HR Software Maker Workday Bets on AI for Future Growth

Workday, a leading provider of human resources software, announced its financial results for the fourth quarter of fiscal year 2024, showcasing robust revenue growth and strategic initiatives driving expansion.
Workday revenue in 2023Pleasanton, California-based Workday reported revenues of $1.9 billion, marking a 17 percent increase from the same period last year. Subscription revenues reached $1.8 billion, reflecting an 18 percent surge year-over-year.

Workday said operating income for the quarter stood at $79 million, representing 4.1 percent of revenues, a significant improvement compared to an operating loss of $89 million, or negative 5.4 percent of revenues, in the corresponding period of the previous fiscal year.

For the full fiscal year 2024, Workday reported revenues of $7.3 billion, indicating a 17 percent increase over fiscal 2023. Subscription revenues for the year amounted to $6.6 billion, marking a notable 19 percent increase from the prior year. Operating income for fiscal 2024 reached $183 million, accounting for 2.5 percent of revenues, compared to an operating loss of $222 million, or negative 3.6 percent of revenues, in fiscal 2023.

Carl Eschenbach, CEO of Workday, in its earnings report, has expressed optimism about the company’s performance, stating, “We’re seeing momentum with full platform customer wins and expansions within our base, strengthening international performance, growth of our partner ecosystem, and the seamless execution of nearly 19,000 Workmates across the globe – all setting us up for an incredible fiscal year 2025.”

AI INVESTMENT

In its pursuit of advancing AI capabilities, Workday highlighted its continued investment in this area. The company has integrated AI into its platform for nearly a decade, with plans to enhance its leadership through initiatives such as Workday Skills Cloud, which utilizes AI to provide insights  into organizational skills and inform talent decisions.

Workday also announced the acquisition of HiredScore, a provider of AI-powered talent orchestration solutions, aimed at enhancing recruiting and internal mobility processes. Workday did not reveal financial details of the deal.

Workday welcomed several new customers, including the Australian Stock Exchange, Boyd Gaming Corporation, and Randstad, among others, while also expanding its existing customer base with strategic renewals and expansions such as BJ’s, Goodyear, and Greystar Global Enterprise.

Despite its strong performance, Workday maintained a cautious outlook for fiscal year 2025, reiterating its subscription revenue guidance range of $7.73 billion to $7.78 billion. The company cited ongoing macroeconomic uncertainties as a factor in its cautious approach.

With over 10,000 organizations relying on Workday for their business operations, the company boasts more than 5,400 core HCM and finance customers, along with over 65 million users under contract, processing over 800 billion transactions annually.

Rajani Baburajan

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