Workday Inc. is banking on growing sales of its cloud-based software for financial management as well as human resources management as it competes more against business software titans SAP SE and Oracle Corp., CEO Aneel Bhursi said yesterday.
The company “had an excellent quarter in terms of adoption of our financial suite of applications,” with particular strength in selling to large corporations, Bhursi said in a conference call with stock analysts, according to a transcript from Seeking Alpha.
Workday said revenue increased 34.2% to $409.58 million for the third quarter ended Oct. 31, from $305.27 million in the year-earlier quarter. The company “saw healthy demand across all major geographies and industries,” said Bhursi, who is also Workday’s co-founder.
Workday’s financial management suite of software includes procurement software that companies use to purchase products from their approved suppliers and control spending by employees. In a complementary move, earlier this year Workday acquired Platfora, a provider of technology for compiling and analyzing large amounts of corporate operational data. That data includes information from supply chains that Workday clients use to monitor and analyze their purchase transactions with suppliers. “Customers want to drill down to transaction-level data and analyze it across multiple dimensions for calculating profitability, ROI and other metrics,” Workday says. Workday didn’t reveal what it paid for Platfora.
Along with its full suite of financial management and HR software, Workday says it has been increasing market share as it competes against SAP and Oracle for large enterprise clients and against NetSuite Inc. and Ultimate Software for mid-market companies. (Oracle recently acquired NetSuite, and Bhursi said on the conference call it was too soon to say how that will affect Workday.)
Among the large financial software clients Workday has recently acquired are restaurant chains Panera Bread Co. and Denny’s Corp.; the Washington, D.C., metropolitan area’s Metropolitan Washington Airports Authority; and Iowa State University, Bhursi said.
Workday reported for the third quarter ended Oct. 31:
Subscription revenue of $335.72 million, up 38.3% from $242.70 a year earlier;
Professional services revenue of $73.86 million, up 18.0% from $62.57 million;
An operating loss of $109.9 million, compared with a year-earlier operating loss of $70.2 million;
A net loss of $114.07 million, compared with a net loss of $77.81 million;
A net increase of 400 employees, resulting in a workforce of 6,400.
For the nine months ended Oct. 31, it reported:
Subscription revenue of $921.95 million, up 38.1% from $667.44 million a year earlier;
Professional services revenue of $210.78 million, up 22.9% from $171.48 million;
An operating loss of $270.43 million, compared with a year-earlier operating loss of $1981.22 million;
A net loss of $302.71 million, compared with a net loss of $208.79 million.
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