Workday Inc (NASDAQ:WDAY) shares fell almost 4% in premarket trading on Monday as brokers mulled the software firm’s guidance following a fourth-quarter earnings beat.
Adjusted earnings climbed 58% to US$1.57 per share over the last three months of the year, the firm said overnight, above analysts’ forecasts for US$1.47.
Revenue of US$1.92 billion, up 17% year on year, was in line with expectations, meanwhile.
Given the earnings beat, William Blai analyst Matthew Pfau suggested a dip in the firm’s share price after the results came as subscription revenue only marginally beat guidance.
This sat at US$1.8 billion for the quarter, against estimates of US$1.76 billion, which Pfau said “was on the lighter side”.
Workday’s guidance for 17.5% to 18.5% current remaining performance obligations growth over the coming quarter is also set to slow compared to recent months, he noted.
“The smaller than normal subscription revenue beat, combined with the decelerating current remaining performance obligations growth, is likely causing concern about whether the fiscal 2025 subscription revenue guidance is conservative,” Pfau said.
Evercore ISI analyst Kirk Materne echoed the view, adding there were no major “thesis breakers” in the results.
Shares dipped 3.8% to US$295.27 ahead of the market’s opening.