Tag Archives: wday

Workday May Hit $5 Billion In 5 Years As Financial Software Rises

At the rate Workday ( WDAY ) is growing its core human capital management (HCM) software, combined with its new financial management products, analysts Ross MacMillan and Matthew Hedberg can see Workday’s path to $5 billion in yearly sales by 2021. The company just hit it first billion-dollar year, closing its fiscal year ended Jan. 31 with sales of $1.16 billion. The pair of RBC Capital Markets analysts on Sunday raised their price target on Workday stock to 92 from 72 and affirmed their outperform rating. Workday stock rose a fraction Monday to a 2016 high, making its seventh consecutive up-day, closing at 78.92. Last week, Workday stock broke out of a cup-with-handle at a 75.60 buy point. Workday wasn’t alone Monday. Rival ServiceNow ( NOW ) rose 3.6%  to 64.28 on a bullish report from William Blair on its long-term fundamentals. Bigger enterprise software rivals Salesforce ( CRM ), Oracle ( ORCL ) and SAP ( SAP ) all slipped a fraction. RBC’s MacMillan and Hedberg drew confidence by comparing Workday to PeopleSoft in 2001, four years before its HCM and financial management (FM) software businesses were acquired by Oracle for $10.4 billion. PeopleSoft co-founder David Duffield, who fought the Oracle takeover, went on to co-found Workday. “A look back at PeopleSoft is striking,” they said. “Workday today has (less than) 25% of PeopleSoft’s customer count in 2001, yet Workday has (more than) 50% of PeopleSoft’s revenue at that time. This is particularly interesting, given Workday has yet to generate any meaningful financial management revenue today and which (according to management) was (more than) 50% of PeopleSoft’s revenue at the time of acquisition by Oracle.” In other words, the RBC analysts say, Workday has plenty of room to grow. “Success in financials would support a path to $5 billion,” they wrote. “While financials (are) not the focus in this note, we think the path to $5 billion revenue remains underpinned (split less than 50% HCM, more than 50% FM) which we think can be realized in the next 5-plus years.” For its fiscal 2016 ended Jan. 31, Workday revenue rose 48% to $1.16 billion. It lost 1 cent per share minus items, a huge improvement from a 33-cent loss in fiscal 2015. Analysts polled by Thomson Reuters expect a Q1 per-share loss minus items of 2 cents, on revenue up 35% to $339 million. They expect adjusted profit to break into the black in Q3.

Workday Financial Software Heading For ‘Success’; Stock Gains Again

Building momentum from a week of positive trade, cloud software developer Workday ’s ( WDAY ) stock gained another 1% Friday morning — nearly 8% for the week — after FBR Capital Markets satisfied itself that Workday’s financial software may “achieve the same level of success as (or greater than) its HCM (human capital management) product suite.” In a research note issued Friday, FBR analyst Samad Samana said that he visited Workday’s Pleasanton, Calif., headquarters in Silicon Valley this week and cornered Betsy Bland, vice president of financial management products, and Robynne Sisco, chief accounting officer, who let him “dig deeper into what we have found to be the single most important issue on investors’ minds.” The issue: Will Workday’s financial software do great? “We walked away more confident that the financials business is positioned to have a strong (fiscal 2017) as the product suite has improved significantly, more WDAY reps are now selling financials, a critical mass of live customers is providing positive references for potential customers, and the willingness to adopt cloud-based financials has increased,” Samana said. Investors responded by pushing Workday stock up 2% to 78.34 before easing back to a 1.6% gain above 78 by midday in the  stock market today . On Wednesday, Workday stock broke out of a 12-week, first-stage cup-with-handle base with a 75.60 buy point. Workday competes against no shortage of rivals, including SAP ( SAP ), Salesforce.com ( CRM ) and legacy software developer Oracle ( ORCL ). Salesforce stock was up 1.6% to 74.98 at midday Friday, and Oracle was up fractionally at 40.96. But SAP stock was down 0.8% to 79.74. Samana said he learned that Workday had added more than 45 financial software customers in the fiscal fourth quarter ended Jan. 31, “the most ever in a single quarter.” At 207 financial customers, it’s more than double the base of a year before. For Q4, Workday earnings beat Wall Street views, but its Q1 revenue outlook missed estimates. For fiscal Q1, ending in April, analysts polled by Thomson Reuters expect Workday to lose an adjusted two cents per share minus items, flat with a year earlier, on revenue up 35% to $339 million. Workday went public in October 2012, priced at 28.

