Workday Inc (NASDAQ:WDAY) stock is up 7.8% at $275.15, after the software name posted fourth-quarter earnings of $1.92 per share on revenue of $2.21 billion, beating estimates of $1.78 on $2.18 billion. The software company is seeing a greater demand for artificial intelligence (AI) tools and benefited from a "$1.1 billion release of the valuation allowance related to U.S. federal and state deferred tax assets." Year over year, the equity is down 6.8%. In the options pits so far, WDAY has seen 11,000 calls ...

Core Insights - Workday's shares surged over 10% in premarket trading following the release of its fiscal 2025 fourth-quarter results, which exceeded analysts' expectations [2][5] - The company reported revenue of $2.21 billion, including $2.04 billion in subscription revenue, both surpassing Visible Alpha consensus [2] - Adjusted earnings per share (EPS) were $1.92, also exceeding estimates [2] Financial Performance - Workday projected first-quarter subscription revenue of $2.05 billion and $8.80 billion for fiscal 2026, aligning closely with analysts' estimates [3] Strategic Opportunities - CEO Carl Eschenbach highlighted growth opportunities with the U.S. federal government due to the administration's focus on efficiency and IT modernization [4] - The growth of Workday's AI products is central to discussions with customers, as they seek significant returns on investment to drive business growth [4][5]

New Partnership Combines Workday Recruiting Agent with Randstad's Expansive Talent Network to Instantly Connect Recruiters with Top Talent, Making Hiring Faster and More Efficient Than Ever Before PLEASANTON, Calif., Feb. 26, 2025 /PRNewswire/ -- Workday, Inc. (NASDAQ: WDAY), the AI platform for managing people and money, and Randstad, the world's leading talent company, today announced a new strategic partnership to transform how companies find and hire talent. By integrating Workday's Recruiting Agent, po ...

Investor Presentation Q4 FY25 Safe Harbor Statement This presentation may contain forward-looking statements for which there are risks, uncertainties, and assumptions. Forward-looking statements may include any statements regarding strategies or plans for future operations; any statements concerning new features, enhancements or upgrades to our existing applications or plans for future applications; any projections of revenues, gross margins, earnings, or other financial items; and any statements of expecta ...

Financial Data and Key Metrics Changes - Workday reported Q4 subscription revenue of $2.040 billion, reflecting a 16% increase year-over-year, and full-year FY '25 subscription revenue of $7.718 billion, up 17% [36][37] - Non-GAAP operating income for Q4 was $584 million, with a non-GAAP operating margin of 26.4%, while full-year non-GAAP operating income was $2.19 billion, representing a margin of 25.9% [39] - Total revenue for Q4 was $2.21 billion, a 15% increase, and for the full year, total revenue was $8.45 billion, up 16% [37][39] Business Line Data and Key Metrics Changes - Workday's core HCM and Financials customers exceeded 6,100, with over 2,000 leveraging the full suite [15] - More than 30% of new business in Q4 was full suite, and this number increased to 50% in focus industries like SLED and healthcare [15][135] - AI solutions saw significant growth, with new ACV from AI SKUs doubling quarter-over-quarter [18][66] Market Data and Key Metrics Changes - U.S. revenue in Q4 totaled $1.66 billion, up 15%, while international revenue was $556 million, growing 16% [37] - The DACH region showed strong performance with new relationships formed with major companies like Bayer and Henkel [29][90] - In APAC, significant wins included Binance and JINGDONG, with ongoing efforts to expand in Japan [30] Company Strategy and Development Direction - Workday is focusing on AI integration across its platform, with the launch of the Agent System of Record to manage AI agents [9][25] - The company aims to leverage its strong customer base and expand its offerings in federal government and higher education sectors [14][115] - Continued investment in international markets and partnerships is a priority, with a focus on enhancing go-to-market strategies [27][150] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the renewal opportunities and the health of the customer base, emphasizing proactive selling into existing accounts [62][66] - The company anticipates FY '26 subscription revenue of approximately $8.8 billion, reflecting a growth of 14% [42] - Management acknowledged macroeconomic challenges but highlighted strong underlying business momentum and customer demand [29][92] Other Important Information - Workday's headcount as of January 31 was approximately 20,400, with a planned reduction of about 8% due to restructuring [42] - The company ended the year with $8 billion in cash and marketable securities, indicating strong financial health [41] - Leadership changes include the retirement of Sayan Chakraborty and the appointment of Gerrit Kazmaier as the new President of Product and Technology [32][33] Q&A Session Summary Question: Can you walk us through the vision and investment scale for the agent system of record? - Management confirmed that restructuring savings will be reinvested into the Agent System of Record due to high customer interest [50][53] Question: What is the health of the renewal base as contracts come up for renewal? - Management indicated strong visibility on renewals and ongoing sales into the customer base, with significant uptake in AI products [62][66] Question: Are you expecting contributions from agent revenue in the back half of the year? - Management noted that while agents are not expected to contribute significantly in FY '26, there is strong momentum in AI solutions [78][82] Question: How is the international market performing, particularly in Europe? - Management highlighted strong results in the U.K. and Germany, with plans to continue investing in international markets [90][92] Question: What changes are expected in the go-to-market strategy with new leadership? - Management stated that while there will be no major changes, the new leadership will refine the go-to-market approach to enhance performance [98][99] Question: How are you balancing investments and margin potential? - Management emphasized a balanced approach to investing in AI while maintaining margin growth, aiming for a non-GAAP operating margin of approximately 28% in FY '26 [104][106]

Workday (WDAY) Q4 2025 Earnings Call February 26, 2025 12:50 AM ET Company Participants Justin Furby - Vice President of IRCarl Eschenbach - CEOZane Rowe - Chief Financial OfficerMark Murphy - Executive DirectorDavid Somers - Chief Product OfficerKash Rangan - Managing DirectorRaimo Lenschow - Managing DirectorBrent Thill - Tech Sector Leader, Software/Internet ResearchJohn DiFucci - Senior Managing DirectorKarl Keirstead - Managing Director - Software Equity Research Conference Call Participants Kirk Mater ...

