Workday Uses Analyst Conference To Highlight Its Differences From Competition

Workday Inc’s WDAY analyst day and user conference highlighted a number of “critical differences” in the company’s underlying architecture versus that provided by competitors, Baird’s Steven M. Ashley said in a report. He maintained an Outperform rating on the company, with a price target of $95.

Workday’s Rising attendance came in at 7,000, up 30 percent y/y, including over 620 prospective customers versus last year’s 420 number. Customer satisfaction of 97 percent was impressive and in-line with that recorded over the previous four years, analyst Ashley mentioned.

Financial Management

Workday announced two new Financial Management customers, namely Panera Bread Co PNRA and Denny's Corporation DENN.

“Financial Management application continues to gain traction and the company now reports 250 Financials customers (up from 160 at Rising one year-ago). Our conversations with partners in expo hall included bullish comments on Financials pipeline and hiring,” Ashley wrote.

Strong Growth Ahead

From a bottom-up perspective, the current penetration, at ~1,350 customers, represents merely 4 percent of prospective target customers, which includes 33,000 companies with more than 1,000 employees. From a top down prospective, Workday indicated a TAM of $65 billion, up from $60 billion last year and $40 billion at its IPO.

“Updated TAM framework shows Workday in the early stages of a strong growth story,” the analyst commented.

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