Workday reported a higher profit and rising revenue in the fiscal second quarter, driven by growing adoption of its artificial-intelligence agents.
The human resources software company on Thursday reported a profit of $632 million, or $2.57 a share, compared with a profit of $228 million, or 84 cents a share, a year earlier. The profit includes a tax benefit of $1.52 a share related to an internal transfer of intellectual property rights, the company said.
Stripping out certain one-time items, adjusted earnings were $2.75 a share. Analysts polled by FactSet were expecting $2.61 a share.
Revenue rose 13% to $2.65 billion, beating analyst expectations for $2.64 billion.
"We had a strong Q2, with AI driving more than 25% of our new ACV and more than 5,500 customers now using at least one of our organic agents," co-founder and Chief Executive Officer Aneel Bhusri said. Chief Financial Officer Zane Rowe added that AI is driving Workday's customer expansion.
The results prompted Workday to lift the bottom end of its full fiscal year guidance. It projected full-year subscription revenue, which makes up most of its topline, of $9.94 billion to $9.95 billion, lifting the lower bound from $9.93 billion.
Analysts currently expect full-year subscription revenue of $9.95 billion.
Shares fell 4.1% to $185.73 in after-hours trading. The stock closed up 1.5% at $193.57, down 9.9% this year.
The earnings release comes two weeks after Reuters reported that the company has had discussions about a potential buyout with private-equity firm Silver Lake, citing people familiar with the matter. Workday did not address the Reuters report in its release.
The company faced a major sell-off earlier this year as investors worried it would become a casualty of displacement by artificial-intelligence. The stock has since recovered some, in part boosted by the buyout report. Workday also brought back Bhusri as chief executive in February to oversee the company's AI push.
For the current fiscal third quarter, Workday guided for subscription revenues of $2.52 billion. Analysts are expecting $2.51 billion.
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