Workday beats revenue and profit estimates on higher subscription revenue

(Reuters) - Workday Inc topped Wall Street estimates for quarterly profit and revenue on Thursday, as more companies signed up for the financial and human resources software maker’s cloud-based software, sending its shares up 2 percent.

Subscription services revenue, which accounts for more than 80 percent of the company’s total revenue, rose 37.5 percent to $673.5 million, beating estimates of $633 million, according to IBES data from Refinitiv.

Professional revenue grew about 24 percent to $115.1 million, above the average estimate of $111.9 million.

Workday has been benefiting as enterprises increasingly shift to cloud-based applications to manage their payroll and human resources.

The company also raised its fiscal 2020 subscription revenue outlook and now expects revenue between $3.03 billion and $3.045 billion. Analysts were expecting $3.02 billion.

In the reported quarter, however, total costs and expenses rose 37 percent to $908.9 million.

Net loss widened to $104.4 million, or 47 cents per share, in the fourth-quarter ended Jan. 31, from $89.1 million, or 42 cents per share, a year earlier.

Excluding items, Workday earned 41 cents per share, beating estimates of 32 cents per share.

Total revenue jumped 35.4 percent to $788.6 million, while analysts were expecting $777.4 million.

Reporting by Akanksha Rana in Bengaluru; Editing by Shinjini Ganguli