Enterprise services provider Workday (NASDAQ: WDAY) recently announced mixed fourth quarter results. It continues to expand its AI capabilities through both product development and acquisitions.

Workday’s Financials

Workday’s fourth quarter revenues grew 17% to $1.92 billion, at par with the Street’s forecast. Non GAAP EPS grew 58% to $1.57, ahead of the market’s forecast of $1.47.

By segment, Subscription Services Revenues grew 18% to $1.8 billion, ahead of the Street’s forecast of $1.76 billion. Professional Services Revenues came in at $162 million.

Its annual revenue in fiscal year 2024 grew 17% to $7.3 billion. Subscription revenues grew 19% to $6.6 billion for the full year. Non-GAAP net income per share was $5.84, compared to $3.64 in the prior year.

For the first quarter, Workday expects Subscription services revenues to be $1.81 billion. Revenues from Professional services are estimated to be $163 million.

For the fiscal year 2025, it expects subscription revenues in the range of $7.725-$7.775 billion and professional services revenues in the range of $630-$640 million. The market was looking for revenues of $8.41 billion and an EPS of $1.77.

Workday’s AI Expansion and HiredScore Acquisition

Workday continues to expand the AI capabilities of its products. Last quarter, it enhanced Workday Skills Cloud so that it can leverage AI to gain insights into an organization’s current skills and help identify skills needed for the future. In its upcoming R1 release, it will continue to add more generative AI use cases to the platform.

Recently, Workday announced the acquisition of New York-based HiredScore, an AI-powered talent orchestration solution provider. HiredScore’s AI solutions enable companies to use data-driven insights to improve recruiting and talent mobility processes. Its automation and integrations empower companies to improve recruitment productivity, internal mobility, and total talent management.

Analysts believe that the global online recruitment industry will grow 15% annually to reach $30.9 billion by 2030. The applicant tracking systems (ATS) market provides the basic tech tools needed for every company to grow their talent pool. With the evolution of AI capabilities, ATS tools are also becoming mature and are transforming themselves from databases to big data platforms that can run complex AI models on countless employee profiles to help match people to jobs.

Workday is banking on HiredScore’s AI capabilities to complement its Skills Cloud to provide customers with a transparent offering that will help them solve recruiting challenges, better manage the talent lifecycle, and improve the recruiter and hiring manager experience. Terms of the deal were not disclosed. Prior to the acquisition, HiredScore was privately held and it did not disclose financial or funding details.

Workday’s stock is trading at $264.74 with a market capitalization of $69.6 billion. It touched a 52-week high of $311.28 last month and a 52-week low of $174.06 in November last year.

Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article. I am an investor in this company.