Workday Inc (NASDAQ: WDAY) stock fell over 6.2% on 30th August, 2019 (As of 11:51 am GMT-4; Source: Google finance) on lower than expected second quarter of FY 20. The company’s net loss widened to $120.7 million in the quarter ended July 31, from $86.2 million, a year earlier.
During the quarter, the company said it added The Gap, Stanley Black & Decker and Rockwell Automation in North America, among others, as new human capital management customers. It also added an insurance company as a customer for its cloud financial management services.
WDAY in the second quarter of FY 20 has reported the adjusted earnings per share of 44 cents, while reported the adjusted revenue growth of 32 percent to $887.8 million in the second quarter of FY 20. Subscription revenue in the second quarter jumped 34% to $757.2 million. The professional services revenue came in at $131 million, up 23%. Revenue outside the US was up 35% year-over-year to $211 million, representing 24% of total revenue.
Subscription revenue backlog was $7.03 billion, growth of 27% year-over-year. Growth was driven by solid results across net new bookings, add-on business and net retention, which was once again over 100%. The non-GAAP operating income for the second quarter was $118 million, resulting in a non-GAAP operating margin of 13.2%. Margin overachievement was driven by a combination of top line over performance and the shifting of certain expenses from Q2 to the back half of the year. Operating cash flow in Q2 was $100 million.
Workday said it now sees subscription revenue between $3.06 billion and $3.07 billion in fiscal 2020, up from an earlier expectation of $3.05 billion to $3.06 billion. The company also forecast third-quarter subscription revenue between $783 million and $785 million. Analysts, on average, were expecting $782.6 million. The company continue to expect the full-year capital outlay for the owned real estate projects to be approximately $130 million, of which $95 million relates to the development center in Pleasanton. For non-GAAP operating margins, WDAY estimate Q3 to be approximately 10.5% and the company still anticipate 12.3% margins for the full year.