Updated Aug 13 at 5:05pm ET.
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Silver Lake, a private equity firm that specializes in large technology investments, is reportedly in talks to acquire Workday. The deal would value the company at more than 43 billion dollars, making it one of the biggest take-private transactions in the history of the software industry.
A buyout would mean the company stops trading on the public stock market and becomes a private business. For long-term owners, this often results in a final payout at a price higher than where the stock was trading before the news. The stock rose about 18 percent on the report, as the market began to price in the possibility of a deal being reached.
Source: Reuters
The company scheduled its second quarter earnings release for late August. These reports are the primary way for owners to see if the company is successfully turning its large backlog of signed contracts into actual revenue and if its profit margins are staying above the 30 percent level.
Source: PRNewsWire
Workday is partnering with EarnIn to let employees at its 11,500 customer organizations access tools for managing their earnings directly through the Workday system. By adding more features for the 80 million people who use its software, the company makes its platform more useful and harder for employers to replace.
Source: Business Wire
The company's planning software earned FedRAMP Moderate authorization, a security credential required to handle sensitive data for the U.S. government. This opens up a large market of federal agencies that can now use the platform to manage their budgets and staff.
Winning more government business is a key part of the company's plan to grow beyond its traditional strength in private-sector human resources. This certification removes a major hurdle for federal agencies that want to modernize their older planning systems.
Source: PRNewsWire
The company launched its new learning experience, which uses artificial intelligence to create personalized training and automated tutoring for employees. It is built on top of the company's existing data, which helps it tailor the training to a specific worker's role.
This is a concrete example of the company's push into artificial intelligence agents. If these AI tools can help employees learn faster or save managers time on training, it gives the company a reason to charge more for its subscriptions.
Source: PRNewsWire
Analysts recently raised their price targets following reports that the company may be a takeover target. Most analysts still rate the stock as a buy, but the average target price is 16% lower than the current stock price.
Workday has a perfect track record of beating analyst targets over the last two years. Management consistently sets a bar they can clear, showing the business is highly predictable.
| Expectation | |
|---|---|
| EPS | $2.61 |
| Revenue | $2.64B |
