Investing.com – Workday stock (NASDAQ:) traded 8% lower in Friday’s premarket as valuation concerns over its $510 million to buy VNDLY gripped the market.
The mostly-cash transaction is expected to close by end-January. VNDLY’s Cloud-based platform helps companies in management of contracted staff including consultants and freelancers.
Workday had $2.25 billion cash and near-cash at the end of October.
The news of the deal overshadowed Workday’s raising of its annual guidance that followed better-than-expected third-quarter results. The October-quarter performance allowed the company to raise its annual guidance one more time.
The company now expects annual subscription revenue around $4.53 billion, higher than the $4.51 billion at the top end of the previous forecast.
Total revenue rose 20% to $1.33 billion as demand from large corporates for its Cloud-based finance and HR applications continued to sustain its pandemic-fuelled momentum. Subscription services contributed $1.17 billion to the third-quarter revenue.
It closed October with a total subscription revenue backlog of $11 billion, up 24%. Adjusted profit per share was $1.10.