Workday stock popped on Wednesday after the company reported fourth-quarter earnings and revenue that topped Wall Street estimates amid lowered expectations.
Enterprise software maker Workday reported earnings for the quarter ending Jan. 31 after the market close on Tuesday.
The Pleasanton, Calif.-based company said earnings rose 22% to $1.92 per share on an adjusted basis. Workday's revenue climbed 15% to $2.21 billion, including acquisitions.
Analysts expected Workday to post earnings of $1.78 a share on revenue of $2.18 billion.
Workday Stock: Guidance In Line
For the current quarter ending in April, Workday expects subscription revenue of $2.05 billion, in line with estimates. For full year fiscal 2026 it projected subscription revenue of $8.8 billion, also in line with estimates.
On the stock market today, Workday stock popped more than 12% to near 287 in early trading.
"For fiscal 2026, management guided subscription revenue growth to 14%, which was in line with the company's early look given last quarter," said William Blair analyst Jake Roberge in a report. "Management expects operating margins of 28% which was slightly ahead of the Street. While Workday recently underwent an 8.5% reduction in force, management still expects its headcount to increase over the next year as it focuses on key growth areas such as artificial intelligence and international expansion."
Also, Workday announced the hiring of Gerrit Kazmaier as president of product and technology. He had been an executive at Alphabet's Google Cloud computing business.
In January, Workday announced a restructuring that reduced its workforce by 8.5%, or 1,750 employees. The restructuring will be largely complete by the second quarter of fiscal 2026, the company said.
The company sells software for human resources management, such as payroll tools. About 70% of revenue comes from human capital management products. Also, it has expanded into financial software.
Heading into the Workday earnings report, shares were down 2% in 2025. Slowing revenue growth has pressured WDAY stock.
Also, WDAY stock holds a Relative Strength Rating of 49 out of a best-possible 99, according to IBD Stock Checkup.
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