Workday posted strong fiscal Q1 results, as total revenue hit $2.24 billion, up 12.6% year-over-year.
Subscription revenue climbed 13.4% to $2.06 billion. However, operating income dropped to $39 million, impacted by $166 million in restructuring costs.
Non-GAAP operating income surged 31% to $677 million, reflecting improved efficiency.
Despite restructuring, Workday’s subscription revenue backlog grew 15.6% to $7.63 billion. Total backlog increased 19.1% to $24.62 billion, signalling stronger future revenues.
Operating cash flow rose 22.8% to $457 million, while free cash flow jumped 44.7% to $421 million.
The company repurchased 1.3 million shares for $293 million, reinforcing shareholder value.
CEO Carl Eschenbach (pictured) emphasised Workday’s AI-driven platform, helping businesses manage people and finances efficiently.
"Workday delivered another solid quarter, a testament to the durability of our business and the relevance of our platform as CEOs increasingly turn to us to drive efficiency, agility, and growth," said Eschenbach. "We are delivering real ROI for our customers by helping them effectively manage their most critical assets — people and money — on one unified platform with AI at the core."
CFO Zane Rowe reaffirmed FY26 subscription revenue guidance.
"Our first quarter results highlight the ongoing progress across our strategic growth areas and the continued efficiencies we are driving throughout the business," said Rowe. "We remain focused on executing in this uncertain environment and are reiterating our fiscal 2026 subscription revenue guidance of $8.8 billion while increasing our fiscal 2026 non-GAAP operating margin guidance to approximately 28.5%."
The company remains focused on growth despite economic uncertainty.
Workday extended its AI capabilities, launching Illuminate Agents to streamline hiring and financial processes. It also integrated Evisort’s AI-powered contract management and secured major clients like United Airlines, CVS Health, and Chipotle.
The firm was named a Leader in Gartner’s Magic Quadrant for student information and talent acquisition software.
Looking ahead, Workday expects Q2 subscription revenue of $2.16 billion, up 13.5%.
The company approved a $1 billion share repurchase program, reinforcing investor confidence.
With continued AI expansion and international growth, Workday is positioning itself as a key player in enterprise software.
At the time of writing, the Workday Inc (NASDAQ: WDAY) stock price was trading at US$272.07, up $3.53 (1.31%) today. But in after-hours trading, it was $253.30, down $18.77 (6.90%). Its market cap is around $72.77 billion.
