Workday raises annual subscription revenue forecast on steady product demand

Automatic Data Processing

28/11/2023 22:02

Nov 28 (Reuters) - Workday  WDAY.O  raised its annual
subscription revenue forecast and beat estimates for quarterly
profit and revenue on Tuesday, benefiting from an easing macro
environment and strong demand for its cloud-based software
services.
    Shares of the Pleasanton, California-based company rose 3.2%
in extended trading. 
        A relatively tight labor market, along with softening
inflation, has boosted enterprise spending on human capital and
financial management services provided by companies like Workday
and Automatic Data Processing  ADP.O . 
    Moreover, the company's incorporation of generative
artificial intelligence and machine learning into its product
offerings and partnerships with companies like Amazon.com's Web
Services, ADP, and Accenture  ACN.F  have further improved
investor confidence. 
    "The momentum across our business is palpable, powered by
our AI innovation, strength in full platform deals, expanding
partner ecosystem, and international growth," said Workday
co-CEO Carl Eschenbach.
    The company now expects full-year subscription revenue of
$6.598 billion, compared with its previous expectation of $6.570
billion to $6.590 billion. 
    The company reported third-quarter total revenue of $1.87
billion, higher than analysts' estimates of $1.85 billion,
according to LSEG data. 
    Workday's subscription revenue rose 18.1% to $1.69 billion. 
    On an adjusted basis, the company earned $1.53 per share,
compared with estimates of a profit of $1.41 per share.

 (Reporting by Zaheer Kachwala in Bengaluru; Editing by Maju
Samuel)
 ((Zaheer.Kachwala@thomsonreuters.com;))