Enterprise services provider Workday (Nasdaq: WDAY) recently announced its first-quarter results that failed to impress the market. But the company continues to diversify its offerings through acquisitions and product development.

Workday’s Financials

Workday’s first quarter revenues grew 22.1% to $1.43 billion, ahead of the Street’s forecast by 0.66%. Non-GAAP EPS was $0.83, which missed the market’s forecast of $0.86.

By segment, Subscription services revenues grew 23.2% to $1.27 billion. Professional services revenues grew 13.8% to $162.6 million.

For the second quarter, the market estimates revenues of $1.51 billion and an EPS of $0.87. It expects Workday to end the year with revenues of $6.2 billion and an EPS of $3.60. Workday did not provide an outlook.

Workday’s VNDLY Acquisition

Recently, Workday announced its acquisition of Ohio- based VNDLY, a cloud-based external workforce and vendor management technology provider, for an estimated $510 million. VNDLY provides a cloud-native technology platform that provides management of non-employee workforce programs. The easy-to-configure and intuitive solution has built-in API integrations that have allowed VNDLY to seamlessly communicate with human resources, procurement, provisioning, finance, and employee management software. These integrations allow clients to share data and other necessary information across departments, thus unifying their technology stacks. Its solution helps connect managed services providers, suppliers, and workers through a single platform.

VNDLY already has certified integration with Workday. The acquisition will provide organizations with a unified system of records to manage their entire workforce and enable greater collaboration with HR, finance, procurement, and functional leaders to plan, execute, and analyze the total workforce. Customers will have visibility into their workforce with insights into headcount, projects, benefits, compensation, contingent speed, and their total workforce cost. They will be able to take insight-driven decisions when planning and analyzing the total rewards of contingent worker spending. The acquisition will enable a more collaborative approach to sourcing and hiring practices, helping customers in responding to the increased competition for talent and managing labor shortages. Additionally, customers will be able to securely manage data and system access, as well as better ensure process integrity.

Prior to the acquisition, VNDLY had raised $58 million in five rounds of funding led by Okta Ventures, Madrona Venture Group, Battery Ventures, ServiceNow, Hyde Park Venture Partners, EPIC Ventures, Bowery Capital, Cintrifuse Syndicate Fun, and Insight Partners. Its most recent round was held in May 2020 where it raised $9 million. VNDLY did not disclose its financials prior to the acquisition.

Besides acquisitions, Workday is also growing its offerings organically. It recently announced two new solutions that will be available later this year to help organizations manage the growing demand for ESG reporting. The first product is Social Reporting for ESG and it will help customers track progress against goals and identify areas for improvement within workforce composition, organizational health, diversity, and workforce investments. The second product is supplier and sustainability which will help customers improve the sustainability and resilience of their supply chains and test scope emissions across their suppliers. These two new solutions will help Workday further gain wallet share from its customers.

Its stock is trading at $169.44 with a market capitalization of $43 billion. It hit a 52-week high of $307.81 in November last year and a 52-week low of $149.06 earlier this month.