Wed, Aug. 26, 5:24 PM
- After briefly rising, Workday (NYSE:WDAY) is now down 0.7% after hours after posting an FQ2 beat and guiding in-line. Shares rose 3.5% in regular trading as markets surged.
- Though Workday didn't provide a non-GAAP EPS number in its FQ2 report, it did state non-GAAP net income was $3.8M. That implies EPS of $0.02, above a -$0.06 consensus.
- The cloud HCM/financials leader says it topped 1K customers during FQ2; it ended FQ1 with 925+. Subscription revenue rose 56% Y/Y to $223.7M, and professional services revenue 37% to $58.9M. On the earnings call, Workday states billings rose 51% Y/Y (even with revenue growth), and that FQ2 win rates were above FQ1 levels. The unearned revenue balance rose 42% Y/Y to $683.1M.
- Free cash flow was -$10.3M, but totals $77.6M for the trailing 12 months. GAAP costs/expenses rose 41% Y/Y to $350.4M - sales/marketing spend totaled $106.4M, and R&D $115.3M. Workday ended FQ2 with $1.9B in cash/investments, and $502M in convertible debt.
- Workday Planning, a budgeting/forecasting app that pushes the company deeper into the traditional ERP software market (SAP's historical stronghold), will become generally available next year.
- FQ2 results/FQ3 guidance, PR
- Update (5:30PM ET): Workday has guided on its call for FY16 (ends Jan. '16) revenue of $1.15B-$1.158B, above a $1.14B consensus. Shares now -3.3% AH.
Wed, Aug. 26, 4:07 PM
- Workday (NYSE:WDAY): FQ2 GAAP EPS of -$0.37 not comparable with -$0.06 non-GAAP consensus.
- Revenue of $282.7M (+51.4% Y/Y) beats by $8.63M.
- Expects FQ3 revenue of $300M-$303M (+39%-41% Y/Y) vs. a $302.1M consensus.
- Shares nearly flat after hours.
- Press Release
- Update (4:23PM ET): Workday is now up 5.4%.
- Update 2 (5:25PM ET): Workday has given back its gains: Shares are now down 0.7%. More details on the FQ2 report here.
- Update 3 (5:38PM ET): Shares are now down 4.8%.
Tue, Aug. 25, 5:35 PM
Fri, May 29, 6:29 PM
- After tumbling on Wednesday in the wake of its FQ1 beat and in-line guidance, Workday (NYSE:WDAY) has continued trending lower. Shares fell 1.5% in regular trading today, hitting their lowest levels since Feb. 2.
- Though no downgrades have arrived, several sell-side firms have suggested tougher competition is hurting growth, with Oracle's (NYSE:ORCL) cloud HR/HCM software the biggest culprit. Jefferies' John DiFucci: "We believe Oracle (and to a lesser degree, SAP) has been behaving irrationally in the market for almost a year ... while it was likely aggressive prior to this, we believe it became even more aggressive doing almost anything to win deals from Workday."
- DiFucci sees a method to Oracle's madness. "This irrational behavior may not be so irrational since a loss to Workday is not only a loss of an HCM opportunity, but also a loss of Oracle infrastructure given Workday’s proprietary infrastructure architecture." However, he admits Oracle/SAP's HCM offerings (though improving) "still trail Workday by a meaningful margin."
- Likewise, Brean's Sarah Hindlian asserts HCM is "becoming incrementally more competitive, with material new pricing pressure from incumbents, while SaaS penetration of the market is maturing." She also thinks Workday's cloud financials software growth is slower than investors were expecting.
- Cowen's Jesse Hulsing is more positive, even if FQ1 billings were lighter than he forecast. "We are ... encouraged by the trend toward larger, blue chip HCM custs (Coca Cola, etc.) and a more bullish tone regarding the financials pipeline. PT to $101 and view the low $80s as attractive entry point, as we expect growth to improve moving forward."
