Feb 25 (Reuters) - Workday beat Wall Street

expectations for fourth-quarter revenue on Tuesday, benefiting

from strong demand for its human capital management software as

clients increased spending in an easing economy.

Shares of the California-based company rose 6.7% in extended

trading.

Cooling inflation and a stable job market are

encouraging businesses to hire, boosting demand for workforce

management solutions such as those offered by Workday.

The company's incorporation of generative artificial

intelligence (GenAI) and machine learning into its product

offerings has further improved investor confidence.

"Our fourth quarter results were driven by solid performance

across key growth areas of the business, including continued

momentum with our full suite and financials products, growing

demand for our AI SKUs, and strong execution across industry

verticals," said CFO Zane Rowe.

The company recently launched the Workday Agent System of

Record to help organizations manage all their AI agents, from

Workday and third-party sources alike.

Earlier in February, Workday said it would cut around 1,750

jobs, or 8.5% of its current workforce, as the human capital

management firm invests heavily in artificial intelligence to

counter a softer macroeconomic environment.

Total revenue for the fourth quarter ended January 31 came

in at $2.21 billion, beating analysts' estimates of $2.18

billion, according to data compiled by LSEG.

The company reported subscription revenue of $2.04 billion,

while analysts were expecting $2.03 billion.

Workday forecast subscription revenue for the first

quarter to be $2.05 billion, compared with expectations of $2.06

billion.

The company's fiscal 2026 subscription revenue forecast of

$8.80 billion is in line with estimates.