Workday (WDAY), which offers human capital management (or HCM) and financial management through its cloud applications for various enterprises, generates strong business growth. The ongoing migration of data warehouse to the cloud has spurred demand for the company’s HCM and financial management services.
HCM offers easy access and management of any data to the human resource teams through its cloud network. These functions include recruitment, compensation, absence, performance management, succession planning, and career and development planning. The company provides its cloud HCM service to more than 175 Fortune 500 customers.
Such strong growth in the company’s client portfolio has contributed to Workday’s top-line growth. In the last five quarters, Workday’s total revenues grew at a CAGR (compound annual growth rate) of 7.0%.
From the graph above, we can see that the company’s top line maintained steady growth momentum during the period. Workday’s fiscal 4Q18 (fiscal 4Q18 ended January 2018) revenues increased 33.0% YoY (year-over-year) to $582.5 million, whereas its fiscal 2018 revenues came in at $2.1 billion, up 36.0% YoY.
Other key catalysts
Workday’s financial management service is driven by its multiple service offerings, which include accounting parameters such as general ledger, accounts payable and receivable, cash management, and asset management. Its offerings also include employee expense management, revenue management, procurement, and inventory. In fiscal 4Q18, it added 58 new core financial management clients, up 45.0% YoY, which also included two Fortune 500 customers.
The company is making a huge investment in two new products—Prism Analytics and Workday Cloud Platform. These growth drivers may help the company counter competition in the cloud space from players like Oracle (ORCL) and Nutanix (NTNX).