Workday Inc. shares fell on Tuesday after the company reported quarterly results that missed analyst estimates and provided a revenue outlook below market expectations.
The enterprise software provider posted adjusted earnings of $1.45 per share for the first quarter, missing the $1.52 per share consensus among analysts polled by Refinitiv. Revenue totaled $1.79 billion, below the $1.82 billion forecast.
Workday also lowered its full-year revenue guidance to a range of $7.85 billion to $7.90 billion, compared with a prior forecast of $7.95 billion to $8.00 billion. The company cited macroeconomic uncertainty and slower enterprise spending as key factors behind the downward revision.
Shares of Workday were down 5% in premarket trading following the results, extending losses from Monday’s close. The stock has declined approximately 12% over the past month amid broader weakness in enterprise software valuations.
Analysts at Jefferies maintained a hold rating on Workday but reduced their price target to $220 from $240, citing the weaker outlook. Other firms, including Barclays and Morgan Stanley, also adjusted their estimates downward following the report.
Workday’s Chief Financial Officer, Barbara Larson, noted that while demand for its human capital management and financial management software remains steady, customers are exercising greater caution in discretionary spending. The company expects this trend to persist through the remainder of the year.
Investors will closely monitor Workday’s ability to regain growth momentum as economic conditions evolve, with the next earnings report due in November.
