Workday has announced results for Q4 2022 and full year ended 31 January 2022, revealing an operating loss of $101m on the quarter and an overall loss of $116.5m for the year.
For Q4 2022, total revenues were $1.38bn, up 21.6 percent against the same period last year with subscription revenues at $1.23bn, an increase of 22.2 percent. For the full fiscal year 2022, Workday recorded revenues of $5.14bn, an increase of 19 percent compared to last year.
Workday continues to deliver mixed news to the markets; its revenues are up, its backlog (revenue it has secured but not yet billed) continues to grow and the number of marque-customer wins is impressive. However, it is yet to muster a profit in its near 20-year history and one has to consider when the continued investment in R&D is going to pay dividends? Workday invests the highest proportion of its revenue back into R&D of all the major vendors – clearly this is paying off in terms of luring new customers and growing revenues but it has not managed to convert an enviable roster and a Tier1 product into cold profit.
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Despite the negative earnings, Aneel Bhusri, co-founder and co-CEO, was upbeat on the earnings calls, stating the company had seen “the fastest growth in full year new ACV bookings in over five years” and went on to proclaim that Workday was “on a path to $10bn in revenues and beyond.”
Other highlights from the earnings call included detail around Workday’s customer retention rate (over 95%) and a sharp increase in the utilisation of Workday services by its customers. More than 440 billion transactions were processed within Workday during its financial year – up by a staggering 67 percent compared to last year. There wasn’t an explanation around the rise in utilisation but it is encouraging to see that customers are, at last, using what they pay for – a topic that ERP Today has been vocal about in the past and one that all vendors have a duty to focus on as part of their customer success efforts.
In a canned statement, Bhusri went on to say: “We closed out the year with another strong quarter that saw continued acceleration of our business, including a growing global workforce and a relentless focus on employees, customers, and innovation. We continue to see increasing demand for our broad suite of finance and HR solutions, as we help some of the world’s largest organizations – and more than 60 million users – navigate the changing world of work. This momentum, along with our employees’ continued commitment, gives me great confidence in the opportunity ahead.”
Chano Fernandez, co-CEO at Workday, added: “Our solid fourth quarter results demonstrate our global momentum with new Fortune 500 customer wins, growing interest in our expanding portfolio of solutions, and the closing of several strategic deals across multiple industries. Looking ahead, the pipeline for fiscal 2023 is strong, as we look to continue investing in our people and go-to-market strategies to deliver on our customers’ future needs.”
