What happened
Shares of Workday (WDAY -1.19%) were moving higher today after the cloud software company posted better-than-expected results in its first-quarter earnings report.
As a result, the stock was up 11.1% as of 12:10 p.m. ET.
So what
Workday, which specializes in software for human resources management, said that revenue in the quarter rose 17.4% to $1.68 billion, edging out estimates at $1.67 billion.
Subscription revenue was up 20.1% to $1.53 billion, and total subscription revenue backlog rose 31.6% to $16.65 billion, a sign of increasing customer demand.
On a generally accepted accounting principles (GAAP) basis, the quarter was still unprofitable, but its loss narrowed from $72.8 million to $19.8 million. On a non-GAAP basis, which adjusts for share-based compensation and one-time factors, operating income jumped from $288.6 million to $395.9 million, making up 23.5% of revenue.
Adjusted earnings per share rose from $0.83 to $1.31, which beat expectations at $1.12.
Co-CEO Aneel Bhusri said, "Workday had a strong first quarter, underscoring the value proposition of the full Workday platform combined with our unique approach to artificial intelligence and machine learning," adding that the company has been delivering AI and machine-learning capabilities for nearly a decade.
Now what
Workday also raised its guidance in response to the strong fourth quarter. It now sees subscription revenue in the range of $6.55 billion-$6.75 billion, representing 18% growth, and it continues to expect a non-GAAP operating margin of 23%.
Analysts broadly cheered the results, which come at a time when much of the cloud sector is struggling. The company's focus on core business functions like HR and finance seems to give it a cushion against the broader slowdown in tech spending.
