Workday Stock Falls As WDAY Stock Guidance Edges By Views Amid Acquisition

Workday (WDAY) reported third-quarter earnings and revenue that topped estimates but subscription revenue guidance just edged by Wall Street targets. WDAY stock fell on Friday as the company announced an acquisition.


Workday said it has agreed to buy software maker Vndly for $510 million in cash.

Pleasanton, Calif.-based Workday reported results for the period ended Oct. 30 after the market close on Thursday. Workday earnings were $1.10 per share, up 28% from the year-earlier period. Revenue climbed 20% to $1.33 billion, including acquisitions.

Subscription revenue rose 21% to $1.17 billion, edging by estimates of $1.16 billion.

A year earlier, Workday earnings were 86 cents a share on sales of $1.11 billion. Analysts expected Workday earnings of 87 cents a share on revenue of $1.31 billion.

“We think revenue performance in the quarter was decent, but not outstanding,” said BMO Capital Markets analyst Keith Bachman in a report. “WDAY guided January-quarter total revenues about 0.5% above consensus. For fiscal 2023, WDAY provided preliminary guidance of 20% subscription revenue growth, which we think will come as a disappointment to investors.”

The company sells software for human capital management, such as payroll tools. It has expanded into financial software.

WDAY Stock: Guidance Edges By Estimates

For the current quarter ending in January, the software maker forecasts subscription revenue of $1.217 billion at the midpoint of its guidance vs. analyst estimates of $1.207 billion.

Workday stock sanke 4.2% to close at 286.60 on the stock market today.

Heading into the Workday earnings report, WDAY stock traded just above a buy zone with an entry point of 282.87. Workday stock had gained about 24% in 2021.

Workday stock owned a Relative Strength Rating of 85 out of a possible 99, according to IBD Stock Checkup.

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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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