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In today’s Cloud Wars Minute, I examined Workday’s recent fiscal quarter results, discussing both the challenges it faces and the promising signs for its future growth.
Highlights
00:16 — Last week, we heard about a mixed bag of results for Workday for Q1. I believe the fundamentals for the company remain very strong, despite the fact that in fiscal Q1 it experienced some customers delaying or stringing out their decisions to buy. The result was that Workday cut its FY 25 guidance by about $35 million.
01:00 — It’s not a huge number, but Workday said, it had not experienced this for many quarters leading up to Q1, which ended April 30. But in Q1, it did see some customers, particularly in EMEA (Europe, Middle East, and Africa) who were pushing off on the deals that they were signing. CEO Carl Eschenbach cited a couple of reasons why.
Ask Cloud Wars AI Agent about this analysis
02:11 — On the flip side, there was a lot of good news in the Workday Q1 report. If you look at their backlogs, there’s the current backlog, then the total backlog. Current refers to the backlog for the next 12 months. And there, the subscription revenue backlog was up 18% to $6.6 billion; the total backlog was up 24% to $20.7 billion. Lots of things in the pipeline there.
03:30 — Is this an isolated case involving Workday? Or are we going to see more of this? Because I can’t come up with any reason why Workday specifically would be an outlier. There are other big companies that sell similar sorts of products.
04:39 — We’ll hear soon about how Salesforce did in the same fiscal Q1. Overall, I think Workday’s fundamentals are great. But in the greatest growth market the world has ever known, it does get your attention when companies revise their revenue guidance downward, even if only very slightly.
