Proactive Investors - Workday Inc (NASDAQ:WDAY) shares fell more than 11% in extended trading as the human resources and financial management platform slashed its subscription revenue outlook for fiscal 2025.
For the full year ending in January 2025, it expects subscription revenue in the range of $7.7 billion to $7.73 billion, representing growth of approximately 17%, from its prior forecast of $7.73 billion to $7.78 billion.
Wall Street analysts expect full-year subscription revenue of $7.73 billion.
The company said its updated guidance reflects elevated sales scrutiny and lower customer headcount growth it experienced during the quarter.
The company’s weak guidance overshadowed first quarter earnings that topped estimates on the top and bottom lines.
Revenue grew 18.1% from the year-ago quarter to $1.99 billion, above estimates of $1.97 billion.
Subscription revenue was $1.82 billion, in line with expectations.
Adjusted earnings per share (EPS) were $1.74, up from $1.33 in the year-ago period and exceeding expectations of $1.57.
"Our first quarter performance was in line with our expectations across our key financial metrics," Workday CFO Zane Rowe said in a statement.
"We were pleased with our progress across key growth initiatives in Q1, which help build a foundation for long-term growth.”
Shares of Workday traded down 10.9% at about $233 before Friday’s opening bell.