Fri, May 23, 8:04 PM (30 days ago)
**Workday, Inc. (WDAY) Q1 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** $2.24 billion, up 13% YoY. - Subscription services: $2.06 billion (92% of total revenue). - Professional services: $181 million. - **Profit Margins:** GAAP operating margin at 1.8%, down from 3.2% YoY. Non-GAAP operating margin at 30.2%, up from 25.9% YoY. - **Cash Flow:** Operating cash flow at $457 million, up 23% YoY. Free cash flow at $421 million, up 45% YoY. - **Earnings Changes:** GAAP net income at $68 million, down from $107 million YoY. Non-GAAP net income at $677 million, up from $515 million YoY. **Key Metrics:** - **Subscription Revenue Backlog:** $24.6 billion, up 19% YoY. $7.6 billion expected to be recognized in the next 12 months. - **Cash Position:** $8.0 billion in cash, cash equivalents, and marketable securities. - **Headcount:** 20,515 employees, up 6% YoY. **Trends & Uncertainties:** - **Economic Conditions:** Global economic and geopolitical volatility impacting customer spending and sales cycles. - **Restructuring:** Fiscal 2026 Restructuring Plan resulting in a 7.5% workforce reduction. - **Investments:** Continued focus on AI, international expansion, and strategic acquisitions. - **Cash Flow:** Strong operating and free cash flow generation supporting growth and share repurchases. **Future Operations Impact:** - **Revenue Growth:** Focus on durable growth through customer expansion and new customer acquisition. - **Operating Margin:** Aim to expand operating margin through scale and efficiency. - **Cash Flow:** Prioritize long-term, sustainable growth in free cash flow. - **Share Repurchases:** $1.0 billion authorized under the May 2025 Share Repurchase Program. **Risks:** - **Market Risks:** Foreign currency exchange and interest rate risks. - **Operational Risks:** Dependence on third-party data centers and potential service disruptions. - **Competitive Risks:** Intensely competitive market with established and emerging competitors. - **Regulatory Risks:** Evolving data privacy and security regulations. **Conclusion:** Workday's Q1 2025 results reflect strong revenue growth and improved profitability, driven by subscription services. The company continues to invest in strategic growth areas while managing operational efficiencies. However, economic uncertainties and competitive pressures pose challenges. Workday's focus on cash flow generation and share repurchases underscores its commitment to shareholder value.