Cloud Stocks: Workday Drives Enterprise Use Cases Through PaaS, As Anaplan Taps Into Consultants

According to a recent report, the global cloud-based ERP market size is expected to grow from $45.3 billion in 2020 to $101.1 billion by 2025 at a CAGR of over 17%. SaaS-based enterprise services provider Workday (Nasdaq: WDAY) recently announced its fourth-quarter results that continued to outpace market expectations.

Workday’s Financials

Workday’s fourth-quarter revenues grew 15.9% to $1.13 billion, ahead of the Street’s forecast of $1.12 billion. Non-GAAP EPS was $0.73, also ahead of the market’s forecast of $0.55. For the quarter, net loss decreased to $71 million compared to loss of $120.7 million a year ago.

By segment, Subscription services revenues grew 19.8% to $1.01 billion while professional services revenues declined 8.2% to $125.4 million.

For the full year, Workday’s revenues grew 19% to $4.32 billion and GAAP loss was $1.19 per share compared with a GAAP loss of $2.12 per share a year ago.

For the first quarter, Workday expects subscription revenues of $1.018-$1.02 billion and professional services revenues of $139 million. Workday expects to end the year with $4.38-$4.4 billion in subscriptions revenues and $590 million in professional services revenue. The market was looking for revenues of $1.16 billion for the quarter with an EPS of $0.58.

Workday’s Acquisition

Recently, Workday announced its plans to acquire Denmark-based Peakon for approximately $700 million. Founded in 2014 by Christian Holm, Dan Rogers, Kasper Hulthin, and Philip Chambers, Peakon is a platform that works to improve employee engagement, inclusion, and growth. Prior to the acquisition, Peakon had raised $68 million in four rounds of funding from investors including Balderton Capital, Atomico, EQT Ventures, Indivest Partners, Heartcore Capital, and Tommy Ahlers.

Workday plans to leverage the acquisition to build a continuous listening platform that will allow customers to capture real-time sentiment, facilitate ongoing feedback, and access personalized, prescriptive recommendations for actions. It will also merge Peakon’s technology that determines and distributes surveys and information with its own employee insight tools to help leaders with the ability to discover and respond to employee needs and behaviors.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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