Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to Workday's financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled "About Non-GAAP Financial Measures."
Forward-Looking Statements
This press release contains forward-looking statements including, among other things, statements regarding Workday's first quarter and full year fiscal 2014 revenue projections, and our expectations for future applications. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications and marketing initiatives by our competitors; (iv) our ability to manage our growth effectively; (v) our limited operating history, which makes it difficult to predict future results; (vi) the development of the market for enterprise cloud services; (vii) acceptance of our applications and services by customers; (viii) breaches in our security measures or unauthorized access to our customers' data; and (ix) changes in sales may not be immediately reflected in our results due to our subscription model. Further information on risks that could affect Workday's results is included in our filings with the Securities and Exchange Commission, including our Form 10-Q for the quarter ended October 31, 2012, that we may file from time to time, which could cause actual results to vary from expectations. Workday assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.
Any unreleased services, features, or functions referenced in this document, our website, or other press releases or public statements that are not currently available are subject to change at Workday's discretion and may not be delivered as planned or at all. Customers who purchase Workday, Inc. services should make their purchase decisions based upon services, features and functions that are currently available.
© 2013. Workday, Inc. All rights reserved. Workday and the Workday logo are registered trademarks of Workday, Inc. All other brand and product names are trademarks or registered trademarks of their respective holders.
Workday, Inc. Condensed Consolidated Balance Sheets (in thousands, except share and per share data) January 31, January 31, 2013 2012 ------------- ------------- (unaudited)AssetsCurrent assets: Cash and cash equivalents $ 84,158 $ 57,529 Marketable securities 706,181 53,634 Accounts receivable, net of allowance for doubtful accounts of $613 and $261 at January 31, 2013 and 2012, respectively 67,437 54,467 Deferred costs 9,816 9,450 Prepaid expenses and other current assets 16,710 8,092 ------------- -------------Total current assets 884,302 183,172Property and equipment, net 44,585 25,861Deferred costs, noncurrent 18,575 13,156Goodwill and intangible assets, net 8,488 8,578Other assets 3,130 1,871 ------------- -------------Total assets $ 959,080 $ 232,638 ============= =============Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)Current liabilities: Accounts payable $ 2,665 $ 2,730 Accrued expenses and other current liabilities 13,558 6,808 Accrued compensation 27,203 13,891 Capital leases 12,008 7,075 Unearned revenue 199,340 114,734 ------------- -------------Total current liabilities 254,774 145,238Capital leases, noncurrent 12,972 8,641Unearned revenue, noncurrent 85,920 73,363Other liabilities 13,131 10,051 ------------- -------------Total liabilities 366,797 237,293Commitments and contingenciesRedeemable convertible preferred stock, $0.001 par value; no shares and 31 million shares authorized as of January 31, 2013 and January 31, 2012; no shares and 30 million shares issued and outstanding as of January 31, 2013 and January 31, 2012 - 170,906Stockholders' equity (deficit): Convertible preferred stock, $0.001 par value; no shares and 68 million shares authorized as of January 31, 2013 and January 31, 2012; no shares and 68 million shares issued and outstanding as of January 31, 2013 and January 31, 2012 - 68 Class A common stock, $0.001 par value; 750 million shares authorized as of January 31, 2013 and 26 million shares issued and outstanding as of January 31, 2013 26 - Class B common stock $0.001 par value; 240 million shares authorized as of January 31, 2013 and 140 million shares issued and outstanding as of January 31, 2013 (including 3 million shares, subject to repurchase, legally issued and outstanding as of January 31, 2013) 136 - Common stock, $0.001 par value; no shares and 200 million shares authorized as of January 31, 2013 and January 31, 2012; no shares and 36 million shares issued and outstanding as of January 31, 2013 and January 31, 2012 (including 3 million shares, subject to repurchase, legally issued and outstanding as of January 31, 2012) - 33 Additional paid-in capital 993,933 106,457 Accumulated other comprehensive income 68 3 Accumulated deficit (401,880) (282,122) ------------- -------------Total stockholders' equity (deficit) 592,283 (175,561) ------------- -------------Total liabilities, redeemable preferred stock and stockholders' equity (deficit) $ 959,080 $ 232,638 ============= ============= Workday, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited) Three