Last week, Workiva Inc. (WK - Free Report) entered into an original equipment manufacturer (“OEM”) agreement with enterprise-application software provider, SAP SE (SAP - Free Report) .
According to the OEM agreement, Workiva’s flagship product, Wdesk platform will be incorporated with SAP’s offering, SAP Cloud Platform Integration. The “bundled” or comprehensive combined solutions will aid customers with auditability, control and linking features.
Workiva’s Wdesk platform is a mobile-enabled and cloud-based platform. It enables the customers to collect, report, manage and analyze business data in real time. In order to leverage the capabilities of the Wdesk platform, SAP cloud customers are required to integrate their SAP business data into the platform.
Workiva believes that the OEM partnership will empower the customers with enhanced business insights.
Per the press release, users will benefit from Wdesk’s robust features, including dynamic commentary, synchronized data, clear audit trails, controlled collaboration and granular permissions.
Moreover, Wdesk platform will allow users with narrative linking across reports, presentations, spreadsheets and documents.
With improved data integrity SAP will be able to provide its users with data-driven solutions, which will consequently empower them to accelerate financial processes.
What The Investors Need To Know?
Shares of Workiva have had a spectacular run year to date, gaining 20.6%, surpassing the industry’s rally of 10%. This outperformance can be attributed to the traction witnessed by Wdesk platform.
The company delivered first-quarter 2018 revenues of $59.9 million outpacing the Zacks Consensus Estimate of $58 million. Moreover, revenues grew 15.4% year over year.
Top-line growth can be attributed to 17.5% growth in subscription and support revenues coming in at $46.5 million. Professional services revenues increased 8.7% year over yearto $13.4 million.
Workiva ended the quarter with 3,119 customers, representing 56 new customers from the previous quarter and 294 new customers from the year-ago quarter.
The company had integrated Wdesk platform with Anaplan’s Connected Planning platform to streamline the process of performance management reporting in the previous quarter. Partnerships like Anaplan aided Workiva capitalize on growth opportunities that the rapidly-growing Software-as-a-Service (“SaaS”) market presents.
Furthermore, according to Gartner, the global SaaS market is expected to increase at a CAGR of 18.1% from $60.2 billion in 2017 to reach $117.1 billion in 2021. We believe Workiva is well poised to capitalize on the growth opportunity present in the domain it operates.
The Financial revealed that as per a recent Market Insights Report, the global financial services application market will be worth $117.1 billion by 2023 from $74.35 billion as of 2017. Notably, the market is currently growing at a CAGR of 7.86% and the time period under consideration is 2018-2023. We believe that since Workiva’s platform is mostly used for auditing and accounting, the company will benefit from growth of the relevant market.
Zacks Rank & Key Picks
Workiva carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the broader technology sector are Mellanox Technologies, Ltd. (MLNX - Free Report) and Micron Technology Inc. (MU - Free Report) , both currently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The projected long-term earnings growth rate for Mellanox and Micron are 15% and 10%, respectively.
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