x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 20-2480422 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Class A Common Stock, par value $0.001 | WDAY | The Nasdaq Stock Market LLC |
(Nasdaq Global Select Market) |
Large accelerated filer | x | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Page No. | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
April 30, 2019 | January 31, 2019 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 781,772 | $ | 638,554 | |||
Marketable securities | 1,110,141 | 1,139,864 | |||||
Trade and other receivables, net | 542,843 | 704,680 | |||||
Deferred costs | 82,316 | 80,809 | |||||
Prepaid expenses and other current assets | 148,062 | 136,689 | |||||
Total current assets | 2,665,134 | 2,700,596 | |||||
Property and equipment, net | 885,789 | 796,907 | |||||
Operating lease right-of-use assets | 280,145 | — | |||||
Deferred costs, noncurrent | 179,616 | 183,518 | |||||
Acquisition-related intangible assets, net | 293,897 | 313,240 | |||||
Goodwill | 1,379,125 | 1,379,125 | |||||
Other assets | 140,468 | 147,360 | |||||
Total assets | $ | 5,824,174 | $ | 5,520,746 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 35,146 | $ | 29,093 | |||
Accrued expenses and other current liabilities | 129,182 | 123,542 | |||||
Accrued compensation | 244,794 | 207,924 | |||||
Unearned revenue | 1,734,442 | 1,837,618 | |||||
Operating lease liabilities | 64,107 | — | |||||
Current portion of convertible senior notes, net | 235,408 | 232,514 | |||||
Total current liabilities | 2,443,079 | 2,430,691 | |||||
Convertible senior notes, net | 983,507 | 972,264 | |||||
Unearned revenue, noncurrent | 95,708 | 111,652 | |||||
Operating lease liabilities, noncurrent | 246,037 | — | |||||
Other liabilities | 11,095 | 47,697 | |||||
Total liabilities | 3,779,426 | 3,562,304 | |||||
Stockholders’ equity: | |||||||
Common stock | 225 | 221 | |||||
Additional paid-in capital | 4,294,370 | 4,105,334 | |||||
Accumulated other comprehensive income (loss) | 13,113 | (809 | ) | ||||
Accumulated deficit | (2,262,960 | ) | (2,146,304 | ) | |||
Total stockholders’ equity | 2,044,748 | 1,958,442 | |||||
Total liabilities and stockholders’ equity | $ | 5,824,174 | $ | 5,520,746 |
Three Months Ended April 30, | |||||||
2019 | 2018 | ||||||
Revenues: | |||||||
Subscription services | $ | 701,024 | $ | 522,149 | |||
Professional services | 124,031 | 96,494 | |||||
Total revenues | 825,055 | 618,643 | |||||
Costs and expenses (1): | |||||||
Costs of subscription services | 112,469 | 80,245 | |||||
Costs of professional services | 130,750 | 97,726 | |||||
Product development | 347,831 | 263,584 | |||||
Sales and marketing | 272,936 | 192,771 | |||||
General and administrative | 84,455 | 55,581 | |||||
Total costs and expenses | 948,441 | 689,907 | |||||
Operating loss | (123,386 | ) | (71,264 | ) | |||
Other income (expense), net | 7,141 | (3,848 | ) | ||||
Loss before provision for (benefit from) income taxes | (116,245 | ) | (75,112 | ) | |||
Provision for (benefit from) income taxes | 30 | (702 | ) | ||||
Net loss | $ | (116,275 | ) | $ | (74,410 | ) | |
Net loss per share, basic and diluted | $ | (0.52 | ) | $ | (0.35 | ) | |
Weighted-average shares used to compute net loss per share, basic and diluted | 223,309 | 213,055 |
(1) Costs and expenses include share-based compensation expenses as follows: | |||||||
Costs of subscription services | $ | 10,415 | $ | 7,877 | |||
Costs of professional services | 16,150 | 10,792 | |||||
Product development | 91,237 | 68,511 | |||||
Sales and marketing | 38,854 | 25,612 | |||||
General and administrative | 28,579 | 19,867 |
Three Months Ended April 30, | |||||||
2019 | 2018 | ||||||
Net loss | $ | (116,275 | ) | $ | (74,410 | ) | |
Other comprehensive income (loss), net of tax: | |||||||
Net change in foreign currency translation adjustment | (646 | ) | (787 | ) | |||
Net change in unrealized gains (losses) on available-for-sale debt securities, net of tax provision of $219 and $0, respectively | 703 | (533 | ) | ||||
Net change in market value of effective foreign currency forward exchange contracts, net of tax provision of $1,981 and $2,424, respectively | 13,865 | 16,967 | |||||
Other comprehensive income (loss), net of tax | 13,922 | 15,647 | |||||
Comprehensive loss | $ | (102,353 | ) | $ | (58,763 | ) |
Three Months Ended April 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (116,275 | ) | $ | (74,410 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 61,165 | 38,664 | |||||
Share-based compensation expenses | 185,235 | 132,659 | |||||
Amortization of deferred costs | 20,880 | 16,360 | |||||
Amortization of debt discount and issuance costs | 11,587 | 18,139 | |||||
Other | 8,976 | (9,289 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Trade and other receivables, net | 157,379 | 168,702 | |||||
Deferred costs | (18,485 | ) | (12,606 | ) | |||
Prepaid expenses and other assets | (5,107 | ) | 8,488 | ||||
Accounts payable | 1,503 | 7,954 | |||||
Accrued expenses and other liabilities | 21,403 | 11,627 | |||||
Unearned revenue | (119,098 | ) | (122,055 | ) | |||
Net cash provided by (used in) operating activities | 209,163 | 184,233 | |||||
Cash flows from investing activities | |||||||
Purchases of marketable securities | (471,054 | ) | (908,126 | ) | |||
Maturities of marketable securities | 460,097 | 686,676 | |||||
Sales of marketable securities | 50,948 | 27,359 | |||||
Owned real estate projects | (39,634 | ) | (39,233 | ) | |||
Capital expenditures, excluding owned real estate projects | (65,535 | ) | (48,862 | ) | |||
Purchases of non-marketable equity and other investments | (2,200 | ) | (2,400 | ) | |||
Other | 23 | — | |||||
Net cash provided by (used in) investing activities | (67,355 | ) | (284,586 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from issuance of common stock from employee equity plans | 3,455 | 2,611 | |||||
Other | (93 | ) | (57 | ) | |||
Net cash provided by (used in) financing activities | 3,362 | 2,554 | |||||
Effect of exchange rate changes | (327 | ) | (420 | ) | |||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 144,843 | (98,219 | ) | ||||
Cash, cash equivalents, and restricted cash at the beginning of period | 642,203 | 1,135,654 | |||||
Cash, cash equivalents, and restricted cash at the end of period | $ | 787,046 | $ | 1,037,435 |
Three Months Ended April 30, | |||||||
2019 | 2018 | ||||||
Supplemental cash flow data | |||||||
Cash paid for interest, net of amounts capitalized | $ | 3 | $ | 19 | |||
Cash paid for income taxes | 3,534 | 1,714 | |||||
Non-cash investing and financing activities: | |||||||
Purchases of property and equipment, accrued but not paid | 77,429 | 62,196 |
April 30, | |||||||
2019 | 2018 | ||||||
Reconciliation of cash, cash equivalents, and restricted cash as shown in the statements of cash flows | |||||||
Cash and cash equivalents | $ | 781,772 | $ | 1,036,045 | |||
Restricted cash included in Prepaid expenses and other current assets | 5,144 | — | |||||
Restricted cash included in Other assets | 130 | 1,390 | |||||
Total cash, cash equivalents, and restricted cash | $ | 787,046 | $ | 1,037,435 |
Three Months Ended April 30, 2019 | ||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances as of January 31, 2019 | 222,052,063 | $ | 221 | $ | 4,105,334 | $ | (809 | ) | $ | (2,146,304 | ) | $ | 1,958,442 | |||||||||
Cumulative-effect adjustment to Accumulated deficit related to the adoption of ASU No. 2018-07 | — | — | 381 | — | (381 | ) | — | |||||||||||||||
Issuance of common stock under employee equity plans | 718,832 | 1 | 3,454 | — | — | 3,455 | ||||||||||||||||
Vested restricted stock units | 2,666,099 | 3 | (3 | ) | — | — | — | |||||||||||||||
Share-based compensation | — | — | 185,204 | — | — | 185,204 | ||||||||||||||||
Other comprehensive income (loss) | — | — | — | 13,922 | — | 13,922 | ||||||||||||||||
Net loss | — | — | — | — | (116,275 | ) | (116,275 | ) | ||||||||||||||
Balances as of April 30, 2019 | 225,436,994 | $ | 225 | $ | 4,294,370 | $ | 13,113 | $ | (2,262,960 | ) | $ | 2,044,748 |
Three Months Ended April 30, 2018 | ||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances as of January 31, 2018 | 211,977,495 | $ | 211 | $ | 3,354,423 | $ | (46,413 | ) | $ | (1,727,856 | ) | $ | 1,580,365 | |||||||||
Cumulative-effect adjustment to Accumulated deficit related to the adoption of ASU No. 2016-16 | — | — | — | — | 427 | 427 | ||||||||||||||||
Issuance of common stock under employee equity plans | 516,354 | 1 | 2,611 | — | — | 2,612 | ||||||||||||||||
Vested restricted stock units | 2,639,972 | 3 | (3 | ) | — | — | — | |||||||||||||||
Share-based compensation | — | — | 132,659 | — | — | 132,659 | ||||||||||||||||
Other comprehensive income (loss) | — | — | — | 15,647 | — | 15,647 | ||||||||||||||||
Net loss | — | — | — | — | (74,410 | ) | (74,410 | ) | ||||||||||||||
Balances as of April 30, 2018 | 215,133,821 | $ | 215 | $ | 3,489,690 | $ | (30,766 | ) | $ | (1,801,839 | ) | $ | 1,657,300 |
Amortized Cost | Unrealized Gains | Unrealized Losses | Aggregate Fair Value | ||||||||||||
U.S. treasury securities | $ | 484,846 | $ | 214 | $ | (79 | ) | $ | 484,981 | ||||||
U.S. agency obligations | 188,057 | 117 | (61 | ) | 188,113 | ||||||||||
Corporate bonds | 373,946 | 637 | (121 | ) | 374,462 | ||||||||||
Commercial paper | 282,527 | 2 | — | 282,529 | |||||||||||
$ | 1,329,376 | $ | 970 | $ | (261 | ) | $ | 1,330,085 | |||||||
Included in cash and cash equivalents | $ | 219,944 | $ | — | $ | — | $ | 219,944 | |||||||
Included in marketable securities | $ | 1,109,432 | $ | 970 | $ | (261 | ) | $ | 1,110,141 |
Amortized Cost | Unrealized Gains | Unrealized Losses | Aggregate Fair Value | ||||||||||||
U.S. treasury securities | $ | 396,347 | $ | 61 | $ | (178 | ) | $ | 396,230 | ||||||
U.S. agency obligations | 241,914 | 73 | (151 | ) | 241,836 | ||||||||||
Corporate bonds | 419,784 | 336 | (352 | ) | 419,768 | ||||||||||
Commercial paper | 254,175 | — | (2 | ) | 254,173 | ||||||||||
$ | 1,312,220 | $ | 470 | $ | (683 | ) | $ | 1,312,007 | |||||||
Included in cash and cash equivalents | $ | 216,270 | $ | — | $ | — | $ | 216,270 | |||||||
Included in marketable securities | $ | 1,095,950 | $ | 470 | $ | (683 | ) | $ | 1,095,737 |
Condensed Consolidated Balance Sheets Location | April 30, 2019 | January 31, 2019 | |||||||||
Money market funds | Cash and cash equivalents | $ | 396,940 | $ | 237,071 | ||||||
Marketable equity investments | Marketable securities | — | 44,127 | ||||||||
Non-marketable equity investments | Other assets | 39,125 | 36,925 | ||||||||
$ | 436,065 | $ | 318,123 |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
U.S. treasury securities | $ | 484,981 | $ | — | $ | — | $ | 484,981 | |||||||
U.S. agency obligations | — | 188,113 | — | 188,113 | |||||||||||
Corporate bonds | — | 374,462 | — | 374,462 | |||||||||||
Commercial paper | — | 282,529 | — | 282,529 | |||||||||||
Money market funds | 396,940 | — | — | 396,940 | |||||||||||
Foreign currency derivative assets | — | 35,238 | — | 35,238 | |||||||||||
Total assets | $ | 881,921 | $ | 880,342 | $ | — | $ | 1,762,263 | |||||||
Foreign currency derivative liabilities | $ | — | $ | 752 | $ | — | $ | 752 | |||||||
Total liabilities | $ | — | $ | 752 | $ | — | $ | 752 |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
U.S. treasury securities | $ | 396,230 | $ | — | $ | — | $ | 396,230 | |||||||
U.S. agency obligations | — | 241,836 | — | 241,836 | |||||||||||
Corporate bonds | — | 419,768 | — | 419,768 | |||||||||||
Commercial paper | — | 254,173 | — | 254,173 | |||||||||||
Money market funds | 237,071 | — | — | 237,071 | |||||||||||
Marketable equity investments | 44,127 | — | — | 44,127 | |||||||||||
Foreign currency derivative assets | — | 22,570 | — | 22,570 | |||||||||||
Total assets | $ | 677,428 | $ | 938,347 | $ | — | $ | 1,615,775 | |||||||
Foreign currency derivative liabilities | $ | — | $ | 3,135 | $ | — | $ | 3,135 | |||||||
Total liabilities | $ | — | $ | 3,135 | $ | — | $ | 3,135 |
April 30, 2019 | January 31, 2019 | ||||||||||||||
Net Carrying Amount | Estimated Fair Value | Net Carrying Amount | Estimated Fair Value | ||||||||||||
1.50% Convertible senior notes | $ | 235,408 | $ | 590,566 | $ | 232,514 | $ | 557,074 | |||||||
0.25% Convertible senior notes | 983,507 | 1,707,750 | 972,264 | 1,560,228 |
April 30, 2019 | January 31, 2019 | ||||||
Land and land improvements | $ | 34,050 | $ | 22,694 | |||
Buildings | 469,405 | 433,863 | |||||
Computers, equipment, and software | 599,584 | 539,090 | |||||
Furniture and fixtures | 46,339 | 38,840 | |||||
Leasehold improvements | 173,837 | 162,657 | |||||
Property and equipment, gross (1) | 1,323,215 | 1,197,144 | |||||
Less accumulated depreciation and amortization | (437,426 | ) | (400,237 | ) | |||
Property and equipment, net | $ | 885,789 | $ | 796,907 |
(1) | Property and equipment, gross included construction-in-progress for owned real estate projects of $413 million and $355 million that had not yet been placed in service as of April 30, 2019 and January 31, 2019, respectively. |
April 30, 2019 | January 31, 2019 | ||||||
Developed technology | $ | 186,800 | $ | 186,800 | |||
Customer relationships | 189,000 | 189,000 | |||||
Trade name | 12,000 | 12,000 | |||||
Backlog | 11,000 | 11,000 | |||||
Acquisition-related intangible assets, gross | 398,800 | 398,800 | |||||
Less accumulated amortization | (104,903 | ) | (85,560 | ) | |||
Acquisition-related intangible assets, net | $ | 293,897 | $ | 313,240 |
Fiscal period: | |||
Remainder of 2020 | $ | 49,513 | |
2021 | 48,142 | ||
2022 | 43,733 | ||
2023 | 41,009 | ||
2024 | 29,833 | ||
Thereafter | 81,667 | ||
Total | $ | 293,897 |
April 30, 2019 | January 31, 2019 | ||||||
Non-marketable equity and other investments | $ | 52,879 | $ | 50,546 | |||
Prepayments for computing infrastructure platforms | 14,510 | 16,976 | |||||
Technology patents and other intangible assets, net | 19,519 | 20,335 | |||||
Deposits | 5,370 | 4,383 | |||||
Net deferred tax assets | 4,504 | 4,544 | |||||
Other | 43,686 | 50,576 | |||||
Total | $ | 140,468 | $ | 147,360 |
Fiscal period: | |||
Remainder of 2020 | $ | 2,438 | |
2021 | 2,926 | ||
2022 | 2,512 | ||
2023 | 2,246 | ||
2024 | 1,943 | ||
Thereafter | 7,454 | ||
Total | $ | 19,519 |
Condensed Consolidated Balance Sheets Location | April 30, 2019 | January 31, 2019 | ||||||||
Derivative assets: | ||||||||||
Foreign currency forward contracts designated as cash flow hedges | Prepaid expenses and other current assets | $ | 18,172 | $ | 12,076 | |||||
Foreign currency forward contracts designated as cash flow hedges | Other assets | 15,303 | 10,015 | |||||||
