Workday (NASDAQ:WDAY) Issues Earnings Results

Workday (NASDAQ:WDAY) posted its quarterly earnings data on Thursday. The software maker reported $2.75 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.61 by $0.14, FiscalAI reports. The business had revenue of $2.65 billion during the quarter, compared to analyst estimates of $2.64 billion. Workday had a return on equity of 20.06% and a net margin of 12.32%.The company’s revenue for the quarter was up 12.8% on a year-over-year basis. During the same period last year, the company earned $2.21 EPS.

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

WDAY stock opened at $204.72 on Friday. The company has a quick ratio of 1.01, a current ratio of 1.01 and a debt-to-equity ratio of 0.30. The business’s fifty day simple moving average is $157.71 and its two-hundred day simple moving average is $140.81. Workday has a twelve month low of $110.36 and a twelve month high of $249.85. The firm has a market cap of $50.57 billion, a price-to-earnings ratio of 41.53, a PEG ratio of 2.06 and a beta of 1.08.

Insider Activity

In other news, insider Gerrit S. Kazmaier sold 2,728 shares of the company’s stock in a transaction dated Tuesday, July 7th. The shares were sold at an average price of $143.62, for a total value of $391,795.36. Following the transaction, the insider directly owned 266,388 shares in the company, valued at approximately $38,258,644.56. This represents a 1.01% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. 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. Also, CAO Mark S. Garfield sold 918 shares of the firm’s stock in a transaction dated Friday, July 10th. The stock was sold at an average price of $142.19, for a total transaction of $130,530.42. Following the completion of the transaction, the chief accounting officer directly owned 73,718 shares in the company, valued at $10,481,962.42. This represents a 1.23% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders sold 875,020 shares of company stock valued at $113,938,503. Insiders own 18.64% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors have recently bought and sold shares of WDAY. Rakuten Securities Inc. purchased a new stake in shares of Workday in the 2nd quarter worth $25,000. Measured Wealth Private Client Group LLC purchased a new position in shares of Workday during the third quarter valued at $26,000. JPL Wealth Management LLC purchased a new position in shares of Workday during the third quarter valued at $30,000. Quarry LP bought a new stake in shares of Workday in the fourth quarter valued at about $36,000. Finally, Aster Capital Management DIFC Ltd purchased a new stake in Workday in the fourth quarter worth about $38,000. 89.81% of the stock is currently owned by hedge funds and other institutional investors.

Key Workday News

Here are the key news stories impacting Workday this week:

• Positive Sentiment: Workday reported fiscal Q2 revenue of $2.649 billion, up 12.8% year over year, while subscription revenue increased 13.9% to $2.471 billion. Adjusted EPS of $2.75 exceeded the $2.61 consensus estimate. Workday Announces Fiscal 2027 Second Quarter Financial Results
• Positive Sentiment: Profitability was a major bright spot: net income rose sharply to $632 million from $228 million a year earlier, and analysts cited subscription growth and expanding margins as reasons for increased price targets. WDAY Q2 Earnings Beat Estimates on Subscription Growth, Margin Gains
• Positive Sentiment: AI products accounted for more than one-quarter of new contract value, suggesting growing customer demand for Workday’s AI agents and supporting the company’s longer-term growth strategy. AI Products Accounted for More Than a Quarter of Workday’s New Q2 Contract Value
• Positive Sentiment: Workday authorized a substantial $4 billion share-repurchase program, potentially providing support for per-share results and signaling confidence in cash generation and valuation.
• Positive Sentiment: Several firms raised their targets after the report, including BMO Capital Markets and Needham to $230, KeyCorp to $215 and Monness to $218, with buy, overweight or outperform ratings.
• Neutral Sentiment: Analyst opinion remains divided. Some see AI momentum and margin expansion driving upside, while others believe the current valuation already reflects much of the improvement.
• Neutral Sentiment: Jim Cramer characterized the results as evidence that there is no broad SaaS-sector meltdown, supporting sentiment toward enterprise software stocks. Jim Cramer Says Workday Results Show No SaaS Meltdown in Sight
• Negative Sentiment: Workday’s fiscal 2027 revenue outlook of approximately $9.9 billion to $10.0 billion was below the roughly $10.7 billion analyst consensus, raising concerns about a potential slowdown and the risk of another guidance reduction. Workday’s outlook meets estimates despite AI demand
• Negative Sentiment: TD Cowen, Freedom Broker, Piper Sandler and DA Davidson maintained neutral or hold views, with targets ranging from $190 to $210—mostly indicating limited upside or downside from recent levels.

Analyst Upgrades and Downgrades

A number of analysts recently issued reports on the company. Wells Fargo & Company raised their price target on Workday from $215.00 to $225.00 and gave the stock an “overweight” rating in a research report on Friday. HC Wainwright set a $140.00 price objective on shares of Workday in a research report on Wednesday, May 27th. UBS Group set a $230.00 target price on shares of Workday in a research note on Friday. Royal Bank Of Canada lifted their price target on shares of Workday from $220.00 to $240.00 and gave the stock an “outperform” rating in a research note on Friday. Finally, The Goldman Sachs Group cut their price target on shares of Workday from $206.00 to $151.00 and set a “neutral” rating on the stock in a report on Tuesday, May 26th. Twenty equities research analysts have rated the stock with a Buy rating, seventeen have issued a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus target price of $206.00.

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.