Tag Archives: wday

Salesforce.com, Workday Nip At Oracle Here; Microsoft, Amazon There

Enterprise software developers Workday ( WDAY ) and especially profitable Salesforce.com ( CRM ) have gotten this far without any love from software king Oracle ( ORCL ), so a little verbal swagger from Oracle’s executives this week isn’t going to stop them. But Oracle’s 40% growth in cloud software revenue to $735 million in its third quarter, with a promise of more in Q4 , can’t bode well for the smaller rivals. Accelerating cloud sales, mostly for software as a service (SaaS) and platform as a service (PaaS), were Oracle co-CEOs Safra Catz and Mark Hurd’s favorite topics in a post-earnings conference call with analysts Tuesday. Oracle’s cloud growth, while approaching Workday’s recent 43% sales growth rate, has already puffed Oracle’s cloud to more than double Workday’s total revenue of $323 million in Workday’s last quarter. More deceleration seems inevitable from Workday’s triple-digit growth as recently as 2013. As for Salesforce.com, its year over year sales growth has slowed to the 23%-29% range for six straight quarters, following 13 out of the prior 14 quarters of 31% to 38% growth. Analysts polled by Thomson Reuters put it on a 25% sales growth trajectory to $1.89 billion in the current quarter ending in April vs. 23% revenue growth in the year-ago quarter. Still, “competition from leading SaaS vendors such as Salesforce.com, Workday and others creates the risk that new customers will be tougher (for Oracle) to find and existing on-premise customers could move to different vendors when they shift to the cloud,” warned RBC Capital Markets analyst Matthew Hedberg in a research note issued Wednesday. “This was not a quarter to change the competitive concerns,” he summarized. Not to worry, suggests Oracle Executive Chairman Larry Ellison. In the Q3 earnings conference with analysts Tuesday, Ellison said: “Oracle is now selling more new SaaS and PaaS annually recurring cloud revenue than any other company in the world including Salesforce.com. We are growing much faster than Salesforce.com, more than twice as fast, because we sell into a lot more SaaS and PaaS markets than they do. We compete directly with Salesforce.com in every segment of the SaaS customer experience (CE) market including sales, service and marketing.” He went on to say: “But Oracle also competes in huge SaaS markets where Salesforce.com does not compete at all, such as ERP (enterprise resource planning) and HCM (human capital management). It took many years for Oracle to develop the most complete ERP suite in the cloud including Fusion Financials, procurement, supply chain, logistics, manufacturing and much, much more. That long effort is now paying off.” In the conference call, Bank of America Merrill Lynch analyst Kash Rangan, discussing the huge database software bulk of Oracle’s business, addressed Ellison by noting that Amazon ( AMZN ) Web Services “wants to go after your business.” “ Microsoft ( MSFT ) just announced a SQL server running on Linux,” Rangan continued, “and everybody seems to be . . . swapping out your Oracle license for their license. Why are they doing this, Larry? Is it just because the industry views Oracle as this big giant that is less flexible with pricing? Is that right, that the industry feels like they need to take you guys on? How should we be thinking of Oracle’s presence in the database market a few years from now, given these threats?” Ellison replied: “Well, our PaaS business grew at 150% this past quarter. I mean, it’s interesting that Microsoft is now offering SQL Server on Linux. But people want Oracle in the cloud. People have a huge investment in Oracle products. I mean, people are coming after us because we are by far the market leader in database. So, of course, Amazon, (if) they’re going to be in the database business too, is coming after us, and of course (if) Microsoft wants to be bigger in the database business, they have to come after us. We’re the biggest player. “We see our customers — literally millions of applications and millions of users of those applications built on top of the Oracle database — wanting to move those applications into the cloud and we do that very well. Our PaaS service is even easier to use and better than Oracle is on-premises.” Or, as Evercore ISI analyst Kirk Materne put it in his Wednesday research note: “With 310,000 on-premises database customers, the company sees an enormous potential TAM (total addressable market), as database customers continue to shift to the cloud.” Workday stock at midday was trading up about 3% near 72 in afternoon trading in the stock market today , 23% off its 52-week high set May 26 at 93.62 and about halfway back from its dive in January and early February to 49.5% below that high mark. Salesforce stock was flat near 73, just 12% off an all-time high 82.90 set Nov. 19. Oracle was up about 1.7% in afternoon trading Friday near 41, just 9% off its 52-week high of 45.24 touched June 17. Oracle stock carries a relatively weak IBD Composite Rating at 56, partly because of its 6% earnings shrinkage and overall 3% revenue slip to $9.01 billion in Q3 — as that fast growth in the cloud pulls sales and profitability away from its own legacy on-premises lines. That cloud revenue only amounted to 8% of Oracle’s total Q3 sales, up from 6% a year earlier. Workday carries a 50 Composite Rating and Salesforce.com stock an 83.

