Workday continues growth at the start of Fiscal FY 2027

Workday has beaten analyst expectations in its first quarter results for Fiscal 2027. Revenue rose 13.5% year-over-year to $2.542 billion. Subscription revenues rose even faster by 14.3% year-over-year to $2.354 billion. Its non-GAAP profit achieved $2.66 per share, 5.7% above analyst expectations.

Other financial figures included:

• Operating income: $338 million, or 13.3% of revenues (Q1:FY2026 $39 million, 1.8% of revenue). Though income in FY2026 was impacted by restructuring costs of $166 million)
• Non-GAAP operating income was $809 million, or 31.8% of revenues (Q1:FY2026: $677 million, or 30.2% of revenues)
• Diluted net income per share: $0.87, (Q1:FY2026 $0.25, impacted by restructuring costs as above)
• Non-GAAP diluted net income per share was $2.66, (Q1:FY2026 $2.23)
• 12-month subscription revenue backlog: $8.806 billion, up 15.5% year-over-year
• Total subscription revenue backlog was $27.294 billion, up 10.9% year-over-year
• Operating cash flows were $696 million, (Q1:FY2026: $457 million)
• Free cash flows were $616 million (Q1:FY2026: $421 million)
• Cash, cash equivalents, and marketable securities were $4.353 billion as of April 30, 2026

During the quarter Workday also repurchased approximately 12.0 million shares of Class A common stock for $1.6 billion as part of its share repurchase programs.

Zane Rowe, CFO, Workday, commented, “Our first quarter results demonstrate ongoing customer adoption across our platform, as enterprises around the globe turn to Workday to manage and empower their most important assets.

“We are reiterating our fiscal 2027 subscription revenue outlook of $9.925 billion to $9.950 billion, while increasing our fiscal 2027 non-GAAP operating margin guidance to 30.5%. Our focus remains on executing on our agentic AI roadmap while driving operational efficiencies as we scale.”

Beyond finance, product revelations were up too

This was not only a strong quarter financially, but also strong for product announcements. Workday often focuses product updates later in the year when it holds Workday Rising. This year, however it announced several updates, first at its Elevate conference in London and then more recently at its Sana AI Summit in New York.

Earlier this year it announced Sana from Workday generally availability to customers worldwide. At the event in New York it unveiled Sana for IT Service Management (ITSM), targeting internal service events for HR, finance and IT, targeting what was ServiceNow. At the same event it showcased a new travel agent, to bring travel and expenses together in a single seamless experience.

Other announcements included:

• Workday Agent System of Record gave customers visibility and control over all of their AI agents.
• Personnel Action Request Agent modernizes federal HR transactions.
• Military Skills Mapper helps organizations more effectively identify and hire military veteran talent.
• EU-based data residency in Frankfurt and multilingual support for Workday Contract Lifecycle Management to meet EU data residency requirements.

Workday also enhanced and added new partnerships including:

• An expanded partnership with Microsoft.
• Workday Recognition provided through a partnership with Achievers.
• The Insperity HRScale solution.
• The Workday Wellness program added Morgan Stanley at Work and PerkSpot.

The firm continued to expanded globally, opening its sixth market in ASEAN in Vietnam.

Aneel Bhusri, Co-Founder, CEO, and Chair, Workday, commented, “We had a great Q1, and it makes one thing clear: Workday is ready for this AI moment. Our core business is strong, our AI strategy is working, and we’re moving with the speed and focus required to lead.

“I am very excited about Workday’s position and our path ahead. We have the platform, the trust, and the innovation to lead this next chapter, just as we did when we founded the company.”

Customer growth

Workday also welcomed new customers during the quarter and saw increase use of its new solutions. New customers include ACHM Hotels by Marriott, Australian Gas Infrastructure Group, Del Monte Fresh Produce Company, Smiths Group, and State of Delaware.

It also expanded relationships with Bank OZK, GE Vernova, and Queensland University of Technology. Workday now has more than 80 million users of its applications.

Use of its Agentic AI solution more than doubled during the quarter. Over 4,000 customers have used at least one Agent. In addition, in Q1 alone its Recruiting Agent supported around 14 million hiring processes, up 44% year-over-year.

Workday was the only vendor to be named a Customers’ Choice in the 2026 Gartner Voice of the Customer for Cloud ERP for Service-Centric Enterprises for two consecutive years.

Looking forward

With more products to cross sells the Financial Outlook remains strong. Financial guidance for fiscal 2027, Q2 includes:

• Subscription revenues of $2.455 billion, representing growth of 13%
• Non-GAAP operating margin of 30.0%

Workday also revised its full year 2027 guidance noting:

• Subscription revenues of $9.925 billion to $9.950 billion, representing growth of 12% to 13%
• Non-GAAP operating margin of 30.5%

Enterprise Times: What does this mean

Another strong set of results from Workday. Importantly the cadence of product releases may be increasing. This may be due in part to the integration of Sana into Workday, it may also be because the development cadence is increasing through the use of AI to accelerate development.

Regardless, the future looks strong for Workday in the short to medium term. The big question is about future leadership and the succession planning that Bhusri should be considering after his return as CEO following carl Eschenbach’s departure.

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