Core Viewpoint - Workday reported quarterly earnings of $2.23 per share, exceeding the Zacks Consensus Estimate of $1.99 per share, and showing an increase from $1.74 per share a year ago, representing an earnings surprise of 12.06% [1][2] Financial Performance - Workday's revenues for the quarter ended April 2025 were $2.24 billion, surpassing the Zacks Consensus Estimate by 1.10%, and up from $1.99 billion year-over-year [2] - The company has consistently surpassed consensus EPS estimates over the last four quarters [2] Stock Performance - Workday shares have increased approximately 4.1% since the beginning of the year, while the S&P 500 has declined by 0.6% [3] Future Outlook - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $2.02 for the coming quarter and $8.40 for the current fiscal year [7] - The estimate revisions trend for Workday is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [6] Industry Context - The Internet - Software industry, to which Workday belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable environment for stocks in this sector [8] - Guidewire Software, another company in the same industry, is expected to report quarterly earnings of $0.46 per share, reflecting a year-over-year increase of 76.9% [9]

Financial Performance - Workday's trailing twelve month subscription revenues reached $7.961 billion, demonstrating a year-over-year growth of 15.5%[9] - The trailing twelve month non-GAAP operating income was $2.349 billion, resulting in a 27.0% margin[9] - Operating cash flow for the trailing twelve months amounted to $2.547 billion, achieving a 29.3% margin[9] - In Q1 FY26, total revenues were $2.240 billion, a 12.6% increase year-over-year, with subscription revenues at $2.059 billion, up by 13.4%[22] - Q1 FY26 operating cash flows reached $457 million, a 23.0% increase year-over-year, and free cash flows were $421 million, up by 44.6%[22] Customer and Operational Metrics - Workday serves over 11,000 global customers across 175+ countries, including 60%+ of the Fortune 500[10] - The company has approximately 19,300 employees worldwide, operating in 30+ countries[10] - Total subscription revenue backlog reached $24.62 billion, a 19.1% increase year-over-year, with the 12-month subscription revenue backlog at $7.63 billion, up by 15.6%[22] Future Guidance - Workday projects full year FY26 subscription revenues to be $8.800 billion and a non-GAAP operating margin of 28.5%[13] - The company anticipates Q2 FY26 total revenues of $2.340 billion, a 12% increase year-over-year, and subscription revenues of $2.160 billion, up by 13%[28]

Financial Data and Key Metrics Changes - Workday reported a 13% growth in subscription revenue, totaling $2,059 million for Q1 FY 2026, with total revenue reaching $2,240 million, also up 13% [28][30] - Non-GAAP operating margin for the quarter was 30.2%, while GAAP operating income was impacted by a $166 million restructuring charge, resulting in a GAAP operating income of $39 million [30][31] - The twelve-month subscription revenue backlog (CRPO) increased by 15.6% to $7,630 million, and total subscription revenue backlog rose by 19% to $24,620 million [29][30] Business Line Data and Key Metrics Changes - More than 30% of net new wins in Q1 were full suite, with over 50% in focused industries like healthcare and SLED [11][43] - New ACV from AI products more than doubled year-over-year, with approximately 25% of customer expansions including AI solutions [12][88] - Professional services revenue was $181 million, contributing to the overall revenue growth [28] Market Data and Key Metrics Changes - U.S. revenue in Q1 totaled $1,680 million, up 13%, while international revenue also grew by 13% to $559 million [28][29] - The company saw notable wins in EMEA and APAC, with significant expansions in various sectors including healthcare and manufacturing [24][25] Company Strategy and Development Direction - Workday is focusing on AI integration and innovation, with a strong emphasis on delivering ROI for customers [20][26] - The launch of Workday Go aims to accelerate deployment for medium enterprises, allowing implementations in as little as 30 to 60 days [14][51] - The company is investing heavily in AI and expanding its partner ecosystem to drive growth and innovation [21][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining guidance despite macroeconomic uncertainties, citing strong customer demand and the value proposition of the Workday platform [40][42] - The company is closely monitoring specific markets like SLED and international business for potential impacts from the macro environment [25][108] - Management highlighted the importance of AI in driving customer engagement and future growth, with expectations for continued strong adoption [88][98] Other Important Information - Workday ended the quarter with $8 billion in cash and marketable securities and announced a new $1 billion open-ended buyback authorization [31] - The company is maintaining its FY 2026 operating cash flow outlook of $2,750 million and capital expenditures of approximately $250 million [35] Q&A Session Summary Question: Can you discuss the current macro environment and how it affects guidance? - Management noted that the Workday value proposition remains strong, with customers consolidating on the platform for better ROI and TCO, despite some headwinds in specific industries [40][41] Question: What is the potential impact of Workday Go on medium enterprises? - Workday Go is designed to accelerate deployment and improve pricing and packaging for medium enterprises, allowing for faster implementations [51][52] Question: How is the adoption of Xtend and XtendPro progressing? - Adoption of Xtend and XtendPro is increasing, with significant growth in partner applications and customer customizations [58][60] Question: What are the growth rates for HCM versus Financials? - Both HCM and Financials are performing well, with a strong sales motion for full suite offerings contributing to overall growth [62][64] Question: How is the company approaching capital allocation in the current environment? - The focus remains on organic growth and strategic investments, with a commitment to returning capital to shareholders through buybacks [84][85] Question: What is the outlook for AI product monetization? - Strong adoption of AI solutions is already being seen, with expectations for continued growth and monetization opportunities in the near future [98][99]

