(Reuters) - Workday Inc reported a better-than-expected 74 percent rise in quarterly revenue due to strong growth in subscriptions for its Web-based human resources and financial management software, and the company raised its full-year revenue forecast.
Workday's shares rose about 3 percent in extended trading.
The company's subscription revenue jumped 77 percent in the second quarter, accounting for three-quarters of total revenue.
Workday said it had more than 800 customers for its human capital management and financial management software as of July 31, up from 675 customers at the end of April.
Bank of America Corp became the company's largest human resource software customer in the quarter, Workday said on a conference call on Wednesday.
In June, insurance provider Unum Group subscribed to Workday's financial and human resources software to manage nearly 10,000 employees.
Workday, whose rivals include SAP SE and Oracle Corp, makes cloud-based software to manage employee performance, payroll and expenses.
Cloud computing software, which allows customers to process data on remote servers, is faster and cheaper than traditional in-house systems. More companies are opting for Web-based software as they are easier to update, maintain and customize.
"Our checks suggest that (Workday's) growth momentum remains solid and we expect upside trends to persist," Susquehanna analyst Derrick Wood wrote in a pre-earnings note.
Workday raised its revenue forecast for the year ending Jan. 31 to $760 million-$770 million from $730 million-$750 million.
Analysts were expecting revenue of $748.7 million, according to Thomson Reuters I/B/E/S.
Workday also raised its full-year billings forecast to $940 million-$960 million from $890 million-$910 million. Billings are a key indicator of the company's future sales.
The company forecast revenue of $200 million-$205 million for the third quarter ending October, above the average analyst estimate of $195.6 million.
However, its net loss widened to $69.2 million, or 38 cents per share, in the quarter ended July 31 from $36 million, or 21 cents per share, a year earlier, as it spends heavily on product development, sales and marketing, and workforce expansion.
Excluding items, Workday had a loss of 11 cents per share.
Revenue rose to $186.8 million from $107.6 million.
Analysts on average had expected a loss of 14 cents per share and revenue of $177.5 million.
Expenses jumped about 78 percent in the quarter as Workday invests in developing software for data analytics, financial management and recruitment to take on Salesforce.com and NetSuite Inc.
The company said it expected to launch a data analytics product in November.
Workday's shares closed at $90.30 on the New York Stock Exchange on Wednesday. Up to Wednesday's close, the stock had risen about 9 percent this year.
Editing by Kirti Pandey