Workday Q4 revenue misses forecasts as FY26 guidance falls short
Workday's fiscal Q4 revenue rose 16% year-over-year to $1.78 billion, below the $1.82 billion consensus, as subscription billings grew 14% to $2.03 billion, trailing estimates. Management guided FY26 total revenue of $7.5 billion, short of the $7.6 billion forecast, citing softer enterprise IT spending.
1. Q4 Earnings Details
Workday reported fiscal Q4 total revenue of $1.78 billion, up 16% year-over-year but $40 million below consensus. Subscription billings increased 14% to $2.03 billion, marking a deceleration from prior quarters and missing analyst estimates.
2. FY26 Guidance and Outlook
Management forecast FY26 total revenue of $7.5 billion, below the $7.6 billion street estimate, and projected subscription revenue growth of mid-teens percentages. The company cited weakening corporate IT budgets and elevated R&D investment as factors pressuring growth and margins.
3. Investor Reaction
Shares of software-focused ETFs, including IGV, fell as investors weighed the decelerating billings growth and softer-than-expected guidance. Market participants flagged signs of cooling enterprise software demand and questioned margin sustainability under rising costs.