Workday 'demonstrating resilience' amid economic uncertainty: analyst
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Back office software provider Workday (NASDAQ:WDAY) is slated to report second-quarter results on August 24 and investment firm Monness, Crespi, Hardt said the company is "demonstrating resilience" despite the uncertain economic environment.
Analyst Brian White, who has a neutral rating on Workday (WDAY), said the company is continuing to expand the reach of its cloud platform, going after a large opportunity, even if the revenue growth rate has slowed down a bit in recent quarters. 
"In our view, pent-up demand created during the pandemic has proven a tailwind for Workday, smoothing out cautious spending trends," White wrote in an investor note. "Moreover, we believe the companyâs seat-based pricing model has insulated revenue from the volatility experienced by usage-based models during this downturn."
White added that Workday's (WDAY) software is "arguably more mission critical" compared to other software companies, given that it helps in critical areas such as human resources and finance. In addition, Carl Eschenbach, who was hired as Co-CEO last December, may have helped the company's go-to-market engine and found ways to improve performance, White added. 
For the quarter, White is expecting Workday (WDAY) to generate $1.785B in revenue, up 16% year-over-year, with earnings clocking in at $1.26 per share. Included in that is $1.624B in subscription revenue and $160.5M in professional services revenue. 
Deferred revenue is expected to come in at $3.323B for the period, up 13% year-over-year, White added.
A consensus of analysts estimate that Workday (WDAY) will earn $1.26 per share on $1.77B in revenue.
Looking ahead, White is anticipating third-quarter revenue of $1.862B and full-year revenue of $7.248B, while Wall Street is expecting $1.843B and $7.212B, respectively. 
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