What is driving Workday Inc (NASDAQ: WDAY) stock

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Workday Inc (NASDAQ: WDAY) stock rose over 5.7% in the pre-market session of May 28th, 2020 (Source: Google finance) after the company posted decent results for the first quarter of FY 21. WDAY in the first quarter of FY 21 has reported the adjusted earnings per share of 44 cents, while reported the adjusted revenue growth of 23.4 percent to $1.02 billion in the first quarter of FY 21, beating the analysts’ estimates for revenue of $994 million.

Workday has lost $158 million in the fourth quarter, compared to a loss of $116 million, in the year-ago quarter. The company has generated operating cash flows of $263.7 million compared to $209.2 million in the prior year. Cash, cash equivalents, and marketable securities were $2.60 billion at the end of April, 2020. As part of its long-term capital structure strategy, Workday has announced the closing of a $750 million term loan and a $750 million revolving credit facility. Meanwhile, during the quarter, the company had appointed Michael C. Bush, CEO of Great Place to Work Institute, to its board of directors.

The company has posted the Operating loss of $144.5 million, or negative 14.2% of revenues, compared to an operating loss of $123.4 million, or negative 15.0% of revenues, in the same period last year. The company has delivered the Non-GAAP operating income for the first quarter of $130.5 million, or 12.8% of revenues, compared to a non-GAAP operating income of $107.7 million, or 13.1% of revenues, in the same period last year.

Workday expects subscription revenue for the fiscal year to be in the range of $3.67 billion to $3.69 billion, down from as much as $3.77 billion. In the second quarter, subscription revenue is expected to be about $915 million. The company has raised the fiscal 2021 non-GAAP operating margin guidance to be 16%.

Meanwhile, the company has announced two partnerships few days back. One, has been signed with Microsoft Corp., that will run Workday’s Adaptive Planning on the Azure cloud. Microsoft’s finance team will start using the product for its internal needs and both companies intends to collaborate on integrating their software products for mutual customers. The second partnership has been signed with Salesforce.com Inc., with an aim to help organizations safely return to their offices in the wake of the Covid-19 pandemic.

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