(Reuters) – Workday raised its annual subscription revenue forecast and beat estimates for quarterly profit and revenue on Tuesday, benefiting from an easing macro environment and strong demand for its cloud-based software services.
Shares of the Pleasanton, California-based company rose 3.2% in extended trading.
A relatively tight labor market, along with softening inflation, has boosted enterprise spending on human capital and financial management services provided by companies like Workday and Automatic Data Processing.
Moreover, the company’s incorporation of generative artificial intelligence and machine learning into its product offerings and partnerships with companies like Amazon.com’s Web Services, ADP, and Accenture have further improved investor confidence.
“The momentum across our business is palpable, powered by our AI innovation, strength in full platform deals, expanding partner ecosystem, and international growth,” said Workday co-CEO Carl Eschenbach.
The company now expects full-year subscription revenue of $6.598 billion, compared with its previous expectation of $6.570 billion to $6.590 billion.
The company reported third-quarter total revenue of $1.87 billion, higher than analysts’ estimates of $1.85 billion, according to LSEG data.
Workday’s subscription revenue rose 18.1% to $1.69 billion.
On an adjusted basis, the company earned $1.53 per share, compared with estimates of a profit of $1.41 per share.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Maju Samuel)
