Workday tops earnings estimates, plans to acquire HiredScore to boost AI efforts

February 26, 2024 4:20 PM EST -- Workday (NASDAQ: WDAY) reported better-than-expected fourth-quarter earnings and detailed plans to acquire human resources group HiredScore in a bid to boost to its artificial intelligence capabilities.

However, shares in the cloud-based software vendor fell sharply in premarket U.S. trading on Tuesday, a move that analysts at Goldman Sachs attributed to investor concerns that "growth will stagnate to the low-end of management's mid-term targets."

For the three months ended Jan. 31, Workday announced earnings per share of $1.57, up from $0.99 a year earlier, on revenue of $1.92 billion. Analysts polled by had anticipated EPS of $1.47 on revenue of $1.92B.

The company also reiterated its subscription revenue guidance of $7.73B to $7.78B for its 2025 fiscal year.

In a separate announcement, Workday said it plans to acquire artificial intelligence-focused HR software provider HiredScore, with the transaction expected to close in the first quarter. The Goldman analysts said the purchase will help Workday "drive innovation via AI-supported new features" that bolster "future pricing power."

Yasin Ebrahim contributed to this report.

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