Workday Elevates Annual Subscription Revenue Forecast on Strong IT Spending

Workday, the Pleasanton-based cloud software services provider, has revised its annual subscription revenue forecast, citing favorable market conditions and robust demand for its cloud-based offerings.
Workday solutions for HRWorkday now anticipates full-year subscription revenue to reach $6.598 billion, surpassing its earlier projection ranging between $6.570 billion to $6.590 billion. This upward adjustment signals Workday’s optimistic outlook amid an evolving business landscape.

In its latest financial report, Workday disclosed a third-quarter total revenue of $1.87 billion, registering 16.7 percent increase. Notably, the company witnessed a notable 18.1 percent surge in subscription revenue, which reached $1.69 billion, underlining the growing traction for its cloud-based services.

Workday has revealed that it achieved 12-month subscription revenue backlog of $6.05 billion, up 21.9 percent year-over-year.

Carl Eschenbach, co-CEO of Workday, in its earnings report, said: “The momentum across our business is palpable, powered by our AI innovation, strength in full platform deals, expanding partner ecosystem, and international growth – with EMEA surpassing $1 billion annual recurring revenue in the quarter.”

“We unveiled a series of new AI capabilities at Workday Rising  – including investments in generative AI and conversational AI  – that will benefit all users with an emphasis on increasing productivity, growing and retaining talent, streamlining business processes, and driving better decision-making,” said Aneel Bhusri, co-founder, co-CEO, and chair, Workday.

Workday has recently announced a platform — Workday Financial Management and Workday Human Capital Management (HCM), with new wins including AdventHealth, Aurelius Group, Bentley Systems, Globe Life, Houston Methodist, and Kern County.

Workday has surpassed 5,000 core Workday Human Capital Management (HCM) customers in Q3.

Workday announced several AI updates, including multiple generative AI capabilities; new AI capabilities in Workday Adaptive Planning; a Manager Insights Hub that surfaces automated insights for managers to develop their teams; and enhancements to Workday Extend to enable developers to leverage Workday AI services.

Workday’s performance mirrors an environment where the confluence of a competitive labor market and a moderation in inflation has driven increased enterprise spending on human capital and financial management services. This trend aligns with the elevated demand observed not only for Workday but also for other companies like Automatic Data Processing (ADP).

The incorporation of generative artificial intelligence and machine learning into its product suite has notably bolstered Workday’s appeal. Strategic collaborations with industry giants such as Amazon.com’s Web Services, ADP, and Accenture have further strengthened investor confidence in Workday’s growth trajectory.

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