What happened

Shares of Workday, Inc. (NASDAQ:WDAY) gained 14.4% last month, according to data provided by S&P Global Intelligence.

So what

Workday stock climbed during the month in anticipation of the company's fiscal first-quarter 2018 earnings, which were released on June 1. The purveyor of cloud-based finance and human capital management software reported crisp performance, with overall revenue rising 38% over the comparable prior-year period.

The quarter was also characterized by a lower loss than the first quarter of fiscal 2017. Workday's operating loss of $60.2 million was 12.5% of total revenue of $479.9 million, a considerable improvement over the loss of $70.1 million in the first quarter of 2017, which equaled 20.6% of total revenue of $347.7 million.

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Workday managed the operational improvement by holding product-development costs and general and administrative costs roughly even with the previous quarter. But the company benefited most from rapid growth in its subscription services, which expanded at a rate of nearly 43%. A decrease of 1.5 percentage points in the costs associated with subscription services provided much-needed operational leverage. Finally, a decline of four percentage points in sales and marketing expenses relative to revenue also contributed to the lower overall loss.

Investors should take note of one cautionary metric which may merit attention in future quarters. While total unearned revenue grew 31% year over year, the noncurrent portion decreased 6%. Management attributed this drop to fewer customers renewing subscriptions which last more than one year.

Now what

Vector image of wheels with cogs in the shape of business people on blue background

Image source: Getty Images.

On Workday's earnings conference call on June 1, management expressed confidence in customer-acquisition trends in both the organization's Workday HCM (Human Capital Management) product and its Financial Management application suite. Investors have echoed this confidence: So far, shares have given up only a bit of May's gain, declining roughly 3% in the first eight trading days of June.

Looking ahead, the company has raised the upper end of its guidance range for full-year fiscal 2018 revenue growth by one percentage point, to 30%, implying best-case revenue of $2.5 billion. Workday is also projecting top-line growth of 35% to 36% in the second quarter. So if you're already looking ahead to Q2 2017, you can pencil in a revenue range of $505 million to $508 million in the Workday expectations ledger.

Asit Sharma has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Workday. The Motley Fool has a disclosure policy.