Last night, Taleo announced a stellar quarter exceeding every financial analyst estimate I know of and raising future guidance. Yours truly was also mentioned on the call….but I digress. Looking at the stock right now, it is up over 17%, adding over $125 million overnight in market capitalization. A couple of highlights…
- Total revenues in the quarter of $33.7 million, a 36% year-over-year growth
- GAAP net income of $2.2 million (yes…that means they are profitable)
- 17 new enterprise customers in the quarter and solid growth in SMB
A couple of side observations. The recruitment market is highly penetrated and somewhat of a ”replacement” market. What Taleo’s financials would suggest is that they are beating the competition (namely Kenexa), winning replacements (think PeopleSoft and SAP), and beginning to lay their claim to market share leadership in recruitment.
This doesn’t mean other vendors aren’t having success. Vurv is also winning new business in the market as are a few others. And by no means are they running away with the market. Global vendors such as Stepstone, the leader in recruitment outside of North America, are beginning to expand their North American presence. I simply think, though, Taleo is in great position based on their financial health, broadening product suite, and leadership position in recruitment to become the dominate vendor in “recruitment-centric” talent management.
What does this mean for talent management buyers? With industry consolidation picking up again, Taleo buyers can feel relatively safe that the company is not going anywhere and in very good health. They are investing heavily in the existing products and with the new performance management product due to be GA (generally available) in January 2008, Taleo buyers will have a great option to leverage a more unified approach in the talent management strategy.