Cloud operator Workday (NYSE:WDAY) has had a doozy of a run since its mid-October IPO; since going public, WDAY shares have clocked a sizzling 90% return.
So even after the company reported an impressive third quarter Wednesday night, it wasn’t too surprising to see the stock cool a little Thursday.
In its most recent quarter, WorkDay it snagged up new customers like DuPont (NYSE:DD), Johnson Controls (NYSE:JCI) and Yale University. The end result? A near-doubling of revenues to $72.6 million! The company also posted a 39-cent loss — better than an expected 49-cent loss.
Better yet, going forward, Workday is projecting revenues of $75 million to $79 million, easily beating a consensus estimate for $70.5 million.
Workday develops enterprise resource planning software, which helps companies manage core functions like HR and financials. Workday’s cloud platform has been making inroads against rivals like Oracle (NASDAQ:ORCL) and SAP (NYSE:SAP), which have been slow to make changes to their own product line. In fact, the company is benefiting from an upgrade cycle and customers now realize that cloud-based software is viable option.
To keep up the momentum, Workday has continued to push on innovation. The company plans to launch a new recruiting system and even a Big Data analytics platform. During the quarter, R&D expenses increased by 71% to $28.1 million.
Still, with nearly $800 million in the bank as of the end of October, Workday certainly has the resources to aggressively invest in its growth ramp.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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