An in depth-up of the Workday logo at its headquarters in Pleasanton, California.
Smith Collection | Archive photos | Getty Images
HR software provider working day The company on Thursday cut its forecast for annual subscription revenue, citing concerns about slower customer growth as a slowdown in hiring and IT budget cuts dampen demand for its payroll services.
Shares of the Pleasanton, California-based company fell nearly 9% in prolonged trading.
A difficult macroeconomic environment has dampened demand for the corporate’s human resources and payroll services, and U.S. technology firms proceed to put off employees after massive layoffs last 12 months.
The company expects subscription revenue for fiscal 2025 to be within the range of $7.70 billion to $7.73 billion, below its previous forecast of $7.73 billion to $7.78 billion. Analysts expect revenue of $7.76 billion.
“Our updated subscription revenue guidance reflects the increased revenue control and lower customer growth we experienced during the quarter,” said Zane Rowe, Workday CFO.
For the second quarter, Workday expects subscription revenue of about $1.90 billion, in keeping with LSEG data, which is near analyst estimates.
Workday’s total revenue was $1.99 billion for the primary quarter ended April 30. The average analyst estimate was $1.97 billion.
Subscription revenue increased 18.8% to $1.82 billion throughout the quarter.
