Subscription business drove gains
The transition to the cloud is delivering gains for Workday (WDAY), a provider of cloud-based human resource and financial management software. For its third quarter of fiscal 2019, which ended October 31, Workday reported revenue of $743.2 million, representing an increase of 33.8% YoY. Oracle’s (ORCL) revenue declined 0.6% YoY in the second quarter of fiscal 2019, which ended on November 30.
Workday’s top-line gain in the third quarter was supported by strength in the subscription business, where revenue rose 34.7% to $624.4 million.
Subscription revenue guidance raised
Workday expects to continue growing as more finance organizations move to the cloud. Given the positive trend it is witnessing in the adoption of its subscription services by finance organizations, Workday has raised its fiscal 2019 subscription revenue projection. The company now expects subscription revenue of as much as $2.38 billion. It previously forecast subscription revenue for 2019 at a peak of $2.35 billion. Workday’s subscription revenue was $1.8 billion in fiscal 2018.
Investing in long-term growth
Workday exited the third quarter with $1.6 billion in cash. The company has said that it will continue to prioritize investing in long-term growth initiatives. In the meantime, focus on growth has kept Workday in the red. The company’s net loss widened to $153.3 million in the third quarter from $85.5 million a year ago.