Workday Inc. (NASDAQ:WDAY) shares surged more than 11% intra-day today after the company reported impressive second-quarter results. The cloud-based enterprise software provider exceeded expectations with adjusted earnings per share of $1.75, surpassing the projected $1.65. Revenue for the quarter reached $2.09 billion, slightly topping the Street estimate of $2.07 billion.
Looking ahead, Workday forecasted third-quarter subscription revenue of $1.955 billion, marking 16% growth, and reaffirmed its full-year fiscal 2025 subscription revenue guidance at $7.700 billion to $7.725 billion, representing a 17% year-over-year increase.
The company’s management also revised its medium-term targets, emphasizing margin expansion. Workday now expects operating margins to reach 30% by fiscal 2027, up from previous expectations. For fiscal 2025, the company slightly raised its operating margin guidance to 25.25%.
Workday’s 12-month subscription revenue backlog grew 16.1% year-over-year to $6.80 billion, while the total subscription revenue backlog increased by 20.9% to $21.58 billion.
In addition, Workday announced a new $1 billion share repurchase program, signaling confidence in its long-term growth and profitability trajectory.