Workday (WDAY) shares spiked early Wednesday as the cloud human resources company reported fiscal fourth-quarter results above market expectations and projected subscription revenue growth for the ongoing fiscal year.

Subscription revenue is anticipated to come in at $2.05 billion for the first quarter of its fiscal year ending Jan. 31, 2026, representing annual growth of 13%, the company said late Tuesday. The current consensus on FactSet is for $2.06 billion. In the previous quarter, subscription revenue advanced 16% to $2.04 billion.

"We expect subscription revenue to increase roughly 5.5% sequentially in (the second quarter)," Chief Financial Officer Zane Rowe said during an earnings call, according to a FactSet transcript. The stock jumped 11% in premarket activity.

Workday continues to forecast subscription revenue of $8.8 billion for fiscal 2026, largely in line with the Street's view, reflecting a 14% gain from the previous fiscal year. The outlook takes into account the impact of a continuously strengthening US dollar, which is set to be a "roughly $20 million incremental headwind" since the company provided guidance in the last quarter, Rowe said on the call.

"We continue to expect a slightly faster pace of year-over-year subscription revenue growth in the second half of (fiscal 2026) relative to the first half," according to Rowe. "This is driven by continued momentum across our investment initiatives, in addition to revenue building from certain deals we closed in (fiscal 2025)."

The company posted adjusted earnings of $1.92 a share for the three months through January, up from $1.57 the year before, topping the average analyst estimate of $1.78. Revenue climbed 15% year over year to $2.21 billion, ahead of the Street's view for $2.18 billion. Professional services revenue rose to $171 million from $162 million in the prior-year quarter.

Subscription revenue benefited from "favorable linearity" of new (annual contract value) bookings within the fourth quarter, Rowe told analysts on the call. US revenue totaled $1.66 billion, while international revenue came in at $556 million, the CFO said.

Adjusted operating margin increased to 26.4% from 24% last year, according to Workday. The company expects the metric to come in at 28% for both the ongoing quarter and fiscal 2026.