Workday Looks Unstoppable

It may have been a roller-coaster end to the previous year for the stock market, but SaaS-based HCM services provider, Workday (NYSE: WDAY) seems unfazed. The company recently reported stellar third quarter results that sent its stock soaring. Despite a turbulent end to December, Workday entered the new year after gaining more than 50% in value over the previous year.

Photo Credit: Steven Miller/Flickr.com

Workday’s Financials

For the third quarter, revenues grew 34% over the year to $743.2 million, ahead of the Street’s forecast of $723.1 million. It ended the quarter with a net loss of $153.3 million, compared to a net loss of $86 million a year ago. Non-GAAP net income per share came in at $0.31, compared to $0.24 reported a year ago. The market was looking for an EPS of $0.15 per share.

By segment, Subscription services revenue rose 34.7% to $624.4 million in quarter and professional services revenue rose 29.4% to $118.8 million.

Workday ended the quarter with more than 8,500 customers. During the quarter, it added names like Bank of Montreal, Glencore International, and Piedmont Airlines as its new HCM customers.

For the current quarter, Workday expects to earn revenues of $775-$777 million, ahead of the Street’s forecast of $757.3 million. For the 2019 fiscal year, it forecast revenues of $2.808-$2.810 billion.

Workday expects its fiscal 2020 subscription services revenue to come in at $3-$3.01 billion, ahead of the analysts’ expectations of $2.97 billion.

Workday’s Product Expansion

During the quarter, Workday continued to expand its product offerings, focusing on integrating AI and machine learning capabilities within its offerings. As part of this effort, it recently released Workday People Analytics, a new application that leverages augmented analytics powered by artificial intelligence to provide customers with key metrics. The solution will give executives, organization leaders and HR business partners a view into the most critical trends in their workforce and an understanding of the most likely drivers of those trends. It will be accompanied by explanatory narratives called stories that will highlight the most critical activities in their business.

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Disclaimer: More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion ...

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