Foreign currency forward contracts not designated as hedges | Prepaid expenses and other current assets | 1,685 | 459 | |||||||
Foreign currency forward contracts not designated as hedges | Other assets | 78 | 20 | |||||||
Total derivative assets | $ | 35,238 | $ | 22,570 | ||||||
Derivative liabilities: | ||||||||||
Foreign currency forward contracts designated as cash flow hedges | Accrued expenses and other current liabilities | $ | 154 | $ | 983 | |||||
Foreign currency forward contracts designated as cash flow hedges | Other liabilities | 275 | 706 | |||||||
Foreign currency forward contracts not designated as hedges | Accrued expenses and other current liabilities | 314 | 1,446 | |||||||
Foreign currency forward contracts not designated as hedges | Other liabilities | 9 | — | |||||||
Total derivative liabilities | $ | 752 | $ | 3,135 |
Condensed Consolidated Statements of Operations Location | Three Months Ended April 30, 2019 | |||||
Total revenues | Revenues | $ | 825,055 | |||
Amount of gains (losses) related to foreign currency forward contracts designated as cash flow hedges | Revenues | 16 |
Condensed Consolidated Statements of Operations and Statements of Comprehensive Loss Locations | Three Months Ended April 30, | |||||||||
2019 | 2018 | |||||||||
Gains (losses) recognized in OCI (1) | Net change in market value of effective foreign currency forward exchange contracts | $ | 15,862 | $ | 18,274 | |||||
Gains (losses) reclassified from OCI into income | Revenues | 16 | (1,117 | ) | ||||||
Gains (losses) recognized in income (amount excluded from effectiveness testing and ineffective portion) | Other income (expense), net | — | 2,231 |
(1) | Of the total value accumulated in OCI from foreign currency forward contracts designated as cash flow hedges as of April 30, 2019, net gains of $7 million are expected to be reclassified out of OCI within the next 12 months. |
Condensed Consolidated Statements of Operations Location | Three Months Ended April 30, | |||||||||
Derivative Type | 2019 | 2018 | ||||||||
Foreign currency forward contracts not designated as hedges | Other income (expense), net | $ | 2,398 | $ | 1,794 |
Gross Amounts of Recognized Assets | Gross Amounts Offset on the Condensed Consolidated Balance Sheets | Net Amounts of Assets Presented on the Condensed Consolidated Balance Sheets | Gross Amounts Not Offset on the Condensed Consolidated Balance Sheets | Net Assets Exposed | ||||||||||||||||||||
Financial Instruments | Cash Collateral Received | |||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||
Counterparty A | $ | 2,603 | $ | — | $ | 2,603 | $ | (272 | ) | $ | — | $ | 2,331 | |||||||||||
Counterparty B | 30,084 | — | 30,084 | (448 | ) | — | 29,636 | |||||||||||||||||
Counterparty C | 2,551 | — | 2,551 | (32 | ) | — | 2,519 | |||||||||||||||||
Total | $ | 35,238 | $ | — | $ | 35,238 | $ | (752 | ) | $ | — | $ | 34,486 |
Gross Amounts of Recognized Liabilities | Gross Amounts Offset on the Condensed Consolidated Balance Sheets | Net Amounts of Liabilities Presented on the Condensed Consolidated Balance Sheets | Gross Amounts Not Offset on the Condensed Consolidated Balance Sheets | Net Liabilities Exposed | ||||||||||||||||||||
Financial Instruments | Cash Collateral Pledged | |||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||
Counterparty A | $ | 272 | $ | — | $ | 272 | $ | (272 | ) | $ | — | $ | — | |||||||||||
Counterparty B | 448 | — | 448 | (448 | ) | — | — | |||||||||||||||||
Counterparty C | 32 | — | 32 | (32 | ) | — | — | |||||||||||||||||
Total | $ | 752 | $ | — | $ | 752 | $ | (752 | ) | $ | — | $ | — |
• | if the last reported sale price of Class A common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price of the respective Notes on each applicable trading day; |
• | during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the respective Notes for each day of that five day consecutive trading day period was less than 98% of the product of the last reported sale price of Class A common stock and the conversion rate of the respective Notes on such trading day; or |
• | upon the occurrence of specified corporate events, as noted in the Indentures. |
April 30, 2019 | January 31, 2019 | ||||||||||||||
2020 Notes | 2022 Notes | 2020 Notes | 2022 Notes | ||||||||||||
Principal amounts: | |||||||||||||||
Principal | $ | 249,975 | $ | 1,150,000 | $ | 249,975 | $ | 1,150,000 | |||||||
Unamortized debt discount | (13,755 | ) | (156,720 | ) | (16,480 | ) | (167,249 | ) | |||||||
Unamortized debt issuance costs | (812 | ) | (9,773 | ) | (981 | ) | (10,487 | ) | |||||||
Net carrying amount | $ | 235,408 | $ | 983,507 | $ | 232,514 | $ | 972,264 | |||||||
Carrying amount of the equity component (1) | $ | 66,007 | $ | 219,702 | $ | 66,007 | $ | 219,702 |
(1) | Included on the condensed consolidated balance sheets within Additional paid-in capital, net of $2 million and $4 million for the 2020 Notes and 2022 Notes, respectively, in equity issuance costs. |
Three Months Ended April 30, | |||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||
2018 Notes | 2020 Notes | 2022 Notes | 2018 Notes | 2020 Notes | 2022 Notes | ||||||||||||||||||
Contractual interest expense | $ | — | $ | 937 | $ | 719 | $ | 656 | $ | 937 | $ | 719 | |||||||||||
Interest cost related to amortization of debt issuance costs | — | 169 | 714 | 352 | 168 | 714 | |||||||||||||||||
Interest cost related to amortization of the debt discount | — | 2,725 | 10,529 | 4,283 | 2,561 | 10,061 |
Three Months Ended April 30, 2019 | |||
Operating lease cost | $ | 18,514 | |
Short-term lease cost | 3,640 | ||
Variable lease cost | 3,426 | ||
Total operating lease cost | $ | 25,580 |
April 30, 2019 | |||
Cash paid for operating lease liabilities | $ | 16,184 | |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities (1) | 295,950 | ||
Weighted average remaining lease term (in years) | 6.1 | ||
Weighted average discount rate | 3.53 | % |
(1) | Includes $279 million for operating leases existing on February 1, 2019 and $17 million for operating leases that commenced in the first quarter of fiscal 2020. |
Fiscal period: | |||
Remainder of 2020 | $ | 56,829 | |
2021 | 76,593 | ||
2022 | 63,106 | ||
2023 | 49,777 | ||
2024 | 40,533 | ||
Thereafter | 70,484 | ||
Total lease payments | 357,322 | ||
Less imputed interest | (47,178 | ) | |
Total | $ | 310,144 |
Number of Shares | Weighted-Average Grant Date Fair Value | |||||
Balance as of January 31, 2019 | 13,013,289 | $ | 108.12 | |||
RSUs granted | 4,239,303 | 189.42 | ||||
RSUs vested | (2,172,249 | ) | 106.12 | |||
RSUs forfeited | (205,799 | ) | 114.15 | |||
Balance as of April 30, 2019 | 14,874,544 | $ | 131.50 |
Outstanding Stock Options | Weighted-Average Exercise Price | Aggregate Intrinsic Value | ||||||||
Balance as of January 31, 2019 | 5,780,742 | $ | 7.96 | $ | 1,003 | |||||
Stock options granted | — | — | ||||||||
Stock options exercised | (718,332 | ) | 4.77 | |||||||
Stock options canceled | (10,865 | ) | 22.99 | |||||||
Balance as of April 30, 2019 | 5,051,545 | $ | 8.38 | $ | 996 | |||||
Vested and expected to vest as of April 30, 2019 | 4,985,749 | $ | 8.07 | $ | 985 | |||||
Exercisable as of April 30, 2019 | 4,366,227 | $ | 5.22 | $ | 875 |
Three Months Ended April 30, | |||||||
2019 | 2018 | ||||||
Interest income | $ | 10,350 | $ | 12,236 | |||
Interest expense (1) | (11,601 | ) | (18,302 | ) | |||
Other (2) | 8,392 | 2,218 | |||||
Other income (expense), net | $ | 7,141 | $ | (3,848 | ) |
(1) | Interest expense includes the contractual interest expense related to the 2018 Notes, 2020 Notes, and 2022 Notes and non-cash interest expense related to amortization of the debt discount and debt issuance costs, net of capitalized interest costs. For further information, see Note 10, Convertible Senior Notes, Net. |
(2) | Other includes the net gains (losses) from our equity investments. For further information, see Note 3, Investments. |
Three Months Ended April 30, | |||||||||||||||
2019 | 2018 | ||||||||||||||
Class A | Class B | Class A | Class B | ||||||||||||
Net loss per share, basic and diluted: | |||||||||||||||
Numerator: | |||||||||||||||
Allocation of distributed net loss | $ | (82,589 | ) | $ | (33,686 | ) | $ | (50,145 | ) | $ | (24,265 | ) | |||
Denominator: | |||||||||||||||
Weighted-average common shares outstanding | 158,613 | 64,696 | 143,579 | 69,476 | |||||||||||
Basic and diluted net loss per share | $ | (0.52 | ) | $ | (0.52 | ) | $ | (0.35 | ) | $ | (0.35 | ) |
As of April 30, | |||||
2019 | 2018 | ||||
Outstanding common stock options | 5,052 | 6,079 | |||
Unvested restricted stock awards, units, and PRSUs | 14,926 | 15,051 | |||
Shares related to the convertible senior notes | 10,876 | 15,079 | |||
Shares subject to warrants related to the issuance of convertible senior notes | 10,876 | 15,079 | |||
Shares issuable pursuant to the ESPP | 402 | 466 | |||
42,132 | 51,754 |
Three Months Ended April 30, | |||||||
2019 | 2018 | ||||||
United States | $ | 628,529 | $ | 480,082 | |||
Other countries | 196,526 | 138,561 | |||||
Total | $ | 825,055 | $ | 618,643 |
April 30, 2019 | January 31, 2019 | ||||||
United States | $ | 809,652 | $ | 726,801 | |||
Ireland | 61,064 | 55,306 | |||||
Other countries | 15,073 | 14,800 | |||||
Total | $ | 885,789 | $ | 796,907 |
Three Months Ended April 30, | |||||||||
2019 | 2018 | % Change | |||||||
Revenues: | |||||||||
Subscription services | $ | 701,024 | $ | 522,149 | 34% | ||||
Professional services | 124,031 | 96,494 | 29% | ||||||
Total revenues | $ | 825,055 | $ | 618,643 | 33% |
Three Months Ended April 30, 2019 | |||||||||||||||
GAAP Operating Expenses | Share-Based Compensation Expenses (1) | Other Operating Expenses (2) | Non-GAAP Operating Expenses (3) | ||||||||||||
Costs of subscription services | $ | 112,469 | $ | (10,415 | ) | $ | (12,660 | ) | $ | 89,394 | |||||
Costs of professional services | 130,750 | (16,150 | ) | (3,459 | ) | 111,141 | |||||||||
Product development | 347,831 | (91,237 | ) | (13,631 | ) | 242,963 | |||||||||
Sales and marketing | 272,936 | (38,854 | ) | (12,834 | ) | 221,248 | |||||||||
General and administrative | 84,455 | (28,579 | ) | (3,298 | ) | 52,578 | |||||||||
Total costs and expenses | $ | 948,441 | $ | (185,235 | ) | $ | (45,882 | ) | $ | 717,324 |
Three Months Ended April 30, 2018 | |||||||||||||||
GAAP Operating Expenses | Share-Based Compensation Expenses (1) | Other Operating Expenses (2) | Non-GAAP Operating Expenses (3) | ||||||||||||
Costs of subscription services | $ | 80,245 | $ | (7,877 | ) | $ | (4,452 | ) | $ | 67,916 | |||||
Costs of professional services | 97,726 | (10,792 | ) | (1,701 | ) | 85,233 | |||||||||
Product development | 263,584 | (68,511 | ) | (8,797 | ) | 186,276 | |||||||||
Sales and marketing | 192,771 | (25,612 | ) | (2,580 | ) | 164,579 | |||||||||
General and administrative | 55,581 | (19,867 | ) | (1,867 | ) | 33,847 | |||||||||
Total costs and expenses | $ | 689,907 | $ | (132,659 | ) | $ | (19,397 | ) | $ | 537,851 |
(1) | Share-based compensation expenses were $185 million and $133 million for the three months ended April 30, 2019 and 2018, respectively. The increase in share-based compensation expenses was primarily due to grants of restricted stock units (“RSUs”) to existing and new employees and assumed Adaptive Insights, Inc. (“Adaptive Insights”) awards. |
(2) | Other operating expenses include employer payroll tax-related items on employee stock transactions of $27 million and $14 million for the three months ended April 30, 2019 and 2018, respectively. In addition, other operating expenses included amortization of acquisition-related intangible assets of $19 million and $5 million for the three months ended April 30, 2019 and 2018, respectively. |
(3) | See “Non-GAAP Financial Measures” below for further information. |
Three Months Ended April 30, 2019 | |||||||||||
GAAP Operating Expenses | Share-Based Compensation Expenses | Other Operating Expenses | Non-GAAP Operating Expenses (1) | ||||||||
Operating margin | (15.0 | )% | 22.5 | % | 5.6 | % | 13.1 | % |
Three Months Ended April 30, 2018 | |||||||||||
GAAP Operating Expenses | Share-Based Compensation Expenses | Other Operating Expenses | Non-GAAP Operating Expenses (1) | ||||||||
Operating margin | (11.5 | )% | 21.4 | % | 3.2 | % | 13.1 | % |
(1) | See “Non-GAAP Financial Measures” below for further information. |
Three Months Ended April 30, | |||||||
2019 | 2018 | ||||||
Net cash provided by (used in): | |||||||
Operating activities | $ | 209,163 | $ | 184,233 | |||
Investing activities | (67,355 | ) | (284,586 | ) | |||
Financing activities | 3,362 | 2,554 | |||||
Effect of exchange rate changes | (327 | ) | (420 | ) | |||
Net increase (decrease) in cash, cash equivalents, and restricted cash | $ | 144,843 | $ | (98,219 | ) |
• | Share-Based Compensation Expenses. Although share-based compensation is an important aspect of the compensation of our employees and executives, management believes it is useful to exclude share-based compensation expenses to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies. Share-based compensation expenses are determined using a number of factors, including our stock price, volatility, and forfeiture rates that are beyond our control and generally unrelated to operational decisions and performance in any particular period. Further, share-based compensation expenses are not reflective of the value ultimately received by the grant recipients. |
• | Other Operating Expenses. Other operating expenses includes employer payroll tax-related items on employee stock transactions and amortization of acquisition-related intangible assets. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of its related amortization can vary significantly and are unique to each acquisition, and thus we do not believe it is reflective of our ongoing operations. |
• | loss or delayed market acceptance and sales; |
• | legal claims, including breach of warranty claims; |
• | issuance of refunds or service credits to customers for prepaid and unused subscription services; |
• | loss of customers; |
• | diversion of development and customer service resources; and |
• | injury to our brand and reputation. |
• | the need to localize and adapt our applications for specific countries, including translation into foreign languages, localization of contracts for different legal jurisdictions, and associated expenses; |
• | the need for a go-to-market strategy that aligns application management efforts and the development of supporting infrastructure; |
• | stricter data privacy laws including requirements that customer data be stored and processed in a designated territory and obligations on us as a data processor; |
