Workday (WDAY, Financial) recently announced second quarter fiscal 2015 revenue of $186.8 million, an increase of 74% from the same period last year. The company anticipates third quarter fiscal 2015 revenue to be in $200 to $205 million range, or growth of nearly 56% to 60% over last year.
Also, Workday reported second quarter fiscal 2015 net loss of ($69.215) million or net loss per share, basic and diluted of ($0.38) each which widened nearly 92% from the net loss of $(35.978) million or net loss per share, basic and diluted of ($0.21) during the same period last year.
Strong customer base
Workday customers include Unum, a leading provider of financial services selected Workday for both its finance and HR functions. Workday also served two more highly distinguished Fortune 500 financial services companies including Bank of America as its largest customer till date.
HP declared enterprise application services for Workday in the second quarter. HP would utilize its expertise in analytics, mobile, Cloud and Big Data coupled with significant experience gained from releasing Workday internally to present deployment services to fresh Workday customers.
Globally, CSC is a top leader in IT services and solutions and recently declared to set up Workday deployment practice.
Workday is expanding its workforce to successfully cater to the rising customer demand in Europe.
Workday is constantly focused on customer satisfaction and retention. The company also increased the investments in its new product initiatives, data centers and into expanding its office facilities to contain growth.
Job one for professional services is believed to successfully implement its Cloud applications either with its ecosystem partners or itself.
In the second quarter, Workday averaged its nearly one year of the entire contract value billed straight during signing. Going forward, the company’s solid business model and building momentum allows for extremely healthy revenue visibility during the third quarter of fiscal 2015 along with a robust quarter.
Workday plans to further expand its workforce in fiscal 2015, more aggressively than performed in fiscal 2014.
On a sequential basis, Workday’s subscription gross margin increased by approximately 70 basis points owing to the revenue expansion and the continued economics of its subscription model.
At present, Workday is focused on continuous product innovation, market expansion and growth coupled with huge generation of cash flows and targeting long-term profitability.
Investment plans
Workday continues to invest into product development for innovative solutions coupled with reinforcing and expanding its portfolio of finance, payroll and HR management applications.
Workday estimates to invest nearly $100 million to $110 million of CapEx in fiscal 2015. It has acquired a leasehold interest in land in Pleasanton near to its active office space.
Workday expects to continuously make significant investments into expanding in the global market and superior product development for maximizing its growth opportunities in a long run.
Workday continue to successfully challenge extremely well-established rivals such as IBM (IBM, Financial), Oracle (ORCL, Financial) and several others in its enterprise software markets. Workday added greater than 800 customers for its financial management and human resource capital management software in July, an increase from 675 customers by April end.
Conclusion
Workday's focus on gaining more customers should ensure strong revenue growth in the long run. As a result, investors should take a closer look at this stock as it is on track for strong growth in the future.
