Workday (WDAY) expects FQ3 revenue of $115M-$118M, mostly above a $115.3M consensus. FY14 (ends Jan. '14) revenue is expected to total $436M-$446M vs. a $439.4M consensus.
The company's unearned revenue balance totaled $325.6M at the end of FQ2, +8% Q/Q and +32% Y/Y. Subscription revenue (75% of total) rose 92% Y/Y, soundly outpacing total rev. growth of 72% and fueling the FQ2 beat. Professional services +25% to $26.4M.
Operating cash flow was -$12.9M, a reversal from FQ1's $17.3M. The cloud HR/ERP software vendor continues to invest aggressively: R&D spend +75% Y/Y to $41.2M, sales/marketing +49% to $44.2M.
A 2013 run-up and lofty multiples - Workday trades at 29x its FY14 revenue guidance midpoint - are tempering investor enthusiasm.