Workday Exceeds Q4 Expectations with Strong Revenue Growth

Workday surpasses analyst expectations in Q4 report. Their non-GAAP EPS reached $1.92, higher than the predicted $1.78, indicating a strong performance and potential for increased stock prices.

Date: 26-02-2025

AI Rating: 7

Earnings Per Share (EPS)
Workday reported a non-GAAP EPS of $1.92 compared to the anticipated $1.78, marking a positive variance that showcases strong profitability. This exceeds last year's EPS of $1.57, reflecting a robust growth rate of 22.3%.

Revenue Growth
Total revenue grew by 15.0% year-over-year, reaching $2.211 billion. This surpasses the analyst estimates of $2.183 billion and indicates strong demand for Workday's offerings, especially in a competitive market.

Profit Margins
Workday saw an improvement in its non-GAAP operating margin, which increased to 26.4%, up from 24.0% the previous year. This enhancement highlights effective cost management in the face of rising expenses, showcasing the company's operational efficiency and favorable financial structure.

Despite navigating challenges such as intense competition and economic uncertainties, Workday's strategic focus on AI and partnerships helped in maintaining revenue momentum. Their subscription revenue specifically rose by 15.9% year-over-year, indicating good performance in customer acquisition and retention.

Looking forward, the company anticipates a subscription revenue growth of 14% for fiscal 2026, aiming for $8.8 billion, and a targeted non-GAAP operating margin of 28.0%. This guidance suggests confidence in continued growth and operational improvements.

In conclusion, given Workday's exceeded analyst expectations in EPS and revenue, alongside improved profit margins, it presents a favorable outlook for investors. However, investors should be cautious of external pressures such as market competition and economic conditions.

Stocks: WDAY