- During Oracle's March FQ3 CC (transcript), Mark Hurd didn't pass up the chance to trash-talk Workday. "In the context of HCM, I think ... we have simply engineered now a better product than Workday ... we now win more than half the deals in the United States. Outside the United States, our win rate goes up actually exponentially because of the breadth of our distribution in those markets." Workday might beg to differ with those claims.
Tue, May 26, 5:33 PM
- With the company having provided above-consensus guidance more often than not since its IPO, Workday (NYSE:WDAY) has sold off after providing an in-line FQ2 outlook (affected by forex headwinds) to go with an FQ1 beat.
- Also: The cloud HR/financials software leader's unearned revenue balance rose 41% Y/Y in FQ1 to $653.4M, a slower clip than FQ3's 53% and trailing revenue growth of 57%. Subscription revenue rose 63% Y/Y to $201M, and professional services 38% to $50M.
- Financials: GAAP costs/expenses rose 44% Y/Y to $304.4M - sales/marketing spend totaled $94.9M, R&D $99.3M, G&A $32.2M, and cost of services $77.8M. Workday ended FQ1 with $1.9B in cash/marketable securities, and $496M in convertible debt. Free cash flow for the trailing 12 months is $50.4M.
- Shares have fallen to $85.12 AH.
- FQ1 results, PR
Tue, May 26, 4:05 PM
Mon, May 25, 5:35 PM
Wed, Feb. 25, 5:09 PM
- In addition to beating FQ4 revenue estimates (while posting in-line EPS), Workday (NYSE:WDAY) is guiding for FQ1 revenue of $242M-$245M, above a $239.5M consensus. With forex a headwind and the company prone to guiding conservatively, FY16 (ends Jan. '16) guidance is for revenue of $1.115B-$1.14B (+42%-45% Y/Y) vs. a $1.13B consensus.
- The cloud HR/financials software vendor's unearned revenue balance rose 53% Y/Y in FQ4 to $632.7M. That helped it post free cash flow of $10.6M in spite of an $11.5M net loss.
- Subscription revenue rose 64% Y/Y to $181.9M, and professional services revenue 42% to $44.4M. GAAP costs/expenses rose 46% Y/Y to $276.7M - sales/marketing spend totaled $88.5M, and R&D $89M.
- WDAY +1.9% AH to $95.75. Fellow cloud software giant Salesforce is soaring following its FQ4 report.
- FQ4 results, PR
Wed, Feb. 25, 4:04 PM
Nov. 25, 2014, 2:51 PM
- "While investors’ first reaction was negative, we believe the initial FY16 'guidance' is very preliminary and conservative. The initial mgmt. view for the current FY15 called for rev growth of ~50%, and we are now modelling 68%," writes UBS, reiterating a Buy on Workday (NYSE:WDAY) post-earnings.
- The firm also thinks Workday's FQ4 outlook is conservative, and is forecasting FQ4 revenue $2M above the high end of Workday's guidance range. "FY16 looks to be a strong year for Fin’l Mgmt pdts, helped by Insight analytic apps [becoming generally available]. Europe has been a bit slow due to (1) entrenched competitors and (2) sales org. changes early in the yr, but should improve next yr."
- Canaccord (Buy) also isn't worried about the FY16 commentary ... for now. "If you dig into the numbers, the fact that WDAY intends to run its OpEx based on 40% revenue growth seems more like a conservative way to manage expectations than a statement of concern about the pace of business."
- Summit Research (Hold) is more cautious, noting Y/Y deferred revenue growth slowed to 8.3% in FQ3 from FQ2's 15.7% and FQ1's 19.7%. "We would expect deferred growth to at least match or exceed revenue growth in a SaaS business model like Workday’s."
- Wedbush (Outperform) thinks large deal activity was "more muted" in FQ3. But it's "optimistic about the [FQ4] contracting and large deal outlook, as our checks indicate that WDAY integrators are heavily loaded with projects and prospects, and Y/Y billings comparisons don't look overly difficult."
- Several targets have been cut, but that might have as much to do with Workday's YTD performance as anything else.
