Workday Conference Call Highlights

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Workday IncWDAY
reported its third quarter earnings on Tuesday. Shares of the company are up 6 percent. Below are some key highlights from its conference call.
Financial Metrics:
• Each year at Workday Rising we announce results of our customer satisfaction survey. • Our company goal is to always have at least a 95% customer satisfaction rate. • We are very pleased to announce that for the third year in a row Workday achieved a 97% customer satisfaction rate. • When we started Workday in 2005 it was the promise to bring customer focus back to the business of enterprise applications. • We are honored and humbled to maintain these levels of satisfaction not generally associated with enterprise software. • We also introduced a new suite of applications called Workday Insight Applications. • We believe these applications leapfrog current analytics by combining Workday data and third-party data and not just offering predictions but actually recommending how a business leader should take action. • Workday Insight Applications will harness advanced data science and machine learning algorithms to equip customers to make business critical financial and work force decisions. • We plan to deliver initial Workday Insight Applications in calendar year 2015, and additional details on availability and pricing will be disclosed at a later date. • I believe these applications will mark a new era of analytics that will provide our users with a true competitive edge. • We continue to focus on customer satisfaction, and believe once we sign and deploy a customer we keep that customer. • Although, still a small part of our volume, our customer renewal rates were strong. • For the second consecutive quarter, total ACV on quarterly renewals exceeded $10 million. • Our balance sheet remains strong with more than $1.8 billion of cash and marketable securities and over $500 million of unearned revenue. • Trailing four-quarter operating cash flows were positive for the eighth consecutive reporting period. • Total revenues for the third quarter were $215.1 million, an increase of 68% from a year ago. • As the vast majority of our sales are currently in U.S. dollars, the impact of exchange rates is minimal. • Subscription revenues for our cloud applications were $164.4 million, up 75% from last year. • The weighted average duration of new contracts signed in our third quarter was approximately 3.4 years. • Professional services revenue was $50.7 million, an increase of 49% compared to last year. • Job One continues to be the successful deployment of our cloud application, whether by our ecosystem partners or us. • Professional services revenue was driven by a record number of customers that either went live in Q3 or are scheduled to go live in Q4. • Total revenues for the fourth quarter are expected to be within a range of $219 million to $222 million, or growth of 54% to 56% as compared to the prior year. • For fiscal 2016, we anticipate generating approximately 40% of total billings in the first half of the year with the first quarter down sequentially from the fourth quarter of the current year and approximately flat to the most recent third quarter. • Keep in mind that derived billings in Q1 of this current year were especially strong and benefited by approximately $15 million to $20 million from contracts that were anticipated to close later in the year. • To summarize, we are very pleased with our solid third quarter. • Looking ahead, we're investing for the long-term and see a very large opportunity in front of us.
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Posted In: EarningsNewsGuidanceconference call
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