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In a note to clients Friday, Jefferies analysts told investors that the firm’s survey of 50 finance executives indicates spending holding steady despite the tougher macroeconomic environment.
The analysts wrote that budgets for back-office apps are expected to grow 9% in 2023 compared to 9.5% in 2022, while the firm’s channel checks “indicate a positive but moderating” demand environment.
They pointed to Workday (NASDAQ:WDAY) as facing “tough comps across the board,” but they stated that estimates “look reasonable for current subs. backlog growth of 19%.”
They added that Workday’s new co-CEO Carl Eschenbach should drive quicker execution, and despite a slight moderation, Jefferies’ checks “indicate demand has mostly held up.”
Furthermore, the analysts said Zuora, Inc. (NYSE:ZUO) “faces relatively easy comps in F4Q, but comps get tough for F1H24.”
“Mgmt. acknowledged the tightening macro last Q and lowered expectations, citing elongated sale cycles and lower volume commitments from existing customers. ZUO faces the easiest billings comps in F4Q, but ARR faces the toughest comp of the yr. Comps will be tough in F1H24 as well,” they wrote.
