Workday (WDAY) - NYSE
  • 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, 4:28 PM | 5 Comments
  • Tue, May 31, 4:04 PM
    • Workday (NYSE:WDAY): FQ1 EPS of $0.05 beats by $0.07.
    • Revenue of $345.4M (+37.6% Y/Y) beats by $6.72M.
    • Expects FQ2 revenue of $371M-$373M (+31%-32% Y/Y), above a $370.9M consensus.
    • Shares -5.1% after hours.
    • Press Release
    | Tue, May 31, 4:04 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."
    | Fri, May 27, 12:36 PM
  • Thu, Apr. 21, 1:09 PM
    • Three months ago, cloud/SaaS software firms sold off after cloud IT service management software (ITSM) firm ServiceNow (NOW +14.5%) missed its Q4 billings guidance and offered light 2016 sales guidance. Today, the group is rallying after ServiceNow beat Q1 estimates, provided in-line guidance, and reported billings of $376.7M, up 41% Y/Y and beating guidance of $360M-$365M. The company also reported a 48% Y/Y increase in clients with over $1M in annualized contract value, to 249.
    • Cloud gainers include HR/financials software leader Workday (WDAY +2.3%), ERP/commerce software firm NetSuite (N +4.9%), marketing automation software firms Marketo (MKTO +3.1%) and HubSpot (HUBS +3.2%), talent management software firm Cornerstone OnDemand (CSOD +2.9%), customer support software firm Zendesk (ZEN +3.8%), collaboration/project management software firm Atlassian (TEAM +2.6%), enterprise healthcare software firm Castlight (CSLT +5.4%), and life sciences software firm Veeva (VEEV +2.4%). The Nasdaq is nearly flat.
    • BTIG's Joel Fishbein has hiked his ServiceNow target by $5 to $85, while reiterating a Buy rating. "Strong results across the board suggest that the company continues to see success both in core ITSM and as a broader enterprise service tool. After enjoying most of its public life as a beat-and-raise stock, 2015 was somewhat messy; strong growth and good [key performance indicators] supportive of the bull thesis were overshadowed throughout the year by minor miscues -- a forecasting error, currency adjustments, and inconsistent billings reporting.

      However, 1Q was clean, with strong billings growth, healthy upsells, and metrics showing growing contribution from non-IT services. Law of large numbers is still looming on the horizon but ServiceNow is on the path of being one of a few elite category-leading enterprise SaaS companies. We continue to be buyers of NOW."
    | Thu, Apr. 21, 1:09 PM | 2 Comments
  • Tue, Mar. 1, 1:25 PM
    • Down slightly for a while yesterday after issuing light FQ1 sales guidance and roughly in-line FY17 sales guidance to go with an FQ4 beat, Workday (WDAY +9.6%) is now flying higher. JPMorgan and Cross Research have upgraded to bullish ratings.
    • Workday's 43% Y/Y FQ4 billings growth has been well-received, and so has its guidance for ~30% FY17 billings growth and accelerating net new annual contract value (ACV) growth. Billings growth contributed to a 42% Y/Y increase in Workday's unearned revenue balance to $900M.
    • FBR's Samad Samana (Outperform, $80 target): "A record level of new customer additions (>120 overall; >40 for financials) and high attach rates for add-on products drove billings upside. The strong demand environment for both HCM and financials [software] in F4Q, a robust pipeline, investments for growth, and a host of new products to be released this year also supported the above-consensus FY17 billings guidance and belief that new ACV will accelerate in FY17.

      Samana also notes Workday's sales guidance would've been better if not for the de-emphasizing of professional services. He considers Workday's margin outlook (profitability is expected in FY18) disappointing, but nonetheless thinks "investors will appreciate WDAY can deliver mid-30s organic growth, even as it has surpassed the $1B subscription revenue run-rate, and will patiently wait for margin expansion down the road."
    • Needham's Scott Berg (Buy, $80 target): "Our checks have been ahead of the increased traction in Financials and with sales pipeline activity up 150% Y/Y entering FY17, we believe the strong 4Q Financials sales traction likely sets up for a materially better year for Financials sales. We also like WDAY’s move to shift more services to partners as it incentivizes more channel sales and makes the WDAY model more profitable."
    • Brean's Yun Kim (Hold) is more cautious. "While the subscription backlog grew 62%, we remain uncertain how much of that was driven by new business bookings vs. increase in contract length (2 months) and favorable contract terms ... Overall, given lack of transparency into its new business bookings, we believe there will likely be a high degree of uncertainty that exists among investors regarding its true sales momentum."
