Workday, Inc. ($WDAY) Stock: Q2 Earnings Beat, Shares Slip on Acquisition News

TLDR

• Q2 2025 GAAP EPS: $0.84 vs. $0.49 last year
• Adjusted EPS: $2.21, topping analyst consensus of $2.11
• Revenue up 12.6% year-over-year to $2.35 billion
• Workday announces acquisition of Paradox, an AI hiring platform
• Shares drop 5.82% pre-market, trading at $214.33

Workday, Inc. (NASDAQ: WDAY) reported second-quarter earnings for the fiscal period ended July 31, 2025. At the close of August 21, shares finished at $227.58, before slipping 5.82% pre-market to $214.33 following the company’s financial update and acquisition news.

Workday, Inc. (WDAY)

The enterprise cloud software provider posted GAAP net income of $228 million, or $0.84 per share, compared with $132 million, or $0.49 per share, a year earlier. On an adjusted basis, earnings reached $2.21 per share, surpassing both last year’s $1.75 and analyst expectations of $2.11.

Revenue came in at $2.348 billion, representing 12.6% growth year-over-year, narrowly exceeding Wall Street’s forecast of $2.34 billion.

Analysts’ Expectations and Market Reaction

The latest results were broadly positive, with both earnings and revenue exceeding analyst estimates. Thirty-four analysts had set EPS forecasts ranging between $1.87 and $2.31, while the consensus stood at $2.11. Workday’s $2.21 print was well within the upper range, reinforcing confidence in its operational momentum.

Despite the earnings beat, Workday’s stock performance has faced headwinds in 2025. The shares have fallen 11.8% year-to-date and are down 5.2% this quarter, underperforming the S&P 500, which has gained 8.31% YTD.

Strategic Acquisition of Paradox

Alongside earnings, Workday announced a definitive agreement to acquire Paradox, a conversational AI company focused on transforming the candidate experience for frontline and high-volume hiring.

Paradox’s technology powers real-time applicant interactions, offering instant responses, scheduling, and support. Its platform has facilitated more than 189 million AI-assisted candidate conversations and has improved time-to-hire rates dramatically for customers.

The acquisition positions Workday to expand its talent acquisition suite by integrating Paradox with its existing recruiting capabilities, joining forces with AI-driven solutions like HiredScore.

Industry experts view the deal as highly strategic, giving Workday leadership in the AI-powered hiring space. The transaction is expected to close in Q3 of Workday’s fiscal 2026, pending regulatory approvals.

Performance Overview

Despite revenue growth and strategic expansion, Workday’s returns have lagged broader markets over different time horizons:

• YTD Return: -11.8% (vs. S&P 500 +8.31%)
• 1-Year Return: -2.54% (vs. S&P 500 +13.33%)
• 3-Year Return: +35.32% (vs. S&P 500 +50.65%)
• 5-Year Return: +18.13% (vs. S&P 500 +87.51%)

While the company continues to grow revenue and strengthen its product suite, investors are cautious about profitability trends and integration costs related to Paradox.

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