Claims HR company can escape the SaaSpocalypse with its core expertise
Workday CEO Aneel Bhusri has used the first quarterly earnings announcement since he returned to the big chair to reassure investors the company is building more capable agentic AI while keeping the fundamentals of the HR platform strong.
“I'm very optimistic about what we're doing on the agentic front,” Bhusri told investors during the company’s fourth quarter earnings call on Tuesday evening. “But when I look at where our business is today the core is rock solid. We built these great HR financial applications, and they continue to grow. And we have this opportunity to build these agentic solutions on top. I'm very bullish on where we're headed.”
That sentiment wasn’t enough to stave off bears.
Workday forecast a sales slowdown, saying that subscription revenue would grow 12 to 13 percent in the company's upcoming fiscal year ending January 31, 2027, coming in between $9.925 billion and $9.95 billion. That's a slowdown from subscription revenue growth of 14.5% in the fiscal year just ended.
The stock fell more than nine percent in after hours trading as investors digested the news.
The stock was already down 50 percent from a year ago, as fears of AI disruption have taken a toll on many software stocks.
Bhusri said Workday’s 20 years of experience with HR and financial data has positioned the company at least five to seven years ahead of “the best AI,” but said despite believing the company has a moat it won’t stand still.
“So we want to get to a model where we’re pretty much indifferent if it's third parties or us building apps on top, we get compensated either way through the consumption model,” Bhusri said.
Bhusri, who co-founded Workday alongside Dave Duffield in 2005, returned to lead the company earlier this month after Carl Eschenbach stepped down from his roles as CEO and board member. According to a company statement, Eschenbach will continue to support Bhusri and Workday as strategic advisor.
During the quarter, Workday closed on its acquisition of Pipedream, an integration platform for AI agents with 3,000 connectors to business applications that it had announced in November. ®