• | difficulties in appropriately staffing and managing foreign operations and providing appropriate compensation for local markets; |
• | difficulties in leveraging executive presence and company culture globally; |
• | different pricing environments, longer sales cycles, and longer trade receivables payment cycles, and collections issues; |
• | new and different sources of competition; |
• | potentially weaker protection for intellectual property and other legal rights than in the United States and practical difficulties in enforcing intellectual property and other rights; |
• | laws, customs, and business practices favoring local competitors; |
• | restrictive governmental actions focused on cross-border trade, such as import and export restrictions, duties, quotas, tariffs, trade disputes, and barriers or sanctions that may prevent us from offering certain portions of our products or services to a particular market, may increase our operating costs, or may subject us to monetary fines or penalties in case of unintentional noncompliance due to factors beyond our control; |
• | compliance challenges related to the complexity of multiple, conflicting, and changing governmental laws and regulations, including employment, tax, privacy, and data protection laws and regulations; |
• | increased compliance costs related to government regulatory reviews or audits, including those related to international cybersecurity requirements; |
• | increased financial accounting and reporting burdens and complexities; |
• | restrictions on the transfer of funds; |
• | ensuring compliance with anti-corruption laws including the Foreign Corrupt Practices Act; |
• | the effects of currency fluctuations on our revenues and expenses and customer demand for our services, including any fluctuations caused by uncertainties relating to the UK leaving the EU (“Brexit”); |
• | the cost and potential outcomes of any international claims or litigation; |
• | adverse tax consequences and tax rulings; and |
• | unstable economic and political conditions. |
• | inability to integrate or benefit from an acquisition in a profitable manner; |
• | acquisition-related costs, liabilities, or tax impacts, some of which may be unanticipated; |
• | difficulty in integrating the intellectual property, technology infrastructure, and operations of the acquired business, including difficulty in addressing security issues of the acquired business; |
• | difficulty in integrating and retaining the personnel of the acquired business; |
• | difficulty in leveraging the data of the acquired business if it includes personal data; |
• | ineffective or inadequate controls, procedures, or policies at the acquired company; |
• | multiple product lines or service offerings, as a result of our acquisitions, that are offered, priced, and supported differently; |
• | difficulties and additional expenses associated with synchronizing product offerings, customer relationships, and contract portfolio terms and conditions between Workday and the acquired business; |
• | potential unknown liabilities or risks associated with the acquired businesses, including those arising from existing contractual obligations or litigation matters; |
• | adverse effects on our existing business relationships with business partners and customers as a result of the acquisition; |
• | potential write-offs of acquired assets and potential financial and credit risks associated with acquired customers; |
• | inability to maintain relationships with key customers, suppliers, and partners of the acquired business; |
• | difficulty in predicting and controlling the effect of integrating multiple acquisitions concurrently; |
• | lack of experience in new markets, products, or technologies; |
• | diversion of management’s attention from other business concerns; |
• | use of resources that are needed in other parts of our business; and |
• | use of substantial portions of our available cash to consummate the acquisition. |
• | our ability to attract new customers; |
• | the addition or loss of large customers, including through acquisitions or consolidations; |
• | customer renewal rates; |
• | the timing of operating expenses and recognition of revenues; |
• | the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure; |
• | network outages or security breaches; |
• | general economic and market conditions; |
• | increases or decreases in the number of elements of our services or pricing changes upon any renewals of customer agreements; |
• | changes in our pricing policies or those of our competitors; |
• | the mix of applications sold during a period; |
• | seasonal variations in sales of our applications, which have historically been highest in our fiscal fourth quarter; |
• | the timing and success of new application and service introductions by us or our competitors; |
• | changes in the competitive dynamics of our industry, including consolidation among competitors, customers, or strategic partners; |
• | changes in laws and regulations that impact our business; and |
• | the timing of expenses related to acquisitions and potential future charges for impairment of goodwill. |
• | overall performance of the equity markets; |
• | fluctuations in the valuation of companies perceived by investors to be comparable to us, such as high-growth or cloud companies, or in valuation metrics, such as our price to revenues ratio; |
• | guidance as to our operating results that we provide to the public, differences between our guidance and market expectations, our failure to meet our guidance, or changes in recommendations by securities analysts that follow our securities; |
• | announcements of technological innovations, new applications or enhancements to services, acquisitions, strategic alliances, or significant agreements by us or by our competitors; |
• | disruptions in our services due to computer hardware, software, or network problems; |
• | announcements of customer additions and customer cancellations or delays in customer purchases; |
• | recruitment or departure of key personnel; |
• | the economy as a whole, market conditions in our industry, and the industries of our customers; |
• | trading activity by directors, executive officers and significant stockholders, or the perception in the market that the holders of a large number of shares intend to sell their shares; |
• | the exercise of rights held by certain of our stockholders, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or our stockholders; |
• | the size of our market float and significant stock option exercises; |
• | any future issuances of securities; |
• | sales and purchases of any Class A common stock issued upon conversion of our convertible senior notes or in connection with the convertible note hedge and warrant transactions related to such convertible senior notes; |
• | our operating performance and the performance of other similar companies; and |
• | the sale or availability for sale of a large number of shares of our Class A common stock in the public market. |
• | make it difficult for us to pay other obligations; |
• | make it difficult to obtain favorable terms for any necessary future financing for working capital, capital expenditures, debt service requirements, or other purposes; |
• | adversely affect our liquidity and result in a material adverse effect on our financial position upon repayment of the indebtedness; |
• | require us to dedicate a substantial portion of our cash flow from operations to service and repay the indebtedness, reducing the amount of cash flow available for other purposes; and |
• | limit our flexibility in planning for and reacting to changes in our business. |
• | any transaction that would result in a change in control of our company requires the approval of a majority of our outstanding Class B common stock voting as a separate class; |
• | our dual class common stock structure, which provides our chairman and CEO with the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding Class A and Class B common stock; |
• | our board of directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause; |
• | when the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of common stock: |
– | certain amendments to our restated certificate of incorporation or restated bylaws will require the approval of two-thirds of the combined vote of our then-outstanding shares of Class A and Class B common stock; |
– | our stockholders will only be able to take action at a meeting of stockholders and not by written consent; and |
– | vacancies on our board of directors will be able to be filled only by our board of directors and not by stockholders; |
• | only our chairman of the board, chief executive officer, either co-president, or a majority of our board of directors are authorized to call a special meeting of stockholders; |
• | certain litigation against us can only be brought in Delaware; |
• | we will have two classes of common stock until the date that is the first to occur of (i) October 11, 2032, (ii) such time as the shares of Class B common stock represent less than 9% of the outstanding Class A and Class B common stock, (iii) nine months following the death of both Mr. Duffield and Mr. Bhusri, or (iv) the date on which the holders of a majority of the shares of Class B common stock elect to convert all shares of Class A common stock and Class B common stock into a single class of common stock; |
• | our restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established, and shares of which may be issued, without the approval of the holders of Class A common stock; and |
• | advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders. |
Incorporation by Reference | |||||||||||
Exhibit Number | Form | File No. | Filing Date | Exhibit No. | Filed Herewith | ||||||
31.1 | X | ||||||||||
31.2 | X | ||||||||||
32.1 | X | ||||||||||
32.2 | X | ||||||||||
101.INS | XBRL Instance Document | X | |||||||||
101.SCH | XBRL Taxonomy Schema Linkbase Document | X | |||||||||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | X | |||||||||
101.DEF | XBRL Taxonomy Definition Linkbase Document | X | |||||||||
101.LAB | XBRL Taxonomy Labels Linkbase Document | X | |||||||||
101.PRE | XBRL Taxonomy Presentation Linkbase Document | X |
Workday, Inc. | |
/s/ Robynne D. Sisco | |
Robynne D. Sisco | |
Co-President and Chief Financial Officer (Principal Financial Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Workday, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 15a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 30, 2019 | By: | /s/ Aneel Bhusri | |
Aneel Bhusri | |||
Chief Executive Officer | |||
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Workday, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 15a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 30, 2019 | By: | /s/ Robynne D. Sisco | |
Robynne D. Sisco | |||
Co-President and Chief Financial Officer | |||
(Principal Financial Officer) |
Date: May 30, 2019 | By: | /s/ Aneel Bhusri | |
Aneel Bhusri | |||
Chief Executive Officer | |||
(Principal Executive Officer) |
Date: May 30, 2019 | By: | /s/ Robynne D. Sisco | |
Robynne D. Sisco | |||
Co-President and Chief Financial Officer | |||
(Principal Financial Officer) |
Document and Entity Information - shares shares in Millions |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
May 28, 2019 |
|
Entity Information [Line Items] | ||
Entity Registrant Name | Workday, Inc. | |
Entity Central Index Key | 0001327811 | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2019 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Trading Symbol | WDAY | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Class A | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 162 | |
Class B | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 64 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
||||
Revenues: | |||||
Total revenues | $ 825,055 | $ 618,643 | |||
Costs and expenses: | |||||
Product development | [1] | 347,831 | 263,584 | ||
Sales and marketing | [1] | 272,936 | 192,771 | ||
General and administrative | [1] | 84,455 | 55,581 | ||
Total costs and expenses | 948,441 | 689,907 | |||
Operating loss | (123,386) | (71,264) | |||
Other income (expense), net | 7,141 | (3,848) | |||
Loss before provision for (benefit from) income taxes | (116,245) | (75,112) | |||
Provision for (benefit from) income taxes | 30 | (702) | |||
Net loss | $ (116,275) | $ (74,410) | |||
Net loss per share, basic and diluted (in dollars per share) | $ (0.52) | $ (0.35) | |||
Weighted-average shares used to compute net loss per share, basic and diluted (in shares) | 223,309 | 213,055 | |||
Subscription services | |||||
Revenues: | |||||
Total revenues | $ 701,024 | $ 522,149 | |||
Costs and expenses: | |||||
Cost of goods and services sold | [1] | 112,469 | 80,245 | ||
Professional services | |||||
Revenues: | |||||
Total revenues | 124,031 | 96,494 | |||
Costs and expenses: | |||||
Cost of goods and services sold | [1] | $ 130,750 | $ 97,726 | ||
|
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Costs of subscription services | ||
Share-based compensation expense | $ 10,415 | $ 7,877 |
Costs of professional services | ||
Share-based compensation expense | 16,150 | 10,792 |
Product development | ||
Share-based compensation expense | 91,237 | 68,511 |
Sales and marketing | ||
Share-based compensation expense | 38,854 | 25,612 |
General and administrative | ||
Share-based compensation expense | $ 28,579 | $ 19,867 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (116,275) | $ (74,410) |
Other comprehensive income (loss), net of tax: | ||
Net change in foreign currency translation adjustment | (646) | (787) |
Net change in unrealized gains (losses) on available-for-sale debt securities, net of tax provision of $219 and $0, respectively | 703 | (533) |
Net change in market value of effective foreign currency forward exchange contracts, net of tax provision of $1,981 and $2,424, respectively | 13,865 | |
Net change in market value of effective foreign currency forward exchange contracts, net of tax provision of $1,981 and $2,424, respectively | 16,967 | |
Other comprehensive income (loss), net of tax | 13,922 | 15,647 |
Comprehensive loss | $ (102,353) | $ (58,763) |
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Unrealized gains (losses) on available for sale debt securities, tax | $ 219 | $ 0 |
Foreign currency forward exchange contracts, tax | $ 1,981 | |
Foreign currency forward exchange contracts, tax | $ 2,424 |
