Workday has announced its Q3 financial results, with revenues reaching $1.6bn for the quarter, up 20.5 percent from Q3 2022.
The HR and finance software vendor showed strong growth in its subscription services, with subscription revenues hitting $1.43bn, up 22.3 percent year over year this quarter. A two-year subscription revenue backlog has reached $8.62bn, up 21 percent, and a total backlog has reached $14.1bn, up 28.5 percent.
The figures meet Workday’s targets of sustaining a 20 percent plus revenue growth for subscriptions, a step towards the company’s long-term $10bn revenue goal by 2025.
A share repurchase program has also been announced, with the authority to repurchase up to $500m in shares over an 18-month period. This move comes in a bid to offset future dilution from employee stock programs and a belief from Workday that the shares are currently undervalued.
Meanwhile, operating loss for the company grew to $26.3m, or negative 1.6 percent revenues, in Q3 this year. This compares to an operating income of $23.9m, or 1.8 percent revenues in the same period last year. Cash, cash equivalents, and marketable securities were $5.49bn as of October this year.
Looking ahead, Workday looks to balance its business momentum with an ‘uncertain macro environment’ and continues to prioritize allocating capital towards organic innovation and targeted mergers and acquisitions.
Aneel Bhusri, Workday co-CEO said: “In Q3, we further solidified our position as a leader in Cloud HR with notable new HCM customers. There is no question that the macro environment presents increased uncertainty. But we are well-positioned in this type of environment because our cloud finance and HR solutions are truly mission-critical. As our Q3 results showed, more and more organizations are selecting Workday as their trusted partner to help them successfully navigate today’s changing world.”
Chano Fernandez, Workday co-CEO said: “Companies increasingly realize the present need to modernize their HR and financial systems. Our industry focus continues to pay off. As we move into our fourth quarter, the environment remains uncertain, which has led to increased scrutiny and the lengthening of certain sales cycles, particularly with the net new opportunities. While we aren’t immune to these and see signs that it will persist into next year, we are confident in our diverse pipeline and are focused on executing in Q4 and laying a strong foundation for FY 2024 and beyond.”