Workday's Q1: Loss not as bad as expected; Sales up 74 percent

In response to the better-than-expected results and strong outlook, Workday shares were up by as much as five percent in after-hours trading.

Albeit a slow week for tech earnings following the holiday weekend, Workday turned in its first quarter statement after the bell on Tuesday.

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The Software-as-a-Service provider reported a net loss of roughly $59.4 million, or 32 cents per share (statement).

On a non-GAAP basis, the loss rang up at 13 cents per share on a revenue of $159.7 million, up 74 percent annually.

Wall Street was expecting a loss of 15 cents per share on a revenue of $152.43 million.

In response to the better-than-expected results as well as a stronger outlook, Workday shares were up by as much as five percent in after-hours trading.

Subscription revenues totaled approximately $123.4 million, up 80 percent year-over-year. Total Q1 billings were $208 million.

While attributing those results to "several new large customers," Workday chief financial officer Mark Peek warned in the report that the HCM software maker expects "total billings for the second quarter to decrease sequentially."

Just a few weeks after taking over as sole CEO , Aneel Bhusri reflected on the quarter in prepared remarks:

Our fiscal year is off to a great start with strong customer demand for our newest application, Workday Recruiting, and double digit customer growth for Workday Financial Management. Our technology innovations, including our recent move to a single code line for development, enabled us to update all customers on Workday 22 in less than six hours – creating more value for our customers and setting new expectations for the industry.

For the current quarter, Wall Street expects Workday to suffer another loss at 14 cents per share on a revenue of $171.51 million.

Workday provided a revenue guidance range of $173 million to $178 million, translating to growth between 61 percent to 65 percent from the same quarter last year.

For fiscal 2015, Workday projected revenue will fall between $730 million to $750 million, an increase of 56 to 60 percent year-over-year.

On a conference call with analysts, Bhusri said:

  • Hewlett-Packard is Workday's largest customer with HCM deployed for 300,000 employees;
  • Philips has a deployment for more than 100,000 employees;
  • Workday Recruiting has 70 customers.

CFO Mark Peek said:

  • Workday added 60 new customers for 650 at the end of the quarter;
  • Bookings are concentrated in North America and HR for now, but "the attach rates of payroll, financials and now recruiting continue to be strong."