 87 cents, beating the analysts’ estimates for the adjusted earnings per share of 73 cents, according to analysts polled by Thomson Reuters. The company had reported the adjusted revenue growth of 15.4 percent to $1.18 billion in the first quarter of FY 22, beating the analysts’ estimates for revenue of $1.16 billion. Subscription revenue in the first quarter was $1.03 billion, which is up 17% year-over-year, due to strong new business sales, favorable in-quarter linearity and an over performance on customer renewals. Professional services revenue was $143 million and total revenue came in at $1.18 billion. Revenue outside the US was $292 million representing 25% of the total. 24-month backlog at the end of the first quarter was $6.59 billion, growth of 20%, on the back of strong new bookings across both net new and add-on business.
For the second quarter of 2022, Workday expects its subscription revenue to grow to between $1.095 billion and $1.097 billion, up 18% year-over-year, while the company has raised its fiscal 2022 guidance for subscript revenue to be between $4.425 billion and $4.44 billion. The analysts had been forecasting the figures of $1.081 billion and $4.407 billion, respectively.