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

By Thomson Reuters Feb 26, 2024 | 5:24 PM

(Reuters) – Human resources software provider Workday 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 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)