Workday
stock is up sharply in late trading Thursday, after the provider of enterprise HR and financial software posted better than-expected results for the fiscal first quarter ended April 30.
For the quarter, Workday (ticker: WDAY) reported revenue of $1.68 billion, up 17% from a year ago, with subscription revenue of $1.53 billion, which rose 20%. That beat the company’s forecast for revenue up 16%, and subscription revenue up 19%.
On an adjusted basis, Workday earned $1.31 a share, well ahead of the Street consensus estimate for $1.12. Under generally accepted accounting principles the company broke even in the quarter, compared with a loss of 41 cents a year ago.
For Workday, one closely watched metric is the 24-month subscription revenue backlog, which hit $9.79 billion, up 23%, nicely ahead of guidance for a 20% gain. Non-GAAP operating margin was 23.5%, two percentage points better than the company’s forecast for 21.5%.
Not too surprisingly given the current climate, Workday also called out its work to add machine-learning and artificial-intelligence features to the company’s software offerings.
“Workday had a strong first quarter, underscoring the value proposition of the full Workday platform combined with our unique approach to artificial intelligence and machine learning,” co-CEO Aneel Bhusri said in a statement.
“We’ve been delivering AI and ML capabilities for nearly a decade and approach its application with a heavy emphasis on being human-centric, using these capabilities to augment people and organizations to make them more productive, better informed, and to help them reduce business risk,” Bhusri said. He added that Workday is committed to “infusing AI and ML across our entire product portfolio.”
For the July quarter, the company projects subscription revenue growth of $1.611 billion to $1.613 billion, up 18% from a year ago. For the full-year ending in January 2024, Workday now sees subscription revenue of $6.55 billion to $6.575 billion, lifting the bottom end of the forecast range slightly from the previous quarter, again growing 18%.
Workday also announced that it has named Zane Rowe as the company’s new chief financial officer, effective June 12. The company said current CFO Barbara Larson is “stepping back to spend more time with her family.” A familiar face to tech investors, Rowe had earlier served as CFO of
VMware
(VMW), EMC, and
United Airlines Holdings
(UAL), and before that led North American sales for
Apple
(AAPL).
Workday in late trading is 8% higher at $212.38.
Write to Eric J. Savitz at eric.savitz@barrons.com
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