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Workday outpaces top and bottom line, reaffirms FY25 outlook; Announces acquisition of HiredScore

AInvestMonday, Feb 26, 2024 4:57 pm ET
1min read

Workday Inc. (WDAY), a prominent enterprise platform that focuses on managing human resources and financials, has reported its earnings for the fourth quarter of fiscal year 2024. The company surpassed analysts' expectations and demonstrated strong growth in various key financial metrics.

In terms of earnings per share (EPS), Workday reported $1.57, which exceeded the consensus estimate of $1.47 by $0.10. This positive result reflects the company's ability to effectively manage its costs and generate higher profitability. Revenues for the quarter reached $1.92 billion, indicating a year-over-year growth rate of 16.8%. This figure was in line with estimates. 

The company's subscription revenues stood at $1.76 billion, experiencing a solid growth rate of 18% compared to the same period last year. The steady rise in subscription revenues suggests sustained customer demand for Workday's services.

Workday also revealed positive trends in its subscription revenue backlog, which is a measure of future revenue. The total subscription revenue backlog increased by 27% compared to the same period last year, reaching $20.9 billion. The 12-month and 24-month subscription revenue backlog also grew by 20% each, amounting to $6.6 billion and $11.7 billion, respectively. These figures demonstrate the company's strong momentum and its potential for continued growth. 

Looking ahead, Workday reiterated its subscription revenue guidance for fiscal year 2025, projecting a range of $7.725 billion to $7.775 billion. This reaffirmation indicates the company's confidence in its ability to sustain its growth trajectory in the coming years. Additionally, Workday expects to achieve non-GAAP operating margins of approximately 24.5% in fiscal year 2025, signaling a commitment to maintaining profitability.

In a strategic move, Workday announced its intention to acquire HiredScore, an Artificial Intelligence HR technology firm. HiredScore is recognized for its ability to enhance recruitment processes by leveraging data science and machine learning. This acquisition aligns with Workday's aim to optimize its Talent Acquisition function, showcasing its commitment to staying at the forefront of technological advancements in the industry. 

Overall, Workday's Q4 earnings report reflects a solid performance across various financial metrics. The company surpassed earnings expectations, experienced strong revenue growth, and showcased a healthy subscription revenue backlog. With its robust financial position and commitment to innovation through acquisitions like HiredScore, Workday appears well-positioned to continue its growth trajectory and maintain its position as a leading enterprise platform in the industry.


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