Credit: Image source: Workday.Enterprise cloud applications company Workday (NASDAQ: WDAY) impressed investors this week with accelerating revenue growth and a better-than-expected adjusted profit per share. In addition, management was optimistic about the rest of the year, raising its full-year fiscal 2019 outlook for subscription revenue. Shares surged about 13% on Friday as investors digested the news.
While the company's quarterly earnings release provides some useful information, investors will have to turn to Workday's third-quarter earnings call to get more detailed insight into how the company's specific product categories are performing.
Image source: Workday.
Below are three key quotes from the call, including a look at the company's strong performance in financial management products, Prism Analytics, and more.
Accelerating growth in financial management products
In Workday's third-quarter earnings release, management said its financial management suite of applications continues to perform very well, seeing "accelerated adoption" by Workday customers. In theearnings call management went into further detail. "Subscription revenue once again grew over 50% with net new [annualized customer value] for core financials growing over 60%," said Workday CEO Aneel Bhusri.
This is a significant catalyst for Workday, considering the company's consolidated subscription revenue is growing at a much slower rate of 35% year over year.
Prism Analytics is growing by triple digits
Workday's business intelligence offering, Prism Analytics, is seeing rapid growth in customer adoption. Indeed, the growth is so fast that management has decided to moderate its efforts to sell the product.
Bhusri explained:
Management breaks down its growth drivers
Since management doesn't break out its revenue by product type in its quarterly financial updates, some investors may wonder how the company thinks about its growth drivers. Fortunately, Bhusri provided some context during the call on how the company ranks its products as contributors to its growth:
Later during the call, Workday co-president Chano Fernandez provided even more context, noting that the company's financial management applications suite is growing as a percentage of its product mix, but at a slow rate because of "the sustained solid growth in [human capital management]..."
It was clear from Workday's earnings release that the company is benefiting from strong momentum, and management commentary from the conference call reinforced this narrative.
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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Workday. The Motley Fool has a disclosure policy .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
