Here's Why Workday Stock Is Soaring Today

Shares of business-management software company (NASDAQ: WDAY) are up 11.7% as of 11:55 a.m. ET Friday, according to data from S&P Global Market Intelligence, in response to its second-quarter results reported after Thursday's close. Although fresh economic headwinds led to merely mediocre guidance, strong revenue growth allowed the organization to top its bottom-line estimates. An aggressive stock buyback plan supported by wider profit margins is further fanning today's bullish flames.

For the three-month stretch ending in July, Workday turned $2.09 billion worth of revenue into non-GAAP/operating income of $1.75 per share. Both numbers were marked improvements on year-ago comparisons of $1.79 billion and $1.43, respectively. And while sales were only in line with estimates, profits handily topped expectations of $1.64 per share.

The future could prove tougher than the past or present, however. CEO Carl Eschenbach commented during Workday's Q2 earnings conference call, "We continue to experience deal scrutiny and moderated headcount [employee] growth within our customer base." In this vein, subscription-revenue growth guidance through 2027 was lowered from an annualized pace of 18% to 15%, although this slowdown is already taking shape. Subscription-revenue growth guidance for the current quarter is only $1.96 billion, just below estimates.

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Source Fool.com