Moody’s rates Workday Baa2

Moody’s Investors Service said it gave Workday Inc. a Baa2 issuer rating.

In a press release, Moody's analyst Raj Joshi said, "Workday's unified data and security model and native cloud applications have significant technology advantages relative to legacy on-premise software applications. The company has rapidly grown to become the market share leader in the Human Capital Management (HCM) applications segment and its cloud Financial Management products are well-regarded in the industry." Workday benefits from the large opportunity to replace legacy, on-premise software products with its modern, cloud-based applications and increasing adoption of business applications to drive higher productivity in organizations.”

The agency said it forecasts Workday's subscription revenue growth of 20% or higher over the next two to three years and free cash flow to increase from $1.2 billion in fiscal year (FY) ending January 2023 to $1.8 billion in FY 2024.

The outlook is stable.

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