Workday's AI Products Drive Revenue Growth Amid SaaS Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Source: NASDAQ.COM
- Significant AI Growth: Workday's first-quarter annual account value (AAV) from agentic AI products surged 200% year-over-year, nearing $500 million in annual recurring revenue, showcasing the company's strong growth potential in AI despite a challenging hiring environment.
- Strong Financial Performance: The company reported a 13.5% year-over-year increase in total revenue to $2.54 billion in Q1, with subscription revenue rising over 14% to $2.35 billion, and adjusted earnings per share (EPS) climbing 19% to $2.66, exceeding market expectations and indicating business resilience.
- Optimistic Future Outlook: Workday forecasts a 13% growth in Q2 subscription revenue to about $2.455 billion, slightly above the $2.45 billion consensus, while maintaining its full-year subscription revenue outlook between $9.925 billion and $9.95 billion, reflecting ongoing growth confidence.
- Attractive Market Valuation: Despite a significant drop in stock price prior to the report, Workday's forward price-to-sales (P/S) ratio stands at only 3.1 and forward price-to-earnings (P/E) ratio at 12.3, combined with its investments in AI, positioning it as a solid rebound candidate that may attract investor interest.
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Analyst Views on WDAY
Wall Street analysts forecast WDAY stock price to rise
31 Analyst Rating
22 Buy
9 Hold
0 Sell
Moderate Buy
Current: 130.010
Low
235.00
Averages
275.19
High
325.00
Current: 130.010
Low
235.00
Averages
275.19
High
325.00
About WDAY
Workday, Inc. is an enterprise artificial intelligence (AI) platform for managing people, money, and agents. The Company provides organizations with cloud solutions powered by artificial intelligence (AI) to solve business challenges, including supporting and empowering the workforce, managing finances and spending. It offers a suite of cloud-based enterprise solutions that address the needs of the C-suite on a platform designed to be open, extensible, and configurable, allowing integration with other applications and the ability for customers and partners to build custom applications. It offers Workday Build, which is an open developer platform that provides customers and partners with the ability to create and share AI-powered solutions. It serves financial services, government, healthcare, higher education, hospitality, manufacturing, professional and business services, retail, technology and media, and transportation.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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