Workday shares rose 9% after hours, following a 1.3% decline in the regular session to close at $143.30.
The Pleasanton, Calif.-based company reported a third-quarter loss of $74.7 million, or 29 cents a share, versus net income of $43.4 million, or 17 cents a share, in the year-ago period.
Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.15 a share, compared with $1.10 a share in the year-ago period.
Revenue rose to $1.6 billion from $1.33 billion in the year-ago quarter, while subscription revenue rose 22% to $1.43 billion from a year ago.
Analysts had forecast 84 cents a share on revenue of $1.59 billion and subscription revenue of $1.42 billion.
“There is no question that the current macro environment presents increased uncertainty, but, due to the great work of our employees and our continued innovation, we are confident in the long-term opportunity and our ability to navigate the road ahead,” said Aneel Bhusri, Workday’s co-founder and co-CEO, in a statement.
Workday makes applications that help companies automate human-resources and business tasks like payroll and expenses, while tracking employee data.
“We delivered solid third-quarter results, a testament to strong execution across the company as well as the strategic and mission-critical nature of our solutions,” said Barbara Larson, Workday’s chief financial officer, in a statement.
“Our updated outlook reflects the ongoing momentum in our business and the power of our business model, while continuing to balance the current environment,” Larson said. “We are raising the low end of our fiscal 2023 subscription revenue guidance to a range of $5.555 billion to $5.557 billion, or 22% growth. We are also raising our fiscal 2023 non-GAAP operating margin guidance to 19.2%, reflecting our commitment to delivering healthy growth and profitability.”
Analysts surveyed by FactSet have already been forecasting subscription revenue of $5.55 billion for the year.
The company also announced its board authorized a $500 million share buyback program over the next 18 months.
So far, in November, cloud software stocks have been getting trashed. While the S&P 500 has gained 2%, and the tech-heavy Nasdaq Composite is flat, the iShares Expanded Tech-Software Sector ETF has fallen more than 2%, the Global X Cloud Computing ETF has declined more than 4%, the First Trust Cloud Computing ETF has fallen more than 6%, and the WisdomTree Cloud Computing Fund has dropped more than 11%.
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