Workday Q4 results top expectations

The software-as-a-service provider reported revenue of $1.13 billion, up 15.9% from a year ago.

Workday delivered better-than-expected fourth quarter financial results on Thursday. The software-as-a-service provider reported a net loss of $71 million, or 30 cents per share.

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Non-GAAP earnings were 73 cents per share on revenue of $1.13 billion, up 15.9% annually. Subscription revenue was $1.01 billion, an increase of 19.8% from the same period last year.

Wall Street was expecting Q4 earnings of 55 cents per share on revenue of $1.12 billion.

Total revenue for the year was $4.32 billion, up 19% from a year ago, with non-GAAP earnings of $2.93 per share. Cash, cash equivalents, and marketable securities were $3.54 billion as of January 31.

"Our solid fourth quarter and full-year fiscal 2021 results are a testament to the strategic, mission-critical nature of our solutions and the resiliency of our business," said Robynne Sisco, president and CFO of Workday. "We currently expect fiscal 2022 subscription revenue to be in a range of $4.38 billion to $4.40 billion, representing year-over-year growth of 16%, and we expect non-GAAP operating margins of 17%. Our focus this year is on driving accelerated bookings growth, which we expect will ultimately result in a faster pace of future subscription revenue growth."

Analysts are looking for Q1 earnings of 58 cents a share on revenue of $1.16 billion. Shares of Workday were down around 3% after hours.

On the conference call with analysts, Sisco said Workday plans to invest $270 million in Q1 of fiscal 2022 in strategic priorities tied to its expansion efforts, including its corporate IT infrastructure and customer data centers

"These data center investments, along with other investments we're making in our technology and platform, including our entrance into the federal market and our expanded use of the public cloud, are expected to reduce our non-GAAP subscription gross margins to slightly under 85% in FY '22," said Sisco.

Fourth quarter developments include: