Workday Inc (NASDAQ:WDAY) stock rose 2.75% (As on August 25, 11:48:08 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the second quarter of FY 24. Subscription revenues were $1.62 billion, an increase of 18.8% from the same period last year. Non-GAAP operating income for the second quarter was $421.4 million, or 23.6% of revenues, compared to a non-GAAP operating income of $301.6 million, or 19.6% of revenues, in the same period last year. Operating cash flows were $425.3 million compared to $114.4 million in the prior year. Cash, cash equivalents, and marketable securities were $6.66 billion as of July 31, 2023.
Moreover, the company saw notable industry growth in Q2, with retail and hospitality joining financial services at $1 billion in annual recurring revenue. Workday announced continued momentum for Workday Financial Management with new customers including KinderCare, Metropolitan Community College, Nordic Consulting Inc., Palomar Health, and The Medical College of Wisconsin. Workday also announced new Workday Human Capital Management (HCM) customers including Commercial Vehicle Group, Mercy Aged and Community Care, SoftwareOne AG, and Symrise AG. Workday saw continued momentum across its net new and existing customer base, surpassing 65 million users and more than 5,000 core Workday Financial Management and Workday HCM customers.
Furthermore, the company is seeing continued momentum with more than 3,000 customers sharing their data with the ML models, more than 50 million ML inferences processed per day, and multiple generative AI capabilities in development including several that the company plan to unveil next month at Workday Rising.
WDAY in the second quarter of FY 24 has reported the adjusted earnings per share of $1.43, beating the analysts’ estimates for the adjusted earnings per share of $1.26. The company had reported the adjusted revenue growth of 16.3 percent to $1.79 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue of $1.77 billion.
The company is raising the fiscal 2024 subscription revenue guidance to a range of $6.570 billion to $6.590 billion, representing 18% year-over-year growth. The company expects third-quarter subscription revenue to be $1.678 billion to $1.680 billion, or 17% growth. In addition, the company is raising the fiscal 2024 non-GAAP operating margin guidance to 23.5%, and the company is on plan on maintaining a disciplined approach of investing in long-term growth while expanding margins.