Workday Stock Slides After Q3 Results Beat Expectations, FY Subscription Revenue Guidance Revised Lower

Workday, Inc. WDAY reported its third-quarter results after Tuesday's closing bell. Here's a look at the details from the report. 

The Details: Workday reported quarterly earnings of $1.89 per share, which beat the analyst consensus estimate of $1.76. Quarterly revenue came in at $2.16 billion which beat the consensus estimate of $2.13 billion and is an increase over sales of $1.87 billion from the same period last year.

• Subscription revenues were $1.959 billion, up 15.8% year-over-year.
• The 12-month subscription revenue backlog was $6.98 billion, up 15.3% from the same period last year.
• Total subscription revenue backlog was $22.19 billion, increasing 20.3% year-over-year.
• Operating cash flows were $406 million compared to $451 million in the prior year.
• Free cash flows were $359 million compared to $391 million in the prior year.

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“Workday’s solid performance in Q3 reflects the trust our customers place in us across industries, the global momentum around our AI-driven innovations, and the strength of our partner ecosystem,” said Carl Eschenbach, CEO of Workday.

“Organizations are increasingly consolidating on the Workday platform to reduce total cost of ownership, simplify their operations, and to unlock the power of our best-in-class AI solutions. Workday gives them the ultimate advantage — and that positions our business for long-term success,” Eschenbach added.

Outlook: Workday revised its fiscal 2025 subscription revenue outlook lower from between $7.7 billion and $7.725 billion to $7.703 billion, representing growth of 17%.

WDAY Price Action: According to Benzinga Pro, Workday shares are down 10.32% after-hours at $242 at the time of publication Tuesday. 

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