Workday, Inc. Reports Fiscal 2025 Third Quarter Financial Results
Workday, Inc. (NASDAQ: WDAY), a leading provider of enterprise cloud applications, has announced its financial results for the fiscal third quarter ending October 31, 2024.
Financial Metrics
| Metric | Q3 Fiscal 2025 | Change Year-over-Year | Consensus Estimates | Comparison to Estimates |
|---|---|---|---|---|
| Total Revenue | $2.160 billion | +15.8% | $2.13 billion | Above Estimates |
| Non-GAAP EPS | $1.89 | +21.2% | $1.76 | Above Estimates |
| GAAP EPS | $0.72 | +67.4% | - | - |
Interpretation: Workday's financial performance exceeded expectations with robust growth in both total revenue and non-GAAP earnings per share, surpassing the Wall Street consensus estimates. The year-over-year increases in revenue and earnings highlight the company's strong operational execution and market position.
Revenue by Segment
| Revenue Segment | Q3 Fiscal 2025 | Change Year-over-Year |
|---|---|---|
| Subscription Revenue | $1.959 billion | +15.8% |
Interpretation: Subscription revenue continues to be the backbone of Workday's financial success, maintaining a consistent growth rate of 15.8% year-over-year, indicating strong customer retention and acquisition.
Key Developments and Operational Highlights
- Workday unveiled Workday Illuminate, its next generation of AI solutions.
- Introduced new AI agents and Workday Assistant for streamlining HR and finance processes.
- Added several prominent clients, including CommonSpirit Health and New Jersey Institute of Technology.
- Closed acquisition of Evisort, an AI-native document intelligence platform.
- Appointed Rob Enslin as President and Chief Commercial Officer.
Executive Comments
CEO Carl Eschenbach emphasized customer trust and AI-driven innovations as key drivers of the company's performance, while CFO Zane Rowe highlighted strong progress in growth areas and reaffirmed the focus on sustaining profitable growth.
Share Repurchase Program
Workday repurchased approximately 0.6 million shares for $157 million, underscoring the company's commitment to returning capital to shareholders.
Forward Guidance
For the fiscal 2025 fourth quarter, Workday provides guidance on subscription revenue at $2.025 billion, representing a 15% growth, and a non-GAAP operating margin of 25.0%. For the full year, guidance is $7.703 billion in subscription revenue, a 17% increase, with a non-GAAP operating margin of 25.5%.
Stock Price Movement
Following the earnings release, Workday's stock experienced a 1.03% increase, indicating positive market reception to the robust quarterly results and optimistic forward guidance.
In summary, Workday, Inc. displayed strong fiscal third-quarter performance with notable gains in its key business segments and continued to deliver innovative solutions, driving enhanced customer engagement and financial growth.
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