CEO of Workday Carl M. Eschenbach and Ana Eschenbach attend the Allen and Company Sun Valley Media and Technology Conference at The Sun Valley Resort in Sun Valley, Idaho, U.S., July 10, 2025.
Brendan McDermid | Reuters
Workday reported an earnings beat on Thursday, but issued guidance that was inline with estimates and warned of pressure in some areas. The shares slipped in extended trading.
Here’s how the company did relative to LSEG consensus:
- Earnings per share: $2.21 adjusted vs. $2.11 expected
- Revenue: $2.35 billion vs. $2.34 billion expected
Revenue increased 13% from a year earlier in the fiscal second quarter, which ended on July 31, according to a statement. The company’s net income rose to $228 million, or 84 cents per share, from $132 million, or 49 cents per share, in the same quarter last year.
For the current quarter, Workday called for $2.24 billion in subscription revenue and $180 million in professional services, which implies $2.42 billion in total revenue. Analysts polled by LSEG had expected a total of $2.42 billion. The company sees an adjusted operating margin of 28.0%, just below the 28.1% consensus among analysts surveyed by StreetAccount.
Workday, which provides software for finance and human resources departments, now sees $8.82 billion in subscription revenue for the full year, and $700 million in professional services revenue, implying a total of $9.52 billion. The LSEG consensus was $9.51 billion.
The part of Workday that works with state and local governments faced challenges during the quarter, CEO Carl Eschenbach said on the earnings call.
“I think we’ll continue to see that as people are trying to figure out what the funding slowdown is going to look like, all the way to the state level,” he said.
Meanwhile, higher education in the U.S. is facing pressure from President Donald Trump, who signed an executive order in March to shut down the Department of Education.
“If it’s a higher ed university that includes a healthcare system, they too are getting a little pullback in funding,” Eschenbach said. “So it’s something we’re keeping our eye on.”
Also on Thursday Workday said it’s acquiring Paradox, a company with conversational artificial intelligence software for recruiting, for undisclosed terms. During the quarter, Workday announced AI agents for extracting accounting details from documents and reporting absent days.
As of Thursday’s market close, Workday shares were down about 12% this year, while the Nasdaq is up about 9%.
