(Reuters) -Workday (WDAY) stock jumped 12% on Wednesday in pre-market trading after it beat Wall Street expectations for fourth-quarter revenue on Tuesday, driven by an increase in demand for its subscription services due to a resilient job market.
The company reported a 16% increase in subscription revenue to $2.04 billion for the fourth quarter, while analysts were expecting $2.03 billion, according to data compiled by LSEG.
Cooling inflation and a stable job market are encouraging businesses to hire, boosting demand for workforce management solutions such as those offered by Workday.
The company’s incorporation of generative artificial intelligence (GenAI) and machine learning into its product offerings has further improved investor confidence.
“Our fourth quarter results were driven by solid performance across key growth areas of the business, including continued momentum with our full suite and financials products, growing demand for our AI SKUs, and strong execution across industry verticals,” said CFO Zane Rowe.
The company recently launched the Workday Agent System of Record to help organizations manage all their AI agents, from Workday and third-party sources alike.
Earlier in February, Workday said it would cut around 1,750 jobs, or 8.5% of its current workforce, as the human capital management firm invests heavily in artificial intelligence to counter a softer macroeconomic environment.
Total revenue came in at $2.21 billion for the quarter ended January 31, beating analysts’ estimates of $2.18 billion.
On an adjusted basis, the company earned $1.92 per share in the quarter, compared with estimates of $1.78 per share.
Workday forecast first quarter subscription revenue to be $2.05 billion, compared with expectations of $2.06 billion.
The company’s fiscal 2026 subscription revenue forecast of $8.80 billion is in line with estimates.
(Reporting by Juby Babu in Mexico City; Editing by Mohammed Safi Shamsi)
