Subscription revenue guidance
Workday’s (WDAY) Subscription segment, which contributes the bulk of the company’s revenues, has witnessed steady growth. The company expects its Subscription revenues to reach $557.0 million–$559.0 million in the fiscal second quarter of 2019, reflecting ~29.0% YoY (year-over-year) improvement.
Workday provided its Subscription revenue outlook for fiscal 2019, and it expects the segment’s revenues to reach $2.28 billion–$2.29 billion. In the fiscal first quarter of 2019, its Subscription revenues came in at $522.0 million, up 3.01% YoY.
The chart above shows the Subscription segment’s revenue growth in the last five fiscal quarters. During this period, the segment’s revenues grew at a CAGR (compound annual growth rate) of 7.0%.
Workday (WDAY) exited the fiscal first quarter of 2019 with a subscription revenue backlog of $5.2 billion. This strong revenue backlog was buoyed by increased order wins, which may have encouraged Workday to increase its guidance in the upcoming quarter.
The expanded use of its Prism Analytics product has also added to its revenue growth. The company’s Fortune 500 customers include Home Depot (HD) and General Electric (GE). The company finished the fiscal first quarter of 2019 with nearly 2,200 customers, including Sprouts Farmers Market (SFM), Rivera and Race Truck Petroleum, Tyson Shared Services, and Unisys (UIS).
Professional Services outlook
Workday (WDAY) expects its Professional Services revenues in the fiscal second quarter of 2019 to reach ~$104.0 million. This segment’s revenues for fiscal 2019 are expected to reach $405.0 million.