Key Takeaways
- Workday’s Q1 adjusted earnings per share reached $2.66, surpassing analyst estimates of $2.51
- Total revenue hit $2.54 billion, reflecting 13% annual growth and exceeding projections
- Subscription revenue climbed 14% to $2.35 billion, beating Wall Street expectations
- Shares of WDAY jumped 12% after hours following a 3.8% decline to $121.85 during regular trading
- Full-year subscription revenue outlook maintained at $9.925B–$9.950B
Workday impressed investors with its fiscal first-quarter performance on Thursday, sparking a significant rally in extended trading. The enterprise cloud software provider saw its shares climb 12% after hours as the company exceeded Wall Street projections across key financial metrics.
The stock had finished regular trading session down 3.8% at $121.85, continuing a challenging year — shares have declined 43% in 2026 amid investor concerns that artificial intelligence could diminish demand for conventional software solutions.
Thursday’s financial results challenged that pessimistic outlook, at least temporarily.
For the quarter ending April 30, Workday announced adjusted earnings per share of $2.66. This represents growth from $2.23 in the same period last year and beats the consensus forecast of $2.51. Total revenue increased 13% year-over-year to $2.54 billion, slightly exceeding the anticipated $2.52 billion.
Subscription revenue — the metric most carefully tracked by analysts — totaled $2.35 billion, marking a 14% increase and surpassing expectations of $2.33 billion.
The company’s 12-month subscription backlog expanded 16% to $8.81 billion. Total subscription backlog reached $27.29 billion, up 11%, though this figure fell short of Wall Street’s $28.38 billion estimate.
Artificial Intelligence Agent Expansion
A noteworthy highlight: Workday’s AI agent user base more than doubled compared to the previous quarter. The company’s Recruiting Agent facilitated 14 million hiring processes, representing a 44% year-over-year increase.
CFO Zane Rowe attributed the subscription growth to sustained customer adoption throughout the platform.
CEO Aneel Bhusri, who resumed his leadership position in February after replacing Carl Eschenbach, emphasized in the earnings statement: “Workday is ready for this AI moment. Our core business is strong, our AI strategy is working, and we’re moving with the speed and focus required to lead.”
Wall Street Reaction
Morgan Stanley analysts indicated the performance provided investors with “solid evidence” countering worries about growth sustainability and margin protection following Bhusri’s return to leadership.
“Investors likely need more than one quarter to buy in, but at current valuation the downside appears limited,” they observed.
Looking ahead to Q2, Workday projected subscription revenue of $2.455 billion — matching the analyst consensus of $2.45 billion, which represents 13% growth.
The company maintained its full-year subscription revenue forecast at $9.925 billion to $9.950 billion, indicating 12%–13% growth. Workday also increased its full-year non-GAAP operating margin outlook to 30.5%, up from the previous 30%, pointing to improved operational efficiency.
Analyst estimates for full-year subscription revenue currently stand at $10.66 billion — exceeding the company’s official guidance.
In premarket trading Friday, the stock was changing hands around $134.71, representing approximately 10.5% gains from Thursday’s closing price.
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