For months, a quiet dread has been building among enterprise software investors. The fear: that generative AI tools would render legacy platforms, the kind that giant corporations pay billions for annually, obsolete. Workday just made a strong case that the opposite is happening.
The human capital management and financial software company reported fiscal Q1 2027 results on May 21 that beat analyst expectations across the board. Total revenue hit $2.542 billion, up 13.5% year-over-year. Adjusted earnings per share came in at $2.66, comfortably clearing the $2.51 Wall Street consensus. Shares responded by rallying between 10% and 14%.
AI as growth engine, not existential threat
The company’s agentic AI solutions are approaching $500 million in annual recurring revenue. That’s up from $400 million reported in the prior quarter, which means Workday added roughly $100 million in AI-driven ARR in a single quarter.
Workday is layering that AI growth on top of a subscription business that already generated $2.354 billion in the quarter, growing 14.3% year-over-year.