Workday Beats For 13th Time In 14 Quarters, But Outlook Short

All in a Leap Year workday’s work, Workday ( WDAY ) late Monday issued its fiscal fourth-quarter earnings that beat Wall Street views, but its Q1 revenue outlook missed forecasts and shares were down in after-hours trading. The company’s CEO, however, said Workday will expand its total addressable market. And the Q4 ended Jan. 31 marked the 13th time in 14 quarters that Workday beat consensus on earnings and revenue since going public in Oct. 2012, priced at 28. But CFO Mark Peek forecast Q1 revenue of $337 million to $339 million, up 35% at the midpoint but below the $343.3 million modeled by analysts polled by Thomson Reuters. Workday stock was down 3% in after-hours trading, after the company released its results. Shares rose 1.7% to 60.46 in Monday’s regular session. Workday stock hit a 39-month low at 47.32 on Feb. 9. The stock climbed over the past two weeks but is still down 24% this year. Investors in software stocks, battered in recent months, had hoped Workday might encourage upward movement in the sector like Salesforce.com ( CRM ) did last week when its stock jumped 11% after its fiscal Q4 earnings and its outlook beat expectations. The enterprise software sector dived Feb. 5 after Big Data developer Tableau Software ( DATA ) issue a disappointing Q4 and gave soft guidance. Tableau crashed 49.5% that day to 41.33 and still has not recovered. “We ended FY16 on a high note with a very strong fourth quarter across product lines and around the world,” Workday CEO Aneel Bhusri said in the earnings release. “Demand for our financial management and HCM (human capital management) products continues to rise, as do our competitive win rates. The year ahead brings us an expanded addressable market with the delivery of Planning, Learning Management and Student applications that allow customers to drive employee engagement and productivity in new and transformative ways.” Big legacy software developer Oracle ( ORCL ) unwittingly might be helping Workday by somewhat reducing its automatic promotional Software as a Service to customers, D.A. Davidson analyst Jack Andrews wrote in a research note before Workday’s earnings release. Workday’s helps companies manage their most important assets: people, in the form of the HCM applications, and money, with financial management software. The company posted a per-share loss minus items of a penny in Q4, better than its 6-cent loss in the year-earlier quarter, on revenue of $323.4 million, up 43%. Workday had guided Q4 to revenue of $317 million to $320 million. Analysts polled by Thomson Reuters had modeled $320.3 million when Q3 results were reported in November, but then revised it down to $319.6 million. Analysts had expected an adjusted loss per share of 5 cents.

If Workday Beat Consensus, That’ll Be 13 For 14 Quarters Since IPO

Well, it’s no Salesforce.com ( CRM ) in size, but investors are turning their attention to hot little rival Workday ( WDAY ), which reports earnings after the close Monday. The maker of cloud-based HR and financial software likely will show continued fast growth — while likely staying in the red as it spends to grow. For its fiscal Q4 2016 ended Jan. 31 , Workday guided to revenue of $317 million to $320 million, up 40% to 41% from the year-earlier quarter. Analysts polled by Thomson Reuters had modeled $320.3 million when Workday issued its Q3 results three months ago, but since then the consensus has slipped to $319.6 million. Workday didn’t forecast earnings, but analysts expect an adjusted loss per share of 4 cents vs. a 6-cent loss in the year-earlier quarter. Like many stocks, Workday has been scraping bottom lately, hitting a 39-month low on Feb. 9 at 47.32. Workday stock fell 16% on Feb. 5, but it wasn’t alone. That was the day Tableau Software ( DATA ) tanked 49.5% after releasing slower growth guidance for 2016, sending most software stocks down with it. Since then, Workday stock has enjoyed two good weeks, up 1% in early trading in the stock market today , near 60 but still down 25% for the year. Workday stock rose 3.2% Thursday, with enterprise software stocks helped by Salesforce.com’s late-Wednesday earnings beat and better-than-expected guidance. Salesforce.com stock rose 11% Thursday but was down a fraction early Friday. Noting that Workday “has beaten consensus revenue and EPS estimates in 12 of the 13 quarters it has been public,” D.A. Davidson analyst Jack Andrews is bullish. “We expect (Q4) revenue to grow 41.9% … to $321.2 million, above consensus … and above the high end of the (Workday-provided) guidance range. By segment, we are projecting 44.6% growth in subscription services to $263 million (81.9% of total revenue) and 31.0% growth in professional services to $58.2 million,” he said in a research report. He expects a 3-cent per-share loss minus items, a penny better than consensus. “One interesting note is that we believe Oracle ( ORCL ) has pulled back a bit on its promotional program on SaaS (Software as a Service) and aims to offer future promotions to customers tactically, rather than automatically,” Andrews wrote. Davidson maintains a buy rating on Oracle stock. It also has a buy rating on Workday stock, with a 99 price target. Oracle stock rose 1.8% Thursday, but was flat early Friday. Investment banker R.W. Baird on Thursday lowered its price target on Workday to 70 from 85, but it rates the stock outperform. “Workday’s share price has also been significantly reduced along with other high-valuation software stocks during the recent correction,” wrote Baird analyst Steven Ashley. In Workday’s Q3 earnings conference call with analysts, CFO Mark Peek said an adjusted operating profit likely wouldn’t happen until Q2 this year.