Workday reported Q1 earnings of $2.66 per share, surpassing estimates of $2.51, with revenue of $2.54 billion beating the $2.52 billion consensus. The company highlighted strong AI adoption, with AI contributing over 25% of new contract value and expanding integrations with Microsoft and Google. Subscription revenue rose 14% to $2.354 billion, and the 12-month subscription backlog grew 15.5% to $8.81 billion. Workday raised its fiscal 2027 operating margin outlook to 30.5%, citing efficiency and AI leverage, while reaffirming subscription revenue guidance of nearly $10 billion.
Workday received a Strong Buy rating with a target price of $145, reflecting a valuation of 13.5x FY2027 and 11.5x FY2028 earnings amid market pessimism. The company is benefiting from Agentic AI, which has boosted new contract value by over 200% yea...
Workday shares have dropped over 35% in the past year due to concerns that generative AI might replace its HR software platform. However, the company's Q1 2027 results showed a healthy 14.7% year-over-year growth in subscription revenue, indicating o...
