Did Strong Q2 Results and New Partnerships Just Shift Workday's (WDAY) Investment Narrative?

• Workday reported its second-quarter 2025 earnings, showing revenue of US$2.35 billion and net income of US$228 million, both up from a year ago, while also raising its full-year subscription revenue guidance following strong first-half momentum and recent acquisitions.
• In addition, new partnerships with Chime and DailyPay are expanding Workday's reach in financial wellness and on-demand pay services, underscoring a broader move toward integrated, AI-powered employee benefits within its HR ecosystem.
• We'll explore how the raised revenue outlook and partnerships in financial wellness could influence Workday's investment narrative moving forward.

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Workday Investment Narrative Recap

Owning Workday means believing in its ability to expand through AI-driven HR and financial solutions, fortifying its competitive edge and driving steady subscription revenue growth. The latest earnings and raised guidance reflect strong momentum, supporting the view that AI integration and new partnerships are central short-term catalysts; however, currency headwinds and heavy investment in technology still remain key risks, and these recent events have not materially changed this balance.

The newly announced partnership with Chime integrates robust financial wellness features into Workday Wellness, directly supporting the push for more differentiated, AI-powered employee benefits, one of the company's main growth levers. This collaboration strengthens Workday's position as a comprehensive benefits platform, which could play an important role in customer adoption rates and overall revenue growth, depending on broader market demand and execution.

On the other hand, investors should be aware of ongoing risks such as heightened competition in AI-driven cloud solutions, which could ...

Read the full narrative on Workday (it's free!)

Workday's outlook projects $12.5 billion in revenue and $1.8 billion in earnings by 2028. This is based on a 13.0% annual revenue growth rate and an earnings increase of $1.3 billion from current earnings of $487.0 million.

Uncover how Workday's forecasts yield a $293.23 fair value, a 31% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community produced 11 distinct fair value estimates for Workday, ranging from US$200 to US$323.96 per share. While the community shows diverse views, many see the company’s push into integrated, AI-powered HR offerings as a key factor for longer-term performance. Explore these perspectives to compare how others weigh the potential and risks.

Explore 11 other fair value estimates on Workday - why the stock might be worth 10% less than the current price!

Build Your Own Workday Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Workday research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Workday research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Workday's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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