Earnings

Workday beat Wall Street estimates for third-quarter profit and revenue on Tuesday, and raised its full-year forecast for sales in its biggest business, as more companies signed up for its cloud-based financial and human resources management software.

Shares of the company rose over 3% to $180 in trading after the bell.

While players like Amazon.com’s Amazon Web Services and Microsoft’s Azure still dominate the broader cloud market, Workday’s core Human Capital Management Software (HCM) benefited from enterprises transitioning to the cloud for managing their payroll and human resources.

Subscription services revenue, which accounts for over 85% of Workday’s total revenue, jumped nearly 28% to $798.5 million, beating analysts’ average estimates of $785.01 million, according to IBES data from Refinitiv.

The company raised its full-year forecast for subscription revenue to between $3.085 billion and $3.087 billion from a range of $3.06 billion to $3.07 billion, above analysts’ estimates of $3.07 billion.

It expects current-quarter subscription revenue between $828 million and $830 million. Analysts on average were expecting $826.14 million.

“As of the end of the third quarter, we have more than 3,000 customers and 42 million users,” said Chief Executive Officer Aneel Bhusri.

The company’s net loss narrowed to $115.7 million, or 51 cents per share, in the third quarter ended Oct. 31, from $153.3 million, or 70 cents per share, a year earlier.

Excluding items, Workday earned 53 cents per share, beating analysts’ average estimate of 37 cents per share.

The Pleasanton, California-based company’s total revenue rose 26.2% to $938.1 million, above analysts’ estimate of $920.8 million.

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