Workday Posts Loss Despite Subscription Growth

(RTTNews) - Cloud-based human resource software maker Workday Inc (WDAY), on Wednesday said its third-quarter loss widened from a year ago, despite a better-than-expected jump in revenues, hurt mainly by stock-based compensation expense and other costs.

Workday shares slipped over 7 percent in after-hours trade on the New York Stock Exchange.

Workday, based in Pleasanton, California, reported a quarterly net loss of $69.4 million or $0.37 per share, compared to a loss of $69.2 million or $0.38 per share last year.

Excluding items, adjusted earnings were $3.8 million, compared to a loss of $20.6 million in the prior year.

On average, 34 analysts polled by Thomson Reuters expected a loss of $0.06 per share for the second quarter. Analysts' estimates typically exclude special items.

Revenues for the third quarter surged 51 percent to $282.7 million from $186.8 million a year ago, driven by a surge in subscriptions. Analysts expected revenues of $274.07 million for the quarter.

Operating expenses increased to $350.3 million from $248.5 million last year.

For the third quarter, the company expects revenues of $300 million to $303 million, while analysts expect $302.1 million.

Workday has been ramping up its subscriber base. The company, which provides enterprise cloud applications for finance and human resources, said that a wide range of businesses have Workday Recruiting. Its customers include Bank of America, BlackBerry Limited and Cornell University.

WDAY closed Wednesday at $72.40, up $2.38 or 3.40%. In after hours, the stock dropped $5.38 or 7.43% at $67.02 Down.