Workday Inc (NASDAQ: WDAY) stock rose over 0.6% on May 30th, 2019 (as of 1:25 pm GMT-4; Source: Google finance) post a week session yesterday. But Workday rose over 50.3% in the last six months (Source: finviz.com)
Workday’s growth is on the back of the ongoing shift among enterprises to cloud-based applications they can use to manage their payrolls and human resources. The company committed itself to this trend in a big way with its $1.55 billion acquisition of Adaptive Insights Inc. last June. Since then, its began selling a new workforce planning module for the Adaptive Insights Business Planning Cloud, which is used to create and test complex business scenarios. The new product, which is really more a set of templates to use with the existing business planning engine, enables better collaboration between the finance and human resources departments for workforce planning, analysis and reporting. The non-GAAP operating income for the first quarter was $108 million, resulting in a non-GAAP operating margin of 13.1%. Operating cash flow in Q1 was $209 million. For the quarter, Workday has reported a loss of $116.3 million compared with $74.4 million a year ago.
With the new product, WDAY is trying to position itself as a provider of comprehensive back office services for small and medium sized businesses. Adaptive Insights has however added about 150 new customers in the last quarter, most of those were in fact larger companies.
WDAY in the first quarter of FY 20 has reported the adjusted earnings per share of 43 cents. The company had reported the adjusted revenue growth of 35.9 percent to $825.1 million in the first quarter of FY 20. Workday’s subscription revenue for the first quarter rose 34%, to $701 million, while professional revenue topped $124 million, up 29%. Subscription revenue backlog was $6.8 billion, growth of 30% year-over-year driven by strong performance across net new bookings, add-on business and renewals with net retention once again over 100%. Total costs and expenses for the quarter were $948.4 million, up about 37% from a year earlier.
The company said it’s now expecting subscription revenue of $746 million to $748 million in the next quarter, versus the analyst consensus of $741.7 million. For the full year, Workday predicts subscription revenue of $3.04 billion to $3.06 billion, versus Wall Street’s forecast of $3.047 billion.