Workday Q4 Earnings Exceed Expectations with Strong Revenue Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy WDAY?
Source: seekingalpha
- Strong Earnings Performance: Workday reported a Q4 non-GAAP EPS of $2.47, beating estimates by $0.15, which underscores the company's improving profitability and reinforces market confidence in its financial health.
- Significant Revenue Growth: The company achieved $2.53 billion in revenue for Q4, representing a 14.5% year-over-year increase and exceeding market expectations by $10 million, indicating robust demand and an increase in market share in the cloud computing sector.
- Subscription Revenue Surge: Q4 subscription revenues reached $2.36 billion, up 15.7% year-over-year, while total subscription revenues for FY 2026 hit $8.833 billion, reflecting a 14.5% growth, showcasing customer loyalty and ongoing demand for Workday's offerings.
- Optimistic Future Guidance: Workday projects Q1 FY 2027 subscription revenues of $2.335 billion, a 13% growth, with full-year subscription revenue guidance between $9.925 billion and $9.950 billion, demonstrating strong confidence in future growth prospects.
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Analyst Views on WDAY
Wall Street analysts forecast WDAY stock price to rise
31 Analyst Rating
22 Buy
9 Hold
0 Sell
Moderate Buy
Current: 129.210
Low
235.00
Averages
275.19
High
325.00
Current: 129.210
Low
235.00
Averages
275.19
High
325.00
About WDAY
Workday, Inc. is a provider of an artificial intelligence (AI) platform to help organizations manage their people, money, and agents. The Company provides over 11,000 organizations with cloud solutions powered by AI to help solve business challenges, including supporting and empowering their workforce, managing their finances and spending in an ever-changing environment, and planning for the unexpected. It offers Financial Management, Spend Management, Human Capital Management (HCM), Planning, and Analytics applications. The Company sells its solutions worldwide primarily through direct sales. It also offers professional services, both directly and through its Workday Services Partners, to help customers deploy its solutions. It offers businesses flexible solutions to help them adapt to their industry-specific needs and respond to change. It serves various industries, including professional and business services, financial services, healthcare, education, government, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Earnings Release Announcement: Workday is set to release its Q4 earnings after the market closes on February 24, with expected earnings per share of $2.32, reflecting a 20.9% increase from $1.92 in the same quarter last year, indicating improved profitability that could positively impact stock prices.
- Revenue Growth Expectations: Analysts forecast Workday's quarterly revenue to reach $252 million, up 14.0% from $221 million a year ago, showcasing the company's sustained growth potential in the market, which may attract more investor interest.
- CEO Departure Impact: The announcement on February 9 regarding CEO Carl Eschenbach's resignation may raise concerns about the company's future strategic direction, contributing to a 6.2% drop in shares to $129.21 on Monday, which could affect investor confidence.
- Analyst Rating Updates: Benzinga offers the latest analyst ratings, allowing investors to filter by stock ticker, company name, and other variables, aiding them in understanding market sentiment and investment opportunities.
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- Net Income Growth: The company reported diluted net income per share of $2.47, significantly up from $1.92 in the same period last year, surpassing analysts' expectations of $2.32, reflecting improved profitability.
- Subscription Revenue Increase: Workday's subscription revenue grew by 15.7% to $2.36 billion this quarter, demonstrating ongoing growth potential in its core business, although future growth expectations have moderated.
- Cautious Future Outlook: The company anticipates a 13% increase in subscription revenue to $2.335 billion in the upcoming quarter, with fiscal year 2027 growth projected at 12% to 13%, lower than the 14.5% growth reported for fiscal year 2026, which may impact investor confidence.
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- Future Guidance: The company anticipates a 30.5% adjusted operating margin and $2.335 billion in subscription revenue for Q1, falling short of analysts' expectations of 30.9% and $2.35 billion, reflecting market concerns about its growth potential.
