Takeaways
- Workday beat earnings and sales estimates and raised forecasts as demand for its finance and human resources software products grew.
- Subscription revenue jumped 18% per year. compared to last year, and subscription backlog soared 30.9% as the company benefited from its artificial intelligence innovation.
- This news sent Workday shares to their highest level since late 2021.
Shares of Workday (WDAY) rose more than 12% in early trading Wednesday as the finance and human resources software provider reported better-than-expected results and upgraded its forecast as sales of Subscriptions have surged due to demand for its artificial intelligence (AI) products.
Workday reported earnings per share (EPS) of $1.53 for the third quarter of fiscal 2024, with revenue up 16.7% year-over-year. last to reach 1.87 billion dollars. Both exceeded expectations. Subscription revenue increased 18% to $1.69 billion, more than the company expected. The subscription backlog climbed 30.9% to $18.5 billion.
CEO Carl Eschenbach said the momentum across the company's business was “palpable”, adding that it was driven by “our innovation in AI, the strength “full platform agreements, partner ecosystem expansion and international growth.” He added that a growing number of businesses around the world are “turning to Workday to manage their most valuable assets: their people and their money.”
Workday now predicts Full-year subscription revenue will be $6.598 billion, up from its previous estimate of $6.57 billion to $6.59 billion. It also increased its operating margin outlook from 23.5% to 23.8%.
Workday shares jumped at their highest level in almost two years after the news.
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Source: investopedia.com