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Enterprise services provider Workday (Nasdaq: WDAY) recently announced its third quarter results that surpassed market expectations. Workday is building out several AI capabilities and an AI-focused marketplace to benefit from the growing trend.
 

Workday’s Financials

Workday’s third quarter revenues grew 16.7% to $1.87 billion, ahead of the Street’s forecast of $1.85 billion. Non GAAP EPS was $1.56, ahead of the market’s forecast of $1.41.

By segment, Subscription services revenues grew 18.1% to $1.69 billion, ahead of the Street’s forecast of $1.68 billion. Professional services revenues grew 5% to $174.6 million.

For the current year, Workday raised its guidance for subscription revenues to $6.598 billion from the earlier estimated $6.570-$6.590 billion. Professional services revenues are expected to be $652 million.

For the fourth quarter, Workday expects Subscription services revenues to be $1.755 billion and revenues from Professional services to be $158 million. The market was looking for revenues of $1.84 billion and an EPS of $1.40.
 

Workday Leverages AI

Workday continued to leverage AI in several new capabilities of its offerings. It added significant generative AI capabilities to Workday Adaptive Planning. The generative AI capability will allow planners to validate unlimited scenarios with ease before implementing them into the operational workflow. It also added ML capabilities to its predictive forecaster to simplify and accelerate the generation of demand forecasts within a user-friendly interface. Besides planning, it also added AI capabilities to the Manager Insights Hub that will showcase automated insights for managers to develop their teams.

It also released several updates within the developer world including a new Workday AI Marketplace to help customers easily find and deploy trusted AI apps within the Workday ecosystem. The marketplace will feature AI and ML apps that integrate with Workday data via APIs, as well as apps built through Workday Extend using Workday-trained large language models.

Workday continued to build on its partner network and expanded its partnership with ADP to help deliver an enhanced global payroll, compliance, and HR solution for joint customers. It expanded an existing partnership with Accenture to help companies accelerate their adoption of skills-based talent strategies.

Its stock is trading around its 52-week high of $278.94 with a market capitalization of $73 billion. It has recovered from the 52-week low of $157.85 that it was trading at in January this year.

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