    • On the earnings call (transcript), CEO Aneel Bhusri stated Workday ended FQ4 with 1,181 customers, with Financials clients growing by over 40 to 207 and Recruiting clients rising to 545. He added 30% of new customers are subscribing to Workday's full platform, and claimed FQ4 win rates were "the higher we have seen over the past eight quarters," with "historically strong" win rates posted against SAP and Oracle.
    • Though GAAP net loss totaled $289.9M in FY16 and non-GAAP net loss $2.5M, Workday produced $125M in free cash flow thanks to billings/deferred revenue growth. The company ended FY16 with $1.97B in cash and $507M in convertible debt.
    • Workday's results/guidance, earnings release
    | Tue, Mar. 1, 1:25 PM
  • Wed, Feb. 24, 5:32 PM
    • Cloud HR software leader Workday (NYSE:WDAY) is up 5.5% after hours to $60.72 after cloud CRM software leader Salesforce (up 9.2%) slightly beat FQ4 sales estimates, posted in-line EPS, issued above-consensus FQ1 guidance, and slightly upped its FY16 guidance. Salesforce also reported a small Y/Y acceleration in deferred revenue growth.
    • Workday's own FQ4 report is due on Feb. 29. OTR Global reported positive pre-earnings checks last week.
    | Wed, Feb. 24, 5:32 PM
  • Fri, Feb. 19, 2:56 PM
    • OTR Global has upgraded Workday (WDAY +5.7%) to Positive from Mixed ahead of the cloud HR/financials software vendor's Feb. 29 FQ4 report. Checks lead the firm to believe Workday will top FQ4 estimates. (source: Notable Calls)
    • Also: Barclays has hiked its Workday target by $10 to $60, while reiterating an Equal Weight rating.
    • Piper offered more cautious commentary on Tuesday, stating checks point to strong price pressure from Oracle - Wedbush and Jefferies have reported something similar - and that "recent quarterly trends suggest less potential upside in billings." Mitsubishi launched coverage with an Overweight rating last week, while talking up Workday's long-term opportunity.
    | Fri, Feb. 19, 2:56 PM
  • Tue, Feb. 9, 10:48 AM
    • Declaring the company to be in the early stages of a "long-tailed enterprise HR implementation cycle," Mitsubishi UFJ's Stephen Bersey has launched coverage on Workday (WDAY +2.5%) with an Overweight rating and $60 target.
    • Bersey: "[H]uman resources (HR) has been an area of IT neglect within the enterprise application market, and that has created a large market opportunity for cloud-based vendors." He's also upbeat on the long-term potential of Workday's cloud financials offerings, while cautioning HR products will remain the main near-term growth driver. "[T]he value of the financials end-market could be greater than that of the HR market and that this opportunity is not fully reflected in the stock’s value.”
    • Workday is bouncing a little after having dropped 24% over the prior two trading days thanks to a tech rout in which cloud software firms were among the hardest-hit names. FQ4 results arrive on the afternoon of Feb. 29.
    • Three months ago: Wedbush downgrades Workday post-earnings on Oracle fears; others defend
    • Four months ago: Stephens upgrades Workday, expects more financials traction
    | Tue, Feb. 9, 10:48 AM
  • Mon, Feb. 8, 2:37 PM
    • Many tech stocks are seeing 6%+ losses as investors flee to safety yet again. The Nasdaq is down 3.4%, and the S&P 2.7%.
    • As was the case on Friday following Tableau and LinkedIn's disappointing guidance, a slew of enterprise tech stocks are seeing big losses, with cloud software and security tech names well-represented on the casualty list.
    • Also: Solar stocks are having another brutal day (TAN -6.7%) as energy stocks get routed amid fears Chesapeake Energy is close to bankruptcy. WTI crude oil is once more near $30/barrel.
    • Enterprise software decliners: Adobe (ADBE -9.6%), Paylocity (PCTY -19.1%), Salesforce (CRM -9.9%), Workday (WDAY -12%), Guidewire (GWRE -12.5%), ServiceNow (NOW -11.5%), Zendesk (ZEN -13.8%), Paycom (PAYC -13.4%), Marin Software (MRIN -10.3%), Castlight (CSLT -8.4%), Cornerstone OnDemand (CSOD -12.1%), Atlassian (TEAM -13.2%), inContact (SAAS -9.6%), and Bazaarvoice (BV -14.5%).
