Oppenheimer analysts provided their outlook on Workday, Inc. (NASDAQ:WDAY) ahead of the upcoming Q3 earnings, scheduled to be announced on Nov 29.
The analysts detected healthy lead generation and installed base activity offset by elongating new customer deal cycles and tough growth optics from the effects of difficult year-over-year comparisons.
The analysts estimate Q3 total revenue of approximately $1.58 billion (up 19% year-over-year) and $0.83 in EPS. Their research mosaic (field checks, surveys, and company-specific data), combined with a tough set-up for subscription backlog billings growth, points to a positive outcome for Workday's margin growth story and below-consensus guidance for Q1/2024, consistent with Street expectations.
The analysts lowered their fiscal 2024 and 2025 revenue estimates to $7.3 billion and $8.5 billion from $7.4 billion and $8.7 billion, respectively. Their 2024/2025 EPS estimates were lowered to $4.38/$5.44 from $4.47/$5.58 to reflect the increasing macro uncertainty, and a more adverse FX impact subsequent to guidance.