Workday, Inc. (NASDAQ: WDAY) Q1 2026 Earnings Call | 05/23/2025

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Workday, Inc. (NASDAQ: WDAY) reported strong Q1 2026 results on May 23, 2025, with total revenue rising 12.6% year-over-year to $2.24 billion, in line with consensus estimates and driven by robust demand for its AI-powered HR and finance solutions. Subscription revenue grew 13.4% to $2.06 billion, while professional services revenue increased 3.4% to $181 million. The company’s 12-month subscription revenue backlog surged 15.6% to $7.63 billion, and the total subscription backlog climbed 19% to $24.62 billion, reflecting strong customer retention and expansion. Non-GAAP operating income jumped 31.5% to $677 million, representing a margin of 30.2%—up from 25.9% a year earlier—while non-GAAP diluted EPS rose to $2.23, beating expectations by over 10%. GAAP operating income was $39 million (1.8% margin), impacted by a $166 million restructuring charge related to workforce reductions and office space exits as Workday prioritized AI innovation and high-growth markets. GAAP diluted EPS was $0.25, down from $0.40 last year, reflecting these restructuring costs. Workday’s Q1 saw accelerating adoption of its AI products, with new annual contract value from AI offerings more than doubling year-over-year. About 25% of customer expansions included at least one AI product, such as Recruiting Agent and Talent Mobility Agent, and over 60% of customers now use Illuminate AI. Notable new customers included United Airlines, Dover Corporation, and Mutual of Omaha, while major expansions came from FedEx, CVS Health, and Chipotle. The company also continued its international expansion, going live on AWS U.K. public cloud and opening a new EMEA headquarters in Dublin. Operating cash flow for the quarter was $457 million, up 23% year-over-year, with free cash flow at $421 million. Workday ended the quarter with $7.97 billion in cash and marketable securities and $2.98 billion in long-term debt. The board approved an additional $1 billion share repurchase program, with $509 million remaining under previous authorizations. Outlook: Q2 2026 guidance: Total revenue of $2.34 billion (+12% YoY), subscription revenue of $2.16 billion (+13%), and a non-GAAP operating margin of 28%. FY2026 guidance: Total revenue of $9.5 billion (+12%), subscription revenue of $8.8 billion (+14%), and a non-GAAP operating margin of 28.5%. Management remains focused on AI innovation, international growth, and disciplined cost control, with a continued emphasis on expanding its customer base and deepening partner engagement. About Inside Ticker: For more expert analysis and real-time updates on Workday, Inc. (NASDAQ: WDAY) and other market movers, follow Inside Ticker and visit InsideTicker.com for in-depth reports, financial insights, and the latest news on leading companies. #Workday #WDAY #EarningsCall #Q12026 #AI #CloudSoftware #HRTech #FinancialResults #StockMarket #InsideTicker