Key Highlights
- First quarter adjusted earnings per share reached $2.66, surpassing analyst estimates of $2.51
- Total revenue hit $2.54 billion, representing 13% annual growth and exceeding projections
- Subscription-based revenue increased 14% to $2.35 billion, outperforming consensus forecasts
- Shares of WDAY rallied 12% after hours following a 3.8% decline to $121.85 during regular trading
- Management maintained its annual subscription revenue outlook of $9.925B–$9.950B
The enterprise cloud software provider posted impressive fiscal first quarter results on Thursday, sparking significant investor enthusiasm. Shares rocketed 12% higher in extended trading after the company exceeded Wall Street’s expectations across key financial metrics.
During regular market hours, WDAY had declined 3.8% to finish at $121.85, continuing a challenging year — shares have tumbled 43% in 2026 amid concerns that artificial intelligence could diminish demand for conventional software solutions.
The quarterly results offered a counterpoint to those worries, at least temporarily.
For the period ending April 30, the company delivered adjusted earnings per share of $2.66. This represented significant growth from $2.23 in the same quarter last year and comfortably exceeded the Street’s $2.51 estimate. Total revenue climbed 13% annually to $2.54 billion, slightly above the $2.52 billion consensus.
Subscription revenue — the metric investors monitor most closely — totaled $2.35 billion, marking 14% growth and beating analyst projections of $2.33 billion.
The 12-month subscription backlog expanded 16% to reach $8.81 billion. Total subscription backlog stood at $27.29 billion, up 11%, though this figure fell short of Wall Street’s $28.38 billion expectation.
Expanding AI Capabilities
A standout metric: the company’s AI agent user base more than doubled compared to the previous quarter. The Recruiting Agent facilitated 14 million hiring workflows, representing a 44% increase from the prior year.
CFO Zane Rowe attributed the subscription revenue expansion to sustained customer adoption throughout the platform.
CEO Aneel Bhusri, who resumed leadership in February following Carl Eschenbach’s departure, emphasized confidence in the earnings announcement: “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 sustainable growth and margin protection following Bhusri’s return to the CEO position.
“Investors likely need more than one quarter to buy in, but at current valuation the downside appears limited,” they observed.
Looking ahead to the second quarter, the company projected subscription revenue of $2.455 billion — matching the $2.45 billion analyst consensus and implying 13% growth.
The annual subscription revenue forecast remained unchanged at $9.925 billion to $9.950 billion, representing 12%–13% expansion. Management also increased its full-year non-GAAP operating margin target to 30.5% from the previous 30%, pointing to improved operational efficiency.
Analysts’ current full-year subscription revenue estimate stands at $10.66 billion — exceeding the company’s guided range.
In premarket trading Friday, shares were changing hands around $134.71, up approximately 10.5% from Thursday’s closing price.
