Workday shares rise on strong Q1 fiscal 2027 results
Non-GAAP earnings of $2.66 per share and a 14.3% jump in subscription revenue help alleviate investor concerns over artificial intelligence disruption.
Workday (NASDAQ: WDAY) shares rose 3.7% on Friday following the release of its fiscal 2027 first-quarter results, which exceeded Wall Street forecasts for both sales and earnings. The company reported non-GAAP earnings of $2.66 per share on revenue of $2.54 billion, with subscription revenue increasing 14.3% year-on-year. Workday also raised its adjusted operating margin guidance to 30.5% for the fiscal year, helping to alleviate investor concerns regarding potential disruption from artificial intelligence software.
The fiscal first quarter ended April 30, with adjusted earnings per share beating the average Wall Street analyst estimate by $0.14. Sales for the period topped the average forecast by $20 million. Subscription revenues increased 14.3% year-over-year to approximately $2.35 billion, contributing to an overall sales increase of 13.4% year-over-year.
In response to the strong performance, Workday raised its adjusted operating margin guidance for the fiscal year to 30.5%, up from the previous guidance of 30%. The company reiterated its full-year subscription revenue guidance, forecasting between $9.925 billion and $9.950 billion for fiscal 2027.
The stock had previously risen as much as 9.7% earlier in trading before settling at the 3.7% gain as of 11 a.m. ET. The positive results contributed to the share price rise amidst a broader market environment where the S&P 500 and Nasdaq Composite indices both gained 0.4% on the day of the report.
Some investors have previously expressed concerns regarding Workday potentially being disrupted by new artificial intelligence software. However, the company's fiscal Q1 report, commentary, and forward guidance are seemingly helping to assuage those fears, according to market observers.
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