Workday Loss Widens On Costs, But Tops Estimates; Lifts FY Outlook

(RTTNews) - Business software solutions provider Workday Inc. (WDAY), Tuesday reported a wider loss for the second quarter, hurt by higher research and marketing expenses. Revenue for the quarter surged on demand for its enterprise cloud applications. Nevertheless, Workday's quarterly loss was lower than what Wall Street analysts expected, even as revenue topped expectations.

Workday also detailed a strong revenue outlook for the third quarter and lifted its guidance for 2014.

"Workday continues to be well positioned for strong growth as a leader in cloud applications for human capital management and financial management," said CEO Aneel Bhusr.

Workday, which went public last October, reported a second-quarter net loss of $36 million or $0.21 per share, compared with a loss of $27 million or $0.78 per share last year. Loss-per-share results for the recent quarter reflect a higher share count.

Excluding items, loss for the quarter was $22.6 million or $0.13 per share, compared with $24.6 million or $0.71 per share a year ago.

On average, 25 analysts polled by Thomson Reuters expected a loss of $0.18 per share for the quarter. Analysts' estimates typically exclude special items.

The Pleasanton, California-based company posted second-quarter revenue of $107.6 million, up 72 percent from $62.7 million a year ago. Analysts expected revenue of $100.50 million for the quarter.

Expenses climbed to $140 million from $89 million in the prior year, due mainly to research, sales and general overheads.

For the third quarter, Workday estimates revenue of $115 million to $118 million, while analysts expect $115.26 million.

For fiscal year 2014, Workday now expects revenue in the range of $436 million to $446 million, from its prior range of $425 million to $440 million. Analysts currently expect revenue of $439.44 million for the year.

The company's stock closed Tuesday at $76.20, up $0.19 or 0.25%, on a volume of over 1 million shares on the NYSE. In after hours, the stock dropped $0.31 or 0.41%.