Pacific Crest analysts peg the global addressable market for SaaS-based Human Resource Management offerings to grow from $50 billion last year to $70 billion by 2015. The market is dominated by three key players - SAP, Oracle (NYSE:ORCL), and Workday (NYSE:WDAY). In 2011, IDC estimated SAP to own 17.4% of the market, followed by Oracle's 12.4% share and Workday's 3.5% market share. Since then though, the landscape has changed significantly with both SAP and Oracle adding to their portfolios SuccessFactors and Taleo, respectively, and Workday going public.
Workday's Q4 revenues grew 76% over the year to $141.9 million. Net loss of $0.13 per share was lower than previous year's loss of $0.16 per share. The market was expecting revenues of $138 million with a loss of $0.16 per share. By segment, subscription revenues grew 86% over the year to $110.72 million. Professional services grew 42% over the year to $31.15 million.
They ended the year with revenue of $468.9 million, up 71% over the year, and a loss of $0.54 per share.
For the current quarter, Workday projected revenues of $148 million-$153 million, compared with the Street's projections of $148 million. Workday expects to end the current year with revenues of $710 million-$740 million, ahead of the market's target of $706 million.
Workday's Recent Acquisition
Last week, Workday announced the acquisition of private recruiting focused company Identified, Facebook's Professional Twin, for an unidentified sum. The move is expected to help Workday get a leading advantage in the world of social sourcing. San Francisco-based Identified is an HR Predictive analytics firm best known for their technology SYMAN, which uses big data analytic tools to gather data from social media networks like Facebook to identify potential job opportunities.
Back in 2012, when I had spoken with Identified's co-founder, Adeyemi Ajao, the company had more than 10 million members already. Workday plans to leverage Identified's strong technical skills to enhance their search engine and integrate predictive analytics offerings into their suite of applications. They should also be able to integrate Identified's social sourcing skills into their talent acquisition service, Workday Recruiting. Workday Recruiting is sold as an additional service to their human capital management service. Since the beginning of this year, Recruiting has already added 39 new customers to their list. Next up? Perhaps TalentCircles, a cloud-based social talent engagement platform.
Workday's Product Enhancement
Meanwhile, Workday continued to upgrade their product offerings and has released a new web portal with an improved user interface. It features an enhanced visual interface on HTML5 and several intuitive features. They have also released an upgrade to Workday 21. This is the first update to be released that leverages Workday's shift to a single code line for development and production environments that will help improve the frequency of innovation delivered to customers, while ensuring minimal disruption of services.
They are also growing their geographic reach, especially in EMEA. In the next few years, they plan to add new services to their products in these markets. For instance, they plan to introduce Workday Payroll in U.K. and France in the next few years.
Their stock is trading at $106.30 with a market capitalization of $18.62 billion. It touched a year high of $116.47 earlier last week.
Disclosure: No positions