Workday beats quarterly profit estimates, expects macro concerns to continue in fiscal 25

Automatic Data Processing

26/02/2024 23:21

Feb 26 (Reuters) - Human resources software provider
Workday  WDAY.O  beat fourth-quarter profit estimates on Monday
helped by strong demand for its cloud-based services, but
reiterated its 2025 subscription revenue forecast citing
macroeconomic concerns.
    Shares of the Pleasanton, California-based company fell more
than 8% in extended trading.
    Tech companies facing an uncertain economy have started this
year by announcing layoffs, which will impact companies like
Workday that provide human capital and financial management
services. 
    Over 42,000 employees have been laid off from 170 tech
companies so far this year, according to tracking website
Layoffs.fyi.
    Workday reported adjusted profit per share of $1.57,
compared with an estimate of $1.47, according to LSEG data.
    Peer Automatic Data Processing  ADP.O  also reported strong
results last month, aided by steady payroll demand. 
    Workday's revenue for the fourth quarter stood at $1.92
billion, in line with market expectations. 
    The company said it would acquire AI-powered talent
orchestration solutions HiredScore and expects the transaction
to be completed in the first quarter of its fiscal year 2025.
        It reiterated its fiscal year 2025 subscription revenue
guidance of $7.73 billion to $7.78 billion and said it expects
macroeconomic conditions to persist.  
    Subscription revenue for the quarter ended Jan. 31 rose
about 18% to $1.76 billion.  
        
  

    
 
    
             

 (Reporting by Zaheer Kachwala and Harshita Mary Varghese in
Bengaluru; Editing by Alan Barona)
 ((Zaheer.Kachwala@thomsonreuters.com;))