Workday delivers strong Q1, tops estimates
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Workday delivered strong first quarter results as the company's revenue jumped 28.9 percent from a year ago.
The company reported a first quarter net loss of 35 cents a share on revenue of $618.6 million. The non-GAAP loss for the quarter was 33 cents a share.
Wall Street was looking for non-GAAP earnings of 26 cents a share on revenue of $609 million.
Workday CEO Aneel Bhusri said the company saw strong demand across its product set. Workday ended the quarter with $3.4 billion in cash, cash equivalents and marketable securities.
Read also: Workday launches $250 million venture fund
As for the outlook, Workday projected subscription revenue of $2.27 billion to $2.29 billion for fiscal 2019. For the second quarter, Workday projected subscription revenue between $557 million and $559 million, up 29 percent to 29 percent.
Among the key points from the conference call:
- Workday HCM has more than 2,200 customers.
- 22 percent of revenue is international. Bhusri expects international revenue to increase because cloud adoption abroad has lagged behind the U.S.
- Bhusri said Workday Financials is gaining traction and added that it "continues to be now a fairly healthy and becoming a more sizable business. And we're seeing good uptake in Prism Analytics and Planning."
- Workday Planning won't be sold as stand-alone for the time being since it's bundled with HCM or Financials.
- Machine learning adoption is slower than the hype. Bhusri said:
"We've had some machine learning capabilities for now multiple years in areas like retention risk and talent scorecard and customer collections. I'd say the uptake is, I think, there's a lot of hype around machine learning. We're providing the technology for our customers to use. They're still getting comfortable with it. I think the tech vendors are out selling and marketing it probably ahead of our customers are in terms of using it, but it's picking up. And it's definitely a differentiator because I think many customers have plans to use it in the next 12 to 18 months once they get their data and process in order. And a big part of that is getting clean data are going forward, in some cases their coming off in systems where they don't have clean data so it takes a while to up ramp it."