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Workday Big Quarter Beats Expectations

February 28, 2017

Workday reported results for the fourth quarter and fiscal year ended January 31, 2017. Total revenues were $436.7 million, an increase of 35% from the fourth quarter of fiscal 2016. Subscription revenue was $365.2 million, an increase of 39% from the same period last year.

Operating loss was $106.2 million, or negative 24.3% of revenues, compared to an operating loss of $73.4 million, or negative 22.7% of revenues, in the same period last year. Non-GAAP operating profit for the fourth quarter was $8.0 million, or 1.8% of revenues, compared to a non-GAAP operating loss of $0.8 million, or negative 0.2% of revenues, in the same period last year.

Net loss per basic and diluted share was $0.52, compared to a net loss per basic and diluted share of $0.42 in the fourth quarter of fiscal 2016. Non-GAAP net income per diluted share was $0.07, compared to a non-GAAP net loss per basic and diluted share of $0.01 for the same period last year.

Investors were looking for a loss of 1-cent per share.

Fiscal Year 2017 Results

Total revenues were $1.57 billion, an increase of 35% from fiscal 2016. Subscription revenue was $1.29 billion, an increase of 39% from the prior year.

Operating loss was $376.7 million, or negative 24% of revenues, compared to an operating loss of $264.7 million, or negative 22.8% of revenues, in fiscal 2016. Non-GAAP operating profit was $29.0 million, or 1.9% of revenues, compared to a non-GAAP operating loss of $2.7 million, or negative 0.2% of revenues, last year.1

Net loss per basic and diluted share was $2.06, compared to a net loss per basic and diluted share of $1.53 in fiscal 2016. Non-GAAP net income per diluted share was $0.12, compared to a non-GAAP net loss per basic and diluted share of $0.01 last year.1

Operating cash flows were $348.7 million and free cash flows were $227.8 million.

Cash, cash equivalents and marketable securities were approximately $2.00 billion as of January 31, 2017. Unearned revenues were $1.23 million, a 37% increase from last year.

"In Q4, we delivered the best quarter in company history to close out a very successful fiscal 2017," said Aneel Bhusri, co-founder and CEO, Workday. "Our strong performance was driven by a combination of our industry-leading products and technology, continued high levels of customer satisfaction, and our dedicated Workday team. We believe these are the right areas of focus to achieve another great year for Workday in the year ahead."

"We finished a very strong fiscal 2017 with an excellent fourth quarter. We generated record revenues, and our subscription revenue growth accelerated in the fourth quarter," said Robynne Sisco, chief financial officer, Workday. "As we look ahead to fiscal 2018, we estimate that total revenues will be $2.005 to $2.025 billion or growth of 27-29%, putting us on track to be only the second true cloud company to reach this significant milestone."

Recent Highlights

Workday held its third annual customer conference in Europe, Workday Rising Europe, bringing together members of the Workday community for education and collaboration in Barcelona.

Workday selected Amazon Web Services (AWS) as its preferred public cloud infrastructure provider for customer production workloads. Through this partnership, Workday will offer customers the option to run its full suite of applications in the public cloud.

Workday joined more than 100 companies in signing the White House Equal Pay Pledge as part of Workday's ongoing commitment to close the gender wage gap.

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