Workday reported first quarter earnings that topped analyst consensus estimates while revenue edged by views. The enterprise software maker's guidance for Workday stock came in below expectations.
Pleasanton, Calif.-based Workday reported financial results after the market close on Thursday.
For the quarter ending April 30, Workday earnings rose 33% to $1.74 per share from a year earlier on an adjusted basis. Revenue climbed 18% to $1.99 billion, including acquisitions.
Workday Stock: Guidance Light
Analysts expected Workday earnings of $1.58 a share on revenue of $1.97 billion. A year earlier, Workday earnings were $1.31 a share on sales of $1.68 billion.
Current remaining performance obligations, or CRPO bookings, rose 18%, in-line with estimates.
On the stock market today, WDAY stock fell 12.3% to 228.86 in early trading.
"In a historically seasonally weak bookings quarter, the company called out longer sales cycles in Europe and slower-than-expected employee growth impact on contracting when customers renew," said BMO Capital Markets analyst Daniel Jester in a report. "Comments from Workday management are consistent with an overall challenging sales landscape noted by many peers."
For the current July quarter, the company said it expects subscription revenue at $1.895 billion at the mid point of guidance versus estimates of $1.93 billion.
Also, Workday predicted CRPO in a range of 15% to 16% growth versus estimates of 17.5%. The company lowered its fiscal 2025 revenue forecast by $25 million.
The company sells software for human resources management, such as payroll tools. About 70% of revenue comes from human capital management products. Also, it has expanded into financial software.
Heading into the Workday earnings report, shares had retreated 5% in 2024.
According to IBD Stock Checkup, WDAY stock holds a Relative Strength Rating of 51 out of a best-possible 99. Workday stock trades near its 50-day moving average.
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