Core Insights - Workday reported revenue of $2.21 billion for the quarter ended January 2025, reflecting a 15% increase year-over-year and a surprise of +1.44% over the Zacks Consensus Estimate of $2.18 billion [1] - Earnings per share (EPS) for the quarter was $1.92, compared to $1.57 in the same quarter last year, resulting in an EPS surprise of +9.71% against the consensus estimate of $1.75 [1] Financial Performance Metrics - Subscription Revenue Backlog reached $25.06 billion, exceeding the two-analyst average estimate of $24.87 billion [4] - Subscription services revenue was reported at $2.04 billion, slightly above the average estimate of $2.02 billion from eight analysts, marking a year-over-year increase of +15.9% [4] - Professional services revenue amounted to $171 million, surpassing the average estimate of $154.84 million from eight analysts, with a year-over-year change of +5.6% [4] Stock Performance - Workday's shares have returned -0.9% over the past month, compared to a -1.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Workday surpassed earnings expectations with a non-GAAP EPS of $1.92, exceeding the anticipated $1.78, and total revenue grew by 15.0% year-over-year to $2.211 billion, surpassing estimates of $2.183 billion [2][3] - The company emphasized its focus on AI integration across its cloud-based software solutions for human capital management and financial management, enhancing operational efficiency [4][11] Financial Performance - Non-GAAP EPS increased by 22.3% year-over-year from $1.57 in Q4 FY 2024 [3] - Total revenue reached $2.211 billion, up from $1.922 billion in Q4 FY 2024, reflecting a 15.0% increase [3] - Subscription revenue rose by 15.9% year-over-year to $2.040 billion [3] - Non-GAAP operating margin improved to 26.4%, up from 24.0% in the previous year [3][7] Business Strategy - Workday's strategy focuses on dynamic product development and strategic partnerships, enhancing efficiency across multiple business functions [5] - The company has integrated AI capabilities into its product lineup, which includes partnerships with Randstad and TechWolf [6][11] Challenges and Competition - Workday faces challenges from intense competition and economic uncertainties, particularly in regions like EMEA, which have affected deal scrutiny and profitability [8][9] - Restructuring expenses totaled $75 million, impacting GAAP earnings [7][8] Future Outlook - For fiscal 2026, Workday anticipates subscription revenue growth of 14%, targeting $8.8 billion, and aims for an improved non-GAAP operating margin of approximately 28.0% [10] - The company plans to continue investing in AI innovation and international expansion to sustain long-term growth [11]

Core Insights - Workday reported better-than-expected quarterly results, with shares rising over 7% in extended trading [1] - Revenue increased by 15% year over year, reaching $2.21 billion, while net income fell to $94 million, or 35 cents per share [1][5] - The previous year's results were positively impacted by a $1.1 billion release of valuation allowance related to deferred tax assets [2] Financial Performance - Workday's revenue for the quarter ending January 31 was $2.21 billion, exceeding the expected $2.18 billion [5] - Adjusted earnings per share were $1.92, surpassing the expected $1.78 [5] - The company anticipates a 28% adjusted operating margin on $2.05 billion in subscription revenue for the fiscal first quarter, higher than the analyst expectation of 26.7% [3] Future Outlook - For the fiscal year 2026, Workday projects an adjusted margin of 28% with $8.8 billion in subscription revenue, indicating a 14% growth [4] - The company is experiencing increased demand for artificial intelligence tools, which is expected to enhance its HR and finance solutions [2] - Workday's new president and chief commercial officer, Rob Enslin, was appointed during the quarter, indicating a strategic move to bolster leadership [3]

Financial Outlook - Workday expects its fiscal 2025 fourth quarter and full-year financial results to be in-line with or above its previous guidance, except for GAAP operating margin, which is projected to be 22 to 23 percentage points lower than non-GAAP for Q4 and 21 percentage points lower for the full year [5]. - Workday's financial outlook for the fourth quarter and fiscal year ending January 31, 2025, includes forward-looking statements that are subject to risks and uncertainties [13]. - Workday's actual results may differ materially from its forward-looking statements due to various risks, including potential higher costs associated with the restructuring plan [13]. Restructuring Plan - The company announced a restructuring plan that will eliminate approximately 1,750 positions, representing 8.5% of its current workforce, while continuing to hire in key strategic areas [7]. - Workday estimates it will incur charges of approximately $230 million to $270 million related to the restructuring plan, with $60 million to $70 million expected to be recognized in Q4 of fiscal 2025 [8]. - The restructuring plan includes approximately $145 million to $175 million in future cash expenditures for severance and employee benefits, and $50 million to $60 million in non-cash charges for stock-based compensation [8]. - The actions associated with the restructuring plan are expected to be substantially complete by the second quarter of fiscal 2026 [9]. - The company plans to exit certain owned office space as part of the restructuring efforts [7]. - Workday's restructuring plan aims to prioritize investments and focus on durable growth [7]. - The company will recognize impairment charges related to office space in the first quarter of fiscal 2026 [11].