Workday Rises on Demand for Business Cloud-Based Softwareby
Company's quarterly sales top estimates amid customer gains
Report follows Salesforce forecast that topped estimates
Workday Inc. rose the most in more than three years after reporting revenue that topped analysts’ estimates, reassuring investors that demand for cloud-based software is growing despite concerns about the economy.
The company, which provides financial and human-resources software, late Monday said fourth-quarter sales rose 43 percent to $323.4 million. That topped estimates of $319.7 million, according to data compiled by Bloomberg. Workday also reported a narrower adjusted loss than was expected.
Chief Executive Officer Aneel Bhusri is benefiting from a growing customer list that shows businesses are moving more of their software to the cloud, holding off pressure from rivals and a global economy that’s struggling to gain momentum. The report comes less than a week after Salesforce.com Inc., which also delivers services via the Internet, issued a forecast that easily topped analysts’ estimates.
“Quietly and with little fanfare, we believe both the stock and the business
could be marking a turning point,” analysts at JPMorgan Chase & Co. said in a note. They upgraded the stock to overweight from neutral.
Shares of the stock rose 19 percent to $71.74 at the close Tuesday in New York, the biggest single-day jump since October 2012. With the increase, the stock still has declined 10 percent this year.
During the quarter, the company added 45 customers to its financial services product, bringing the total to more than 200.