What happened

Shares of Workday (WDAY 1.02%) were rising today after the software-as-a-service company posted better-than-expected results on the bottom line in its third-quarter earnings report. To top it off, it also raised its guidance for the year.

In a challenging environment for tech stocks, that was enough to give the shares a boost, and the stock was up 10.8% as of 10:20 a.m. ET.

So what

Revenue at Workday, which provides a comprehensive software suite for businesses to manage finance and HR needs, rose 20.5% to $1.6 billion -- essentially even with analysts' estimate of $1.59 billion.

Subscription revenue increased 22.3% to $1.43 billion, and total subscription backlog climbed 28.5% to $14.1 billion, giving investors confidence in the company's long-term growth.

On the bottom line, adjusted earnings per share fell from $1.10 to $0.99 as the company stepped up spending on product development and marketing, but that still beat estimates for $0.84 in earnings per share.

Co-CEO Aneel Bhusri noted an uncertain macroeconomic environment, but also said, "We delivered another solid quarter, demonstrating how our cloud finance and HR solutions are vital for global organizations navigating today's changing world."

Workday also announced a share repurchase plan of up to $500 million, though the company is still losing money on a GAAP basis as it spends more than $1 billion a year on share-based compensation.

Now what

Workday raised its guidance slightly for the full year, calling for subscription revenue of $5.555 billion-$5.557 billion, or 22% growth from a year ago, up from a previous range of $5.537 billion-$5.557 billion. It also sees an adjusted operating margin of 19.2%, which compares to previous guidance of 19%, but 22.4% adjusted operating margin in 2021.

Investors seemed encouraged by its fiscal 2024 guidance, which calls for subscription revenue growth of 17%-19% and an operating margin expansion of 150-200 basis points.

Considering the broader headwinds in the SaaS sector and the stock's sell-off this year, Workday seemed to have a low bar to overcome in its quarterly report, and it did just that.