Nov. 24, 2014, 4:32 PM
- Workday (NYSE:WDAY) is guiding for FQ4 revenue of $219M-$222M, +54%-56% Y/Y and in-line with a $220.5M consensus. That isn't being received well, given Workday's history of providing above-consensus guidance.
- Subscription revenue rose 75% Y/Y in FQ3 to $164.4M, exceeding total revenue growth of 68%. Workday's unearned revenue balance rose 44% Y/Y to $508.1M.
- Though Workday had a net loss of $5.3M, unearned revenue growth led free cash flow to total $13.3M. GAAP costs/expenses rose 58% Y/Y to $266.5M - sales/marketing spend amounted to $80.7M, R&D $85.3M, and G&A $28.8M.
- FQ3 results, PR
Nov. 24, 2014, 4:07 PM
Nov. 23, 2014, 5:35 PM
Aug. 29, 2014, 1:00 PM
- Low expectations and a high short interest (11.9M shares as of Aug. 15) are proving a good mix for Veeva (VEEV +18.1%) following its FQ2 beat and guidance hike. Several firms have raised their targets.
- Workday (WDAY +5.5%), which sold off yesterday (and took peers down with it) following its FQ2 report, is following Veeva higher. As are Veeva partner Salesforce (CRM +2.1%) and several other cloud software names. NOW +2.9%. CTCT +3.4%. JIVE +2.5%. CSOD +2%. ULTI +1.9%. MKTO +1.9%.
- "We like [Veeva's] momentum with new products, the pace of customer deployments, and view the second-half guidance as likely conservative," says Deutsche (Buy).
- Pac Crest (Outperform) likes the fact Veeva's billings and subscription revenue each rose over 60% Y/Y, and that its large deal activity also grew. It sees a $5B addressable market for life sciences CRM/content management software.
Aug. 28, 2014, 2:45 PM
- Workday (WDAY -4.7%) has received several target hikes after beating FQ2 estimates and upping its FY15 (ends Jan. '15) guidance. But there have also been some cautious notes focused on cloud HR/financial software giant's valuation.
- Citi observes Workday trades at 15x 2015E sales, and says it has trouble seeing upside catalysts at current levels. Goldman points out Workday is trading at 11x estimated enterprise value/billings even if its upside scenario plays out.
- Cantor (target raised to $121) sees several reasons to be bullish. Among them: The ramp of Workday's recently-launched recruiting product; the pending launch of Workday Student; an enterprise software upgrade cycle; strong international growth (echoes of Salesforce); and expected announcements at the November Workday Rising conference.
- Wedbush (target raised to $106) expects new big data/analytics products to be shown off at the conference. It also sees room for a fresh guidance hike in 3 months, though it thinks it might be smaller than yesterday's hike.
- Workday used its CC (transcript) to hike its FY15 billings guidance by $50M to $940M-$960M (above revenue guidance of $760M-$770M). FQ3 billings guidance is at $225M-$230M (above revenue guidance of $200M-$205M).
- Salesforce (CRM -2%) and several other cloud software names are following Workday lower. CSOD -3.3%. MKTO -3.3%. DWRE -2.2%. JIVE -1.6%. N -1.4%.
Aug. 27, 2014, 4:16 PM
- Workday (NYSE:WDAY) expects FQ3 revenue of $200M-$205M, above a $195.6M consensus. FY15 (ends Jan. '15) revenue guidance is at $760M-$770M, up from a prior $730M-$750M and above a $748.7M consensus.
- The unearned revenue balance rose 4% Q/Q and 48% Y/Y in FQ2 to $481.5M; Y/Y growth was at 54% in FQ1. Free cash flow was -$37.4M, thanks in part to capex of $28.4M.
- Sales/marketing spend +68% Y/Y to $70.9M; R&D +60% to $59.9M; G&A +42% to $14.6M. The figures compare with revenue growth of 74%.
- Subscription revenue rose 77% Y/Y to $143.7M, and professional services 63% to $43.1M.
- FQ2 results, PR
WDAY vs. ETF Alternatives
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