Workday Beats Q1 Estimates, Subscription Revenue Up 14.3%, Shares Surge 12%
Workday beat Q1 revenue and EPS estimates, posting $2.54B in revenue and $2.66 adjusted EPS, driving a nearly 12% premarket share jump. Subscription revenue rose 14.3% to $2.35B, with 40% net new business growth, and the company maintained its full-year subscription forecast.
1. First-Quarter Financial Results
Workday delivered $2.54 billion in Q1 revenue, surpassing the $2.52 billion consensus, and reported $2.66 in adjusted EPS versus an expected $2.51. The stronger-than-forecast results triggered a nearly 12% premarket share rally.
2. Subscription Business Performance
Subscription revenue climbed 14.3% to $2.35 billion, driven 40% by net new business, while the company reiterated its full-year subscription revenue forecast. Despite a 43% year-to-date stock decline, the software and services index is down about 14%.
3. AI Strategy and Valuation Position
Workday launched Sana, its conversational AI layer, and continues integrating AI features across its platform to bolster competitiveness. Its 80 million–user base, high retention as a system of record, and forward P/E of 10.93 versus Salesforce’s 12.8 suggest relative insulation from AI disruption.