- Stock Price Reaction: Following the earnings report, Workday's shares dropped 10% in after-hours trading, and the stock has plummeted 39% since 2026, marking the steepest decline since its IPO in 2012, signaling investor skepticism about future growth.
- Leadership Change: CEO Carl Eschenbach announced his resignation, with co-founder Aneel Bhusri stepping in, and despite advancements in generative AI features, the slow progress in closing deals with large new clients may impact short-term performance.
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- Revenue Growth: The quarterly revenue reached $2.53 billion, surpassing the analyst estimate of $2.52 billion and reflecting a 14.5% increase from $2.21 billion in the same period last year, showcasing the company's sustained competitive strength in the market.
- Subscription Revenue Backlog: The 12-month subscription revenue backlog stood at $8.83 billion, up 15.8% year-over-year, while the total subscription revenue backlog reached $28.1 billion, increasing 12.2%, indicating ongoing customer demand for Workday's services.
- Future Outlook: Workday expects first-quarter revenue of $2.52 billion, slightly below the analyst estimate of $2.53 billion, and forecasts fiscal 2027 revenue between $10.64 billion and $10.66 billion, lower than the market expectation of $10.72 billion, which may raise investor concerns about future growth.
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- Revenue Forecast Downgrade: Workday projects its fiscal 2027 subscription revenue to be between $9.93 billion and $9.95 billion, falling short of the $10 billion expected by analysts, indicating that economic uncertainty is leading corporations to cut technology spending and affecting new client acquisitions.
- Stock Price Reaction: Shares of Workday fell 6% in after-hours trading, reflecting market concerns about its future growth prospects, particularly as businesses adopt a more cautious approach to large software investments in the current macroeconomic climate.
- Quarterly Earnings Performance: For the quarter ending January 31, total revenue reached $2.53 billion, slightly exceeding analysts' expectations of $2.52 billion, suggesting that despite challenges, Workday can still achieve revenue growth from its existing customer base.
- AI Investment Challenges: Although Workday is pushing into artificial intelligence, high interest rates and economic uncertainty are causing businesses to be more cautious in their software purchasing decisions, potentially impacting the implementation of its long-term growth strategy.
See More
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- Earnings Release Announcement: Workday is set to release its Q4 earnings after the market closes on February 24, with expected earnings per share of $2.32, reflecting a 20.9% increase from $1.92 in the same quarter last year, indicating improved profitability that could positively impact stock prices.
- Revenue Growth Expectations: Analysts forecast Workday's quarterly revenue to reach $252 million, up 14.0% from $221 million a year ago, showcasing the company's sustained growth potential in the market, which may attract more investor interest.
- CEO Departure Impact: The announcement on February 9 regarding CEO Carl Eschenbach's resignation may raise concerns about the company's future strategic direction, contributing to a 6.2% drop in shares to $129.21 on Monday, which could affect investor confidence.
- Analyst Rating Updates: Benzinga offers the latest analyst ratings, allowing investors to filter by stock ticker, company name, and other variables, aiding them in understanding market sentiment and investment opportunities.
See More
Workday Reports Strong Q4 Results but Shares Drop Over 8%
- Strong Performance: Workday's Q4 revenue reached $2.53 billion, a 14.5% year-over-year increase, slightly exceeding Wall Street's expectation of $2.52 billion, indicating robust market performance but failing to support stock price.
- Net Income Growth: The company reported diluted net income per share of $2.47, significantly up from $1.92 in the same period last year, surpassing analysts' expectations of $2.32, reflecting improved profitability.
- Subscription Revenue Increase: Workday's subscription revenue grew by 15.7% to $2.36 billion this quarter, demonstrating ongoing growth potential in its core business, although future growth expectations have moderated.
- Cautious Future Outlook: The company anticipates a 13% increase in subscription revenue to $2.335 billion in the upcoming quarter, with fiscal year 2027 growth projected at 12% to 13%, lower than the 14.5% growth reported for fiscal year 2026, which may impact investor confidence.
