Workday (NASDAQ:WDAY) Announces Quarterly Earnings Results

Workday (NASDAQ:WDAY) announced its quarterly earnings data on Thursday. The software maker reported $2.75 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $2.61 by $0.14, FiscalAI reports. Workday had a return on equity of 14.75% and a net margin of 8.60%.The firm had revenue of $2.65 billion during the quarter, compared to the consensus estimate of $2.64 billion. During the same quarter in the prior year, the company earned $2.21 EPS. The business’s revenue for the quarter was up 12.8% on a year-over-year basis.

Here are the key takeaways from Workday’s conference call:

• Positive Sentiment: Workday reported Q2 subscription revenue of $2.471 billion, up 14%, with cRPO rising 14.2% to $9.03 billion and gross revenue retention remaining strong at 97%.
• Positive Sentiment: AI adoption and monetization accelerated: AI products generated more than $100 million of new ACV, AI ARR reached nearly $600 million, and more than 5,500 customers are using Workday’s organic agents.
• Positive Sentiment: Management raised FY2027 non-GAAP operating-margin guidance to 31%, authorized a new open-ended $4 billion share-repurchase program, and expects at least two percentage points of margin expansion in FY2028.
• Negative Sentiment: Workday’s preliminary FY2028 subscription-revenue growth target is approximately 11%, consistent with the expected second-half FY2027 rate, suggesting AI-related revenue benefits may take time to become meaningfully incremental.

Workday Stock Performance

NASDAQ:WDAY opened at $193.57 on Friday. The firm has a market cap of $47.81 billion, a PE ratio of 60.49, a price-to-earnings-growth ratio of 2.03 and a beta of 1.08. Workday has a fifty-two week low of $110.36 and a fifty-two week high of $249.85. The company has a debt-to-equity ratio of 0.30, a quick ratio of 1.01 and a current ratio of 1.01. The business has a 50 day moving average price of $155.95 and a 200-day moving average price of $140.36.

Insider Buying and Selling

In other Workday news, major shareholder David A. Duffield sold 107,500 shares of the stock in a transaction on Tuesday, June 30th. The shares were sold at an average price of $122.04, for a total transaction of $13,119,300.00. Following the completion of the sale, the insider owned 105,049 shares of the company’s stock, valued at $12,820,179.96. This represents a 50.58% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Zane Rowe sold 6,000 shares of the firm’s stock in a transaction on Tuesday, July 7th. The stock was sold at an average price of $143.70, for a total transaction of $862,200.00. Following the completion of the sale, the chief financial officer directly owned 288,460 shares in the company, valued at approximately $41,451,702. This trade represents a 2.04% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 875,020 shares of company stock valued at $113,938,503 over the last three months. 18.64% of the stock is owned by company insiders.

Institutional Trading of Workday

A number of institutional investors have recently modified their holdings of WDAY. State Street Corp grew its stake in shares of Workday by 1.0% in the fourth quarter. State Street Corp now owns 9,770,707 shares of the software maker’s stock worth $2,098,552,000 after purchasing an additional 96,139 shares during the last quarter. Hotchkis & Wiley Capital Management LLC raised its position in Workday by 47.5% during the 3rd quarter. Hotchkis & Wiley Capital Management LLC now owns 5,842,491 shares of the software maker’s stock valued at $1,406,463,000 after purchasing an additional 1,882,391 shares during the last quarter. Generation Investment Management LLP raised its position in Workday by 33.4% during the 4th quarter. Generation Investment Management LLP now owns 4,118,011 shares of the software maker’s stock valued at $884,466,000 after purchasing an additional 1,030,616 shares during the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its holdings in Workday by 41.5% in the 3rd quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 3,761,599 shares of the software maker’s stock worth $905,530,000 after buying an additional 1,103,421 shares during the period. Finally, The Manufacturers Life Insurance Company grew its position in shares of Workday by 4.4% in the 4th quarter. The Manufacturers Life Insurance Company now owns 2,772,669 shares of the software maker’s stock worth $595,514,000 after buying an additional 116,125 shares during the last quarter. 89.81% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analyst Weigh In

A number of analysts recently commented on WDAY shares. Sanford C. Bernstein restated an “outperform” rating and set a $216.00 price target on shares of Workday in a research note on Friday, May 22nd. Citigroup reissued a “neutral” rating on shares of Workday in a report on Friday. Wells Fargo & Company increased their target price on Workday from $185.00 to $215.00 and gave the company an “overweight” rating in a research note on Wednesday, August 12th. Guggenheim reiterated a “buy” rating and issued a $275.00 price objective on shares of Workday in a report on Friday, August 21st. Finally, KeyCorp restated an “overweight” rating on shares of Workday in a research report on Friday, August 14th. One investment analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating, fifteen have issued a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, Workday has an average rating of “Moderate Buy” and an average price target of $190.65.

More Workday News

Here are the key news stories impacting Workday this week:

• Positive Sentiment: Workday reported fiscal Q2 adjusted EPS of $2.75, above the roughly $2.61–$2.62 consensus, while revenue reached $2.649 billion, slightly exceeding estimates and increasing 12.8% year over year. Workday Surpasses Q2 Earnings and Revenue Estimates
• Positive Sentiment: Subscription revenue climbed 13.9% to $2.471 billion. Management also said AI-related offerings represented more than 25% of new contract value, reinforcing the company’s positioning in enterprise AI for HR, finance and IT. Workday Fiscal 2027 Second-Quarter Results
• Positive Sentiment: Profitability was a major strength: net income reportedly rose to $632 million from $228 million a year earlier, while operating profit increased 26.2%. Workday also authorized an additional $4 billion share repurchase, which could support per-share results and signal confidence in cash generation. Workday Reports Higher Profit and Revenue
• Positive Sentiment: Canaccord Genuity raised its price target to $225, adding to bullish sentiment following the earnings beat. Canaccord Raises Workday Price Target
• Neutral Sentiment: Management’s outlook broadly met expectations and targets at least two points of non-GAAP margin expansion, but investors are watching whether AI adoption can offset slower growth in the coming years. Workday Signals Future Growth and Margin Targets
• Negative Sentiment: Workday’s projected subscription-revenue growth near 11% for fiscal 2028 implies continued deceleration from current levels, raising valuation concerns for a stock trading at a premium earnings multiple. Workday Outlook Despite AI Demand
• Negative Sentiment: Recent insider activity was heavily weighted toward selling, including substantial sales by founder David Duffield. While such transactions may be planned, they can weigh on investor sentiment.

Workday Company Profile

Workday, Inc (NASDAQ: WDAY) is a provider of cloud-based enterprise applications focused on human capital management (HCM) and financial management. Founded in 2005 by Dave Duffield and Aneel Bhusri following their tenure at PeopleSoft, the company develops software-as-a-service solutions that help organizations manage workforce and financial processes in a unified, cloud-native environment. Workday’s platform emphasizes continuous updates, data security, and a configurable architecture aimed at large and mid-sized enterprises.

The company’s product portfolio centers on Workday Human Capital Management and Workday Financial Management, with additional offerings for payroll, talent management, workforce planning and analytics.