Workday Stock Plummets on Weak Fiscal 2027 Guidance Despite Q4 Beat
Workday shares tumbled approximately 10% in extended trading after the HR software provider issued disappointing subscription revenue guidance for fiscal 2027. While Q4 results surpassed expectations with $2.53 billion in revenue and $2.47 adjusted EPS, the company's $9.93B-$9.95B FY2027 subscription outlook fell short of the $9.99B consensus.
The market punished WDAY despite demonstrating operating leverage improvement, with non-GAAP margins expanding to 30.6%. Investors appear concerned about slowing margin growth as the company ramps AI investments. The stock has now lost 39% year-to-date and 50% over the past twelve months.
CEO Aneel Bhusri emphasized long-term AI positioning during the earnings call, but traders focused on the immediate top-line deceleration. Q1 subscription revenue guidance of $2.335 billion (+13% YoY) likewise missed Street expectations by $15 million.
