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Workday (NASDAQ:WDAY) shares fell 7.5% in extended-hours trading on Thursday after the back office software provider lowered its full-year revenue guidance.
The company now expects full-year subscription revenue to be between $7.7B and $7.725B, up 17% year-over-year. In February, Workday said it expected subscription revenue for the full-year to be between $7.73B and $7.78B.
Adjusted operating margin is now forecast to be 25%, up from a prior view of 24.5%.
“Our updated subscription revenue guidance reflects the elevated sales scrutiny and lower customer headcount growth we experienced during the quarter,” Workday CFO Zane Rowe said. “At the same time, we are increasing our margin outlook as we focus on driving increased efficiencies across the company.”
For the period ending April 30, Workday earned an adjusted $1.74 per share on $1.99B in revenue. Subscription revenue for the period totaled $1.815B, up 18% year-over-year.
A consensus of analysts expected Workday to earn $1.58 per share on $1.97B in sales.
Looking ahead, Workday expects second-quarter subscription revenue to be $1.895B. Adjusted operating margin is forecast to be 24.5%, in-line with estimates.
The company is slated to hold a conference call at 4:30 p.m. EST to discuss the results.
