Workday, Inc. WDAY is set to release third-quarter fiscal 2025 results on Nov. 26, after the closing bell. In the trailing four quarters, the company delivered an earnings surprise of 9.13%, while in the last reported quarter, it delivered an earnings surprise of 7.36%.
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Based in Pleasanton, CA, WDAY is expected to have recorded higher revenues on the back of solid demand for its human capital management and financial management solutions across different end markets.
Factors at Play
During the quarter, Workday introduced cutting-edge global HR and payroll solutions in collaboration with Strada, aimed at providing organizations with a unified view of their payroll data to enhance business growth and success. The company also collaborated with Axonify to develop an advanced set of tools that address the distinct requirements of frontline workers.
Workday also formed a partnership with Equifax to accelerate and streamline the employment and income verification process by leveraging complementary capabilities. These initiatives are expected to have had a favorable impact on third-quarter earnings.
In the quarter under review, the University of Arkansas System has deployed the Workday Student Management system across seven campuses. Workday is also witnessing healthy traction in the U.S. public sector market. These factors are likely to have had a positive impact on Workday’s fiscal third-quarter performance.
WDAY’s Key Developments in Q3
In the to-be-reported quarter, the company inked a definitive agreement to acquire the leading AI-based Document Intelligence Platform Evisort for an undisclosed amount. With this buyout, WDAY is aiming to integrate Evisort’s AI-native solution across its finance and human resource solution suite. This will enhance information accessibility and speed up the process of data extraction, enabling WDAY clients to transfer accurate financial or operational details to the Workday platform directly in a matter of seconds.
Organizations are looking for a solution that can help manage the exponential growth of data that is overwhelming the processing capabilities. By incorporating Evisort AI native document intelligence technology, WDAY is set to capitalize on this evolving market trend.
Overall Expectations From Workday
Our estimate for Subscription Services revenues is pegged at $1.95 billion, suggesting 15.6% year-over-year growth. Our estimate for Professional Services revenues is pegged at $175 million.
For the October quarter, the Zacks Consensus Estimate for revenues is pegged at $2.13 billion, suggesting an increase from the year-ago quarter’s reported figure of $1.87 billion. The consensus estimate for adjusted earnings per share is pegged at $1.72, indicating an increase from $1.53 reported in the prior year.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Workday for the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.72. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Workday, Inc. Price and EPS Surprise
Workday, Inc. price-eps-surprise | Workday, Inc. Quote
WDAY’s Zacks Rank: Workday currently carries a Zacks Rank #2.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Pure Storage Inc. PSTG is set to release quarterly numbers on Dec. 03. It has an Earnings ESP of +2.98% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Manchester United PLC MANU is scheduled to report quarterly numbers on Nov. 26. It has an Earnings ESP of +29.83% and carries a Zacks Rank of 3.
The Earnings ESP for Abercrombie & Fitch Co. ANF is +4.59% and it has a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Nov. 26.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
