TLDR
- WDAY shares rise after Q1 revenue hits $2.54B with strong subscription growth.
- AI adoption doubles, with over 4,000 customers using Workday agents globally.
- Subscription backlog climbs to $27.3B, up 10.9% from last year.
- Free cash flow reaches $616M, boosting operational and financial strength.
- Workday expands into Vietnam and adds new AI tools for HR and IT.
Workday (WDAY) shares surged in after-hours trading following a strong fiscal 2027 first-quarter report. The stock closed at $121.85, down 3.76%, before climbing to $135.68, up 11.35% post-market. Revenue growth, AI adoption, and a growing subscription backlog drove the market response.
Fiscal 2027 First Quarter Performance
Workday reported total revenues of $2.542 billion, up 13.5% year-over-year. Subscription revenues reached $2.354 billion, a 14.3% increase from last year. Operating income totaled $338 million, representing 13.3% of revenues, compared to $39 million, or 1.8%, in the prior year.
Non-GAAP operating income rose to $809 million, 31.8% of revenues, improving from $677 million, or 30.2%, last year. Diluted net income per share increased to $0.87 from $0.25. Non-GAAP diluted net income per share climbed to $2.66, compared to $2.23 a year earlier.
The subscription revenue backlog reached $27.294 billion, up 10.9% from last year. The 12-month subscription backlog grew 15.5% to $8.806 billion. Operating cash flows were $696 million, while free cash flows totaled $616 million.
Business Expansion and AI Adoption
Workday added new customers including ACHM Hotels, Del Monte, and the State of Delaware. Existing clients, such as Bank OZK and GE Vernova, expanded usage. Over 4,000 customers now use Workday’s AI agents, more than double last quarter.
The Recruiting Agent supported 14 million hiring processes, up 44% year-over-year. Sana, Workday’s AI system, launched globally, including ITSM and travel expense agents. Workday also released the Agent System of Record, providing customers full visibility and control over AI agents.
The company expanded into Vietnam, its sixth ASEAN market. Workday announced EU data residency in Frankfurt and multilingual support for contract lifecycle management. Strategic partnerships expanded with Microsoft, Morgan Stanley, and others through HR and wellness programs.
Outlook and Guidance
Workday expects fiscal 2027 second-quarter subscription revenue of $2.455 billion. Non-GAAP operating margin guidance stands at 30.0% for the quarter. Full-year subscription revenue guidance remains $9.925 billion to $9.950 billion, with a non-GAAP operating margin of 30.5%.
The company repurchased 12 million shares for $1.6 billion, strengthening shareholder value. Cash, cash equivalents, and marketable securities totaled $4.353 billion as of April 30, 2026. Revenue growth, expanding AI adoption, and strong backlog indicate robust operational momentum.
Workday’s first-quarter results reflect solid enterprise adoption, AI integration, and operational efficiency. The company maintains guidance while scaling platform capabilities. Stock performance reflects investor confidence in Workday’s growth trajectory and AI strategy.
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