Strong demand for agentic AI offerings helps Workday beat expectations and boost its stock price
Shares of the financial services and human resources software company Workday Inc. rose more than 10% in late trading after it reported first-quarter earnings and revenue that came in higher than expected, and also bumped up its full-year margin forecast, increasing optimism over its future profitability.
The company reported earnings before certain costs such as stock compensation of $2.66 per share, easily beating Wall Street’s target of $2.51 per share. Revenue for the period rose 13%, to $2.54 billion, edging past the consensus estimate of $2.52 billion. Subscription revenue, which is a key metric for the company, increased 14%, to $2.35 billion, with 40% of that growth coming from net new business, said Chief Commercial Officer Rob Enslin.
Those results helped Workday to drive up its bottom line, with net income at the end of the quarter coming to $222 million, compared with just $68 million in the year-ago period.
In terms of guidance, the company said it’s looking for subscription revenue of $2.46 billion at the midpoint of its range, and called for a 30% adjusted operating margin in the second quarter. Wall Street had been looking for slightly lower subscription sales of $2.45 billion and the same 30% margin.
