Summary
Workday reported total revenues of $1.38 billion for FY2022 Q4, up 21.6% from the prior-year quarter. Full-year total revenues were $5.14 billion, up 19.0% from fiscal 2021. GAAP operating loss was $101.0 million in the quarter, or negative 7.3% of revenues, compared with an operating loss of $73.3 million and negative 6.5% of revenues in the prior-year quarter. For fiscal 2022, GAAP operating loss was $116.5 million, or negative 2.3% of revenues, compared with an operating loss of $248.6 million and negative 5.8% of revenues in fiscal 2021. Net loss was $73.3 million for the quarter, compared with a net loss of $71.7 million in the prior-year quarter. Full-year net income was $29.4 million, compared with a net loss of $282.4 million in fiscal 2021. Full-year diluted EPS was $0.12, compared with a diluted loss per share of $1.19 in fiscal 2021. Operating cash flow was $615.1 million in the quarter, up 11.1% from the prior-year quarter. Full-year operating cash flow was $1.65 billion, up 30.1% from fiscal 2021. Deferred revenue, current portion, was $3.11 billion at January 31, 2022, up 21.7% from a year earlier.
The GAAP picture shows a business still absorbing heavy stock-based compensation and acquisition costs. Non-GAAP operating income was $237.1 million in the quarter, or 17.2% of revenues, compared with $211.0 million and 18.6% of revenues in the prior-year quarter. For fiscal 2022, non-GAAP operating income was $1.15 billion, or 22.4% of revenues, compared with $867.2 million and 20.1% in fiscal 2021. The gap between GAAP and non-GAAP results comes from share-based compensation, employer payroll taxes on employee stock transactions, and amortization of acquisition-related intangibles. That gap was wide because the non-GAAP measures exclude those items.
Operational activity was brisk. Workday ended fiscal 2022 with 15,204 employees, up from 12,524 a year earlier, an increase of 2,680, or 21%. The company completed its acquisition of VNDLY, adding a unified workforce optimization solution for salaried, hourly, contingent, and outsourced workers. It also pointed to customer momentum in financial services, where more than 70% of Fortune 500 financial services companies have selected Workday, and in retail, where over 50% of the 2021 NRF Top 100 Retailers have selected Workday. More than 50% of the Fortune 500 and more than 60 million users rely on Workday applications.
Guidance for fiscal 2023 is for the full year. Management raised subscription revenue guidance to a range of $5.530 billion to $5.550 billion, representing growth of 22%, and raised non-GAAP operating margin guidance to 18.5%. The company said the pipeline for fiscal 2023 is strong and that it will continue investing in people and go-to-market strategies. Workday also said acquisitions and investments will increase costs on an absolute basis in the near term. Risks remain significant. The COVID-19 pandemic continues to create uncertainty for customer demand, renewals, deployments, and payment timing. Workday flagged security breaches, service outages, delays in deployments, competition and pricing pressure, challenges managing growth, macroeconomic and regulatory changes, and reductions in information technology spending. Management noted that the favorable margin impact from COVID-related expense moderation in fiscal 2022 and 2021 is not expected to continue long-term. It also said customers may request payment timing concessions if the pandemic worsens, which could affect the timing and predictability of operating cash flow. The 2022 Notes became convertible at the option of holders in the first quarter of fiscal 2023, though conversions through the filing date were not material.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.38B | $1.33B | +3.7% | $1.13B | +21.6% |
| Research & development | $537.7M | $455.6M | +18.0% | $439.1M | +22.5% |
| Sales & marketing | $410.9M | $366.3M | +12.2% | $335.2M | +22.6% |
| General & administrative | $138.6M | $121.7M | +13.9% | $117.6M | +17.9% |
| Total operating expenses | $1.48B | $1.30B | +13.3% | $1.20B | +22.6% |
| Operating income (loss) | -$101.0M | $23.9M | -521.6% | -$73.3M | -37.7% |
| Operating margin | -7.3% | 1.8% | -9.1 pp | -6.5% | -0.9 pp |
| Net income (loss) | -$73.3M | $43.4M | -268.7% | -$71.7M | -2.2% |
| Net margin | -5.3% | 3.3% | -8.6 pp | -6.3% | +1.0 pp |
| Diluted EPS | -$0.29 | $0.17 | -$0.46 | — | — |
Risks
The ongoing COVID-19 pandemic and related global economic volatility may continue to hurt demand, renewals, and sales. MD&A says fiscal 2022 GAAP operating margin improved to (2.3)% from (5.8)% in fiscal 2021 and non-GAAP operating margin improved to 22.4% from 20.1%, but Workday does not anticipate the favorable margin impact to continue long term.
Workday faces higher attrition during the "great resignation" and intense competition for product development, machine learning and artificial intelligence, cybersecurity, and senior sales talent. The Federal Contractor Mandate and related vaccine requirements may also cause attrition and impede recruiting.
In December 2021 the critical Log4j RCE vulnerability affected Workday environments, and Workday expects additional vulnerabilities and potential attacks to continue for several months. In April 2021 a malicious third party accessed the development environment of recently acquired Peakon and took source code.
The $1.15 billion 2022 Notes are due October 1, 2022, and MD&A says the conversion trigger was met so the notes are convertible during the first quarter of fiscal 2023. Workday may receive additional conversion requests requiring settlement, and its Credit Agreement imposes leverage and other covenants.
Workday is subject to the U.S. Government's Federal Contractor Mandate on vaccination requirements, currently stayed by trial courts; if effective it could require compliance, cause attrition, affect third-party vendor arrangements, increase labor costs, and disrupt operations.
Workday acquired Peakon, Zimit, and VNDLY in fiscal 2022 and may continue acquisitions, which could divert management attention, result in dilution, create integration and impairment risks, and increase costs in the near term.
Workday recognized net gains of $124 million on equity investments in fiscal 2022, including $83 million from an equity investment that completed its IPO. Changes in fair value of marketable and non-marketable equity investments could create material quarterly volatility and may cause its stock price to decline.
Workday encounters long sales cycles for large customers, recognizes subscription revenue over the contract term, and has limited ability to predict renewal rates. Large customers have requested and may continue to request greater price concessions and delayed payment terms, which could hurt revenue and profitability.
The enterprise cloud applications market is intensely competitive, with Oracle and SAP as primary competitors and legacy vendors expanding cloud offerings through acquisitions and alliances. Competitors may offer price concessions, delayed payment terms, or financing terms that are more enticing to potential customers.
Workday is investing in new markets and lines of business, including machine learning and artificial intelligence, where it may have limited experience. If these technologies are not widely adopted, fail to operate as expected, or do not attract adequate revenue, its business and reputation may be harmed.
Workday depends on third-party data centers and hosted infrastructure partners including AWS, Google LLC, and Microsoft Corporation. Disruptions, capacity constraints, or service-level failures at these providers could cause service outages, customer dissatisfaction, refunds or service credits, and contract terminations.
MD&A says operating cash flow was $1.65 billion for fiscal 2022, up 30.1% from the prior-year YTD. If the COVID-19 pandemic worsens or is prolonged, customers may request payment timing concessions, which could materially impact the timing and predictability of operating cash flows.
Workday replaced its two largest annual customer conferences with a virtual event in fiscal 2021 and 2022 and shifted Workday Elevate to digital, which may not showcase products as well or generate the same customer interest and leads. Brand promotion activities may not generate anticipated customer awareness or revenue.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Total Subscription Revenue Backlog
24-Month Subscription Revenue Backlog
Gross Revenue Retention
Summary, forecast, risks and KPIs are extracted from Workday, Inc.'s SEC filings for Q4 FY2022 (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.