Workday Drops 5.37% Despite Strong Earnings, Acquisition Concerns

On August 22, 2025, Workday's stock experienced a pre-market drop of 5.37%.

Workday's recent earnings call for Q2 2025 revealed strong financial performance, with the company exceeding analyst expectations for earnings per share. The company's diluted net income per share was $0.84, surpassing the estimated $0.73. However, despite these positive results, the stock experienced a slight decline in after-hours trading.

One of the key factors contributing to the stock's decline was the company's announcement of its acquisition of Paradox, an AI-driven talent acquisition platform. While the acquisition is expected to enhance Workday's capabilities in the talent management space, the undisclosed amount of the deal raised concerns among investors about potential financial strain.

Additionally, analysts have noted a slowing revenue growth rate for Workday, projecting a 12.3% year-over-year increase for the current quarter. This is a decrease from the previous quarter's 16.7% growth, which has led to some investor caution. Despite these concerns, Workday's strong subscription growth and AI-powered initiatives continue to drive investor interest in the company.