    • Enterprise security decliners: Palo Alto Networks (PANW -12.2%), FireEye (FEYE -9.8%), CyberArk (CYBR -11.5%), Proofpoint (PFPT -12.7%), Qualys (QLYS -8.9%), Imperva (IMPV -9.7%), Rapid7 (RPD -9.4%), and Barracuda (CUDA -8.4%).
    • Solar decliners: SunEdison (SUNE -11.3%), SunPower (SPWR -8.8%), JinkoSolar (JKS -7.6%), SolarEdge (SEDG -7.9%), Yingli (YGE -7.1%), TerraForm Power (TERP -10.7%), and TerraForm Global (GLBL -9.2%).
    • Other major decliners: Micron (MU -9.1%), Western Digital (WDC -10.5%), Arista (ANET -10.9%), Universal Display (OLED -10.6%), Rackspace (RAX -11.3%), Fitbit (FIT -8.7%), Nimble Storage (NMBL -11.3%), Sierra Wireless (SWIR -9.9%), Rocket Fuel (FUEL -9.8%), Knowles (KN -9%), Mitel (MITL -8.9%), and (ALRM -8.9%).
    • Previously covered: Yelp, Cognizant, Tableau, Globant, Ambarella, European tech stocks
    | Mon, Feb. 8, 2:37 PM | 28 Comments
  • Fri, Feb. 5, 11:01 AM
    • A long list of enterprise software and security tech names are off sharply after business intelligence/analytics software upstart Tableau (down 45.3%) reported slower-than-expected license revenue growth and issued below-consensus Q1/2016 guidance.
    • Also possibly weighing: LinkedIn (down 39.6%), which derives a large % of its revenue from cloud-based recruiting and sales tools for enterprises, issued weak Q1/2016 guidance.
    • Given the magnitude of the drops, margin calls and forced selling by funds could be playing a big role. The Nasdaq is down 2.2%.
    • Tableau suggested its growth slowdown has to do with softening IT spend and a need to improve sales productivity, but analysts have raised questions about competition from the likes of Microsoft, Amazon, and Qlik. LinkedIn forecast a growth slowdown for its field sales hiring solutions business, while blaming European/Asian macro pressures. The company also noted its display ad business continues declining amid weak industry growth.
    • Major enterprise software decliners include Splunk (SPLK -23.7%), Workday (WDAY -15.1%), Adobe (ADBE -7%), Zendesk (ZEN -15.2%), ServiceNow (NOW -13.6%), NetSuite (N -12.4%), Salesforce (CRM -11.2%), Paycom (PAYC -10.6%), Ellie Mae (ELLI -11.5%), Cornerstone OnDemand (CSOD -7.8%), Veeva (VEEV -7.7%), Ultimate Software (ULTI -9%), Luxoft (LXFT -7.5%), Manhattan Associates (MANH -8.5%), Box (BOX -6.6%), Guidewire (GWRE -13.6%), Demandware (DWRE -9.3%), Hortonworks (HDP -9.7%), and Tableau rival Qlik (QLIK -16.6%). The casualty list includes many cloud software firms, as well as several analytics software plays. Previously covered: New Relic, Atlassian.
    • Major decliners among security tech firms: Palo Alto Networks (PANW -12%), FireEye (FEYE -8.9%), Rapid7 (RPD -8.6%), CyberArk (CYBR -8.3%), Proofpoint (PFPT -8%), Imperva (IMPV -8.3%), Fortinet (FTNT -6.9%), and Vasco (VDSI -5.1%). The selloff comes in spite of an FQ3 beat and in-line FQ4 guidance from Symantec, which has been losing share to various upstarts.
    | Fri, Feb. 5, 11:01 AM | 19 Comments
  • Thu, Jan. 28, 2:53 PM
    • Though the Nasdaq is up 0.8%, enterprise cloud software firms Salesforce (CRM -2.7%), Workday (WDAY -3.8%), Demandware (DWRE -4.5%), Veeva (VEEV -3.5%), Cornerstone OnDemand (CSOD -3.3%), Marketo (MKTO -4.4%), Actua (ACTA -2.4%), HubSpot (HUBS -6.2%), and Zendesk (ZEN -2.7%) are lower after cloud IT service management (ITSM) software leader ServiceNow (NOW -16.5%) posted a Q4 billings miss to go with revenue/EPS beats and issued light 2016 sales guidance.
    • On ServiceNow's earnings call (transcript), CFO Michael Scarpelli attributed the billings shortfall to a ~$5M forecasting error. Regardless, Mizuho and MKM have responded to the Q4 report by downgrading to Neutral. Mizuho: "We find two [billings] misses in one year concerning." The firm is also worried about a premium valuation, missed quotas by sales reps, and a "large customer's preference to cut payment terms in half."
