For the fourth quarter of fiscal 2019, which ended on January 31, 2019, Workday beat earnings and revenue estimates. The Pleasanton, California-based company reported earnings of 41 cents on revenue of $788.6 million. Workday had topped earnings estimates in the past four quarters. With continuous growth in its customer base and improvement in the product portfolio, the company is expected to top the Wall Street’s views and it could hit a fresh all-time high next week.
Subscription revenue, which accounted for 85% of Workday’s total revenues, surged 37.5% year-over-year to $673.5 million in 4Q 2019, helped by the increased number of customer contracts. Revenue from Professional Services jumped 24% to $115.1 million. It’s worth noting that no single customer represented more than 10% of the company’s revenue during fiscal 2019.
Also Read: Workday (WDAY) Q4 2019 Earnings Conference Call Transcript
The company had increased its headcount to about 10,500 at the end of fiscal 2019 from about 8,200 at the end of fiscal 2018. On a non-GAAP basis, operating expenses increased to $2.5 billion for fiscal 2019 from $1.9 billion in fiscal 2018. This increase was driven by the higher headcount and expenses related to facilities, IT, depreciation, amortization, and service contracts to expand data center capacity.
As Workday grows its business, the company’s operating costs are expected to increase in the future due to the anticipated increases in product development costs, sales and marketing expenses, and administrative costs. Hence Workday is expected to report loss on a GAAP basis for the foreseeable future.
Workday had gained 32% since the beginning of 2019 and 62% in the past 52 weeks.