Workday Results Top Estimates, Lifts Outlook; Stock Up

(RTTNews) - Cloud-based software vendor Workday Inc (WDAY), Tuesday reported a loss for the first quarter of 2015 that widened from a year ago, hurt by stock-based compensation expense and other costs. Meanwhile, revenue continued to surge as the company expanded its customer base that drove up subscriptions. Nevertheless, earnings for the quarter came in ahead of Wall Street estimates.

Moving ahead, Workday provided an impressive outlook for the second quarter and lifted expectations for 2015. Following the announcement, Workday shares gained more than 5 percent in after-hours trade on the New York Stock Exchange.

Pleasanton, California-based Workday operates as a cloud-based human resource and financial management software vendor. Founded in 2005 by PeopleSoft veterans Dave Duffield and Aneel Bhusri, Workday went public last October in an impressive initial public offering.

Workday has added new customers, hastened adoption of financial product and expanded presence in the education and government industries.

The company said billings in the first quarter were strong at about $208 million but sees some decline in billings on a sequential basis.

Workday posted a net loss of $59.4 million or $0.32 per share for the first quarter, compared with a loss of $33 million or $0.20 per share last year.

Results for the recent quarter included $28.9 million of stock-based compensation expense, among other items.

Excluding items, adjusted loss for the quarter was $0.13 per share, compared with $0.15 per share a year ago. On average, 27 analysts polled by Thomson Reuters expected a loss of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the first quarter surged 74 percent to $159.7 million from $91.7 million in the prior year. Twenty-five analysts had a consensus revenue estimate of $152.4 million for the quarter.

Results were offset by total expenses that escalated to $211.8 million from $124 million a year ago.

For the second quarter, Workday projects revenue in the range of $173 million to $178 million, while analysts currently estimate $171.5 million.

For fiscal 2015, the company now expects revenue of $730 million to $750 million, up from its prior guidance of $710 million to $740 million. Analysts currently expect revenue of $735.4 million for the year.

In February, Workday acquired Identified Inc., a San Francisco-based company, whose product development team is expected to enhance search capabilities and accelerate the delivery of predictive analytics and machine learning.

Workday stock closed Tuesday at $82.13, up $3.83 or 4.89%, on a volume of about 3 million shares. In after hours, the stock gained $4.25 or 5.17% at $86.38.