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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.




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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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