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Jan 31, 2025
Workday Q4 2025 Earnings Report
Workday reported strong revenue growth in the fourth quarter of fiscal 2025 despite restructuring expenses impacting profitability.
Key Takeaways
Workday reported a 15% increase in total revenue for Q4 FY25, driven by strong subscription growth. However, restructuring expenses negatively impacted operating income. The company reported an increase in non-GAAP operating income and EPS.
Total revenue increased by 15% to $2.211 billion.
Subscription revenue grew by 15.9% to $2.040 billion.
Operating income was impacted by $75 million in restructuring expenses.
Non-GAAP diluted EPS increased to $1.92 from $1.57 in the same period last year.
Revenue by Segment
Forward Guidance
Workday expects continued growth in fiscal 2026 with subscription revenue forecasted to reach $8.8 billion and a non-GAAP operating margin of approximately 28%.
Positive Outlook
- Subscription revenue forecasted to grow 14% to $8.8 billion.
- Non-GAAP operating margin expected to reach 28%.
- Strong demand for AI-powered HR and finance solutions.
- Momentum in full suite and financials products.
- New strategic partnerships and product innovations announced.
Challenges Ahead
- Restructuring expenses impacting short-term profitability.
- Potential risks related to global macroeconomic uncertainties.
- Ongoing competition in HR and finance software space.
- Higher operating costs anticipated.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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