Workday (WDAY) Reports Earnings Tomorrow. What To Expect
Finance and HR software company Workday (NASDAQ:WDAY) will be reporting earnings tomorrow after market close. Here's what to look for.
Last quarter Workday reported revenues of $1.87 billion, up 16.7% year on year, beating analyst revenue expectations by 1.1%. It was a decent quarter for the company, with an improvement in its gross margin. A beat on non-GAAP operating income shows that expense control is solid and outperformance on the free cash flow line was also welcome. It was also encouraging that the company raised its full year outlook for both subscription revenue and non-GAAP operating margin.
Is Workday buy or sell heading into the earnings? Read our full analysis here, it's free.
This quarter analysts are expecting Workday's revenue to grow 16.4% year on year to $1.92 billion, slowing down from the 19.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.47 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 0.9%.
Looking at Workday's peers in the finance and HT software segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. Bill.com delivered top-line growth of 22.5% year on year, beating analyst estimates by 6.8% and Paycor reported revenues up 20.1% year on year, exceeding estimates by 2.4%. Bill.com traded up 16.1% on the results, Paycor was flat on the results.
Read our full analysis of Bill.com's results here and Paycor's results here.
Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, and while some of the finance and HR software stocks have fared somewhat better, they have not been spared, with share price declining 2.9% over the last month. Workday is up 3% during the same time, and is heading into the earnings with analyst price target of $301.1, compared to share price of $305.7.
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