Condensed Consolidated Statements of Cash Flows (Reconciliation) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Apr. 30, 2018 |
---|---|---|
Reconciliation of cash, cash equivalents, and restricted cash as shown in the statements of cash flows | ||
Cash and cash equivalents | $ 781,772 | $ 1,036,045 |
Total cash, cash equivalents, and restricted cash | 787,046 | 1,037,435 |
Prepaid expenses and other current assets | ||
Reconciliation of cash, cash equivalents, and restricted cash as shown in the statements of cash flows | ||
Restricted cash | 5,144 | 0 |
Other assets | ||
Reconciliation of cash, cash equivalents, and restricted cash as shown in the statements of cash flows | ||
Restricted cash | $ 130 | $ 1,390 |
Overview and Basis of Presentation |
3 Months Ended |
---|---|
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Overview and Basis of Presentation | Overview and Basis of Presentation Company and Background Workday provides financial management, human capital management, planning, and analytics applications designed for the world’s largest companies, educational institutions, and government agencies. We offer innovative and adaptable technology focused on the consumer internet experience and cloud delivery model. Our applications are designed for global enterprises to manage complex and dynamic operating environments. We provide our customers highly adaptable, accessible, and reliable applications to manage critical business functions that enable them to optimize their financial and human capital resources. We were originally incorporated in March 2005 in Nevada, and in June 2012 we reincorporated in Delaware. As used in this report, the terms “Workday,” “registrant,” “we,” “us,” and “our” mean Workday, Inc. and its subsidiaries unless the context indicates otherwise. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements include the results of Workday, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of our management, the information contained herein reflects all adjustments necessary for a fair presentation of Workday’s results of operations, financial position, cash flows, and shareholders' equity. All such adjustments are of a normal, recurring nature. The results of operations for the quarter ended April 30, 2019 shown in this report are not necessarily indicative of the results to be expected for the full year ending January 31, 2020. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2019, filed with the SEC on March 18, 2019. There have been no material changes in our significant accounting policies as described in our Annual Report on Form 10-K for the year ended January 31, 2019, other than the adoption of accounting pronouncements as described in Note 2, Accounting Standards. Certain prior period amounts reported in our condensed consolidated financial statements have been reclassified to conform to current period presentation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, the fair value of assets acquired and liabilities assumed through business combinations, the determination of the period of benefit for deferred commissions, certain assumptions used in the valuation of equity awards, and assumptions used in the valuation of non-marketable equity investments. Actual results could differ from those estimates and such differences could be material to our condensed consolidated financial position and results of operations. Segment Information We operate in one operating segment, cloud applications. Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker, who is our chief executive officer, in deciding how to allocate resources and assessing performance. Our chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. |
Accounting Standards |
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Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Accounting Standards | Accounting Standards Recently Adopted Accounting Pronouncements ASU No. 2016-02 In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires the recognition of right-of-use assets and lease liabilities on the balance sheet for those leases currently classified as operating leases under Accounting Standards Codification Topic 840 Leases. Accounting for finance leases remains substantially unchanged. We adopted this standard effective February 1, 2019 using a modified retrospective method, under which financial results reported in periods prior to February 1, 2019 were not adjusted. We elected the package of transition practical expedients, which among other things, does not require reassessment of lease classifications. Additionally, we elected to combine lease and non-lease components for each of our existing underlying asset classes and to not include leases with a term of 12 months or less on our condensed consolidated balance sheets. The most significant impact of adopting this standard was the recognition of $279 million of operating lease right-of-use assets and $307 million of operating lease liabilities on our condensed consolidated balance sheet as of February 1, 2019. Additionally, we reclassified $28 million in previously recognized deferred rent obligations and lease incentives to operating lease right-of-use assets. This adoption did not result in any cumulative-effect adjustments to Accumulated deficit, and there was no material impact on our condensed consolidated statement of operations. For further information, see Note 11, Leases. ASU No. 2017-12 In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. We adopted this new standard effective February 1, 2019. As a result of adopting the standard, the entire change in the fair value of our foreign currency forward contracts designated as cash flow hedges will be presented in the same income statement line item as the respective hedged items. This adoption did not result in any cumulative-effect adjustments to Accumulated deficit, and the amended presentation guidance will be applied prospectively. For further information, see Note 9, Derivative Instruments. ASU No. 2018-02 In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which provides entities the option to reclassify tax effects stranded in accumulated other comprehensive income as a result of the 2017 Tax Cuts and Jobs Act to retained earnings. We adopted this new standard effective February 1, 2019. The adoption of this new standard did not have a material impact on our condensed consolidated financial statements. ASU No. 2018-07 In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees, with certain exceptions. We adopted this standard effective February 1, 2019, and remeasured all outstanding equity-classified non-employee share-based payment awards at fair value as of the adoption date, which resulted in a $0.4 million cumulative-effect adjustment to Accumulated deficit. Recently Issued Accounting Pronouncements ASU No. 2016-13 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including trade receivables. ASU No. 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in more timely recognition of credit losses. We plan to adopt this new standard in the first quarter of our fiscal 2021. We are evaluating the accounting, transition, and disclosure requirements of this standard. The effect on our condensed consolidated financial statements will largely depend on the composition and credit quality of our investment portfolio and trade receivables as well as the economic conditions at the time of adoption. |
Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Debt Securities As of April 30, 2019, debt securities consisted of the following (in thousands):
As of January 31, 2019, debt securities consisted of the following (in thousands):
We do not believe the unrealized losses represent other-than-temporary impairments based on our evaluation of available evidence as of April 30, 2019, which includes an assessment of whether it is more likely than not that we will be required to sell the investment before recovery of the investment's amortized cost basis. The unrealized losses on debt securities that have been in a net loss position for 12 months or more were not material as of April 30, 2019. We classify our debt securities as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. We consider all debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classify these securities as current assets in the accompanying condensed consolidated balance sheets. Debt securities included in Marketable securities on the condensed consolidated balance sheets consist of securities with original maturities at the time of purchase greater than three months, and the remainder of the securities is included in Cash and cash equivalents. There were no sales of debt securities during the three months ended April 30, 2019. We sold $27 million of our debt securities during the three months ended April 30, 2018. The realized gains and losses from the sales were immaterial. Equity Investments Money market funds and marketable equity investments are investments with readily determinable fair values. Non-marketable equity investments consist of investments in privately held companies without readily determinable fair values. Equity investments consisted of the following (in thousands):
We sold $51 million of our marketable equity investments during the three months ended April 30, 2019, with a corresponding gain recognized of $7 million. There were no sales of marketable equity investments during the three months ended April 30, 2018. No material adjustments were made to the carrying value of the non-marketable equity investments as measured under the measurement alternative during the three months ended April 30, 2019 and 2018. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements We measure our cash equivalents, marketable securities, and foreign currency derivative contracts at fair value at each reporting period using a fair value hierarchy that requires that we maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs that are supported by little or no market activity. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of April 30, 2019 (in thousands):
The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of January 31, 2019 (in thousands):
Fair Value Measurements of Other Financial Instruments The following table presents the carrying amounts and estimated fair values of our financial instruments that are not recorded at fair value on the condensed consolidated balance sheets (in thousands):
In June 2013, we completed an offering of $250 million of 1.50% convertible senior notes due July 15, 2020 (“2020 Notes”). In September 2017, we completed an offering of $1.15 billion of 0.25% convertible senior notes due October 1, 2022 (“2022 Notes” and together with the 2020 Notes, the “Notes”). The estimated fair values of the Notes, which we have classified as Level 2 financial instruments, were determined based on the quoted bid prices of the Notes in an over-the-counter market on the last trading day of each reporting period. The if-converted value of the 2020 Notes exceeded the principal amount by $379 million. The if-converted value of the 2022 Notes exceeded the principal amount by $458 million. The if-converted values were determined based on the closing price of our common stock of $205.63 on April 30, 2019. For further information, see Note 10, Convertible Senior Notes, Net. |
Deferred Costs |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Costs | Deferred Costs Deferred costs, which consist of deferred sales commissions, were $262 million and $264 million as of April 30, 2019 and January 31, 2019, respectively. Amortization expense for the deferred costs was $21 million and $16 million for the three months ended April 30, 2019 and 2018, respectively. There was no impairment loss in relation to the costs capitalized for the periods presented. |
Property and Equipment, Net |
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Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consisted of the following (in thousands):
Depreciation expense totaled $41 million and $33 million for the three months ended April 30, 2019 and 2018, respectively. Interest costs capitalized to property and equipment totaled $4 million and $2 million for the three months ended April 30, 2019 and 2018, respectively. |
Acquisition-related Intangible Assets, Net |
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Acquisition-related Intangible Assets, Net | Acquisition-related Intangible Assets, Net Acquisition-related intangible assets, net consisted of the following (in thousands):
Amortization expense related to acquisition-related intangible assets was $19 million and $5 million for the three months ended April 30, 2019 and 2018, respectively. As of April 30, 2019, our future estimated amortization expense related to acquisition-related intangible assets is as follows (in thousands):
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Other Assets |
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Other Assets | Other Assets Other assets consisted of the following (in thousands):
Technology patents and other intangible assets with estimable useful lives are amortized on a straight-line basis. As of April 30, 2019, the future estimated amortization expense is as follows (in thousands):
