Workday reports strong Q1, sees subscription revenue accelerating

As for the outlook, Workday projected second quarter subscription revenue of $1.09 billion to $1.097 billion, up 18%.

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Workday reported better-than-expected first quarter results and raised its outlook for the second quarter and fiscal 2022.

The human resources and financial software maker reported first quarter revenue of $1.18 billion, up 15.4% from a year ago. Workday reported a net loss of 19 cents a share and  non-GAAP earnings of 87 cents a share.

Wall Street was expecting first quarter revenue of $1.16 billion with non-GAAP earnings of 73 cents a share.

As for the outlook, Workday projected second quarter subscription revenue of $1.09 billion to $1.097 billion, up 18%. Fiscal 2022 subscription revenue will be between $4.42 billion and $4.44 billion, up 17%.

Aneel Bhusri, Workday's co-CEO, said Workday was gaining momentum as enterprises continue to spend more on digital transformation. Chano Fernandez, co-CEO at Workday, said he had "increased confidence in new bookings acceleration this fiscal year."

During the first quarter, Workday said it is expanding its global headcount about 20% in fiscal 2022. The company also completed the purchase of Peakon.

On a conference call with analysts, Bhusri said:

In addition to an acceleration in core Financials bookings, we also saw strength across the portfolio with offerings such as Workday Adaptive Planning, Spend Management, including Workday Strategic Sourcing, formerly known as Scout, and our enterprise finance solutions. 

Fernandez said:

From a geographic standpoint, we saw outperformance in North America and APJ while also driving healthy bookings growth across EMEA. Our medium enterprise team also had an exceptional start to the year as our investments in that market continue to pay off. And our strength continued in vertical markets, such as professional and financial services, health care and education and government, where industry-specific innovation and a dedicated go-to-market effort are critical to our success.