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Shares of Workday fall after a lukewarm quarter subscription revenue

Workday's third-quarter subscription revenues were in line with Wall Street expectations on Tuesday. This signaled a softer market and sent its shares down by nearly 7% during extended trading.

A sluggish higher education market, which heavily relies on federal funding, also affected the forecast for subscription revenue in the fourth quarter of this human resources software provider.

Workday is a payroll provider that competes with Oracle and SAP. Customers include United Airlines, Visa, and FedEx.

Some customers, in an uncertain economic climate, are reassessing their budgets and timing. They may also reduce spending on Workday.

According to data compiled and analyzed by LSEG, the company anticipates fourth-quarter revenue from subscriptions of approximately $2.36 billion. This compares with an average analyst estimate of $2.35billion.

The company's third-quarter revenue increased 12.6%, to $2.43 Billion, slightly exceeding the estimates of $2.42 Billion.

The quarter ended October 31 saw subscription revenue rise 14.6%, to $2.24 Billion. This was in line with expectations.

The company reported a profit per share adjusted of $2.32, which was higher than the estimate of $2.18. (Reporting and editing by Jaspreet in Bengaluru, Alan Barona).

(source: Reuters)