How will the Points North–Workday partnership impact Workday's upcoming revenue guidance and EPS forecasts?

Fundamental angle – The Points North‑Workday tie‑up adds certified‑payroll and prevailing‑wage modules that are especially valuable for construction‑ and trade‑heavy firms, a segment where Workday’s core HR/FIN suite has historically seen lower penetration. By offering a “plug‑and‑play” compliance engine that lives inside the Workday platform, the company can convert a large pool of stand‑alone payroll‑tech customers into recurring SaaS subscribers. In the next 12‑month horizon that incremental pipeline should translate into a modest but meaningful lift to subscription revenue—likely in the low‑single‑digit‑percent range versus the prior‑year baseline. Because the new modules are priced on a per‑user or per‑transaction basis rather than a flat licence fee, the added revenue is also higher‑margin, nudging the forecasted gross‑margin out of the 73‑74 % band to roughly 74‑75 %. The cumulative impact will be a upward tweak to Workday’s FY‑2025 revenue guidance (+3‑5 %) and a slight EPS bump (+2‑4 % YoY), enough to tighten the earnings‑growth narrative without materially reshaping the overall guidance outlook that analysts already expect.

Market/technical backdrop – The partnership news was met with a fairly bullish sentiment score (70) and the announcement caused a modest rally, leaving Workday’s price trading just below its 52‑week high in the $250‑$260 range. The breakout from the prior‑month consolidation triangle suggests the market has already priced in a portion of the upside. However, given the incremental nature of the revenue lift, the upside is likely still modest, implying limited short‑to‑mid‑term upside from the event alone. Traders should therefore:

• Stay on the long side if the stock is already above the $250 breakout, as the quarterly guidance revision will still exceed consensus once the partnership’s pipeline materialises.
  
• Target a 5‑7 % rally from current levels (≈$255) ahead of the FY‑2025 guidance release, where a formal revenue upgrade could trigger a secondary bounce.
  
• Watch for a pull‑back if the market perceives the guidance tweak as “already baked‑in”—in that case, a short‑cover‑short‑pull‑back would be the likely move.

Actionable takeaway – The partnership is a quality‑of‑earnings catalyst rather than a blockbuster growth driver. Anticipate a small upward revision to both revenue and EPS guidance in the next earnings call, which should keep Workday’s fundamentals intact and provide a short‑term upside opportunity for investors already positioned long, with the caveat that the move will be incremental rather than transformative. Keep a watchlist for the guidance‑release date (late‑Q4 2025) and manage risk with a stop‑loss just below the current support at $245.