Luxor Capital adds new position in Workday Inc.
Highlights of Luxor Capital Group's 3Q14 holdings (Part 4 of 12)
Workday Inc. position
During the third quarter of 2014, Luxor Capital Group initiated a position in Workday Inc. (WDAY). The position accounted for 1.51% of the fund’s total 3Q14 portfolio, per 13F filings.
About Workday Inc.
Workday Inc. is an on-demand financial and human capital management software vendor. Founded by David Duffield and Aneel Bhusri in 2005, WDAY targets the customers of rivals Oracle and SAP by offering them “online services at a fraction of the cost of upgrading from their incumbent vendors.”
WDAY provides the world’s largest companies, educational institutions, and government agencies with services in financial management, human capital management, and analytics applications. Over the last few years, these entities have increasingly been investing in product development.
In October 2012, Workday Inc. launched an IPO (initial public offering), valuing the company at $9.5 billion.
3Q14 results
From the graph above, we can see that WDAY’s revenues from subscriptions and professional services have been growing at a healthy rate. The total 3Q14 revenues were $216 million, up from $128 million in 3Q13.
WDAY’s balance sheet was strong during the third quarter. The company had over $500 million in unearned revenue and more than $8.1 billion in cash and marketable securities.
Improving market position
In order to grow in the industry and drive the company’s share price, Workday Inc. will need to focus on improving market share outside of North America. WDAY has important UK-based clients like Unilever, Rolls-Royce, and TalkTalk Telecom Group. Workday Inc. intends to strengthen its presence in Europe by acquiring prominent clients on a regular basis.
To achieve significant growth in the future, WDAY will also need to increase market share in the government and education segments.
Other 3Q14 positions for Luxor Capital
Luxor Capital’s new positions in the third quarter included IAC/InterActiveCorp (IACI) and Cheniere Energy Inc. (LNG). The fund sold its stakes in Melco Crown Entertainment (MPEL), Yahoo! Inc. (YHOO), and Apple Inc. (APPL). Luxor Capital increased its positions in 21st Century Fox (FOX), Searchlight Minerals (SRCH), and Conn’s Inc. (CONN), while it decreased its positions in AMC Networks (AMCX) and RCS Capital Corp. (RCAP).
The next article in this series will explore Luxor Capital Group’s former position in Apple Inc.
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