Shares in Workday Inc. rose in late trading today after the enterprise resource planning software giant delivered earnings and revenue beats in its latest quarterly results.

For its second quarter that ended July 31, Workday reported adjusted earnings per share of $1.43, up from 83 cents per share a year prior, on revenue of $1.79 billion, up 16.3% year-over-year. Analysts had been expecting earnings per share of $1.26 on revenue of $1.77 billion.

Workday’s strong figures were driven by subscription revenue, which rose almost 19% year-over-year, to $1.62 billion, versus an expected $1.61 billion. The good news continues, with the company reporting operating income of $36.3 million or 2% of revenue, compared with an operating loss of $31.4 million in the same period last year.

Operating cash flows in the quarter were $425.3 million, up from $114.4 million in the same quarter of last year. Workday ended the quarter with a healthy $6.66 billion in cash, cash equivalents and marketable securities on hand.

Recent business highlights include Workday seeing continued momentum in its customer base, passing 65 million users and more than 5,000 core Workday Financial Management and Workday HCM customers. The company saw particular growth from the retail and hospitality sector, which surpassed $1 billion in annual recurring revenue for Workday for the first time, joining financial services.

Like many companies, Workday is also embracing artificial intelligence and machine learning, announcing its AI strategy in August. The strategy includes building capabilities that leverage generative AI for various language and image-related tasks, including natural language generation, document understanding and content search, summarization and augmentation.

“Workday delivered another strong quarter, driven by our ongoing focus on employees, customers and innovation – including our leadership in AI and ML,” Aneel Bhusri, co-founder and co-chief executive of Workday, said in the company’s earnings release. “We’re seeing continued momentum with more than 3,000 customers sharing their data with our ML models, more than 50 million ML inferences processed per day and multiple generative AI capabilities in development.”

For its outlook, Workday said it expects revenue of between $1.843 billion and $1.845 billion for its fiscal third quarter and revenue of between $7.2 billion to $7.24 billion for the full fiscal year. Investors liked the numbers, with Workday shares up over 3%.

Photo: Workday