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments We conduct business on a global basis in multiple foreign currencies, subjecting Workday to foreign currency risk. To mitigate this risk, we utilize hedging contracts as described below. We do not enter into any derivatives for trading or speculative purposes. Our foreign currency contracts are classified within Level 2 of the fair value hierarchy because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates. Foreign Currency Forward Contracts Designated as Cash Flow Hedges We are exposed to foreign currency fluctuations resulting from customer contracts denominated in foreign currencies. We have a hedging program in which we enter into foreign currency forward contracts related to certain customer contracts. We designate these forward contracts as cash flow hedging instruments since the accounting criteria for such designation have been met. Foreign currency forward contracts designated as cash flow hedges are recorded on the condensed consolidated balance sheets at fair value. Gains or losses resulting from changes in the fair value of these hedges are recorded in Accumulated other comprehensive income (loss) (“OCI”) on the condensed consolidated balance sheets and will be subsequently reclassified to the related revenue line item on the condensed consolidated statements of operations in the same period that the underlying revenues are earned. Prior to the adoption of ASU No. 2017-12, the changes in value of these contracts resulting from changes in forward points were excluded from the assessment of hedge effectiveness and were recorded as incurred in Other income (expense), net on the condensed consolidated statements of operations. Upon adoption of ASU No. 2017-12, we elected to prospectively include changes in the value of these contracts resulting from changes in forward points in the assessment of hedge effectiveness. These changes are recorded in OCI on the condensed consolidated balance sheets and will be subsequently reclassified to the related revenue line item on the condensed consolidated statements of operations in the same period that the underlying revenues are earned. Cash flows from such forward contracts are classified as operating activities. As of April 30, 2019 and January 31, 2019, we had outstanding foreign currency forward contracts designated as cash flow hedges with total notional values of $788 million and $717 million, respectively. All contracts have maturities not greater than 36 months. The notional value represents the amount that will be bought or sold upon maturity of the forward contract. Foreign Currency Forward Contracts Not Designated as Hedges We also enter into foreign currency forward contracts to hedge a portion of our net outstanding monetary assets and liabilities. These forward contracts are intended to offset the foreign currency gains or losses associated with the underlying monetary assets and liabilities and are recorded on the condensed consolidated balance sheet at fair value. The forward contracts are not designated as hedging instruments under applicable accounting guidance, and therefore all changes in the fair value of the forward contracts are recorded in Other income (expense), net on the condensed consolidated statements of operations. Cash flows from such forward contracts are classified as operating activities. As of April 30, 2019 and January 31, 2019, we had outstanding forward contracts not designated as hedges with total notional values of $134 million and $198 million, respectively. The fair values of outstanding derivative instruments were as follows (in thousands):
The effect of foreign currency forward contracts designated as cash flow hedges on the condensed consolidated statements of operations was as follows (in thousands):
Pre-tax gains (losses) associated with foreign currency forward contracts designated as cash flow hedges were as follows (in thousands):
Gains (losses) associated with foreign currency forward contracts not designated as cash flow hedges were as follows (in thousands):
We are subject to master netting agreements with certain counterparties of the foreign exchange contracts, under which we are permitted to net settle transactions of the same currency with a single net amount payable by one party to the other. It is our policy to present the derivatives gross on the condensed consolidated balance sheets. Our foreign currency forward contracts are not subject to any credit contingent features or collateral requirements. We manage our exposure to counterparty risk by entering into contracts with a diversified group of major financial institutions and by actively monitoring outstanding positions. As of April 30, 2019, information related to these offsetting arrangements was as follows (in thousands):
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Convertible Senior Notes, Net |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Senior Notes, Net | Convertible Senior Notes, Net Convertible Senior Notes In June 2013, we issued 0.75% convertible senior notes due July 15, 2018 with a principal amount of $350 million (“2018 Notes”). The 2018 Notes were unsecured, unsubordinated obligations, and interest was payable in cash in arrears at a fixed rate of 0.75% on January 15 and July 15 of each year. During the second quarter of fiscal 2019, the 2018 Notes were converted by note holders and we repaid the $350 million principal balance in cash. We also distributed approximately 1.5 million shares of our Class A common stock to note holders during the second quarter of fiscal 2019, which represents the conversion value in excess of the principal amount. In June 2013, we issued 1.50% convertible senior notes due July 15, 2020 with a principal amount of $250 million. The 2020 Notes are unsecured, unsubordinated obligations, and interest is payable in cash in arrears at a fixed rate of 1.50% on January 15 and July 15 of each year. The 2020 Notes mature on July 15, 2020 unless repurchased or converted in accordance with their terms prior to such date. We cannot redeem the 2020 Notes prior to maturity. In September 2017, we issued 0.25% convertible senior notes due October 1, 2022 with a principal amount of $1.15 billion. The 2022 Notes are unsecured, unsubordinated obligations, and interest is payable in cash in arrears at a fixed rate of 0.25% on April 1 and October 1 of each year. The 2022 Notes mature on October 1, 2022 unless repurchased or converted in accordance with their terms prior to such date. We cannot redeem the 2022 Notes prior to maturity. The terms of the Notes are governed by Indentures by and between us and Wells Fargo Bank, National Association, as Trustee (the “Indentures”). Upon conversion, holders of the Notes will receive cash, shares of Class A common stock, or a combination of cash and shares of Class A common stock, at our election. For the 2020 Notes, the initial conversion rate is 12.2340 shares of Class A common stock per $1,000 principal amount, which is equal to an initial conversion price of approximately $81.74 per share of Class A common stock, subject to adjustment. Prior to the close of business on March 13, 2020, conversion of the 2020 Notes is subject to the satisfaction of certain conditions, as described below. For the 2022 Notes, the initial conversion rate is 6.7982 shares of Class A common stock per $1,000 principal amount, which is equal to an initial conversion price of approximately $147.10 per share of Class A common stock, subject to adjustment. Prior to the close of business on May 31, 2022, conversion of the 2022 Notes is subject to the satisfaction of certain conditions, as described below. Holders of the Notes who convert their Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the Indentures) are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a corporate event that constitutes a fundamental change (as defined in the Indentures), holders of the Notes may require us to repurchase all or a portion of their Notes at a price equal to 100% of the principal amount of the Notes, plus any accrued and unpaid interest. Holders of the 2020 Notes and 2022 Notes may convert all or a portion of their Notes prior to the close of business on March 13, 2020 and May 31, 2022, respectively, in multiples of $1,000 principal amount, only under the following circumstances:
On or after March 15, 2020 for the 2020 Notes and June 1, 2022 for the 2022 Notes, holders of the respective Notes may convert their Notes at any time until the close of business on the second scheduled trading day immediately preceding the respective maturity date of their Notes. In accounting for the issuance of the Notes, we separated each of the Notes into liability and equity components. The carrying amounts of the liability components were calculated by measuring the fair value of similar liabilities that do not have associated convertible features. The carrying amount of the equity components representing the conversion option were determined by deducting the fair value of the liability components from the par value of the respective Notes. These differences represent debt discounts that are amortized to interest expense over the respective terms of the Notes using the effective interest rate method. The equity components are not remeasured as long as they continue to meet the conditions for equity classification. In accounting for the issuance costs related to the Notes, we allocated the total amount of issuance costs incurred to liability and equity components based on their relative values. Issuance costs attributable to the liability components are being amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the respective terms of the Notes. The issuance costs attributable to the equity components were netted against the respective equity components in Additional paid-in capital. For the 2018 Notes, we recorded liability issuance costs of $7 million and equity issuance costs of $2 million. Amortization expense for the liability issuance costs was $0.4 million for the three months ended April 30, 2018. There was no related amortization expense for the three months ended April 30, 2019, as the 2018 Notes were converted and repaid during the second quarter of fiscal 2019. For the 2020 Notes, we recorded liability issuance costs of $5 million and equity issuance costs of $2 million. Amortization expense for the liability issuance costs was $0.2 million for each of the three-month periods ended April 30, 2019 and 2018. For the 2022 Notes, we recorded liability issuance costs of $14 million and equity issuance costs of $4 million. Amortization expense for the liability issuance costs was $1 million for each of the three-month periods ended April 30, 2019 and 2018. The Notes, net consisted of the following (in thousands):
As of April 30, 2019, the 2020 Notes and 2022 Notes have remaining lives of approximately 14 months and 41 months, respectively. For more than 20 trading days during the 30 consecutive trading days ended April 30, 2018, July 31, 2018, October 31, 2018, January 31, 2019, and April 30, 2019, the last reported sale price of our Class A common stock exceeded 130% of the conversion price of the 2020 Notes. As a result, the 2020 Notes were convertible at the option of the holders during the second, third, and fourth quarter of fiscal 2019, the first quarter of fiscal 2020, and will continue to be convertible during the second quarter of fiscal 2020. Accordingly, the 2020 Notes are classified as current on the condensed consolidated balance sheet as of April 30, 2019. From May 1, 2018 through the date of this filing, the amount of the principal balance of the 2020 Notes that has been converted or for which conversion has been requested was not material. The effective interest rates of the liability components of the 2018 Notes, 2020 Notes, and 2022 Notes are 5.75%, 6.25%, and 4.60%, respectively. These interest rates were based on the interest rates of similar liabilities at the time of issuance that did not have associated convertible features. The following table sets forth total interest expense recognized related to the Notes (in thousands):
We capitalized interest costs related to the Notes of $4 million and $2 million for the three months ended April 30, 2019 and 2018, respectively. Notes Hedges In connection with the issuance of the Notes, we entered into convertible note hedge transactions with respect to our Class A common stock (“Purchased Options”). The Purchased Options relating to the 2018 Notes gave us the option to purchase, subject to anti-dilution adjustments substantially identical to those in the 2018 Notes, approximately 4.2 million shares of our Class A common stock for $83.28 per share, exercisable upon conversion of the 2018 Notes. During the second quarter of fiscal 2019, we received approximately 1.5 million shares of our Class A common stock from the exercise of the Purchased Options relating to the 2018 Notes. These shares were recorded as treasury stock. The Purchased Options relating to the 2020 Notes give us the option to purchase, subject to anti-dilution adjustments substantially identical to those in the 2020 Notes, approximately 3.1 million shares of our Class A common stock for $81.74 per share, exercisable upon conversion of the 2020 Notes. The Purchased Options relating to the 2022 Notes give us the option to purchase, subject to anti-dilution adjustments substantially identical to those in the 2022 Notes, approximately 7.8 million shares of our Class A common stock for $147.10 per share, exercisable upon conversion of the 2022 Notes. The Purchased Options will expire in 2020 for the 2020 Notes and in 2022 for the 2022 Notes, if not exercised earlier. The Purchased Options are intended to offset potential economic dilution to our Class A common stock upon any conversion of the Notes. The Purchased Options are separate transactions and are not part of the terms of the Notes. We paid an aggregate amount of $144 million for the Purchased Options relating to the 2018 Notes and 2020 Notes, and $176 million for the Purchased Options relating to the 2022 Notes. The amount paid for the Purchased Options is included in Additional paid-in capital on the condensed consolidated balance sheets. Warrants In connection with the issuance of the Notes, we also entered into warrant transactions to sell warrants (“Warrants”) to acquire, subject to anti-dilution adjustments, up to approximately 4.2 million shares over 60 scheduled trading days beginning in October 2018, 3.1 million shares over 60 scheduled trading days beginning in October 2020, and 7.8 million shares over 60 scheduled trading days beginning in January 2023 of our Class A common stock at an exercise price of $107.96, $107.96, and $213.96 per share, respectively. If the Warrants are not exercised on their exercise dates, they will expire. If the market value per share of our Class A common stock exceeds the applicable exercise price of the Warrants, the Warrants will have a dilutive effect on our earnings per share assuming that we are profitable. The Warrants are separate transactions and are not part of the terms of the Notes or the Purchased Options. We received aggregate proceeds of $93 million from the sale of the Warrants related to the 2018 Notes and the 2020 Notes, and $81 million from the sale of the Warrants related to the 2022 Notes. The proceeds from the sale of the Warrants are recorded in Additional paid-in capital on the condensed consolidated balance sheets. During the third and fourth quarters of fiscal 2019, Warrants related to the 2018 Notes were exercised, and we distributed approximately 1.1 million shares of our Class A common stock to warrant holders primarily utilizing treasury stock. The number of net shares distributed was determined based on the number of Warrants exercised multiplied by the difference between the exercise price of the Warrants and their daily volume weighted-average stock price. As of April 30, 2019, there were no Warrants outstanding related to the 2018 Notes. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases We have entered into operating lease agreements for our office space, data centers, and other property and equipment. Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Right-of-use assets also include adjustments related to prepaid or deferred lease payments and lease incentives. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on information available at the lease commencement date to determine the present value of lease payments. As of April 30, 2019, total operating lease right-of-use assets and operating lease liabilities were approximately $280 million and $310 million, respectively. Options to extend or terminate a lease are included in the lease term when it is reasonably certain that we will exercise such options. The remaining lease term of our leases generally ranges from less than one year to ten years. The components of operating lease expense were as follows (in thousands):
