Nov 26 (Reuters) - Workday forecast

fourth-quarter subscription revenue below Wall Street

expectations on Tuesday, hit by weaker client spending on its

human capital management software.

Shares of the Pleasanton, California-based company fell over

10% in extended trading.

Workday is experiencing weak demand for its payroll

software, as clients cut tech budgets due to high interest rates

and a cooling labor market.

The company is facing stiff competition from larger rivals

such as Automatic Data Processing ( ADP ), prompting it to

introduce new artificial intelligence features to remain

competitive in a crowded market.

Workday's shares have dropped about 3% this year,

underperforming compared to its peers such as ADP and Paycom

.

The company forecast fourth-quarter subscription revenue of

$2.03 billion, compared with estimates of $2.04 billion,

according to data compiled by LSEG.

Workday said it expects fiscal 2025 subscription revenue to

be $7.70 billion, below estimates of $7.72 billion.

Total revenue for the third quarter came in at $2.16

billion, versus expectations of $2.13 billion.

It reported subscription revenue of $1.96 billion for

the quarter ended Oct.31, in line with analyst expectations.

On an adjusted basis, the company earned $1.89 per

share, compared with estimates of $1.76 per share.

Separately, the company said it has appointed former

UiPath and Google executive Rob Enslin to the newly created role

of president and chief commercial officer.