Key Highlights
- Q1 adjusted earnings per share reached $2.66, surpassing analyst expectations of $2.51
- Total revenue hit $2.54 billion, representing 13% year-over-year growth and exceeding projections
- Subscription revenue increased 14% to reach $2.35 billion, beating consensus estimates
- Shares of WDAY climbed 12% during after-hours trading following a 3.8% decline to $121.85 in regular hours
- Management confirmed full-year subscription revenue outlook of $9.925B–$9.950B
Workday reported robust fiscal first-quarter results on Thursday, triggering a significant positive market reaction. The enterprise cloud software provider saw its shares spike 12% in extended trading after surpassing analyst projections across key performance indicators including revenue, profitability, and subscription metrics.
During regular market hours, WDAY had fallen 3.8% to close at $121.85, continuing a challenging period for the stock — shares have declined 43% year-to-date in 2026 amid investor concerns that artificial intelligence could disrupt demand for conventional software solutions.
Thursday’s quarterly performance offered a counterpoint to these concerns, at least temporarily.
For the quarter ending April 30, the company delivered adjusted earnings per share of $2.66. This represents a substantial increase from $2.23 in the year-ago period and exceeded the Street consensus of $2.51. Total revenue climbed 13% on a year-over-year basis to $2.54 billion, slightly topping 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. Meanwhile, total subscription backlog reached $27.29 billion, up 11%, though this figure fell short of Wall Street’s $28.38 billion projection.
AI Agent Momentum
A particularly noteworthy development: Workday’s AI agent user base more than doubled compared to the previous quarter. The company’s Recruiting Agent facilitated 14 million hiring processes, marking a 44% year-over-year increase.
CFO Zane Rowe attributed the subscription revenue expansion to sustained customer adoption throughout the platform.
CEO Aneel Bhusri, who resumed leadership in February after replacing Carl Eschenbach, expressed confidence in the company’s 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 characterized the results as providing investors with “solid evidence” countering worries about growth sustainability and margin protection following Bhusri’s return to the helm.
“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 $2.45 billion analyst consensus and indicating 13% growth.
The company maintained its full-year subscription revenue forecast at $9.925 billion to $9.950 billion, implying 12%–13% growth. Management also elevated its full-year non-GAAP operating margin outlook to 30.5%, up from the previous 30% target, attributing the improvement to operational efficiency gains.
Current Wall Street estimates for full-year subscription revenue stand at $10.66 billion — exceeding the company’s guidance range.
In premarket trading Friday, the stock changed hands around $134.71, representing approximately a 10.5% gain from Thursday’s closing price.
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