Workday (WDAY) to Report Q1 Earnings: What's in Store?
Workday, Inc. WDAY is scheduled to report first-quarter fiscal 2022 results on May 26.
The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at 73 cents, indicating an improvement of 65.9% from the prior-year quarter’s levels. Notably, the consensus estimate for earnings has been stable in the past 30 days.
The consensus mark for fiscal first-quarter revenues is currently pegged at $1.16 billion, indicating an improvement of 14% from the prior-year quarter’s levels.
Workday, Inc. Price and EPS Surprise
Workday, Inc. price-eps-surprise | Workday, Inc. Quote
Factors to Consider
Workday’s fiscal first-quarter results are likely to benefit from healthy demand for its cloud-based human capital management (HCM) solutions.
For fiscal first quarter, Workday expects subscription revenues in the range of $1.018-$1.020 billion. The Zacks Consensus Estimate is pegged at $1.02 billion, indicating growth of 15.6% on a year-over-year basis.
Coronavirus crisis-induced accelerated digital transformation of enterprises taking place across all industries is anticipated to have driven robust uptake of Workday Adaptive Planning, Workday Prism Analytics and Workday Strategic Sourcing as well as Spend Management offerings.
Increasing clout of Workday People Experience and Workday Extend, integrated with enhanced capabilities might have contributed to the company’s fiscal first-quarter performance.
Also, Workday People Analytics is gaining traction and might have favored the top line performance in the about to-be-reported quarter. Workday People Analytics is an augmented analytics application that offers vital insights paeratining to risks and opportunities related to a company’s workforce.
Workday is also well-poised to gain from growing clout of FINS Plus solution, Workday Accounting Center and Workday Talent Marketplace offerings.
The company is also expected to benefit from healthy uptick in its two new offerings, VIBE Central and VIBE Index, that help HR leaders boost inclusivity as well as accelerate belonging and diversity (B&D) endeavours within the workplace. Workday noted that VIBE is the acronym for Value Inclusion, Belonging and Equity.
Markedly, professional services revenues for fiscal first quarter are projected to be $139 million driven by new business trends. The Zacks Consensus Estimate is pegged at $139 million, suggesting an increase of 2.2% on a year-over-year basis.
Synergies from Scout RFP and Adaptive Insights acquisitions are expected to have benefited fiscal first-quarter performance for this Zacks Rank #3 (Hold) company.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Nonetheless, increased expenditures on product portfolio expansion as well as sales and marketing might amid increasing competition from the likes of Oracle ORCL, SAP SAP and Automatic Data Processing ADP are likely to have limited margin expansion in fiscal first quarter.
Further, pandemic-induced layoffs due to broader macroeconomic weakness and sluggish spend from small and medium sized businesses (SMBs) are expected to have negatively impacted contract renewals in the fiscal first quarter, which in turn is likely to have acted as a headwind.
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