Summary
Workday closed fiscal 2021 with fourth-quarter total revenue of $1.13 billion, up 15.9% from $976.3 million in the prior-year quarter. Full-year revenue reached $4.32 billion, an increase of 19.0% from $3.63 billion. The company still posted GAAP losses, but they were smaller. Fourth-quarter operating loss was $73.3 million, or negative 6.5% of revenue, compared with an operating loss of $146.1 million, or negative 15.0% of revenue. Full-year operating loss was $248.6 million, or negative 5.8% of revenue, against $502.2 million, or negative 13.8%. Net loss for the quarter was $71.7 million, compared with $128.0 million. For the full year, net loss was $282.4 million, compared with $480.7 million, and diluted earnings per share was negative $1.19, compared with negative $2.12.
Cash generation was the standout. Operating cash flow was $553.7 million in the quarter, up 86.4% from $297.1 million. For fiscal 2021, operating cash flow was $1.27 billion, up 46.7% from $864.6 million. Deferred revenue, current portion, was $2.56 billion, up 15.0% from $2.22 billion. Backlog also expanded. The 24-month subscription revenue backlog was $6.53 billion, up 19.2%, and total subscription revenue backlog was $10.09 billion, up 21.6%. Non-GAAP operating income was $211.0 million, or 18.6% of revenue, compared with $116.6 million, or 11.9%. Full-year non-GAAP operating income was $867.2 million, or 20.1% of revenue, compared with $484.5 million, or 13.4%. Non-GAAP net income per diluted share was $0.73 for the quarter and $2.93 for the full year, compared with $0.50 and $1.88.
Management pointed to operational momentum. Workday announced its intent to acquire Peakon ApS, an employee success platform. It expanded its CFO addressable market with Workday Enterprise Finance and launched a COVID-19 vaccine management solution. The customer community represents more than 50 million workers. The company also added Lynne Doughtie to its board as an independent director and promoted Doug Robinson to executive vice president of global sales. Workday was named a Leader in the 2020 Gartner Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises for the fifth year in a row and received Best in KLAS recognition for the fourth year in a row. Guidance is for the full fiscal year 2022. Management expects subscription revenue of $4.38 billion to $4.40 billion, which represents 16% growth, and non-GAAP operating margin of 17%. The company said its focus is on driving accelerated bookings growth, which it expects will ultimately lead to a faster pace of future subscription revenue growth.
The margin improvement came as revenue growth outpaced headcount growth and operating expenses moderated in response to the COVID-19 pandemic, including reduced travel. Management does not expect the extent of that favorable margin impact to continue long-term because Workday remains committed to investing in the business. The company also said it expects professional services revenue as a percentage of total revenues to decline over time as it relies more on service partners. That mix shift matters because subscription revenue is the larger part of total revenue.
Risks remain material. Workday flagged the ongoing COVID-19 pandemic as a factor that could hurt new business, customer renewals, sales and marketing, revenue growth, customer deployments, customer solvency, product development, and other financial metrics. The pending Peakon acquisition may not close in a timely manner or at all, may not deliver expected benefits, or may bring unanticipated costs. Other named risks include security breaches, unauthorized access to personal data, data center or computing infrastructure disruptions, service outages, delays in deployments, failure of applications to perform properly, difficulty managing growth, pricing pressure, industry consolidation, new competitors and applications, technology advances, and regulatory risks related to machine learning, artificial intelligence, and blockchain. Workday also said the favorable margin impact from fiscal 2021 is not expected to continue long-term, because it remains committed to investing in the business. The 2022 Notes became convertible during the fourth quarter of fiscal 2021 and remain convertible in the first quarter of fiscal 2022; conversions through the filing date were not material.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.13B | $1.11B | +2.3% | $976.3M | +15.9% |
| Research & development | $439.1M | $420.0M | +4.6% | $422.2M | +4.0% |
| Sales & marketing | $335.2M | $302.9M | +10.7% | $306.6M | +9.3% |
| General & administrative | $117.6M | $102.0M | +15.3% | $108.8M | +8.1% |
| Total operating expenses | $1.20B | $1.12B | +7.6% | $1.12B | +7.4% |
| Operating income (loss) | -$73.3M | -$14.1M | -420.8% | -$146.1M | +49.8% |
| Operating margin | -6.5% | -1.3% | -5.2 pp | -15.0% | +8.5 pp |
| Net income (loss) | -$71.7M | -$24.3M | -194.6% | -$128.0M | +44.0% |
| Net margin | -6.3% | -2.2% | -4.1 pp | -13.1% | +6.8 pp |
Risks
The ongoing pandemic and measures taken in response may materially and adversely affect the business, operating results, financial condition, and earnings guidance. MD&A states COVID-19 impacted the ability to generate new business during fiscal 2021 and may continue to negatively affect new business, customer renewals, sales and marketing efforts, revenue growth rates, customer deployments, customer solvency, and product development.
Long sales cycles for large customers typically run six to twelve months but can extend for eighteen months or more, including as a result of the ongoing COVID-19 pandemic. Subscription revenue is generally recognized over three years or longer, so downturns in new sales are not immediately reflected in operating results and are difficult to discern.
Customers have no obligation to renew subscriptions, and renewal rates may decline due to satisfaction, pricing, spending levels, or business changes. COVID-19 may cause reduced renewal rates, particularly within the subset of small and medium-sized planning customers, and large customers may request price concessions and delayed payment terms.
The markets are intensely competitive, with Oracle and SAP as primary competitors and additional vendors such as UKG, ADP, Infor, Ceridian, Microsoft, Anaplan, and Coupa. Legacy vendors are expanding cloud offerings through acquisitions and alliances, and competitors may offer lower prices or COVID-19-related price concessions and delayed payment terms.
Competition is intense for highly skilled employees, especially engineers with machine learning and AI experience, cybersecurity professionals, and senior sales executives. Remote work, COVID-19 illness risk, and the perceived value of equity awards may impair the ability to attract, train, and retain personnel.
Substantial debt includes $1.15 billion of 0.25% convertible senior notes due 2022 and a $750 million Term Loan plus a $750 million Revolving Credit Facility. The 2022 Notes became convertible in Q4 FY2021 and remain convertible in Q1 FY2022, and the Credit Agreement includes a leverage ratio covenant that if breached could accelerate repayment.
The company acquired Adaptive Insights and Scout and has entered an agreement to acquire Peakon in fiscal 2022. Acquisitions may divert management attention, disrupt operations, result in dilution or debt, and create integration, unknown liability, and impairment risks.
COVID-19 made brand development harder. Workday did not hold its two largest annual customer conferences for fiscal 2021, Workday Rising and Workday Rising Europe, and shifted events to virtual formats that may not generate similar customer interest and leads.
Privacy laws such as GDPR impose fines of the greater of €20 million or 4% of worldwide revenue, and CCPA and CPRA create similar compliance burdens. Inability to provide adequate data protection assurances or comply with evolving and conflicting laws could reduce demand and increase costs.
GAAP operating margin improved from (13.8)% for fiscal 2020 to (5.8)% for fiscal 2021, and non-GAAP operating margin improved from 13.4% to 20.1%. MD&A states the favorable fiscal 2021 margin impact from revenue growth outpacing headcount and COVID-19 expense moderation is not anticipated to continue long-term.
The company is and has been the target of malicious cyber-attack attempts and has experienced other security events. During COVID-19 remote work, there is increased risk of themed phishing attacks, exploitation of flaws, and other security challenges from non-corporate managed networks.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Subscription Revenue
Total Revenues
Summary, forecast, risks and KPIs are extracted from Workday, Inc.'s SEC filings for Q4 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.