Workday Cuts FY25 Guidance as Customers Scrutinize Subscriptions

By Ben Glickman

Workday reduced its full-year outlook for subscription revenue after customers scrutinized their purchases and headcounts grew slower than expected in the fiscal first quarter.

The Pleasanton, Calif.-based human-resources software company reported a profit of $107 million, or 40 cents a share, in the three months ended April 30, compared with roughly breaking even a year earlier. Analysts polled by FactSet expected a per-share profit of 23 cents.

Stripping out certain one-time items, the company posted a profit of $1.74 a share, greater than the $1.58 a share expected by analysts surveyed by FactSet.

Revenue rose 18% to $1.99 billion, compared with the $1.97 billion expected by analysts polled by FactSet.

Workday now expects subscription revenue of $7.7 billion to $7.725 billion in the current fiscal year, compared with its previous outlook of $7.725 billion to $7.775 billion. Analysts polled by FactSet expect $7.77 billion in subscription revenue on the year.

Chief Financial Officer Zane Rowe said the company's updated outlook reflected greater scrutiny on sales and lower-than-expected customer headcount growth during the first quarter. He added that the company has increased its margin outlook for the year.

Write to Ben Glickman at ben.glickman@wsj.com

(END) Dow Jones Newswires

May 23, 2024 16:30 ET (20:30 GMT)

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