Categories Earnings, Technology

Workday Q3 earnings preview: Here’s all that investors need to know

Workday (NASDAQ: WDAY), which provides human capital management solutions, will be publishing third-quarter results on Tuesday after the closing bell. Earlier, the company’s executives had predicted a marked increase in subscription revenues in the to-be-reported quarter, both sequentially and on an annual basis.

Wall Street’s forecast for third-quarter revenue is $920.78 million, up 27% from last year. Consequently, earnings are seen gaining by a fifth year-over-year to $0.31 per share.  

workday revenue trend

The initiatives to enhance user experience through innovations in the portfolio have helped the company retain its client base and attract more customers. Considering Workday’s growing footprint in overseas markets, especially in Europe and Asia, there will be an uptick in international revenues in the third quarter.

Stable Demand

The company’s human capital and financial management solutions continue to witness solid demand in key markets, including advanced offerings like Workday Prism Analytics and Adaptive Insights, even as more and more enterprises shift to cloud platforms. The trend is estimated to have lifted third-quarter revenues, in-line with the forecasts.

Cost Woes

On the negative side, margins might come under pressure from high costs, mainly those related to promotional activities and human resources.

The company recently witnessed multiple rating actions, with the latest being a downgrade by Morgan Stanley to equal-weight from overweight, citing a potential slowdown in subscription growth due to lower enterprise spending. Earlier this week, Bank of America and Wedbush reiterated their buy and hold ratings, respectively, on the company.

Looking Back

In the second quarter, earnings increased to $0.44 per share on revenues of $887.8 million, and the results surpassed analysts’ forecast. Subscription revenue, which accounts for about 85% of total revenues, grew 34%. Buoyed by the positive results, the management raised its revenue guidance for fiscal 2020.

Also see: Workday Q2 2020 Earnings Conference Call Transcript

At the stock market, it has been a dismal show by Workday since hitting a peak mid-year. The stock declined 14% in the past six months and traded below the $180-mark this week.

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips

Most Popular

ADBE Earnings: Adobe reports higher Q2 earnings; results beat estimates

Design software maker Adobe Inc. (NASDAQ: ADBE) on Thursday reported an increase in second-quarter 2024 revenue and earnings. The results also topped expectations. Second-quarter revenues came in at $5.31 billion,

Dollar Tree (DLTR): A look at the discount retailer’s growth initiatives at its namesake banner

Shares of Dollar Tree, Inc. (NASDAQ: DLTR) were down over 1% on Thursday. The stock has dropped 24% year-to-date. The company delivered sales and GAAP earnings growth for the first

Key highlights from Signet Jewelers’ (SIG) Q1 2025 earnings results

Signet Jewelers Limited (NYSE: SIG) reported first quarter 2025 earnings results today. Sales decreased 9.4% year-over-year to $1.5 billion. Sales were down 9.6% on a constant currency basis. Same-store sales

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top