Information related to our operating lease right-of-use assets and operating lease liabilities was as follows (in thousands, except periods and percentages):
As of April 30, 2019, maturities of operating lease liabilities were as follows (in thousands):
As of April 30, 2019, we have additional operating leases, primarily for office space, that have not yet commenced with total undiscounted lease payments of $21 million. These operating leases will commence between fiscal 2020 and fiscal 2021, with lease terms ranging from 4.9 years to 9.0 years. Related Party Lease Transactions We lease certain office space from an affiliate of our Chairman, Mr. Duffield, adjacent to our corporate headquarters in Pleasanton, California, under various lease agreements. As of April 30, 2019, the operating lease right-of-use assets and operating lease liabilities related to these agreements were $55 million and $68 million, respectively. The weighted average remaining lease term of these agreements is 5.4 years. The total rent expense under these agreements was $3 million for each of the three-month periods ended April 30, 2019 and 2018. |
Commitments and Contingencies |
3 Months Ended |
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Apr. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Computing Infrastructure-related Commitments We have entered into non-cancelable agreements with computing infrastructure vendors with various expiration dates. As of April 30, 2019, the future non-cancelable minimum payments under these agreements were $68 million. Legal Matters We are a party to various legal proceedings and claims that arise in the ordinary course of business. We make a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter. In our opinion, as of April 30, 2019, there was not at least a reasonable possibility that we had incurred a material loss, or a material loss in excess of a recorded accrual, with respect to such loss contingencies. |
Common Stock and Stockholders' Equity |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock and Stockholders' Equity | Common Stock and Stockholders’ Equity Common Stock As of April 30, 2019, there were 161 million shares of Class A common stock, and 64 million shares of Class B common stock outstanding. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to 10 votes per share. Each share of Class B common stock can be converted into a share of Class A common stock at any time at the option of the holder. Employee Equity Plans Our 2012 Equity Incentive Plan (“EIP”) serves as the successor to our 2005 Stock Plan (together with the EIP, the “Stock Plans”). Pursuant to the terms of the EIP, the share reserve increased by 11 million shares in March 2019. As of April 30, 2019, we had approximately 72 million shares of Class A common stock available for future grants. In connection with the acquisition of Adaptive Insights, Inc. in fiscal 2019, we assumed unvested awards that had been granted under the Adaptive Insights, Inc. 2013 Equity Incentive Plan. We also have a 2012 Employee Stock Purchase Plan (“ESPP”). Under the ESPP, eligible employees are granted options to purchase shares at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. Options to purchase shares are granted twice yearly on or about June 1 and December 1 and exercisable on or about the succeeding November 30 and May 31, respectively, of each year. As of April 30, 2019, approximately 6 million shares of Class A common stock were available for issuance under the ESPP. Restricted Stock Units The Stock Plans provide for the issuance of restricted stock units (“RSUs”) to employees and non-employees. RSUs generally vest over four years. A summary of information related to RSU activity during the three months ended April 30, 2019 is as follows:
As of April 30, 2019, there was a total of $1.9 billion in unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately 3.1 years. Performance-based Restricted Stock Units During fiscal 2019, 0.5 million shares of performance-based restricted stock units (“PRSUs”) were granted to all employees other than executive management that included both service conditions and performance conditions related to company-wide goals. These performance conditions were met and the PRSUs vested on March 15, 2019. During the three months ended April 30, 2019, we recognized $15 million in compensation cost related to these PRSUs. Stock Options The Stock Plans provide for the issuance of incentive and nonstatutory stock options to employees and non-employees. Stock options issued under the Stock Plans generally are exercisable for periods not to exceed 10 years and generally vest over five years. A summary of information related to stock option activity during the three months ended April 30, 2019 is as follows (in millions, except share and per share data):
As of April 30, 2019, there was a total of $62 million in unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of approximately 2.1 years. |
Unearned Revenue and Performance Obligations |
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Apr. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Unearned Revenue and Performance Obligations | Unearned Revenue and Performance Obligations $642 million and $487 million of subscription services revenue was recognized during the three months ended April 30, 2019 and 2018, respectively, that was included in the unearned revenue balances at the beginning of the respective periods. Professional services revenue recognized in the same periods from unearned revenue balances at the beginning of the respective periods was not material. Transaction Price Allocated to the Remaining Performance Obligations As of April 30, 2019, approximately $6.8 billion of revenue is expected to be recognized from remaining performance obligations for subscription contracts. We expect to recognize revenue on approximately $4.56 billion of these remaining performance obligations over the next 24 months, with the balance recognized thereafter. Revenue from remaining performance obligations for professional services contracts as of April 30, 2019 was not material. |
Other Income (Expense), Net |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense), Net | Other Income (Expense), Net Other income (expense), net consisted of the following (in thousands):
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Income Taxes |
3 Months Ended |
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Apr. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We compute the year-to-date income tax provision by applying the estimated annual effective tax rate to the year-to-date pre-tax income or loss and adjust for discrete tax items in the period. We reported a tax expense of less than $0.1 million and a tax benefit of $1 million for the three months ended April 30, 2019 and 2018, respectively. The income tax expense for the three months ended April 30, 2019 was primarily attributable to state taxes and income tax expenses in profitable foreign jurisdictions. The tax expense was partially offset by the application of intra-period tax allocation rules for the gains from comprehensive income and the excess tax benefits in certain foreign jurisdictions from share-based compensation. The income tax benefit for the three months ended April 30, 2018 was primarily attributable to the application of intra-period tax allocation rules for the gains from comprehensive income and the excess tax benefits in certain foreign jurisdictions from share-based compensation. The income tax benefit was partially offset by state taxes and income tax expenses in profitable foreign jurisdictions. We are subject to income tax audits in the U.S. and foreign jurisdictions. We record liabilities related to uncertain tax positions and believe that we have provided adequate reserves for income tax uncertainties in all open tax years. Due to our history of tax losses, all years remain open to tax audit. We periodically evaluate the realizability of our net deferred tax assets based on all available evidence, both positive and negative. The realization of net deferred tax assets is dependent on our ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets. As of April 30, 2019, we continue to maintain a full valuation allowance on our deferred tax assets except in certain jurisdictions. |
Net Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss Per Share Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including our outstanding stock options, outstanding warrants, common stock related to unvested early exercised stock options, common stock related to unvested restricted stock units and awards and convertible senior notes to the extent dilutive, and common stock issuable pursuant to the ESPP. Basic and diluted net loss per share was the same for each period presented, as the inclusion of all potential common shares outstanding would have been anti-dilutive. The net loss per share attributable to common stockholders is allocated based on the contractual participation rights of the Class A common shares and Class B common shares as if the loss for the period had been distributed. As the liquidation and dividend rights are identical, the net loss attributable to common stockholders is allocated on a proportionate basis. The following table presents the calculation of basic and diluted net loss attributable to common stockholders per share (in thousands, except per share data):
The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share were as follows (in thousands):
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Geographic Information |
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Geographic Information | Geographic Information Disaggregation of Revenue We sell our subscription contracts and related services in two primary geographical markets: to customers located in the United States and to customers located outside of the United States. Revenue by geography is generally based on the address of the customer as specified in our master subscription agreement. The following table sets forth revenue by geographic area (in thousands):
No single country other than the United States had revenues greater than 10% of total revenues for three months ended April 30, 2019 and 2018. No customer individually accounted for more than 10% of our trade and other receivables, net as of April 30, 2019 or January 31, 2019. Long-Lived Assets We attribute our long-lived assets, which primarily consist of property and equipment, to a country based on the physical location of the assets. The following table sets forth Property and equipment, net by geographic area (in thousands):
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Overview and Basis of Presentation (Policies) |
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Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements include the results of Workday, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of our management, the information contained herein reflects all adjustments necessary for a fair presentation of Workday’s results of operations, financial position, cash flows, and shareholders' equity. All such adjustments are of a normal, recurring nature. The results of operations for the quarter ended April 30, 2019 shown in this report are not necessarily indicative of the results to be expected for the full year ending January 31, 2020. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2019, filed with the SEC on March 18, 2019. There have been no material changes in our significant accounting policies as described in our Annual Report on Form 10-K for the year ended January 31, 2019, other than the adoption of accounting pronouncements as described in Note 2, Accounting Standards. Certain prior period amounts reported in our condensed consolidated financial statements have been reclassified to conform to current period presentation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, the fair value of assets acquired and liabilities assumed through business combinations, the determination of the period of benefit for deferred commissions, certain assumptions used in the valuation of equity awards, and assumptions used in the valuation of non-marketable equity investments. Actual results could differ from those estimates and such differences could be material to our condensed consolidated financial position and results of operations. |
