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Workday Beats Q3 Estimates as Margin Outlook Disappoints, Shares Drop in Late Trading

Recent AI-focused deals such as Pipedream plus a planned Sana purchase underscore a push to broaden its platform beyond core HR software.

Overview

  • Adjusted EPS came in at $2.32 versus $2.18 expected, with revenue of $2.43 billion topping the $2.42 billion consensus.
  • Shares fell more than 5% after-hours as the company guided to at least 28.5% adjusted operating margin for Q4, below Street projections.
  • Workday forecast Q4 subscription revenue of $2.355 billion, and reported Q3 subscription revenue of $2.24 billion with a 28.5% adjusted operating margin.
  • Revenue rose about 13% year over year in the quarter ended Oct. 31, with net income of $252 million, up from $193 million a year earlier.
  • The company detailed AI agents and struck deals including a definitive agreement to acquire Pipedream and plans to buy Sana for $1.1 billion, while Elliott Management disclosed a stake above $2 billion.