Enterprise cloud applications provider for human resource and
) reported fourth-quarter 2013 non-GAAP loss per share of 16
cents, considerably narrower than the loss per share of 73 cents
reported in the prior-year quarter.
Including share-based compensation of 3 cents, loss per share
came in at 19 cents per share and fared better than the Zacks
Consensus Estimate of a loss of 25 cents per share.
Revenues surged 88.7% from the year-ago quarter to $81.6
million and were ahead of the Zacks Consensus Estimate of $78
million. Subscription revenue soared 105% year over year to $59.6
million in the quarter. Services revenue increased 55% year over
year to $21.9 million.
Workday ended the fourth quarter with 400 customers in total.
Most of the contracts signed during the quarter were of
three-and-a half to four years in duration. Total unearned
revenue at the quarter end increased 52% from the year-ago
quarter to $285.0 million.
Gross profit surged 112.0% year over year to $48.5 million.
Gross margin expanded 660 basis points ("bps") to 59.5% in the
reported quarter, primarily due to higher revenue base.
Operating expenses rose sharply to $79.2 million from $45.9
million reported in the year-ago quarter, due to a 148.9%
increase in general & administrative expense, 61.1% jump in
sales & marketing and 65.4% rise in research &
As a result of higher operating expenses, Workday reported
operating loss (Including share based compensation) of $30.7
million, wider than a loss of $23.1 million in the year-ago
quarter. Net loss (including stock-based compensation) was $30.9
million compared with $23.6 million loss in the year-ago
Cash & cash equivalents and marketable securities were
$790.3 million compared with $797.4 million in the previous
quarter. Cash from operations during the quarter was $5.9
For first quarter 2014, total revenue is expected in the range
of $83 million to $87 million. Subscription revenue is expected
between $64 million and $66 million.
Workday expects macroeconomic challenges to remain and IT
spending to be muted in 2014. Workday expects the revenue mix to
shift toward subscriptions.
We believe that Workday's innovative product pipeline will
help it to gain significant footprint in the human resource and
financials market. However, we believe that the company will face
serious competition from large established players such as
) in both of its operational markets.
This cut-throat competition and increasing investments in
product development and personnel cost will hurt profitability
Currently, Workday has a Zacks Rank #3 (Hold).
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