Workday Beats Estimates on Cloud-Computing Demand

Wednesday, 28 Nov 2012 05:18 PM

 

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Workday Inc., a maker of Web-based human-resources software, reported third-quarter revenue that beat analysts’ estimates as companies spent more on cloud-computing programs.

In its first quarterly report since becoming a publicly traded company, Workday had a loss excluding some items of 39 cents a share, the company said in a statement Wednesday. Analysts had predicted a loss of 49 cents, according to the average of estimates compiled by Bloomberg. Sales in the quarter ended Oct. 31 doubled to $72.6 million, compared with projections for $64 million.

Workday, founded in 2005 by co-Chief Executive Officers Dave Duffield and Aneel Bhusri, makes applications to help corporations manage human resources and financial records. The company is benefiting from the growing demand for cloud computing used by corporate customers. Large companies are switching to online tools from software installed on their own machines. Salesforce.com Inc. and ServiceNow Inc. also make Web- based software for businesses. In addition, the company competes with enterprise software companies Oracle Corp. and SAP AG.

“The vast majority of business software is 5 to 10 years old, and corporate customers are making the decision to upgrade,” Richard Davis, an analyst at Canaccord Genuity Inc., said in an interview. “Oracle and SAP are not going away. They’re just not going to have 100 percent market share between them.”

Shares of Pleasanton, California-based Workday were up 3.9 percent at $55.26 in after-hours trading, after gaining 2.6 percent during the regular trading day. Workday has climbed 90 percent since its initial public offering in October.

The software maker raised $637 million in its IPO. Workday sold 22.8 million shares for $28 each.

© Copyright 2014 Bloomberg News. All rights reserved.

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