What Is Workday Waiting For?
Thu, Aug. 25, 3:00 PM
Thu, Aug. 25, 9:16 AM
Wed, Aug. 24, 5:38 PM
Wed, Aug. 24, 4:42 PM
- Total revenue of $377M and subscription revenue of $306.2M.
- Operating profit of $5.9M (1.6% of revenue) vs. operating loss of $0.7M (-0.3% of revenue) Y/Y. Net loss per basic and diluted share of $0.04 vs. net income per basic and diluted share of $0.02 Y/Y.
- Projects Q3 total revenue of $398M-$400M and subscription revenue of $331M-$333M.
- Aneel Bhusri, Workday (NYSE:WDAY) co-founder and CEO: "We delivered record second quarter results with solid customer momentum and strong competitive win rates. The results were well balanced across our key initiatives as we saw consistent strength across product lines, industries, and geographies and we are proud to welcome our new largest customer based in the APJ region."
- Conference call
- Press release
Wed, Aug. 24, 4:03 PM
Wed, Aug. 24, 1:24 PM
- Oppenheimer & Co. analyst Brian Schwartz restates an Outperform rating and $90 price target ($80.26 current price), projecting revenue of $372.1M (vs. $373M consensus) and loss per share of $0.03 (vs. loss per share of $0.02 consensus).
- He cites a strong SaaS spending environment, confident management sentiment, improved hiring trends, continuing pipeline expansion and a favorable operating environment. He also, however, sees, "tougher billings y/y comparisons, intensified FX headwinds, and conservative guidance stance possibly taken by the company’s new CFO."
- On the other side, Needham & Company issued a less assured note on Workday (WDAY +0.3%) earlier this week citing billings and financials business concerns.
Tue, Aug. 23, 5:35 PM
Mon, Aug. 22, 11:49 AM
- Needham & Company previously held a Buy rating on the company. Analyst Scott Berg cites limited billings upside and a challenging financials market. Regarding the financials segment he notes, "customers don't seem ready for a Cloud solution, and functionality not quite complete yet." He forecasts Q2 billings in line with recent trends of decelerating outperformance and values the company at 9.5x EV/FY17 and 7x FY18 revenues.
- Workday (WDAY -4.2%) will report Q2 results on Wednesday.
Mon, Aug. 15, 5:07 AM
- Workday (NYSE:WDAY) is expected to announce a seven-year deal today to use IBM's cloud-computing services for some internal operations, sources told WSJ.
- The deal, in which Big Blue is winning a marquee customer with solid cloud credentials, comes soon after two recent reports from analysts raised questions about IBM's ability to compete in the contentious market for computing horsepower delivered over the internet.
Sun, Aug. 14, 12:04 PM
- About 40 companies have signed on to the so-called Privacy Shield agreement, the new data-protection pact that allows American firms to transfer information on European citizens to servers in the U.S.
- Among them: Microsoft (NASDAQ:MSFT), Workday (NYSE:WDAY) and Salesforce.com (NYSE:CRM).
- According to the Commerce Department, "there are nearly 200 applications currently involved in our rigorous review process" and the list will be updated on a rolling basis.
Wed, Jun. 1, 2:58 PM
- After opening low following its post-earnings decline last night, business software firm Workday (NYSE:WDAY) has climbed with the market to log a 0.9% gain so far today.
- Analysts have largely reiterated their existing stances on the stock -- mainly Buys and Holds -- as the company beat expectations and guided strong but saw billings growth slowing.
- Citigroup's Walter Pritchard summed up a number of views: “Stock was controversial into the print, and we see Q1 results and outlook as good enough."
- Goldman Sachs (Neutral) took the opportunity to raise its price target, to $80 from $71 (implying about 5% upside ahead). Meanwhile, Piper Jaffray (Hold) saw the report and lowered its target, to $74. Shares are at $76.46, in the red for 2016 but up 56% since early February.
- “We could see some (stock) pressure as the billings outperformance this quarter was more muted, though the raised billings view and pipeline commentary should limit any downside,” wrote Justin Furby of William Blair.
Tue, May 31, 4:28 PM
- With shares up sharply from their February lows going into earnings, investors are in profit-taking mode (for now, at least) after Workday (NYSE:WDAY) beat FQ1 estimates and offered slightly above-consensus FQ2 sales guidance. The stock is currently down 3.9% after hours to $72.85.
- FQ1 top-line metrics are solid: Cloud app subscription revenue rose 39% Y/Y to $280M, and professional services revenue grew 31% to $65.4M. The unearned revenue balance rose 42% to $926.1M, a growth rate on par with FQ4's in spite of a slowdown in revenue growth to 38% from 43%.
- GAAP costs/expenses rose 38% Y/Y to $419.1M, with sales/marketing accounting for $127.5M and R&D $141.8M. Op. cash flow and free cash flow for the last 12 months are respectively $327.9M and $188.1M. Workday ended FQ1 with $2.1B in cash/investments and $514M in convertible debt.
- Wedbush downgraded ahead of earnings last Friday, citing soft reseller checks and Workday's performance since February.
- Workday's results/guidance, earnings release
Tue, May 31, 4:04 PM
Mon, May 30, 5:35 PM
Fri, May 27, 12:36 PM
- Wedbush's Steve Koenig has downgraded Workday (WDAY -3.4%) to Underperform ahead of Tuesday's FQ1 report, while keeping a $63 target. He states reseller checks "point to softer implementation pipelines due to pressure from macro-related and competitive factors, compounding our concerns about ORCL’s aggressive discounting and valuation.”
- Koenig, who downgraded the cloud HR/financials software leader to Neutral in November on concerns about aggressive price pressure from Oracle, adds he's "hearing of general buyer hesitance to sign large deals, which integrators attribute to several possible causes." The weakness is centered around Workday's core cloud HR/HCM business, with financials strength partly offsetting.
- He notes Workday is up 60% from its Feb. 8 bottom compared with a 13% gain for the S&P 500, and that shares now sport a 6.6x forward EV/sales multiple (above a 5.3x average for high-growth SaaS names). "Relatively high short interest (15% of free float) could limit near-term downside, but we see risk/reward as skewed negatively over the next 12 months."
Mon, May 9, 11:01 AM
- Believing new revenue-recognition rules will prevent many firms from implementing Workday's (WDAY -1.4%) cloud financials apps, Brean's Yun Kim has downgraded shares to Sell, and set a $55 target.
- Kim thinks companies will be nervous about "additional risk and uncertainties" as they adopt the new rules. Though Workday still gets the lion's share of its revenue from its cloud HR apps, the company has been counting on financials apps to act as a growth driver. Workday disclosed on its FQ4 earnings call over 100 financials clients were now live.
- Pac Crest downgraded Workday last month. FQ1 results arrive on May 31.