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Workday (WDAY) Q4 Earnings Beat Estimates on Revenue Growth
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Workday, Inc. (WDAY - Free Report) reported solid fourth-quarter fiscal 2022 results (ended Jan 31, 2022) with a year-over-year increase in revenues and non-GAAP earnings, backed by healthy demand trends. The company expects this momentum to continue in fiscal 2023 with the gradual revival of business operations in the post-pandemic era.
Quarter Details
Net loss in the reported quarter was $73.3 million or a loss of 29 cents per share compared with $71.7 million or a loss of 30 cents per share in the year-earlier quarter. Despite top-line growth, the company recorded a wider loss on an absolute basis owing to higher operating expenses.
Non-GAAP net income in the quarter improved to $206 million or 78 cents per share from $184.6 million or 73 cents per share in the year-ago quarter, and surpassed the Zacks Consensus Estimate by 7 cents.
In fiscal 2022, Workday registered a net income of $29.4 million or 12 cents per share against a net loss of $282.4 million or a loss of $1.19 per share in fiscal 2021, primarily driven by higher revenues. Non-GAAP net income in fiscal 2022 improved to $1,038.7 million or $3.99 per share from $724.2 million or $2.93 per share in fiscal 2021.
Total quarterly revenues aggregated $1,376.1 million compared with $1,131.7 million in fourth-quarter fiscal 2021 and beat the consensus estimate of $1,364 million. Subscription services revenues (89.3% of total revenues) rallied 22.2% year over year to $1,229.2 million on the back of an expanding customer base. Workday customer community now includes more than 50% of the Fortune 500, of which, roughly 90% are using its products regularly. Subscription revenue backlog was $12.81 billion, up 26.9% year over year. Professional services’ revenues (10.7% of total revenues) increased 17.2% to $147 million.
In fiscal 2022, total revenues were up 19% year over year to $5,138.8 million, largely driven by higher subscription revenues (up 20%) of $4,546.3 million led by higher customer contracts and strong customer renewals, with gross retention of more than 95%.
Operating expenses in the reported quarter were $1,477.1 million compared with $1,205 million in the prior year, resulting in respective operating loss of $101 million and $73.3 million.
Balance Sheet & Cash Flow
As of Jan 31, 2022, cash and cash equivalents were $1,534.3 million with total debt (current and non-current) of $1,839.8 million compared with respective tallies of $1,384.2 million and $1,795 million in the prior-year period. In fiscal 2022, Workday generated an operating cash flow of $1,650.7 million compared with $1,268.4 million in fiscal 2021.
Guidance
With solid quarterly and fiscal results, Workday expects its fiscal 2023 subscription services revenues in the range of $5,530-$5,550 million. Non-GAAP operating margin is anticipated to be 18.5%.
Clarivate has a long-term earnings growth expectation of 14.8% and delivered an earnings surprise of 10.1%, on average, in the trailing four quarters. The company has embarked on a new corporate strategy dubbed One Clarivate Vision to put greater focus on its customers and solutions.
CrowdStrike Holdings, Inc. (CRWD - Free Report) , carrying a Zacks Rank #2, is another key pick. It has a long-term earnings growth expectation of 25% and delivered an earnings surprise of 50.8%, on average, in the trailing four quarters.
Earnings estimates for CrowdStrike for the current year have moved up 56.8% since February 2021, while that for the next year is up 16.3%. The company offers modern security with the world’s most advanced cloud-native platforms for protecting critical areas of enterprise risk – endpoints and cloud workloads, identity and data.
Duck Creek Technologies, Inc. carries a Zacks Rank #2. It has a long-term earnings growth expectation of 41.4% and delivered a stellar earnings surprise of 233.3%, on average, in the trailing four quarters.
Earnings estimates for Duck Creek for the current year have moved up 350% since April 2021. Duck Creek’s functionally-rich solutions are available on a standalone basis or as a full suite, and all are available via Duck Creek OnDemand.
