Executive Summary

Workday (WDAY) is the system of record for Human Resources and Finance. Once a large enterprise (Target, Walmart, Netflix) puts its employee data in Workday, they never leave. The thesis is "Financial Management." Workday is successfully cross-selling its "FINS" (Financial) product to its HR customers, displacing legacy Oracle and SAP systems.

1. The Power of "Core"

Workday holds the most sensitive data in the company: Payroll and Headcount.

• Stickiness: Startups rip out software every year. Fortune 500s rip out ERPs every 15 years. Workday is a "Stay Rich" stock, not a "Get Rich Quick" stock.

2. AI in HR

• Skill Graph: Workday is using AI to map employee skills. Instead of hiring new people, companies use Workday to find internal candidates who already have the skills they need.

Risks to the Thesis

1. Salesforce/Slack: Salesforce could encroach on the "Employee Experience" layer.
2. Seat Pricing: In an AI world where companies hire fewer people (but pay them more), a "Per Seat" pricing model is deflationary. Workday must pivot to value-based pricing.

Conclusion

Workday is the "Blue Chip" of SaaS. Consistent 17-20% growth and massive cash flow.