Workday Beats Forecasts, Buys Analytics Startup

Workday wraps up fiscal 2014 with 71% gain, buys HR-oriented predictive analytics company.

Doug Henschen, Executive Editor, Enterprise Apps

February 27, 2014

3 Min Read
Workday co-founders Dave Duffield, left, and Aneel Bhusri.

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Workday wrapped up its first full year as a public company reporting Wednesday a 71% year-over-year gain in total revenues and an 86% increase in subscriptions revenues. The results handily surpassed Wall Street expectations. The company also announced it has acquired Identified, a startup company that offers predictive analytics software for human resources applications.

Workday's total revenues for the fiscal year ended January 31 were $468.9 million, while subscription revenues were $354.2 million. Fourth-quarter revenue jumped 74%, to $141.9 million, while analysts had expected $137.9 million. The company said revenue in the current quarter will be $148 million to $153 million, whereas financial analysts were expecting $148 million to be the ceiling.

"Fiscal 2014 marked a significant year of growth with more than 200 new customers and 800 new employees joining Workday," said Workday chairman, co-founder, and co-CEO Aneel Bhusri in a statement. "During the year, we also accelerated adoption of our financials product, increased market presence in the education and government industries, and expanded our applications with the delivery of Workday Big Data Analytics."

[Want more on Workday? Read Workday Brings Consumer Web Experience To Enterprise Apps.]

The young company is still far from profitable, but the income trend is headed in the right direction. The operating loss for fiscal 2014 was $153.3 million, or negative 32.7% of total revenues, compared to an operating loss of $117.9 million, or negative 43.1% of total revenues, in fiscal 2013. Given the company's cash flow and backlog of new business, the financial community isn't worried.

"We believe Workday is driving the transition of HCM and Financial applications from stale and technologically limited on-premise solutions," wrote Wells Fargo equity research analyst Jayson Maynard on the company's latest results. "We believe that Workday's SaaS delivery model, broad product offerings, and developer tools represent valuable differentiators."

Workday said in a statement that it acquired Identified to "enhance search capabilities and accelerate the delivery of predictive analytics and machine learning throughout Workday's suite of applications." The terms of the deal were not disclosed.

Identified launched in 2011 promising a better job search engine. It later added analytics-driven recruiting software. The company's technology combs social media profiles to find best prospects and spot job-market trends. Its predictive capabilities will likely be applied to financial trend analysis as well as HR management.

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About the Author(s)

Doug Henschen

Executive Editor, Enterprise Apps

Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of Transform Magazine, and Executive Editor at DM News. He has covered IT and data-driven marketing for more than 15 years.

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