    • MKM is less concerned about the billings miss, and calls Q4 results solid. But the firm is worried about macro pressures, and thinks ServiceNow's track record of major op. margin guidance beats is "unlikely to be sustained given decelerating billings and the current macroeconomic environment."
    | Thu, Jan. 28, 2:53 PM | 12 Comments
  • Wed, Jan. 6, 1:46 PM
    • Barclays' Raimo Lenschow has downgraded firewall/security software firm Check Point (CHKP -1.9%), cloud talent management software firm Cornerstone OnDemand (CSOD -2.7%), and data warehousing hardware/software provider Teradata (TDC -3.8%) to Underweight. Cloud HR/financials software vendor Workday (WDAY -3.6%) and e-commerce software/services provider Demandware (DWRE -2.9%) have been cut to Equal Weight.
    • Cloud HR software firm Paycom (PAYC -1%), on the other hand, has been upgraded to Overweight on a belief consensus estimates are too low. Meanwhile, BofA/Merrill has launched coverage on Demandware at Buy.
    • Regarding Check Point, Lenschow says he prefer security tech firms that are gaining share - his top three ideas are Palo Alto Networks, Imprivata, and Rapid7. He sees security IT spend rising 7% in both 2016 and 2017, a rate on par with 2015's.
    • Regarding Cornerstone, Lenschow is worried about slowing top-line growth, a lack of profits, and growing competition. Regarding Workday, he's concerned about competition from SAP/Oracle, a high valuation, and the relatively limited impact of its financials offerings on sales growth.
    • The downgraded names are underperforming amid a 1.1% Nasdaq drop.
    | Wed, Jan. 6, 1:46 PM | 1 Comment
  • Dec. 11, 2015, 3:21 PM
    • A long list of tech firms are off sharply as the Nasdaq and S&P respectively drop 2% and 2.2% ahead of an expected Fed rate hike.
    • The casualty list includes threat-prevention hardware/software provider FireEye (FEYE -6.2%), machine data analytics software vendor Splunk (SPLK -7.1%), driver-assistance system vendor Mobileye (MBLY -6.3%), supercomputer makers Cray (CRAY -7.6%) and Silicon Graphics (SGI -7%), audio codec chipmaker Cirrus Logic (CRUS -5.3%), and local services marketplace Angie's List (ANGI -6.3%).
    • Others include cloud HR/financials software provider Workday (WDAY -5.6%). enterprise social networking software firm Jive Software (JIVE -5.9%), cloud telematics software provider FleetMatics (FLTX -5.2%), mobile accessory maker Zagg (ZAGG -7.5%), network visibility/monitoring hardware provider Gigamon (GIMO -5.8%), smart grid networking hardware/software provider Silver Spring (SSNI -8.9%), and online travel deals provider Travelzoo (TZOO -6%).
    | Dec. 11, 2015, 3:21 PM | 2 Comments
  • Nov. 20, 2015, 9:17 AM
    | Nov. 20, 2015, 9:17 AM
  • Nov. 19, 2015, 5:35 PM
    | Nov. 19, 2015, 5:35 PM
  • Nov. 6, 2015, 12:22 PM
    • In addition to beating FQ1 estimates, Paylocity (NASDAQ:PCTY) is guiding for FQ2 revenue of $48M-$49M and EPS of -$0.04 to -$0.02, above a consensus of $45.4M and -$0.08. The company also now expects FY16 (ends June '16) revenue of $210M-$214M and EPS of $0.04-$0.07, above a consensus of $201.6M and -$0.05.
    • Cloud HR/HCM software leader Workday (WDAY +2.5%) is following Paylocity higher. Cornerstone OnDemand's strong 2016 outlook might also be helping. Two days ago, Paylocity rallied in response to Paycom's Q3 beat and strong Q4 guidance. Workday's FQ3 report is expected later this month.
    • Paylocity CEO Steve Beauchamp: "We continue to see strong demand for our unified payroll and HCM platform and are encouraged by the response to our ACA Enhanced product offering," Adjusted gross margin rose 450 bps Y/Y to 58.8%. GAAP operating expenses rose 37% Y/Y to $28.3M.
    • Paylocity's Q3 beat, PR
    | Nov. 6, 2015, 12:22 PM
Company Description
Workday, Inc. provides enterprise cloud applications for human capital management, payroll, financial management and analytics. It offers innovative and adaptable technology focused on the consumer Internet experience and cloud delivery model. The company applications are designed for global... More
Sector: Technology
Industry: Application Software
Country: United States