03:15 PM EDT, 08/22/2025 (MT Newswires) -- Workday's (WDAY) latest financial outlook reflects an "uninspiring" second half for its fiscal 2026 and factors in contributions from an acquisition, Oppenheimer said Friday.

Late Thursday, the cloud human resources company raised its full-year subscription revenue outlook to $8.82 billion from $8.80 billion and its non-GAAP operating margin projection to 29% from 28.5%.

The outlook implies an "uninspiring" second half for the year, Oppenheimer analysts, including Brian Schwartz, said in a Friday note to clients. "The organic revenue guidance is weaker than 90 days ago and raised solely for an acquisition."

The company said late Thursday it agreed to acquire Paradox in deal expected to close in its fiscal third quarter. Workday expects the acquisition to provide it with an artificial intelligence-powered "talent acquisition suite" to help customers, it said in a statement.

The company's full-year subscription revenue outlook is inclusive of contributions from Paradox, indicating that Workday's second-quarter sales beat "did not flow through," Oppenheimer said. Additionally, the guidance implies less margin improvements in the second half of the year than the first half, according to the note.

Workday shares were down 3.3% in Friday late-afternoon trade. The stock has slumped almost 15% so far this year.

For the quarter through July 31, the company's adjusted earnings rose to $2.21 a share from $1.75 a year earlier, while revenue jumped 13% to $2.35 billion. Analysts polled by FactSet were looking for $2.11 and $2.34 billion, respectively. Second-quarter subscription revenue increased 14% to $2.17 billion. For the ongoing quarter, the company expects subscription revenue of $2.24 billion.

"Workday's (second-quarter) results support a durable, profitable growth compounder at scale, and multiples remain reasonable," Oppenheimer said. The company saw "strong AI bookings and industries momentum" in the three-month period, according to the note.

The brokerage reiterated its outperform rating on the Workday stock, but reduced its price target to $270 from $300.

Price: 220.29, Change: -7.29, Percent Change: -3.20