Earnings Roundup: Workday Slips; Zuora, VMware, Yext Rise

In last evening's earnings results, things were generally pretty upbeat.

Shares of virtualization pioneers VMware (VMW) are rising, recently public enterprise resource planning (ERP) software maker Zuora (ZUO) is jumping, and Yext (YEXT), a maker of services for things such as voice-powered search, is also up, in after-hours trading, after all three beat quarterly expectations.

Workday (WDAY), the cloud- software darling, however, is down slightly on its report.

VMware reportedfiscal Q1 revenue of $2.01 billion and earnings per share of $1.26 for the three months ended in April, topping the average estimates for revenue of $1.96 billion and EPS of $1.15.

Chief Executive Pat Gelsinger called it a "strong start" to the year, with demand for the product in all three of the geographies it classifies for its sales. The company's "license" revenue rose by 21% to $774 million, year-over-year.

VMware is expected to offer its forecast on a conference call starting at 5 pm. You can listen in to that webcast on the company's investor relations home page.

VMware stock is up $3.47, or 2.5%, to $140.95, in late trading.

Zuora, in its first quarter since going public in mid-April, reported its April-ended fiscal Q1, turning in $48.97 million in revenue and a net loss of 32 cents per share, versus consensus estimates for revenue of $36.1 million and a 40-cents loss per share.

For the current quarter, the forecast is also better, with revenue projected in a range from $53.5 million to $54.5 million, and the net loss projected at 15 cents to 16 cents per share, compared with the consensus estimates for revenue of $51 million and a loss of 17 cents per share.

For the full year, Zuora projects revenue of $220 million to $223 million, and a per-share loss of 59 cents to 62 cents. That's better than the average estimates for revenue of $213.5 million and a loss of 65 cents per share.

Zuora's CEO, Tien Tzuo, called the results "strong," and said they "reflect the continuing adoption of the subscription business model by companies across all industries, around the world." Zuora markets its ERP software as being especially well designed to handle the growing number of businesses that provide goods and services as a subscription, instead of an outright sale.

Zuora shares are up $1.80, or 8%, at $23.98.

Yext reported its April-ended Q1 revenue rose 38% year-over-year to $51.1 million, yielding a net loss of 11 cents, beating the average estimates for revenue of $49.4 million and a loss of 12 cents per share.

The forecast for this quarter is just a little light on revenue, projected at $53 million to $54 million, against consensus for $53.8 million. The net loss estimate for 11 cents to 13 cents per share is in line with the average estimate for a per-share loss of 12 cents.

Yext's CEO, Howard Lerman, trumpeted the revenue growth, saying the company was "pleased" with the results, and pointing to the firm adding "60 new enterprise logos" during the quarter.

Yext shares are up 11 cents, or 0.7%, to $15.50.

Workday's stock is down $3.93, or 3%, to $127.03, despite the company reporting Q1 revenue for the period ended in April of $619 million, and EPS of 33 cents, topping consensus estimates for revenue of $610 million and EPS of 26 cents.

The issue may be the outlook: The company is projecting subscription revenue this quarter of $557 million to $559 million, above consensus for $553 million, after delivering $522 million last quarter, which also beat the average estimate of $516 million.

The forecast for the full year's subscription revenue, $2.275 billion to $2.29 billion--although increased from a prior forecast of $2.265 billion to $2.28 billion--is not much higher than the consensus estimate for $2.28 billion for the year.

In any event, Workday's co-founder and CEO Aneel Bhusri called it a "great first quarter," citing "notable deployments" of the company's product for financials, which is newer than its traditional HR apps. That was deployed "across customer sizes, geographies, and industries," he noted.

Added Bhusri, "As we look toward the rest of FY19 and beyond, we expect continued momentum for our growing suite of products, as we stay relentlessly focused on innovation, customer satisfaction, and our commitment to culture as we further our position as a great place to work globally."

Sign up to Review & Preview, a new daily email from Barron's. Every evening we'll review the news that moved markets during the day and look ahead to what it means for your portfolio in the morning.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.