Adobe Summit Sees World Gone Digital, From ‘Deadpool’ To Sea Of Data

Hit anti-superhero flick “Deadpool” got made with what’s been called an all-Adobe workflow . No wonder  Adobe Systems ( ADBE ) CEO Shantanu Narayen sounds a fan. In a keynote address kicking off the Adobe Summit 2016 digital marketing conference Tuesday, he used the cheeky comic book movie to illustrate how the content world’s gone digital. Adobe, of course, makes the Creative Cloud digital tools, such as Photoshop and Premiere Pro video editing software, and the Adobe Marketing Cloud tools used to track online content popularity and to power advertising decisions. The company gets a near-top IBD Composite Rating of 97, and the stock hit a new high in high volume Friday, after Adobe beat analyst views in its first-quarter earnings report and lifted its annual sales and earnings guidance. After February’s market dip, Adobe stock is back where it was in early January. How ‘Deadpool’ Went Digital “Last year one of the biggest media companies in the world decided to make an unknown superhero as big as Captain America without the usual big media and TV spots,” Narayen said in a livecast keynote  from the event in Las Vegas that he said drew more than 10,000 attendees. “Deadpool, a brash antihero most people had never heard of, wove his way into their lives through using one of the most innovative digital and social media campaigns ever.” “Deadpool,” by film folks at Twenty-First Century Fox ( FOX ), “shattered all box office records and is on the way to becoming the highest-grossing R-rated movie in film history,” Narayen said. He went on to talk about how MasterCard ( MA ), too, had moved to “pivot” a bit from traditional ad strategy toward online and social forms, exemplified by its #Priceless Surprises campaign that included things like winning a trip to the Grammy Awards. “Businesses must re-imagine how they interact with customers in a digital-first and digital-enabled world,” Narayen said, adding that “getting content to the right person at the right place at the right time takes data” — that is, the ability to analyze and target. Adobe Summit 2016 Debuts Adobe made several announcements in conjunction with its annual Summit show, including these three Adobe Marketing Cloud enhancements , among others: Adobe Certified Metrics , which standardizes some digital page and video viewership data that’s tracked in the Marketing Cloud. That will allow measurement partners, such as ComScore ( SCOR ) and Nielsen ( NLSN ), to “provide a complete view of total digital audience engagement across TV and digital,” which could boost ad-revenue opportunities. A new developer portal , Adobe.io. A TV recommendation engine called Adobe Primetime Recommendations, based on how the majority of U.S. households watch streaming TV and movies. It could be used by media companies and other kinds of firms to power what Adobe calls ” the next generation of TV recommendations.” TV Ratings For Digital Ad-Buying After viewing migrating away from the television itself toward online viewing via devices such as mobile phone screens and tablets, some online video viewing is now “going back to the living room,” Jeremy Helfand, Adobe’s vice president of video solutions, told IBD. “Over 20% of ‘TV Everywhere’ viewing is happening on connected devices — Apple ( AAPL ) TV, Roku or ( Sony ( SNE )) PlayStation or ( Microsoft ( MSFT )) Xbox, which is quite remarkable.” Historically, he says, “there was one currency — it was Nielsen — that’s what was used in order to purchase advertising,” Helfand said, “largely through upfronts and some residuals — that’s how advertising was bought and sold.” But tracking how many people are watching what these days, across a bunch of devices and websites, hasn’t been easy and that has hampered online video monetization efforts. Adobe Certified Metrics, which involves a developing partnership with ComScore following last year’s link-up with Nielsen, is one way that Adobe aims to make audience measurement easier and more standardized. “You’ve seen ComScore merge with Rentrak trying to bring digital and linear together just as Nielsen is,” Helfand said. “And you’re also seeing some media companies build their own definitions of who their audiences are, and go out to (ad) buyers and say ‘here’s my audience’.” The partnerships and platform development further Narayen’s goal of Adobe products and services being able to “make, monetize and measure” the digital experiences that people have in today’s world of content. The hope is that in turn will make Adobe software more crucial across a breadth of industries. In its Q1 report last week, digital marketing segment revenue at Adobe reached $406.2 million, which Pacific Crest Securities analyst Brendan Barnicle said, in a research note, was “better than the expectation of $402.7 million.” He added that the Summit event this week was “likely  to  provide  additional  positive  announcements  on  the marketing business.” Adobe added 798,000 new subscribers for its Creative Cloud businesses last quarter, and Barnicle noted that 30% of them were new to Adobe. He sees more CEOs driving adoption of Adobe products. “Like Salesforce.com ( CRM ) and Workday ( WDAY ), Adobe is seeing more CEOs make purchasing decisions,” he wrote. “In the 2016 Pacific Crest CFO Survey, both CIOs and CMOs saw a decline in the portion of the IT budget that they control. We believe that CEOs are making more IT decisions than ever before. They are looking to move their businesses to digital and to the cloud, and Adobe is one of several beneficiaries.” The Adobe Summit runs through Thursday, with actor George Clooney among speakers listed for the event — albeit most come more from the tech side than from Tinseltown. San Jose, Calif.-based Adobe has offices around the globe, including in Diegem, Belgium. It’s just outside Brussels, where terrorist attacks hit the airport and a subway station early Tuesday. Narayen started his talk with condolences, and despite its Summit event @Adobe said it was keeping its Twitter account silent for the day, in light of the Brussels situation.