Workday CEO Carl Eschenbach, right, walks to the morning session during the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on July 11, 2025.
David Paul Morris | Bloomberg | Getty Images
Workday shares slid more than 5% in extended trading Tuesday after the finance and human resources software maker issued quarterly margin guidance that came in below Wall Street projections.
Here’s how the company did in comparison with LSEG consensus:
- Earnings per share: $2.32 adjusted vs. $2.18 expected
- Revenue: $2.43 billion vs. $2.42 billion expected
The company forecast a fourth-quarter adjusted operating margin of at least 28.5% and $2.355 billion in subscription revenue, according to a statement. The StreetAccount consensus was a 28.7% margin and $2.35 billion in subscription revenue.
Workday’s revenue grew about 13% year over year in the quarter, which ended on Oct. 31. Net income of $252 million, or 94 cents per share, was up from $193 million, or 72 cents per share, in the same quarter a year ago.
Subscription revenue in the third quarter totaled $2.24 billion, with an adjusted operating margin of 28.5%. Analysts polled by StreetAccount had anticipated $2.24 billion in subscription revenue and a 28.1% margin.
During the fiscal third quarter, Workday announced artificial intelligence agents for analyzing employee performance testing financial health, and the company revealed plans to buy AI and learning software startup Sana for $1.1 billion. Also, activist investor Elliott Management said it had built a Workday stake worth over $2 billion.
Workday has seen its stock decline this year as pundits discuss the risk of generative AI tools threatening the growth prospects for cloud software incumbents. Company shares have fallen 9% so far in 2025, while the Nasdaq Composite index has gained 19%.
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