Q2 FY23 Highlights and Guidance
About Non-GAAP Financial Measures
To provide investors and others with additional information regarding Workday's results, we have disclosed the following non-GAAP financial measures: non-GAAP operating
income (loss), non-GAAP operating margin, and non-GAAP net income (loss) per share. Workday has provided a reconciliation of each non-GAAP financial measure used in this
earnings release to the most directly comparable GAAP financial measure. Non-GAAP operating income (loss) and non-GAAP operating margin differ from GAAP in that they
exclude share-based compensation expenses, employer payroll tax-related items on employee stock transactions, and amortization expense for acquisition-related intangible
assets. Non-GAAP net income (loss) per share differs from GAAP in that it excludes share-based compensation expenses, employer payroll tax-related items on employee stock
transactions, amortization expense for acquisition-related intangible assets, and income tax effects.
Workday's management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and
forecasting purposes, for short- and long-term operating plans, and to evaluate Workday's financial performance. Management believes these non-GAAP financial measures
reflect Workday's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in Workday's business. Management also
believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Workday's operating results and prospects
in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.
Management believes excluding the following items from the GAAP Condensed Consolidated Statements of Operations is useful to investors and others in assessing Workday's
operating performance due to the following factors:
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.View entire presentation