Workday Inc (NASDAQ:WDAY) has unveiled impressive financial results for Q2 FY24, showcasing a remarkable revenue growth of 16.3% year-over-year, reaching a substantial $1.79 billion. This achievement has outperformed the consensus forecast of $1.77 billion.
A significant highlight includes the remarkable growth in subscription revenues, which surged by 18.8% year-over-year to an impressive $1.62 billion.
The company’s adjusted operating income has demonstrated a noteworthy ascent, reaching $421.4 million from $301.6 million in the previous year. This substantial improvement in profitability corresponds to a notable margin expansion of 23.6%, marking a significant advancement from the 19.6% margin achieved in the prior year.
The adjusted earnings per share (EPS) have surpassed expectations, reaching $1.43, which stands notably higher than the consensus estimate of $1.26.
In terms of operational cash flow, the company showcased an impressive figure of $425.3 million, a considerable increase from the $114.4 million reported in the same period last year. As of July 31, 2023, the company maintains a robust financial position with cash, cash equivalents, and marketable securities amounting to an impressive $6.66 billion.
Aneel Bhusri, the co-founder, co-CEO, and chair of Workday, expressed the company’s positive momentum. He stated, “We’re witnessing an ongoing surge in momentum, with more than 3,000 customers actively contributing their data to our machine learning models. We’re processing over 50 million machine learning inferences on a daily basis. Furthermore, we’re diligently developing multiple generative AI capabilities, some of which are scheduled for unveiling next month at Workday Rising. We hold a firm belief that this momentum will continue to amplify as more companies entrust Workday as their reliable partner for the responsible integration of AI and machine learning.”
Looking ahead, the company’s outlook remains promising. Workday anticipates Q3 subscription revenue to range between $1.678 billion and $1.680 billion, reflecting a remarkable 17% year-over-year growth.
As a testament to their sustained growth trajectory, Workday has raised their subscription revenue guidance for FY24 to a range of $6.570 billion to $6.590 billion. This adjustment comes in comparison to the previously guided range of $6.550 billion to $6.575 billion. Additionally, the company has elevated its adjusted operating margin projection to 23.5%, up from the earlier figure of 23%.
In terms of stock performance, Workday’s shares experienced a marginal decline of 2.32%, concluding at $224.87 at the close of trading on Thursday.
