What's Happening with Workday Shares on Wednesday?

Workday, Inc. (NASDAQ: WDAY) is experiencing a decline in its stock price on Wednesday, following the company's announcement of its third-quarter earnings for the 2025 fiscal year on Tuesday.

Overview of the Earnings Report: After the earnings were released, Workday shares dropped around 10%, with this downward trend continuing into Wednesday. The company reported adjusted earnings per share (EPS) of $1.89, surpassing analyst projections of $1.76.

In addition, Workday saw sales amount to $2.16 billion, which also exceeded analyst expectations of $2.12 billion. Key financial metrics included a 12-month subscription revenue backlog of $6.98 billion and an overall total subscription revenue backlog of $22.19 billion. The company's free cash flows stood at $359 million, while operating cash flows were reported at $406 million.

Looking forward, Workday provided guidance for the fourth quarter of the 2025 fiscal year, predicting subscription revenue to be around $2.02 billion. Furthermore, the company adjusted its total subscription revenue forecast for the fiscal year, reducing it slightly from a range of $7.70 billion to $7.72 billion, to a new figure of $7.703 billion.

CEO Carl Eschenbach commented on the results, stating, "Workday's solid performance in Q3 reflects the trust our customers place in us across industries, the global momentum around our AI-driven innovations, and the strength of our partner ecosystem. Organizations are increasingly consolidating on the Workday platform to reduce total cost of ownership, simplify their operations, and to unlock the power of our best-in-class AI solutions. Workday gives them the ultimate advantage – and that positions our business for long-term success."

Analyst Reactions: In the wake of the earnings announcement, several analysts adjusted their price targets for Workday stock.

• Piper Sandler analyst Brent Bracelin shifted his rating from Overweight to Neutral, lowering the price target from $285 to $270.
• Needham analyst Scott Berg maintained a Buy rating with a price target of $300.
• B of A Securities analyst Brad Sills kept his Buy rating but reduced the price target from $310 to $285.
• Barclays analyst Raimo Lenschow held an Overweight rating, adjusting the price target from $314 to $305.
• Loop Capital analyst Yun Kim maintained a Hold rating, decreasing the price target from $270 to $242.
• Morgan Stanley analyst Keith Weiss reaffirmed an Overweight rating but raised the price target from $315 to $330.

Current Stock Price Movement: At the time of reporting, Workday's stock was trading at $256.74, reflecting a decline of 4.97% based on data from Benzinga Pro.

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Workday, Stocks, Earnings