Workday (WDAY, Financial) shares jumped 7% after reporting strong Q4 results, despite forecasts indicating slower growth in subscription revenue. Excitement over AI developments and CEO Carl Eschenbach's comments on government efficiency overshadowed growth concerns.

• WDAY exceeded adjusted EPS estimates for the tenth consecutive quarter, with a 22% year-over-year increase to $1.92. Non-GAAP operating margins improved by 250 basis points to 26.4%.
• Revenue grew 15% year-over-year to $2.21 billion. Subscription revenue rose 15.9% to $2.04 billion, surpassing the $2.025 billion forecast. Growth was consistent across the U.S. and internationally, with the U.K. and Germany posting strong results despite economic challenges.
• AI demand increased in Q4, with 30% of customer expansions involving AI products like Extend Pro. New annual contract value more than doubled sequentially.
• WDAY integrates AI into its core offerings and sees new monetization opportunities as AI evolves. This approach supports long-term growth.
• WDAY projects Q1 and FY6 subscription revenue growth of 13% and 14%, respectively, indicating a slowdown. However, the company is optimistic about opportunities in government efficiency, especially after wins with the Department of Energy and DIA.

Despite macroeconomic uncertainties, WDAY is well-positioned for long-term growth through AI investments and government-related revenue expansion, providing a solid foundation for future growth.