Workday Q3 results beat expectations, raises year outlook for the second time in a row

The cloud software maker said it has now reached 1,000 customers for its financials application.

Shares of cloud computing application vendor Workday are sharply higher in late trading after the company this afternoon reported fiscal Q3 revenue that topped Wall Street's expectations, and profit per share that beat by a wide margin, and raised its revenue outlook for the second quarter in a row.

Workday's co-CEO, Aneel Bhusri, said the quarter had been "another strong quarter across our product portfolio with continued momentum in financial management" applications. He noted the company has now signed 1,000 customers for its financials application, a new product offering on top of the company's traditional focus on human capital management applications.

The company's other co-CEO, Chano Fernandez, said that in addition to "strategic wins in HR and finance" during the quarter, "we also saw continued momentum selling into our existing customer base." 

Revenue in the three months ended in October rose to 18%, year over year, to $1.11 billion, yielding EPS of 86 cents, excluding some costs. 

Subscription revenue of $968.5 million was up 21.3%, year over year, after rising 23.1% in the prior quarter.

Analysts had been modeling $1.09 billion in revenue and 67 cents per share in earnings. 

For the full year, the company raised its forecast for the subscription portion of its revenue, to a range of $3.773 billion to $3.775 billion from a prior forecast offered August 27th for $3.73 billion to $3.74 billion. \

That is higher than the current forecast on Wall Street for $3.74 billion.

It was the second quarter in a row the company raised its outlook after having cut the forecast in the first fiscal quarter to adjust for the uncertainty of the COVID-19 pandemic.

Workday management will host a conference call with analysts at 4:30 pm, Eastern time, and you can catch it on the company's investor relations Web site.

Shares of Workday are up almost 5% in late trading at $241.22.