Segment Information | Segment Information We operate in one operating segment, cloud applications. Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker, who is our chief executive officer, in deciding how to allocate resources and assessing performance. Our chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements ASU No. 2016-02 In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires the recognition of right-of-use assets and lease liabilities on the balance sheet for those leases currently classified as operating leases under Accounting Standards Codification Topic 840 Leases. Accounting for finance leases remains substantially unchanged. We adopted this standard effective February 1, 2019 using a modified retrospective method, under which financial results reported in periods prior to February 1, 2019 were not adjusted. We elected the package of transition practical expedients, which among other things, does not require reassessment of lease classifications. Additionally, we elected to combine lease and non-lease components for each of our existing underlying asset classes and to not include leases with a term of 12 months or less on our condensed consolidated balance sheets. The most significant impact of adopting this standard was the recognition of $279 million of operating lease right-of-use assets and $307 million of operating lease liabilities on our condensed consolidated balance sheet as of February 1, 2019. Additionally, we reclassified $28 million in previously recognized deferred rent obligations and lease incentives to operating lease right-of-use assets. This adoption did not result in any cumulative-effect adjustments to Accumulated deficit, and there was no material impact on our condensed consolidated statement of operations. For further information, see Note 11, Leases. ASU No. 2017-12 In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. We adopted this new standard effective February 1, 2019. As a result of adopting the standard, the entire change in the fair value of our foreign currency forward contracts designated as cash flow hedges will be presented in the same income statement line item as the respective hedged items. This adoption did not result in any cumulative-effect adjustments to Accumulated deficit, and the amended presentation guidance will be applied prospectively. For further information, see Note 9, Derivative Instruments. ASU No. 2018-02 In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which provides entities the option to reclassify tax effects stranded in accumulated other comprehensive income as a result of the 2017 Tax Cuts and Jobs Act to retained earnings. We adopted this new standard effective February 1, 2019. The adoption of this new standard did not have a material impact on our condensed consolidated financial statements. ASU No. 2018-07 In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees, with certain exceptions. We adopted this standard effective February 1, 2019, and remeasured all outstanding equity-classified non-employee share-based payment awards at fair value as of the adoption date, which resulted in a $0.4 million cumulative-effect adjustment to Accumulated deficit. Recently Issued Accounting Pronouncements ASU No. 2016-13 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including trade receivables. ASU No. 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in more timely recognition of credit losses. We plan to adopt this new standard in the first quarter of our fiscal 2021. We are evaluating the accounting, transition, and disclosure requirements of this standard. The effect on our condensed consolidated financial statements will largely depend on the composition and credit quality of our investment portfolio and trade receivables as well as the economic conditions at the time of adoption. |
Investments | We classify our debt securities as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. We consider all debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classify these securities as current assets in the accompanying condensed consolidated balance sheets. Debt securities included in Marketable securities on the condensed consolidated balance sheets consist of securities with original maturities at the time of purchase greater than three months, and the remainder of the securities is included in Cash and cash equivalents. |
Fair Value Measurements | We measure our cash equivalents, marketable securities, and foreign currency derivative contracts at fair value at each reporting period using a fair value hierarchy that requires that we maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs that are supported by little or no market activity. |
Derivatives | We conduct business on a global basis in multiple foreign currencies, subjecting Workday to foreign currency risk. To mitigate this risk, we utilize hedging contracts as described below. We do not enter into any derivatives for trading or speculative purposes. Our foreign currency contracts are classified within Level 2 of the fair value hierarchy because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates. Foreign Currency Forward Contracts Designated as Cash Flow Hedges We are exposed to foreign currency fluctuations resulting from customer contracts denominated in foreign currencies. We have a hedging program in which we enter into foreign currency forward contracts related to certain customer contracts. We designate these forward contracts as cash flow hedging instruments since the accounting criteria for such designation have been met. Foreign currency forward contracts designated as cash flow hedges are recorded on the condensed consolidated balance sheets at fair value. Gains or losses resulting from changes in the fair value of these hedges are recorded in Accumulated other comprehensive income (loss) (“OCI”) on the condensed consolidated balance sheets and will be subsequently reclassified to the related revenue line item on the condensed consolidated statements of operations in the same period that the underlying revenues are earned. Prior to the adoption of ASU No. 2017-12, the changes in value of these contracts resulting from changes in forward points were excluded from the assessment of hedge effectiveness and were recorded as incurred in Other income (expense), net on the condensed consolidated statements of operations. Upon adoption of ASU No. 2017-12, we elected to prospectively include changes in the value of these contracts resulting from changes in forward points in the assessment of hedge effectiveness. These changes are recorded in OCI on the condensed consolidated balance sheets and will be subsequently reclassified to the related revenue line item on the condensed consolidated statements of operations in the same period that the underlying revenues are earned. Cash flows from such forward contracts are classified as operating activities. Foreign Currency Forward Contracts Not Designated as Hedges We also enter into foreign currency forward contracts to hedge a portion of our net outstanding monetary assets and liabilities. These forward contracts are intended to offset the foreign currency gains or losses associated with the underlying monetary assets and liabilities and are recorded on the condensed consolidated balance sheet at fair value. The forward contracts are not designated as hedging instruments under applicable accounting guidance, and therefore all changes in the fair value of the forward contracts are recorded in Other income (expense), net on the condensed consolidated statements of operations. Cash flows from such forward contracts are classified as operating activities. |
Convertible Debt | In accounting for the issuance of the Notes, we separated each of the Notes into liability and equity components. The carrying amounts of the liability components were calculated by measuring the fair value of similar liabilities that do not have associated convertible features. The carrying amount of the equity components representing the conversion option were determined by deducting the fair value of the liability components from the par value of the respective Notes. These differences represent debt discounts that are amortized to interest expense over the respective terms of the Notes using the effective interest rate method. The equity components are not remeasured as long as they continue to meet the conditions for equity classification. In accounting for the issuance costs related to the Notes, we allocated the total amount of issuance costs incurred to liability and equity components based on their relative values. Issuance costs attributable to the liability components are being amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the respective terms of the Notes. The issuance costs attributable to the equity components were netted against the respective equity components in Additional paid-in capital. |
Net Loss Per Share | Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including our outstanding stock options, outstanding warrants, common stock related to unvested early exercised stock options, common stock related to unvested restricted stock units and awards and convertible senior notes to the extent dilutive, and common stock issuable pursuant to the ESPP. Basic and diluted net loss per share was the same for each period presented, as the inclusion of all potential common shares outstanding would have been anti-dilutive. The net loss per share attributable to common stockholders is allocated based on the contractual participation rights of the Class A common shares and Class B common shares as if the loss for the period had been distributed. As the liquidation and dividend rights are identical, the net loss attributable to common stockholders is allocated on a proportionate basis. |
Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Debt Securities | As of April 30, 2019, debt securities consisted of the following (in thousands):
As of January 31, 2019, debt securities consisted of the following (in thousands):
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Equity Investments | Equity investments consisted of the following (in thousands):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information about Assets that are Measured at Fair Value on a Recurring Basis | The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of April 30, 2019 (in thousands):
The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of January 31, 2019 (in thousands):
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Summary of Carrying Amounts and Estimated Fair Values of Financial Instruments | The following table presents the carrying amounts and estimated fair values of our financial instruments that are not recorded at fair value on the condensed consolidated balance sheets (in thousands):
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Property and Equipment, Net (Tables) |
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Summary of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands):
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Acquisition-related Intangible Assets, Net (Tables) |
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Schedule of Acquired Assets | Acquisition-related intangible assets, net consisted of the following (in thousands):
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of April 30, 2019, our future estimated amortization expense related to acquisition-related intangible assets is as follows (in thousands):
As of April 30, 2019, the future estimated amortization expense is as follows (in thousands):
|
Other Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets | Other assets consisted of the following (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of April 30, 2019, our future estimated amortization expense related to acquisition-related intangible assets is as follows (in thousands):
As of April 30, 2019, the future estimated amortization expense is as follows (in thousands):
|
Derivative Instruments (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair values of outstanding derivative instruments were as follows (in thousands):
|
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Schedule of Cash Flow Hedges On The Condensed Consolidated Statements of Operations | The effect of foreign currency forward contracts designated as cash flow hedges on the condensed consolidated statements of operations was as follows (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments, Gain (Loss) | Pre-tax gains (losses) associated with foreign currency forward contracts designated as cash flow hedges were as follows (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Gains (losses) associated with foreign currency forward contracts not designated as cash flow hedges were as follows (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting Assets | As of April 30, 2019, information related to these offsetting arrangements was as follows (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting Liabilities |
|
Convertible Senior Notes, Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Senior Notes | The Notes, net consisted of the following (in thousands):
|
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Schedule of Interest Expense Recognized Related to Convertible Senior Notes | The following table sets forth total interest expense recognized related to the Notes (in thousands):
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense | The components of operating lease expense were as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||
Information Related to Right-of-Use Assets and Lease Liabilities | Information related to our operating lease right-of-use assets and operating lease liabilities was as follows (in thousands, except periods and percentages):
|
||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of Operating Lease Liabilities | As of April 30, 2019, maturities of operating lease liabilities were as follows (in thousands):
|
Common Stock and Stockholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Information Related to Restricted Stock Units Activity | A summary of information related to RSU activity during the three months ended April 30, 2019 is as follows:
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Summary of Information Related to Stock Option Activity | A summary of information related to stock option activity during the three months ended April 30, 2019 is as follows (in millions, except share and per share data):
|
Other Income (Expense), Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense), Net | Other income (expense), net consisted of the following (in thousands):
|
Net Loss Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Calculation of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net loss attributable to common stockholders per share (in thousands, except per share data):
|
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Shares Excluded from Diluted Loss Per Share | The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share were as follows (in thousands):
|
Geographic Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Revenues by Geographic Area | The following table sets forth revenue by geographic area (in thousands):
|
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Long-lived Assets by Geographic Areas | The following table sets forth Property and equipment, net by geographic area (in thousands):
|
Overview and Basis of Presentation (Detail) |
3 Months Ended |
---|---|
Apr. 30, 2019
segment
| |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Accounting Standards - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Feb. 01, 2019 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 280,145 | |
Operating lease liabilities | $ 310,144 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 279,000 | |
