Company plans to go public on stock market
Workday, a leading provider of HR and finance software-as-a-service, has recently filed an S1 for an initial public offering (IPO) later this year. The company, which was founded by the same individuals behind PeopleSoft, has been experiencing cumulative losses and high operating costs, as stated in the S1 filing.
Despite these challenges, Workday reported £134 million in revenues in 2011 and £119 million in the first six months of 2012, indicating an annual run rate of around £240 million. However, the company has a history of losses and does not expect to be profitable for the foreseeable future.
The S1 filing also highlights several risk factors that could potentially impact Workday's business. High competition in the SaaS space and the possibility that current growth in cloud computing is not sustained are among the identified risks. Moreover, the company acknowledges that its business would be adversely affected if present partner Salesforce.com were to launch applications for its target markets.
The S1 also identifies exposure to privacy breaches and data centre outages as risk factors. To mitigate these risks, Workday has implemented robust security measures and disaster recovery plans.
Workday's UK customer base includes Aviva Europe and RBS Insurance Group (the company behind Direct Line). However, specific information on the revenue of Workday in Germany for the year 2011 and the first half of 2012 could not be found.
In addition to the risks mentioned, Workday cannot guarantee achieving profitability in the future, nor sustaining profitability if it does become profitable. The company is planning to raise $400 million in its IPO, significantly more than SaaS pioneer Salesforce.com raised in its IPO in 2004.
Despite the challenges, Workday's current growth rate is approximately 80% year-on-year, which is a testament to the company's resilience and potential for future growth. The company's IPO is expected to provide an exciting opportunity for investors to be a part of this growing enterprise.
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