Workday did some early Black Friday shopping. Last week, Workday announced its intent to acquire VNDLY, a cloud-based external workforce and vendor management technology company, for $510 million. With the acquisition, VNDLY, who focuses on managing external contractors and vendors, will expand Workday’s human resource capabilities as the job market continues to evolve. The deal is expected to close in the fourth quarter of Workday’s fiscal year 2022, which ends January 31, 2022. The acquisition is subject to customary closing conditions and regulatory approvals.
Leadership’s comments
“As organizations expand the definition of their workforce to meet growing business and talent demands, they need solutions that provide a holistic view of all worker types — including contingent workers — so they can better plan for and meet the great opportunity in front of them,” said Pete Schlampp, Workday’s chief strategy officer in a November 18, 2021 news release.
“VNDLY is at the forefront of the vendor management industry with an innovative and intuitive approach. The powerful combination of our technologies and talent will help customers better manage their evolving workforce dynamics, helping them keep pace with today’s changing world of work,” Schlampp added.
Shashank Saxena, co-founder and CEO of VNDLY, also commented on the news.
“We’ve seen the value of true cloud-based technologies in helping organizations adapt and evolve to a more complex workforce composition,” said Saxena. “By joining Workday, we’ll be able to expand the value we bring to customers, helping provide greater visibility, collaboration, and oversight to workforce needs and opportunities.”
Four strategic benefits
Even before the pandemic, our nation’s workforce needs have changed. The pandemic accelerated that process, creating greater demand for flexibility and work from home options. This acquisition will help Workforce and VNDLY better serve their customers. Specifically, the deal will improve the organizations’ ability to:
1. Build a holistic workforce strategy and a unified system to manage workforces of all types and hybrids, including more collaboration across HR, finance, procurement and functional divisions.
2. Provide a clear picture, including costs and metrics, of an organization’s entire workforce, including everything from full- and part-time employees to seasonal staff and independent contractors.
3. Support employers in better planning for and managing current and future labor needs.
4. Help companies control compliance and security risks specifically related to taxation, co-employment and regulatory rules that span the globe.
Third quarter fiscal year 2022 financials
Workday made the announcement the same day its third quarter fiscal year 2022 financials were released. The company had total revenue of $1.33 billion, a 20% increase year-over-year. Subscription revenue was $1.17 billion, a 21% increase year-over-year, representing 88% of total revenue. The company reported net income of $43.4 million, or $0.17 diluted earnings per share, compared to a loss of $(24.3) million, or $(0.10) diluted earnings per share, for the same period last year.
Insider Take
As our workforce evolves beyond the pandemic, employee – and employer – expectations are changing, and the power balance has shifted. By partnering with VNDLY, Workday can expand its client base and its subscription offerings to better serve clients who have a wide range of needs. Workday can leverage VNDLY’s network and expertise, while VNDLY brings true value to the table. And based on third quarter fiscal year 2022 results, this is an acquisition Workday can afford and that will bring immediately value to all parties.
