Eliott builds a site on the working day after the software company reveals a multi -year plan to increase the value

Company: Working Day (WDAY)

a job: Working day It is an artificial intelligence platform to help organizations to manage their members, money and agents. The company provides more than 11,000 organizations with cloud solutions supported by artificial intelligence to help solve work challenges, including support and empowerment of the workforce, managing its money and spending in a constantly changing environment, and planning what is unexpected. It provides financial management, spending management, human capital management, planning, planning, analysis applications. The company sells its solutions all over the world mainly through direct sales. It also provides professional services, directly and through working day services, to help customers spread their solutions. It provides companies with flexible solutions to help them adapt to their own needs in this field and respond to change. It serves many industries, including professional and commercial services, financial services, health care, education, government and others.

Market value shares: 58.48 billion dollars ($ 219.01 per share)

Activist: Investment Department Elliot

ownership: ~ 3.4 %

Average cost: us

Activist’s comment: Elliott is a multi -asset investment company that manages about $ 76.1 billion of assets (as of June 30) and is one of the oldest companies of its kind under continuous management. Elliot, known for due care and due resources, is regularly known as companies for years before investing. Elliott is the most active among active investors, and to participate with companies across industries and multiple geographical regions.

What is happening

Elliot has taken A position of more than $ 2 billion On the working day and expressed its support for the company’s management team.

backstage

Workday is a software software -based software company that provides human resources solutions for human capital and financial management. The human capital platform for companies enables manpower and human resources operations, while the financial data platform supports simplifying financial operations such as payment accounts, purchases and accounting. Although the human resource programs sector is very competitive, the working day is a dominant player, used by more than 11,000 organizations and more than 60 % of Fortune 500 companies. In addition, this is a very sticky business model with 98 % customer retaining rate and continuous growth in the middle of adolescence. Despite this strong background, the working day has led to the closest to the nearest group of peers (servicenowand Bait and Salesforce) With the rate of 13.61, 69.58 and 49.87 percentage points over the past periods and 3 and 5 years, respectively.

Since its publication 13 years ago, I adopted a growth day in all followers, which were very effective, which allowed them to develop their revenue base from less than $ 300 million before the public subscription to approximately 9 billion dollars.

The problem with this strategy today is that the working day now faces a large numbers law – with a large revenue base, which becomes increasingly high. Moreover, despite this excessive growth, the working day has never generated great profits and investors have lost patience. However, the company has recently changed a major change in a plan that must pay a tremendous value to the shareholders-after the co-founder Aneel Bhusri has led it since its inception, Karl Hachbach has become the full-time CEO in February 2024.

This is not intended to distort Bhusri – the exact opposite. Bhusri is the rare insight that has already made the most difficult part – building a zero company to $ 58 billion. The next stage, which often runs a public company, is a different group of skills, most founders, especially young people such as bhusri, should not be recognized by another person. It deserves a lot of credit for delivering it during the daily compensation and moving to the CEO. This will allow the company with a new, decisive start in its strategic direction. And they just did.

On Tuesday, Workday announced a multi -year plan on the Financial Analysts Day, which included a number of initiatives that focus on value, such as the $ 5 billion -dollar shares program, and cost prevention measures expected to provide approximately 1,000 basis points from the expansion of the GAAP margin over the next two years, and $ 15 per share, the goal of free cash flow by the fiscal year 2028.

Elliot announced on Wednesday that they had occupied more than two billion dollars on the working day and expressed their support for the company’s management team. Many people believe that Elliot and “friendly” are progressing together in addition to “silent silence” or “virtual reality”, but Elliot has achieved great success in friendly associations and this will be another example.

Elliott is doing deep research on all the companies and industries in which they invest and they were more likely to see the working day when Eschenbach became the CEO, which raises their interest more. Elliot’s relationship with Eschenbach stems over a decade from time to his former role as head and CEO of VMware, where Elliot was a very active contributor. Therefore, it is not a coincidence that Elliot’s decision to make their investment the public comes the next day to announce the day of work for their new multi -year plan. Elliott will not take such an important position in a controlled company (via dual category shares) unless they have extensive conversations with the administration and know that it was on the same page.

Accordingly, although the Board of Directors and Administration must obtain a balance for this new plan, we can only see the Elliott imprints on it to some extent. Moreover, this will not be a difficult implementation plan.

With more than $ 8 billion in net cash, Workday has more than enough capital to finance re -purchases while keeping the M & A war. Since the company is still growing in a healthy clip, the margin can be expanded without reducing costs, but by cost maintenance. In addition, artificial intelligence application offers a great opportunity for work day.

In 2024, the company achieved about $ 150 million in net new revenues based on artificial intelligence – an increase of 200 % on an annual basis. With the presence of many human resources functions that involve boring and frequent operations, the working day is in a good position to take advantage of artificial intelligence to automate its workflow and improve its products offers.

The company is well aware of this and has already started integration and purchase in the space. On Tuesday, work day announced a $ 1.1 billion deal To gain SANA; And last month, the company acquired both Paradox and Flow.

It is also important to note that a company like Workday that is controlled, as Busri carries more than 70 % of the voting power through Class B shares, it can often be attributed if the market does not believe that the founder will control it on behalf of the shareholders. A new body that is not consistent with the C-SUITE, which is encouraged by ELLIOTT support for a long way to reduce these fears.

Ken Squire is the founder and head of 13D Monitor, an institutional research service on shareholders ’activity, founder and manager of the 13D activist Fund portfolio, a joint fund that invests in a set of 13D active investments.