Months Ended Year Ended January 31, January 31, -------------------- -------------------- 2013 2012 2013 2012 --------- --------- --------- ---------Revenues $ 81,519 $ 43,158 $ 273,657 $ 134,427Costs and expenses(1): Costs of revenues 32,986 20,330 116,535 65,368 Research and development 30,252 18,287 102,665 62,014 Sales and marketing 36,389 22,582 123,440 70,356 General and administrative 12,570 5,050 48,880 15,133 --------- --------- --------- ---------Total costs and expenses 112,197 66,249 391,520 212,871 --------- --------- --------- ---------Operating loss (30,678) (23,091) (117,863) (78,444)Other expense, net (167) (444) (1,203) (1,018) --------- --------- --------- ---------Loss before provision for income taxes (30,845) (23,535) (119,066) (79,462)Provision for income taxes 99 51 124 167 --------- --------- --------- ---------Net loss (30,944) (23,586) (119,190) (79,629) --------- --------- --------- ---------Accretion of redeemable convertible preferred stock - (257) (568) (342) --------- --------- --------- ---------Net loss attributable to Class A and Class B common stockholders $ (30,944) $ (23,843) $(119,758) $ (79,971) ========= ========= ========= =========Net loss per share attributable to Class A and Class B common stockholders, basic and diluted $ (0.19) $ (0.77) $ (1.62) $ (2.71) ========= ========= ========= =========Weighted-average shares used to compute net loss per share attributable to Class A and Class B common stockholders 161,916 30,818 74,011 29,478 ========= ========= ========= =========(1) Costs and expenses include share-based compensation as follows: Costs of revenues $ (812) $ (212) $ (1,913) $ (628) Research and development (1,301) (373) (3,528) (1,124) Sales and marketing (879) (306) (2,717) (839) General and administrative (2,456) (535) (7,170) (1,591) Workday, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Three Months Ended Year Ended January 31, January 31, -------------------- -------------------- 2013 2012 2013 2012 --------- --------- --------- ---------Cash flows from operating activitiesNet loss $ (30,944) $ (23,586) $(119,190) $ (79,629)Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Depreciation and amortization 5,784 3,069 17,722 9,319Share-based compensation 5,448 1,427 15,328 4,182Donation of common stock to Workday Foundation - - 11,250 -Amortization of deferred costs 3,032 2,004 11,368 7,099Other 15 15 56 60Changes in operating assets and liabilities: Accounts receivable (6,338) (22,144) (12,970) (39,025) Deferred costs (5,727) (4,894) (17,153) (12,036) Prepaid expenses and other assets (2,133) (388) (9,877) (4,909) Accounts payable (138) 1,804 (65) 2,195 Accrued and other liabilities 3,844 1,822 17,582 9,260 Unearned revenue 33,097 34,228 97,163 89,710 --------- --------- --------- ---------Net cash provided by (used in) operating activities 5,940 (6,643) 11,214 (13,774)Cash flows from investing activitiesPurchases of marketable securities (391,198) (51,358) (765,797) (63,282)Maturities of marketable securities 38,792 4,480 111,577 13,086Purchase of cost method investment - - - (1,000)Purchases of property and equipment (9,095) (1,257) (15,898) (4,999) --------- --------- --------- ---------Net cash used in investing activities (361,501) (48,135) (670,118) (56,195)Cash flows from financing activitiesProceeds of initial public offering, net of issuance costs - - 684,620 -Proceeds from exercise of stock options 285 2,067 10,370 6,265Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs - 13,536 - 95,009Principal payments on capital lease obligations (3,541) (1,348) (9,453) (4,296) --------- --------- --------- ---------Net cash provided by financing activities (3,256) 14,255 685,537 96,978Effect of exchange rate changes (5) 1 (4) 8 --------- --------- --------- ---------Net increase in cash and cash equivalents (358,822) (40,522) 26,629 27,017Cash and cash equivalents at the beginning of period 442,980 98,051 57,529 30,512 --------- --------- --------- ---------Cash and cash equivalents at the end of period $ 84,158 $ 57,529 $ 84,158 $ 57,529 ========= ========= ========= ========= Workday, Inc. Reconciliation of GAAP to Non-GAAP Data For the Three Months Ended January 31, 2013 (in thousands, except per share data) (unaudited) Non-GAAP Share-Based as GAAP Compensation adjusted ---------- ------------ ----------Costs and expenses: Costs of revenues: Subscription services $ 12,484 $ (200) $ 12,284 Professional services 20,502 (612) 19,890 Total costs of revenues 32,986 (812) 32,174 Research and development 30,252 (1,301) 28,951 Sales and marketing 36,389 (879) 35,510 General and administrative 12,570 (2,456) 10,114Operating loss (30,678) 5,448 (25, 230)Operating margin (37.6%) 6.7% (30.9%)Loss before provision for income taxes (30,845) 5,448 (25,397)Provision for income taxes 99 - 99Net loss $ (30,944) $ 5,448 $ (25,496)Net loss per share attributable to common stockholders, for Class A and Class B, basic and diluted (1) $ (0.19) $ 0.03 $ (0.16)
