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On Wednesday, enterprise cloud-based company Workday (NYSE:WDAY) reported its first public earnings report (you can read the call transcript here). The company's third quarter showed strong revenue growth and gave investors a peak beyond the IPO to see where the company is headed in the future. I highlighted Workday's recent IPO and encouraged investors to "Buy Into This IPO For The Long-Term Growth." Hopefully, today's earnings report highlighted that growth.

Revenue increased 99% to hit $72.6 million in the third quarter. Subscription revenue came in at $51.6 million, an increase of 116%. The company reported a non-GAAP net loss of $23.9 million, representing earnings per share of -$0.39.

Chairman and co-founder Aneel Bhusri had this to say about the company's first public quarter:

Workday had a strong third quarter, and we continue to make great strides as we build for the long term. Our pace of innovation, high levels of customer satisfaction, and employee-centric culture are key contributors to our growth. With these differentiators, we see more companies choosing Workday to bring HR, finance, and analytics to the cloud.

Here is a look at how total revenue has increased over the last two years:

QuarterSubscription RevenueProfessional RevenueTotal Revenue
Q1 2012$16.1 million$8.6 million$24.7 million
Q2 2012$19.7 million$10.5 million$30.5 million
Q3 2012$23.9 million$12.6 million$36.5 million
Q4 2012$29.0 million$14.1 million$43.2 million
Q1 2013$36.9 million$19.9 million$56.8 million
Q2 2013$42.2 million$20.5 million$62.7 million
Q3 2013$51.6 million$21.0 million$72.6 million

Cash and cash equivalents rose during the quarter, due to the recent IPO. Workday had $797.4 million as of Oct. 31, after receiving proceeds of $684.6 million from the IPO. Unearned revenue increased 64% to $252.2 million.

New customers continue to increase for Workday. Around the time of Workday's IPO, the company had 340 customers. In the third quarter, the company added key customers including DuPont, Johnson Controls, Yale University, J.B. Hunt, and Hewlett-Packard. In total, the company added 31 customers in the third quarter and now has a total of 356 at quarter's end. One key thing to point out is how Workday counts its revenue from customers. In a multiyear deal, which is the majority of contracts from Workday, the first year revenue is listed in the unearned revenue.

I mentioned in my IPO writeup on Workday that several key new applications could be a reason to buy shares, as customers will increase along with revenue. In August, Workday rolled out a new attendance application called Workday Time Tracking. Two new applications were announced during the third-quarter earnings call. Workday Big Data Analytics will roll out in the second half of 2013. Workday Recruiting will roll out in the first half of 2014. The company hopes both of these applications provide more reasons to choose Workday.

Workday expects fourth-quarter revenue to hit $75 million to $79 million, of which $56 million to $58 million will be from subscription revenue. This marks a 74%-83% year-over-year increase for total revenue. Analysts on Yahoo Finance are calling for revenue of $63.97 in the fourth quarter and earnings per share of -$0.59. For the fiscal year, analysts see the company posting a net loss of -$1.49 per share and revenue of $253.79 million.

Since Workday's IPO, shares have traded between $45.05 and $57.21. Shares shot up on Wednesday in the after-hours trading session after the earnings report. Workday shares have since retreated and now trade at $50.43. Shares originally priced at $28 for their IPO, after two previous ranges of $21-$24 and $24-$26. Strong demand raised the offering price and also caused shares to soar in their first publicly traded day. I continue to like Workday going forward with its minimal international exposure and opportunity for growth, growing sequential revenue, and new applications. If shares drop below $50, you should consider buying and holding.

Source: Workday's First Public Quarter Shows Bullish Case For Investors