Operating lease liabilities | 307,000 | |
Deferred rent obligation and lease incentives | 28,000 | |
Accumulated Deficit | Accounting Standards Update 2018-07 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of new accounting principle in period of adoption | $ 400 |
Investments (Detail) - USD ($) |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Proceeds of sale of marketable securities, debt | $ 0 | $ 27,000,000 |
Proceeds of sale of marketable securities, equity | 51,000,000 | $ 0 |
Net realized gains (losses) recognized on equity investments sold | $ 7,000,000 |
Investments - Equity Investments (Details) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Jan. 31, 2019 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Money market funds | $ 396,940 | $ 237,071 |
Marketable equity investments | 0 | 44,127 |
Non-marketable equity investments | 39,125 | 36,925 |
Equity investments | $ 436,065 | $ 318,123 |
Fair Value Measurements - Summary of Carrying Amounts and Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Jan. 31, 2019 |
Sep. 30, 2017 |
Jun. 30, 2013 |
---|---|---|---|---|
1.50% Convertible senior notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Net Carrying Amount | $ 235,408 | $ 232,514 | ||
Estimated Fair Value | $ 590,566 | 557,074 | ||
Contractual interest rate | 1.50% | 1.50% | ||
0.25% Convertible senior notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Net Carrying Amount | $ 983,507 | 972,264 | ||
Estimated Fair Value | $ 1,707,750 | $ 1,560,228 | ||
Contractual interest rate | 0.25% | 0.25% |
Fair Value Measurements - Narrative (Detail) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Apr. 30, 2019 |
Jan. 31, 2019 |
Sep. 30, 2017 |
Jun. 30, 2013 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Share price (in dollars per share) | $ 205.63 | |||
1.50% Convertible senior notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Convertible senior notes, principal amount | $ 249,975,000 | $ 249,975,000 | $ 250,000,000 | |
Contractual interest rate | 1.50% | 1.50% | ||
If-converted value in excess of principal | $ 379,000,000 | |||
0.25% Convertible senior notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Convertible senior notes, principal amount | $ 1,150,000,000.00 | |||
Contractual interest rate | 0.25% | 0.25% | ||
If-converted value less than principal | $ 458,000,000 |
Deferred Costs (Detail) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
Jan. 31, 2019 |
|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Deferred sales commission | $ 262 | $ 264 | |
Amortization of deferred costs | $ 21 | $ 16 |
Property and Equipment, Net (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 41 | $ 33 |
Interest costs capitalized | $ 4 | $ 2 |
Acquisition-related Intangible Assets, Net - Schedule of Acquired Assets (Detail) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
Jan. 31, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | $ 398,800 | $ 398,800 | |
Less accumulated amortization | (104,903) | (85,560) | |
Total | 293,897 | 313,240 | |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 186,800 | 186,800 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 189,000 | 189,000 | |
Trade name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 12,000 | 12,000 | |
Backlog | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 11,000 | $ 11,000 | |
Acquired Intangible Assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total | 293,897 | ||
Amortization of intangible assets | $ 19,000 | $ 5,000 |
Acquisition-related Intangible Assets, Net - Schedule of Future Amortization Expense (Detail) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Jan. 31, 2019 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 293,897 | $ 313,240 |
Acquired Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2020 | 49,513 | |
2021 | 48,142 | |
2022 | 43,733 | |
2023 | 41,009 | |
2024 | 29,833 | |
Thereafter | 81,667 | |
Total | $ 293,897 |
Other Assets - Schedule of Other Assets (Detail) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Jan. 31, 2019 |
---|---|---|
Other Assets [Line Items] | ||
Non-marketable equity and other investments | $ 52,879 | $ 50,546 |
Prepayments for computing infrastructure platforms | 14,510 | 16,976 |
Technology patents and other intangible assets, net | 293,897 | 313,240 |
Deposits | 5,370 | 4,383 |
Net deferred tax assets | 4,504 | 4,544 |
Total | 140,468 | 147,360 |
Other | 43,686 | 50,576 |
Technology patents and other intangible assets, net | ||
Other Assets [Line Items] | ||
Technology patents and other intangible assets, net | $ 19,519 | $ 20,335 |
Other Assets (Summary of Future Estimated Amortization Expense Related to Acquired Land Leasehold Interest and Technology Patents) (Details) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Jan. 31, 2019 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 293,897 | $ 313,240 |
Technology patents and other intangible assets, net | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2020 | 2,438 | |
2021 | 2,926 | |
2022 | 2,512 | |
2023 | 2,246 | |
2024 | 1,943 | |
Thereafter | 7,454 | |
Total | $ 19,519 | $ 20,335 |
Derivative Instruments (Detail) - Forward Contracts - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Jan. 31, 2019 |
|
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 134 | $ 198 |
Cash Flow Hedging | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 788 | $ 717 |
Cash Flow Hedging | Designated as Hedging Instrument | Maximum | ||
Derivative [Line Items] | ||
Derivative, remaining maturity | 36 months |
Derivative Instruments - Effect of Cash Flow Hedges on Income Statement (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total revenues | $ 825,055 | $ 618,643 |
Revenues | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gains (losses) related to foreign currency forward contracts designated as cash flow hedges | $ 16 |
Convertible Senior Notes, Net - Schedule of Senior Notes (Detail) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
Jan. 31, 2019 |
Jun. 30, 2013 |
|
Convertible Debt [Abstract] | ||||
Convertible Debt, Current | $ 235,408,000 | $ 232,514,000 | ||
Convertible Debt, Noncurrent | 983,507,000 | 972,264,000 | ||
2018 Notes | ||||
Convertible Debt [Abstract] | ||||
Principal | $ 350,000,000 | |||
Equity issuance costs | $ 2,000,000 | |||
2020 Notes | ||||
Convertible Debt [Abstract] | ||||
Principal | 249,975,000 | 249,975,000 | $ 250,000,000 | |
Unamortized debt discount | (13,755,000) | (16,480,000) | ||
Unamortized debt issuance costs | (812,000) | (981,000) | ||
Convertible Debt, Current | 235,408,000 | 232,514,000 | ||
Carrying amount of the equity component | 66,007,000 | 66,007,000 | ||
Equity issuance costs | 2,000,000 | |||
2022 Notes | ||||
Convertible Debt [Abstract] | ||||
Principal | 1,150,000,000 | 1,150,000,000 | ||
Unamortized debt discount | (156,720,000) | (167,249,000) | ||
Unamortized debt issuance costs | (9,773,000) | (10,487,000) | ||
Convertible Debt, Noncurrent | 983,507,000 | 972,264,000 | ||
Carrying amount of the equity component | $ 219,702,000 | $ 219,702,000 |
Convertible Senior Notes, Net - Schedule of Interest Expense Recognized Related to Convertible Senior Notes (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
2018 Notes | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 0 | $ 656 |
Interest cost related to amortization of debt issuance costs | 0 | 352 |
Interest cost related to amortization of the debt discount | 0 | 4,283 |
2020 Notes | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | 937 | 937 |
Interest cost related to amortization of debt issuance costs | 169 | 168 |
Interest cost related to amortization of the debt discount | 2,725 | 2,561 |
2022 Notes | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | 719 | 719 |
Interest cost related to amortization of debt issuance costs | 714 | 700 |
Interest cost related to amortization of the debt discount | $ 10,529 | $ 10,061 |
Leases - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Lessee, Lease, Description [Line Items] | ||
Operating lease right-of-use assets | $ 280,145 | |
Operating lease liabilities | 310,144 | |
Operating lease, lease not yet commenced, payment | $ 21,000 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Leases, remaining lease term, period (less than) (years) | 1 year | |
Operating lease, lease not yet commenced, term (years) | 4 years 10 months 24 days | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Leases, remaining lease term, period (less than) (years) | 10 years | |
Operating lease, lease not yet commenced, term (years) | 9 years | |
Pleasanton, California | Chairman, Mr. Duffield | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease right-of-use assets | $ 55,000 | |
Operating lease liabilities | $ 68,000 | |
Term of agreements (in years) | 5 years 4 months 24 days | |
Rent expense | $ 3,000 | $ 3,000 |
Leases - Components of Lease Expense (Details) $ in Thousands |
3 Months Ended |
---|---|
Apr. 30, 2019
USD ($)
| |
Leases [Abstract] | |
Operating lease cost | $ 18,514 |
Short-term lease cost | 3,640 |
Variable lease cost | 3,426 |
Total operating lease cost | $ 25,580 |
Leases - Maturities of Operating and Finance Lease Liabilities (Details) $ in Thousands |
Apr. 30, 2019
USD ($)
|
---|---|
Operating Leases | |
Remainder of 2020 | $ 56,829 |
2021 | 76,593 |
2022 | 63,106 |
2023 | 49,777 |
2024 | 40,533 |
Thereafter | 70,484 |
Total lease payments | 357,322 |
Less imputed interest | (47,178) |
Total | $ 310,144 |
Commitments and Contingencies - Narrative (Detail) $ in Thousands |
Apr. 30, 2019
USD ($)
|
---|---|
Loss Contingencies [Line Items] | |
Future non-cancelable minimum payments | $ 357,322 |
Computing Infrastructure Platforms | |
Loss Contingencies [Line Items] | |
Future non-cancelable minimum payments | $ 68,000 |
Common Stock and Stockholders' Equity - Restricted Stock Units Activity (Detail) - Restricted Stock Units |
3 Months Ended |
---|---|
Apr. 30, 2019
$ / shares
shares
| |
Restricted Stock Units | |
Beginning Balance, Number of Shares | shares | 13,013,289 |
RSUs granted, Number of Shares | shares | 4,239,303 |
RSUs vested, Number of Shares | shares | (2,172,249) |
RSUs forfeited, Number of Shares | shares | (205,799) |
Ending Balance, Number of Shares | shares | 14,874,544 |
Weighted-Average Grant Date Fair Value | |
Beginning Balance (in dollars per share) | $ / shares | $ 108.12 |
RSUs granted (in dollars per share) | $ / shares | 189.42 |
RSUs vested (in dollars per share) | $ / shares | 106.12 |
RSUs forfeited (in dollars per share) | $ / shares | 114.15 |
Ending Balance (in dollars per share) | $ / shares | $ 131.50 |
Common Stock and Stockholders' Equity - PRSU's (Detail) - Vesting March 15 2019 - All Other Employees - Performance Based Restricted Stock Unit PRSU - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSUs granted (in shares) | 0.5 | |
Compensation related cost | $ 15 |
Common Stock and Stockholders' Equity - Stock Options (Detail) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Jan. 31, 2019 |
|
Outstanding Stock Options | ||
Beginning Balance (in shares) | 5,780,742 | |
Stock options granted (in shares) | 0 | |
Stock options exercised (in shares) | (718,332) | |
Stock options canceled (in shares) | (10,865) | |
Ending Balance (in shares) | 5,051,545 | |
Vested (in shares) | 4,985,749 | |
Exercisable (in shares) | 4,366,227 | |
Weighted-Average Exercise Price | ||
Beginning Balance (in dollars per share) | $ 7.96 | |
Stock option granted (in dollars per share) | 0.00 | |
Stock options exercised (in dollars per share) | 4.77 | |
Stock options canceled (in dollars per share) | 22.99 | |
Ending Balance (in dollars per share) | 8.38 | |
Vested, Weighted-Average Exercise Price (in dollars per share) | 8.07 | |
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 5.22 | |
Aggregate Intrinsic Value | $ 996 | $ 1,003 |
Vested and expected to vest as of April 30, 2019 | 985 | |
Exercisable as of April 30, 2019 | $ 875 |
Unearned Revenue and Performance Obligations (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Revenue from Contract with Customer [Abstract] | ||
Subscription revenue recognized that was included in total unearned revenue balance at beginning of period | $ 642 | $ 487 |
Subscriptions | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-05-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue is expected to be recognized from remaining performance obligations for subscription contracts | $ 6,800 | |
Recognition period | 24 months |
Other Income (Expense), Net (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Other Income and Expenses [Abstract] | ||
Interest income | $ 10,350 | $ 12,236 |
Interest expense | (11,601) | (18,302) |
Other | 8,392 | 2,218 |
Other income (expense), net | $ 7,141 | $ (3,848) |
Income Taxes (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Provision for (benefit from) income taxes | $ 30 | $ (702) |
Net Loss Per Share - Summary of Calculation of Basic and Diluted Net Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 30, 2019 |
Apr. 30, 2018 |
|
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 223,309 | 213,055 |
Basic and diluted net loss per share (in dollars per share) | $ (0.52) | $ (0.35) |
Class A | ||
Numerator: | ||
Allocation of distributed net loss | $ (82,589) | $ (50,145) |
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 158,613 | 143,579 |
Basic and diluted net loss per share (in dollars per share) | $ (0.52) | $ (0.35) |
Class B | ||
Numerator: | ||
Allocation of distributed net loss | $ (33,686) | $ (24,265) |
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 64,696 | 69,476 |
Basic and diluted net loss per share (in dollars per share) | $ (0.52) | $ (0.35) |
Geographic Information Summary of Revenues by Geographic Area (Detail) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 30, 2019
USD ($)
market
|
Apr. 30, 2018
USD ($)
|
|
Disaggregation of Revenue [Line Items] | ||
Number of primary geographical markets | market | 2 | |
Revenue | $ 825,055 | $ 618,643 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 628,529 | 480,082 |
Other countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 196,526 | $ 138,561 |
Geographic Information - Long-Lived Assets (Details) - USD ($) $ in Thousands |
Apr. 30, 2019 |
Jan. 31, 2019 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 885,789 | $ 796,907 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 809,652 | 726,801 |
Ireland | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 61,064 | 55,306 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 15,073 | $ 14,800 |
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