Workday continues to blow out financials expectations. While the market was expecting growth of 62% for Q1 fiscal 2015, Workday posted revenue of $159.7 million, a rise of 74%. The company closed several large deals that were expected to close later in the year, contributing to growth of year over year 80%. The company expects revenue of $173-178 million for Q2, up 61-65%. Margin was down slightly overall. Subscription margin improved to 83.5%. Operating loss was $52.1 million or negative 32.6%, compared to $32.6% or 35.6%.
Some other headline numbers:
- Total financials customers now above 80 representing double digit growth.
- During the earnings call, the company mentioned that it plans to spend around $110 million on capex in the current fiscal year excluding any major construction on expanded facilities at Workday's Pleasanton HQ.
- At the end of the quarter, Workday had $460 million in unearned revenue.
- The company currently holds $1.9 billion in near cash items and is at cash flow break even.
- The average billing term is now at 3.6 years with growth coming from education and government.
Talking about the competitive landscape, CEO Aneel Bhusri said: "We sense weakness in the Ariba [SAP] market in the non-manufacturing space so as we sell in financials we look for procurement opportunities."
- Workday continues to be on a roll, outperforming analyst expectations. How long this can continue is not known but for now, Workday is sticking to its full year expected outcome of revenue in the range $730-750 million.
- The fact HP went live with 300,000 employees and Phillips with 170,000 are solid references in HR. Having Netflix go live on financials is yet another solid reference.
- Winning 100 customers on financials is going to be the next milestone as Workday progresses towards rolling out additional analytics solutions and especially those with a 'big data' component.
- I maintain my prediction that by this time next year, Workday will be looking down the barrel of $1 billion in revenue run rate.
- The company remains cautious in the way it talks about recent acquisitions and the impact of new releases like Recruiting that recently went into general availability.
Disclosure: Workday is a partner at time of writing