See More
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- Remarkable Investment Returns: Since the launch of ChatGPT by OpenAI, Palantir's stock has surged from an initial investment of $1,000 to nearly $17,400, showcasing its strong performance in the AI revolution and attracting significant investor interest, thereby fueling market enthusiasm.
- High Valuation Multiples: Palantir's price-to-sales and price-to-earnings ratios are at historically high levels within the software market, and while its revenue and profitability outpace many peers, the stark valuation disparity raises concerns about its future performance.
- Clear Competitive Advantage: Palantir's AI platform boasts a higher customer lifetime value due to its lack of direct competition, with analysts noting that its uniqueness allows the company to win and retain key clients, thereby enhancing the predictability of future revenue.
- Divergent Market Sentiment: Despite 40% of analysts rating Palantir as a
See More
Workday Reports Light Quarterly Guidance, Shares Drop 10%
- Performance Metrics: Workday's adjusted earnings per share for Q4 reached $2.47, surpassing the expected $2.32, while revenue was $2.53 billion, slightly above the $2.52 billion forecast, indicating stable growth in the financial software sector.
- Future Guidance: The company anticipates a 30.5% adjusted operating margin and $2.335 billion in subscription revenue for Q1, falling short of analysts' expectations of 30.9% and $2.35 billion, reflecting market concerns about its growth potential.
- Stock Price Reaction: Following the earnings report, Workday's shares dropped 10% in after-hours trading, and the stock has plummeted 39% since 2026, marking the steepest decline since its IPO in 2012, signaling investor skepticism about future growth.
- Leadership Change: CEO Carl Eschenbach announced his resignation, with co-founder Aneel Bhusri stepping in, and despite advancements in generative AI features, the slow progress in closing deals with large new clients may impact short-term performance.
See More
Workday Reports Strong Earnings, Stock Volatility Observed
- Strong Earnings Report: Workday reported earnings of $2.47 per share, exceeding the market expectation of $2.32, indicating enhanced profitability that may boost investor confidence.
- Revenue Growth: The quarterly revenue reached $2.53 billion, surpassing the analyst estimate of $2.52 billion and reflecting a 14.5% increase from $2.21 billion in the same period last year, showcasing the company's sustained competitive strength in the market.
- Subscription Revenue Backlog: The 12-month subscription revenue backlog stood at $8.83 billion, up 15.8% year-over-year, while the total subscription revenue backlog reached $28.1 billion, increasing 12.2%, indicating ongoing customer demand for Workday's services.
- Future Outlook: Workday expects first-quarter revenue of $2.52 billion, slightly below the analyst estimate of $2.53 billion, and forecasts fiscal 2027 revenue between $10.64 billion and $10.66 billion, lower than the market expectation of $10.72 billion, which may raise investor concerns about future growth.
See More
Workday's Fiscal 2027 Subscription Revenue Forecast Falls Short of Expectations
- Revenue Forecast Downgrade: Workday projects its fiscal 2027 subscription revenue to be between $9.93 billion and $9.95 billion, falling short of the $10 billion expected by analysts, indicating that economic uncertainty is leading corporations to cut technology spending and affecting new client acquisitions.
- Stock Price Reaction: Shares of Workday fell 6% in after-hours trading, reflecting market concerns about its future growth prospects, particularly as businesses adopt a more cautious approach to large software investments in the current macroeconomic climate.
- Quarterly Earnings Performance: For the quarter ending January 31, total revenue reached $2.53 billion, slightly exceeding analysts' expectations of $2.52 billion, suggesting that despite challenges, Workday can still achieve revenue growth from its existing customer base.
- AI Investment Challenges: Although Workday is pushing into artificial intelligence, high interest rates and economic uncertainty are causing businesses to be more cautious in their software purchasing decisions, potentially impacting the implementation of its long-term growth strategy.
See More
