Workday acquires VNDLY for $510 million, reports strong Q3
Workday said it will acquire VNDLY, a cloud contractor and vendor management provider, for $510 million in cash.
With the move, Workday is aiming to meld optimization tools for both internal and external salaried, hourly, contingent and outsourced workers. Workday said it was aiming to support talent management, costs, planning and compliance in a holistic approach.
VNDLY already has certified integrations with Workday Financial Management and Workday Human Capital Management. The rationale for the VNDLY purchase goes like this:
- The two companies will have a unified system of record to manage customers' entire workforce.
- Offer visibility tools to optimize costs and workers mix.
- Workday with VNDLY can provide an end-to-end process for requisitions, statements of work, onboarding, invoicing and payroll.
- The integration will include compliance and security tools.
Workday said it will invest in VNDLY's managed service provider network and support third party integrations.
Separately, Workday reported third quarter revenue of $1.33 billion, up 20% from a year ago. Net income for the third quarter was 17 cents a share and $1.10 a share non-GAAP. Wall Street analysts were expecting third quarter revenue of $1.31 billion and non-GAAP earnings of 86 cents a share.
As for the fourth quarter outlook, Workday projected subscription revenue of $1.216 billion to $1.218 billion, or growth of 21%. For fiscal 2022, Workday projected subscription revenue between $4.533 billion to $4.535 billion.
Aneel Bhusri, co-CEO of Workday, said the quarter featured sustained growth from its product portfolio. Bhusri also said VNDLY would round out Workday's growth plans.
Workday and VNDLY together will deliver a comprehensive total workforce optimization solution that brings an integrated approach to managing all types of workers. It will help customers bridge the gap between internal and external workforce management, while enabling a holistic workforce strategy that delivers full visibility into the entire workforce and managing and planning for labor needs, while also helping to control compliance and security risks. We look forward to expanding our efforts in this area, and we'll share more information after the deal closes, which we expect to occur in our fourth quarter.
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