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Workday beats estimates but CEO warns of challenges in education and government
CNBC· 2025-08-21 21:34
Company Performance - Workday reported a revenue increase of 13% year-over-year for the fiscal second quarter, totaling $2.35 billion, surpassing the expected $2.34 billion [1][5] - Net income rose to $228 million, or 84 cents per share, compared to $132 million, or 49 cents per share, in the same quarter last year [1] Future Guidance - For the current quarter, Workday anticipates $2.24 billion in subscription revenue and $180 million in professional services, leading to a total revenue forecast of $2.42 billion, aligning with analyst expectations [2] - The company projects an adjusted operating margin of 28.0%, slightly below the consensus of 28.1% [2] Full Year Outlook - Workday expects $8.82 billion in subscription revenue and $700 million in professional services revenue for the full year, totaling $9.52 billion, which is in line with the LSEG consensus of $9.51 billion [3] Challenges and Acquisitions - The segment serving state and local governments faced challenges, attributed to uncertainties regarding funding [3][4] - Workday announced the acquisition of Paradox, a company specializing in conversational AI for recruiting, although the terms were not disclosed [4] Market Performance - As of the latest market close, Workday shares have declined approximately 12% year-to-date, contrasting with a 9% increase in the Nasdaq [5]