Workday slightly beats Q1 revenue estimates on strong subscription growth

Workday

21/05/2026 21:11

Overview

Enterprise HR/finance software firm's fiscal Q1 revenue up 13.5%, slightly beating analyst expectations

Adjusted EPS for fiscal Q1 beat consensus

Company repurchased $1.6 bln in shares during the quarter

Outlook

Workday sees Q2 subscription revenue at $2.455 bln, up 13%

Company expects full-year subscription revenue of $9.925 bln to $9.950 bln, up 12%-13%

Workday raises full-year non-GAAP operating margin guidance to 30.5%

Result Drivers

SUBSCRIPTION REVENUE GROWTH - Subscription revenues rose 14.3% year-over-year, driven by ongoing customer adoption across the platform, per CFO Zane Rowe

AI AGENT ADOPTION - The number of customers using Workday's organically developed AI agents more than doubled quarter-over-quarter, and its Recruiting Agent supported 14 mln hiring processes, up 44% year-over-year

OPERATIONAL EFFICIENCIES - Improved non-GAAP operating margin attributed to focus on operational efficiencies as the company scales

Company press release: ID:nPn3w2Hhra

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Revenue
Slight Beat*
$2.54 bln
$2.52 bln (35 Analysts)
Q1 Adjusted EPS
Beat
$2.66
$2.51 (36 Analysts)
Q1 EPS
$0.87
Q1 Adjusted Operating income
Slight Beat*
$809 mln
$806.16 mln (34 Analysts)
Q1 Operating income
$338 mln
Q1 Subscription Revenue
$2.35 bln


*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 25 "strong buy" or "buy", 17 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the software peer group is "buy"

Wall Street's median 12-month price target for Workday Inc is $171.17, about 35.2% above its May 20 closing price of $126.61

The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 16 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)