Workday (WDAY) Q3 2025 Earnings Report

work day Shares fell as much as 11% in extended trading Tuesday after the financial and human resources software maker issued a quarterly forecast that fell short of Wall Street projections.

For the fiscal fourth quarter, Workday expected an adjusted operating margin of 25% on $2.03 billion in subscription revenue. Analysts surveyed by StreetAccount expected a 25.5% margin and $2.04 billion in subscription revenue.

Here’s how the company performed during the fiscal third quarter compared to the consensus among analysts surveyed by LSEG:

• Earnings per share: $1.89 adjusted vs. $1.76 expected
• Revenue: $2.16 billion vs. $2.13 billion expected

Workday’s total revenue grew approximately 16% year over year in the quarter ended Oct. 31, according to a statement. Subscription revenue totaled $1.96 billion, up about 16%, in line with the $1.96 billion consensus among analysts surveyed by StreetAccount.

The company reported net income of $193 million, or 72 cents per share, up from $114 million, or 43 cents per share, in the same quarter a year earlier. Adjusted operating margin for the quarter was 26.3%. StreetAccount expected 25.4%.

In some parts of the world, Workday still faces greater scrutiny than usual on its deals, Workday CFO Zane Rowe said on a conference call with analysts.

Now the company is looking to grow its business in the U.S. government, said CEO Carl Eschenbach. “We think there’s a huge opportunity there, as probably more than 80% of HCM and ERP are still on-premise,” he said, referring to human capital management and enterprise resource planning.

Earlier this month, President-elect Donald Trump announced plans to create an advisory panel called the “Department of Government Efficiency.”

“People are absolutely interested in driving more economies of scale and more efficiency,” Eschenbach said.

Workday said Rob Enslin, the former Google and SAP The executive who resigned as CEO of UiPath in June joined as president and chief commercial officer. In October, Workday told employees that Doug Robinson, co-president, is retiring.

During the quarter, Workday acquired contract lifecycle management software startup Evisort. Workday also said that AI agents for detecting inefficiencies, filing expense reports, and updating succession plans will be available in early access in 2025.

“We think they’re going to have a good impact on bookings and revenue as we move into the new year,” Eschenbach said.

Rowe called for $8.8 billion in subscription revenue by fiscal 2026, representing 14% growth.

At Tuesday’s close, Workday shares were down 2% in 2024, while the S&P 500 index had gained 26%.

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