Workday Q4 EPS Beat But 2027 Revenue Guidance Miss Sends Shares Down 8%
Workday posted Q4 non-GAAP EPS of $2.47 versus $2.32 consensus and revenue of $2.53 billion, up from $2.21 billion a year earlier. It forecast Q1 revenue of $2.52B below the $2.53B estimate and fiscal 2027 revenue of $10.64B-$10.66B versus $10.72B consensus, triggering an 8.4% extended-session share drop.
1. Q4 Earnings Beat Estimates
Workday reported non-GAAP EPS of $2.47, topping the $2.32 consensus, and delivered revenue of $2.53 billion, a 14.5% increase from $2.21 billion year-ago. The company’s 12-month subscription revenue backlog rose 15.8% to $8.83 billion, while total subscription backlog grew 12.2% to $28.1 billion.
2. Cautious Fiscal Outlook
Management guided Q1 revenue to $2.52 billion, below the $2.53 billion analyst estimate, and projected fiscal 2027 revenue between $10.64 billion and $10.66 billion, short of the $10.72 billion consensus. The slower subscription growth outlook suggests potential headwinds in enterprise demand.
3. Share Price Reaction
Following the cautious guidance, Workday shares plunged 8.4% in extended trading to $119.17. Investors cited concerns over decelerating subscription revenue growth and the conservative outlook for the year ahead.