Cloud is one of the biggest themes in the technology industry at the moment. It, therefore, makes sense to invest in companies that specialize in cloud technology. Workday specializes in human capital management software solutions that are based on cloud technology. Workday earns a lot of its revenue via the SaaS model where software subscriptions are offered and the deployment happens through the cloud. Workday’s co-founder, Aneel Bhusri, has been with the company since 2005 and is now the co-CEO. Recently, Workday announced its third-quarter 2020 earnings results.
Workday 3Q2020 Earnings
Workday announced its third-quarter 2020 earnings in November. Revenues were up from $938 million to $1.1 billion. Subscription revenues were up from $798 million to $968 million while professional services revenues were down from $139 million to $137 million. Despite the growth in revenues, Workday still reported a net loss per share of $0.1. However, this net loss significantly reduced from a net loss of $0.51 per share reported in the same quarter the previous year.
Co-CEO and Co-Founder Aneel Bhusri said, “We had another strong quarter for Workday HCM with notable customer additions in the quarter, including Novartis, DraftKings, CTBC Bank, a Fortune 500 telecommunications company and Tecnologias Rappi, our first notable win in Mexico.”
As an investor, you would ask yourself which software stock you would look to buy now. Looking at the price performance may give you some direction. Workday’s stock closed at $248 on 24th December 2020. It is up11% for the preceding month and up 48% for the year 2020. Over a longer 5-year period, the stock has gone from $71 to $248.
Paycom, a company that specializes in payroll software is up 10% for the preceding month after its stock closed at $462 on 24th December 2020. However, the stock is up 70% for the year 2020 and has risen from a mere $32 to $462 currently.