Workday's 1Q revenue rises 74 pct, stock surges

PLEASANTON, Calif. (AP) -- Workday Inc.'s fiscal first-quarter revenue surged 74 percent as more companies subscribed to its online software service for managing personnel departments.

The robust growth announced Tuesday topped analyst projections, making it easier for investors to tolerate Workday's widening losses during the three months ending in April. Management also predicted the company's revenue during the current quarter ending in July will come in above analyst forecasts.

Workday's stock gained $4.37, or 5.3 percent, to $86.50 in extended trading after the numbers came out. The shares still remain well below a peak of $116.47 that was reached in late February before Wall Street began dumping the stocks of technology companies in trendy areas such as cloud computing — a term that refers to software services that are used on Internet-connected devices.

Workday has emerged as darling of the cloud computing movement, partly because of its pedigree. The Pleasanton, California, company was started by two executives, Aneel Bhusri and David Duffield, who built PeopleSoft Inc. into one of the world's biggest software makers before that company was sold to rival Oracle Corp. for $11.1 billion nine years ago.

That previous success helped Workday quickly win over corporate customers with its online service and raise more than $600 million in a 2012 initial public offering of stock priced at $28 per share.

The company is still struggling to make money.

Workday's latest quarterly loss came in at $59.4 million, or 32 cents per share. That compared to a loss of $33 million, or 20 cents per share, at the same time last year.

If not for certain accounting items, Workday said it would have lost 13 cents per share. That figure was slightly better than a loss of 15 cents per share envisioned by analysts surveyed by FactSet.

Revenue totaled $159.7 million, up from $91.6 million at the same time last year. Analysts had expected $152.2 million.

The company expects revenue in its current quarter to range from $173 million to $178 million. Analysts had projected revenue of $171.3 million.