Workday (NASDAQ:WDAY) shares rose around 3% pre-market after the company reported results for its second fiscal quarter.
EPS of $1.43 came in better than the consensus estimate of $1.26. Revenue grew 16.3% year-over-year to $1.79 billion, beating the consensus estimate of $1.77B.
Subscription revenues rose 18.8% year-over-year to $1.62B. 24-month subscription revenue backlog was $10.27B, representing a 22.7% year-over-year growth.
"We're incredibly well positioned going into the second half of our fiscal year as Workday is increasingly seen as the system of trust for enterprises around the world," said co-CEO Carl Eschenbach.
For Q3/24, the company expects total revenue in the range of $1.843-$1.845B, which compares to the consensus of $1.84B, with subscription revenue of $1.678-$1.68B.
For the full year, the company sees total revenue of $7.20-$7.240B, roughly in line with the consensus of $7.21B, with subscription revenue seen in the range of $6.57-$6.59B.
For Goldman Sachs analysts, the results were "solid."
"We remain constructive on management’s LT targets of $10bn in revenue. Cost discipline and operating efficiencies can also support LT margins that exceed management’s targets of 25%. We reiterate our Buy rating."
On the other hand, Guggenheim analysts remain Sell-rated on the WDAY stock.
"While we acknowledge Workday as a well-run company providing significant value to its customer base, we continue to rate WDAY as a Sell as we see risk in future estimates and see a persistent R&D expense that will suppress FCF margins over the very long term," they said in a note.
Additional reporting by Senad Karaahmetovic