Shares in financial management and human capital management software firm Workday Inc. surged to a record high in after-hours trading today after the company reported better-than-expected numbers in its quarterly earnings report.

For the quarter ended July 31, Workday reported revenue of $1.06 billion, up 19.6% from the same quarter of 2019. Analysts had been predicting $1.04 billion in revenue. Subscription revenue came in at $931.7 million the quarter, up 23% year-over-year.

The operating loss for the company was $16.8 million, down from a loss of $122.5 million a year ago, while operating income before items such as stock compensation was $257.7 million, up from $117.5 million a year ago. Adjusted profit per diluted share came in at 84 cents, up from 44 cents in the second quarter of 2019. Analysts had been predicting a 66-cent adjusted profit.

“It was a strong quarter despite the environment, with continued demand for our products as more organizations realize how mission critical cloud-based systems are in supporting their people and businesses through continuous change,” Aneel Bhusri, co-founder and co-chief executive officer of Workday, said in a statement. “As we navigate this unique time, we will continue to deliver new solutions that extend the power of Workday to help customers make more informed people and finance decisions, including how to safely return to work.

The push to get people safely back to work refers in part to an initiative between Workday and International Business Machines Corp. announced Aug. 12. It’s aimed at helping companies plan and monitor their workplaces as they reopen their physical premises for business. The approach combines Workday’s planning capabilities with IBM’s tools for analyzing employee, health and workplace data.

Off the back of its higher-than-expected earnings, Workday revised its fiscal 2021 subscription revenue guidance to a range of $3.73 billion to $3.74 billion. The company said it expects third-quarter subscription revenue of $948 million to $950 million.

Along with its earnings report, Workday also announced that it’s promoting Chano Fernandez to co-CEO. Under the model, Bhusri will oversee product and technologies as well as corporate functions, including the offices for HR, finance and operations. Chano will cover customer relationships, from acquisitions to customer services, support and success.

Chano joined Workday in 2014 and had previously held the position of co-president. Chano will be stepping down from that role and existing co-President Robynee Sisco is now becoming president and chief financial officer.

Holger Mueller, principal analyst and vice president of Constellation Research Inc., congratulated Workday on a very good quarter under challenging conditions. “It’s the first time the vendor has broken $1 billion in revenues and it’s the lowest net loss the vendor has seen since being public – so it looks like the long quest for profit may come to an end soon for Workday,” he said.

Mueller also praised the co-CEO model, noting one will be in North America and the other in Europe, allowing for more CEO coverage than the single model.

“On the go to market expansion, it is good to see Workday getting serious in Mexico, finally supporting its North American customers on the whole continent and increasing its attraction to manufacturing customers,” he added.

Investors liked what they saw. Shares rose almost 12% in after-hours trading. The figure is a record high share price for the company, eclipsing its previous high of $222.17 on July 12, 2019.

Image: Workday