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Workday (WDAY) Q4 Earnings Beat Estimates on Revenue Growth
Workday, Inc. (WDAY - Free Report) reported solid fourth-quarter fiscal 2022 results (ended Jan 31, 2022) with a year-over-year increase in revenues and non-GAAP earnings, backed by healthy demand trends. The company expects this momentum to continue in fiscal 2023 with the gradual revival of business operations in the post-pandemic era.
Quarter Details
Net loss in the reported quarter was $73.3 million or a loss of 29 cents per share compared with $71.7 million or a loss of 30 cents per share in the year-earlier quarter. Despite top-line growth, the company recorded a wider loss on an absolute basis owing to higher operating expenses.
Non-GAAP net income in the quarter improved to $206 million or 78 cents per share from $184.6 million or 73 cents per share in the year-ago quarter, and surpassed the Zacks Consensus Estimate by 7 cents.
In fiscal 2022, Workday registered a net income of $29.4 million or 12 cents per share against a net loss of $282.4 million or a loss of $1.19 per share in fiscal 2021, primarily driven by higher revenues. Non-GAAP net income in fiscal 2022 improved to $1,038.7 million or $3.99 per share from $724.2 million or $2.93 per share in fiscal 2021.
Workday, Inc. Price, Consensus and EPS Surprise
Workday, Inc. price-consensus-eps-surprise-chart | Workday, Inc. Quote
Revenues
Total quarterly revenues aggregated $1,376.1 million compared with $1,131.7 million in fourth-quarter fiscal 2021 and beat the consensus estimate of $1,364 million. Subscription services revenues (89.3% of total revenues) rallied 22.2% year over year to $1,229.2 million on the back of an expanding customer base. Workday customer community now includes more than 50% of the Fortune 500, of which, roughly 90% are using its products regularly. Subscription revenue backlog was $12.81 billion, up 26.9% year over year. Professional services’ revenues (10.7% of total revenues) increased 17.2% to $147 million.
In fiscal 2022, total revenues were up 19% year over year to $5,138.8 million, largely driven by higher subscription revenues (up 20%) of $4,546.3 million led by higher customer contracts and strong customer renewals, with gross retention of more than 95%.
Operating expenses in the reported quarter were $1,477.1 million compared with $1,205 million in the prior year, resulting in respective operating loss of $101 million and $73.3 million.
Balance Sheet & Cash Flow
As of Jan 31, 2022, cash and cash equivalents were $1,534.3 million with total debt (current and non-current) of $1,839.8 million compared with respective tallies of $1,384.2 million and $1,795 million in the prior-year period. In fiscal 2022, Workday generated an operating cash flow of $1,650.7 million compared with $1,268.4 million in fiscal 2021.
Guidance
With solid quarterly and fiscal results, Workday expects its fiscal 2023 subscription services revenues in the range of $5,530-$5,550 million. Non-GAAP operating margin is anticipated to be 18.5%.
Zacks Rank & Stocks to Consider
Workday currently has a Zacks Rank #3 (Hold).
Clarivate Plc (CLVT - Free Report) , carrying a Zacks Rank #2 (Buy) is a solid pick for investors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Clarivate has a long-term earnings growth expectation of 14.8% and delivered an earnings surprise of 10.1%, on average, in the trailing four quarters. The company has embarked on a new corporate strategy dubbed One Clarivate Vision to put greater focus on its customers and solutions.
CrowdStrike Holdings, Inc. (CRWD - Free Report) , carrying a Zacks Rank #2, is another key pick. It has a long-term earnings growth expectation of 25% and delivered an earnings surprise of 50.8%, on average, in the trailing four quarters.
Earnings estimates for CrowdStrike for the current year have moved up 56.8% since February 2021, while that for the next year is up 16.3%. The company offers modern security with the world’s most advanced cloud-native platforms for protecting critical areas of enterprise risk – endpoints and cloud workloads, identity and data.
Duck Creek Technologies, Inc. carries a Zacks Rank #2. It has a long-term earnings growth expectation of 41.4% and delivered a stellar earnings surprise of 233.3%, on average, in the trailing four quarters.
Earnings estimates for Duck Creek for the current year have moved up 350% since April 2021. Duck Creek’s functionally-rich solutions are available on a standalone basis or as a full suite, and all are available via Duck Creek OnDemand.