Workday reports healthy Q2 growth

Workday has experienced sustained strong global demand for its product in Q2 of fiscal 2023, as organizations continue to drive digital transformation across finance and HR to support the changing world of work.

The company reported adjusted earnings of 83 cents per share on revenues of $1.54bn, beating analysts’ expectations of an adjusted EPS of 80 cents on sales of $1.52bn.

Subscription revenues were $1.37bn, an increase of 22.8 percent from the same period last year. Operating loss was $34.1m, or negative 2.2 percent of revenues, while non-GAAP operating income for the second quarter was $301.6m, or 19.6 percent of revenues.

Chano Fernandez, co-CEO of Workday, said: “Our continued momentum is a testament to our strategy, which focuses on delivering significant value to our customers and helping them adapt and grow in today’s dynamic environment. As we look to the future, we will continue to invest in key industries and our global opportunity, as well as grow our footprint with existing customers and our partner ecosystem.”

Barbara Larson, chief financial officer at Workday, added: “We delivered strong second-quarter results with healthy growth across the business, as enterprises of all sizes increasingly realize the need for a flexible, modern finance and HR solution to navigate their businesses and drive change during these uncertain times.”

Workday is maintaining its guidance for fiscal 2023 subscription revenue to be in the range of $5.537bn to $5.557 bn, representing 22 percent year-over-year growth. It expects third quarter subscription revenue of $1.418bn to $1.420bn, growth of 21 percent.

The company is raising its fiscal 2023 non-GAAP operating margin guidance to 19 percent, reflecting the scalability of its commitment to longer-term margin expansion.