By Davit Kirakosyan and Senad Karaahmetovic
Workday (NASDAQ:WDAY) reported its Q4 results, with EPS of $0.99 coming in better than the consensus estimate of $0.89. Revenue grew 19.6% year-over-year to $1.65 billion, beating the consensus estimate of $1.63B. Subscription revenues increased 21.7% year-over-year to $1.50B.
"We are maintaining the midpoint of our preliminary fiscal year 2024 subscription revenue guidance while increasing our fiscal 2024 non-GAAP operating margin outlook to the high end,” said Barbara Larson, CFO of Workday.
The company now expects full-year subscription revenue in the range of $6.525B-$6.575B (growth of 17%-18%), and a non-GAAP operating margin of 23.0%.
The company also appointed Sayan Chakraborty as co-president, Robynne Sisco as vice chair, and elected Mark Hawkins as an independent director of its Board of Directors.
Oppenheimer analysts said the results were "good," driven by new large FINS customers.
"The good F4Q results and above-consensus operating margin guidance lend good support to our durable growth with improving margin and cash flow acceleration thesis. We believe Workday has a good fundamentals set-up within our coverage universe this year. Reiterate Outperform," they said in a note.
Morgan Stanley analysts raised the price target to $230 per share after weighing in positively on Workday's earnings report.
"Within a volatile market backdrop, Workday's solid execution to targets, durability of top-line growth, and ability to consistently expand margins look increasingly attractive. At the same time, this equation enabling 25%+ FCF in FY24 and beyond looks underpriced at <24X EV/CY24 FCF," the analysts wrote.
Shares are trading over 2% lower pre-open Tuesday.