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Research Alert: Wday Beats Estimates; Reiterates Sales Expectations But Raises Margin Outlook

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

WDAY reported Q1 FY 27 non-GAAP EPS of $2.66, beating consensus by $0.14, while total revenues of $2.542B grew 13.5% Y/Y, ahead of estimates by $20M. Subscription revenues of $2.354B grew 14.3% Y/Y, exceeding guidance, while professional services revenue of $188M grew 3.9% Y/Y, and non-GAAP operating margin reached 31.8%, significantly ahead of 30.5% guidance and up 160 bps Y/Y. Although 12-month subscription backlog growth decelerated to 15.5% from Q4's 15.8%, we think the growth rates still reflect healthy momentum. Management reiterated FY 27 subscription revenue guidance of $9.925-$9.950B (12-13% growth) but raised full-year non-GAAP operating margin guidance to 30.5% from 30.0%. We think WDAY's maintained revenue outlook puts total revenue projections ahead of consensus estimates of $10.663B. The strong operational leverage demonstrated by the 130 bps margin beat and 52.3% operating cash flow growth to $696M supports our positive view on execution capabilities.

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