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The Key Takeaways
- Workday gave weaker-than-anticipated guidance for fiscal 2025 subscription services revenue, sending shares tumbling.
- Profit and sales for the third quarter of 2013 exceeded expectations.
- Workday said artificial intelligence-driven innovations and its "partner ecosystem" helped boost results.
Workday shares (WDAY), a human resources software company, fell 8% on Wednesday after it predicted lower-than-expected subscription service revenue for the full year.
In fiscal 2025, the company expects subscription revenue to reach $7.703billion. The company had predicted a range between $7.700 billion to $7.725 million last quarter. Visible Alpha’s analysts expected $7.714billion. Workday believes that the non-GAAP margin of operating profit will also be 25,0%. This also falls short of some expectations.
Q3 Results Top Estimates
The company’s adjusted earnings per share (EPS), which was $1.89 in the third quarter of 2013, increased by 16% over the previous year to $2.16 Billion. The two beat expectations.
Revenue from subscription services increased by 16% and reached $1.96 billion. The revenue for professional services grew by 15% to reach $201 millions.
Carl Eschenbach, CEO of the Chief Executive Office (CEO), said that performance was reflected in “global momentum around our AI-driven innovations, and the strength of our partner ecosystem.” Eschenbach said that many organizations are looking for cost-saving measures and turning to Workday.
This year, the number of shares traded on Workday has dropped by around 10%.
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