Workday Earnings: What To Look For From WDAY

Adam Hejl /
2022/08/24 5:13 am EDT

Finance and HR software company Workday (NASDAQ:WDAY) will be reporting earnings tomorrow after market hours. Here's what you need to know.

Last quarter Workday reported revenues of $1.43 billion, up 22% year on year, in line with analyst expectations. It was a mixed quarter for the company, with top-line results in line with analysts' estimates but a miss on the bottom line.

Is Workday buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Workday's revenue to grow 20.5% year on year to $1.51 billion, in line with the 18.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.80 per share.

Workday Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 1.33%.

Looking at Workday's peers in the finance and HR software segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Bill.com delivered top-line growth of 155% year on year, beating analyst estimates by 9.35% and Paycor reported revenues up 26.1% year on year, exceeding estimates by 7.26%. Bill.com traded up 18.2% on the results, and Paycor traded up 3%. Read our full analysis of Bill.com's results here and Paycor's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 3.12% over the last month. Workday is up 8.96% during the same time, and is heading into the earnings with analyst price target of $214.2, compared to share price of $158.31.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.