Workday Shines In Q2 With Robust Revenue Growth And AI Momentum, Raises FY24 Outlook

Workday Inc WDAY reported Q2 FY24 revenue growth of 16.3% Y/Y to $1.79 billion, beating the consensus of $1.77 billion.

Subscription revenues grew 18.8% Y/Y to $1.62 billion.

Adjusted operating income rose to $421.4 million from $301.6 million a year ago, with a margin expansion of 23.6% from 19.6% the prior year.

Adjusted EPS of $1.43 surpassed the consensus of $1.26.

Operating cash flow stood at $425.3 million vs. $114.4 million a year ago. As of July 31, 2023, cash, cash equivalents, and marketable securities stood at $6.66 billion.

"We're seeing continued momentum with more than 3,000 customers sharing their data with our ML models, more than 50 million ML inferences processed per day, and multiple generative AI capabilities in development including several that we plan to unveil next month at Workday Rising. We believe this momentum will continue to grow as more companies look to Workday as their trusted partner in responsible implementation of AI and ML," said Aneel Bhusri, co-founder, co-CEO, and chair.

Outlook: The company expects Q3 subscription revenue of $1.678 billion to $1.680 billion (+17% Y/Y).

WDAY raised FY24 subscription revenue guidance to $6.570 billion to $6.590 billion from $6.550 billion and $6.575 billion guided earlier and adjusted operating margin to 23.5% from 23% earlier. 

Price Action: WDAY shares closed lower by 2.32% at $224.87 on Thursday.