SAN FRANCISCO -- Workday forecast better-than-anticipated quarterly revenue growth as the provider of Internet-based corporate software accelerates the growth of its widening client portfolio, helping drive a gain of 4 percent in its shares.
Pleasanton-based Workday, which sells human resources and financial tools to help manage companies, doubled fiscal third-quarter revenue and is predicting sales growth of 74 percent to 83 percent in the current three months, to between $75 million and $79 million. That exceeded Wall Street's average prediction for $70.7 million.
The fast-growing company vies with larger rivals Salesforce and Oracle (ORCL) in the rapidly expanding field of cloud software but has yet to turn a profit. It debuted in October in the biggest technology listing since Facebook went public in May. Its shares have almost doubled since it debuted at $28.
The company, headed by ex-PeopleSoft executives David Duffield and Aneel Bhusri, remains among the most richly valued of cloud computing plays on Wall Street, favored by analysts for its growth potential and flexible software.
Last quarter, it added DuPont and Johnson Controls to its growing stable of major corporate clients, the company said in its results filing.
Revenue leapt to $72.6 million in the fiscal third quarter. For the current three months, Workday is forecasting revenue growth of 74 to 83 percent.
The company posted a net loss of $41.3 million or 67 cents a share, more than double the $19.7 million or 66 cents of a year earlier, before the issuance of IPO stock. Stripping out certain one-time items, its non-GAAP loss came to 39 cents a share, smaller than the loss of 59 cents expected on average by analysts, according to Thomson Reuters I/B/E/S.
Cloud computing technology, which lets customers access data from remote servers, is thought to be faster and cheaper than traditional in-house infrastructure. Internet-based software is deemed easier to update, maintain and customize.
Workday and peers like Cornerstone OnDemand are thus grabbing market share from larger tech players like Oracle, SAP and IBM as these larger companies digest recent acquisitions in the human resources software sector.
Workday's stock was up 4 percent at $55.20 in after hours trade, from a close of $53.19 on the New York Stock Exchange.