Aug 27 (Reuters) – Workday reported a 12.8% increase in second-quarter revenue, as enterprises signed up for its AI-powered finance and human resources software.
Shares of the Pleasanton, California-based company fell 5% in extended trading after its quarterly revenue and forecast for third-quarter subscription revenue broadly met Wall Street expectations.
“We had a strong second quarter, with AI driving more than 25% of our new Annual Contract Value and more than 5,500 customers now using at least one of our organic agents,” said CEO Aneel Bhusri.
Despite the ongoing shift to the cloud, Workday faces headwinds from a challenging macroeconomic environment that has caused some customers to scrutinize IT budgets and delay large-scale software projects.
Analysts say Workday’s room for further module expansion could be limited, and that reviving growth in its Financials business and overseas markets may prove difficult unless the company lowers its prices.
Workday posted total revenue of $2.65 billion for the second quarter ended July 31, compared with analysts’ average estimate of $2.64 billion, according to data compiled by LSEG.
It forecast subscription revenue of $2.52 billion for the current quarter, which will end on October 31.
(Reporting by Juby Babu in Mexico City; Editing by Vijay Kishore)