Financial Data and Key Metrics Changes - Workday reported a 13% growth in subscription revenue, totaling $2,059 million for Q1 2026, with a non-GAAP operating margin of 30% [6][27] - Total revenue for the quarter reached $2,240 million, also reflecting a 13% increase [27] - The twelve-month subscription revenue backlog (CRPO) was $7,630 million, up 15.6%, while total subscription revenue backlog increased by 19% to $24,620 million [28][29] - Non-GAAP operating income was $677 million, with a GAAP operating income of $39 million impacted by a $166 million restructuring charge [29][30] - Operating cash flow grew by 23% to $457 million [30] Business Line Data and Key Metrics Changes - More than 30% of new wins in Q1 were full suite, with over 50% in focused industries like healthcare [11] - New ACV across AI products more than doubled year over year, with approximately 25% of customer expansions including AI solutions [11][17] - Workday Go was launched to target medium enterprises, enabling faster implementations in as little as 30 to 60 days [12][13] Market Data and Key Metrics Changes - U.S. revenue totaled $1,680 million, up 13%, while international revenue also increased by 13% to $559 million [27][28] - The company saw notable wins in EMEA and APAC, with significant expansions in various sectors [22][23] Company Strategy and Development Direction - Workday's strategy focuses on leveraging AI to drive efficiencies and innovation for customers, positioning itself as a leader in the evolving future of work [25] - The company is investing heavily in AI and expanding its partner ecosystem to enhance its offerings [19][22] - Workday aims to capture growth opportunities in emerging and medium enterprises through initiatives like Workday Go [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainties but expressed confidence in the company's value proposition and customer demand [24][40] - The company reiterated its subscription revenue guidance of $8,800 million for FY 2026, expecting continued growth in the second half of the year [32][44] - Management highlighted strong ROI and total cost of ownership as key selling points for customers navigating economic challenges [110][113] Other Important Information - Workday's AI solutions are seeing strong adoption, with a 100% year-over-year growth in AI-related sales [88][99] - The company has a new $1 billion open-ended buyback authorization, reflecting its commitment to returning capital to shareholders [31][84] Q&A Session Summary Question: Can you discuss the current environment and your confidence in maintaining guidance? - Management noted that the Workday value proposition resonates in both headwinds and tailwinds, with strong ROI driving customer consolidation on the platform [40][44] Question: What impact do you expect from Workday Go on medium enterprises? - Workday Go is designed to accelerate deployment and improve pricing and packaging for medium enterprises, with implementations now possible in as little as 60 days [50][52] Question: How is the adoption of Xtend and XtendPro progressing? - Xtend and XtendPro are seeing increased customer and partner engagement, with significant growth in applications being developed on the Workday platform [57][59] Question: What are the growth rates for HCM versus Financials? - Both HCM and Financials are performing well, with full suite wins being a strong sales motion, particularly in key markets [62][64] Question: How is the company approaching capital allocation in the current environment? - The focus remains on organic growth and strategic investments, with a high bar for any inorganic growth opportunities [83][84] Question: What is the timeline for monetization of AI products? - Strong adoption of AI solutions is already being seen, with significant growth expected as new agents are introduced [98][99]

Core Insights - Workday reported Q1 net revenue of $1.63 billion, exceeding analyst expectations of $1.61 billion [1] - The company maintained its full-year subscription revenue guidance at $8.8 billion, aligning with analyst forecasts [1] - For Q2, Workday anticipates subscription revenue of $2.16 billion, matching analyst expectations [1] - Following the earnings report, Workday's stock fell by 2.34% in after-hours trading [1]

Exhibit 99.1 Workday Announces Fiscal 2026 First Quarter Financial Results Fiscal First Quarter Total Revenues of $2.240 Billion, Up 12.6% Year Over Year Subscription Revenues of $2.059 Billion, Up 13.4% Year Over Year PLEASANTON, Calif., May 22, 2025 – Workday, Inc. (NASDAQ: WDAY), the AI platform for managing people, money, and agents, today announced results for the fiscal 2026 first quarter ended April 30, 2025. Fiscal 2026 First Quarter Results Comments on the News "Workday delivered another solid quar ...

Core Insights - Workday, Inc. reported total revenues of $2.240 billion for the fiscal first quarter of 2026, reflecting a year-over-year increase of 12.6% [1][7] - Subscription revenues reached $2.059 billion, marking a 13.4% increase compared to the same period last year [1][7] - The company reaffirmed its fiscal 2026 subscription revenue guidance of $8.8 billion and increased its non-GAAP operating margin guidance to approximately 28.5% [4] Financial Performance - Operating income for the first quarter was $39 million, or 1.8% of revenues, down from $64 million (3.2% of revenues) in the same quarter last year, impacted by restructuring expenses of $166 million [7][20] - Non-GAAP operating income was $677 million, representing 30.2% of revenues, compared to $515 million (25.9% of revenues) in the prior year [7][26] - Diluted net income per share was $0.25, down from $0.40 in the same quarter last year, while non-GAAP diluted net income per share increased to $2.23 from $1.74 [7][26] Cash Flow and Share Repurchase - Operating cash flows were $457 million, an increase from $372 million in the previous year, while free cash flows rose to $421 million from $291 million [7][29] - Workday repurchased approximately 1.3 million shares of Class A common stock for $293 million and announced a new share repurchase program of up to $1.0 billion [7][8] Strategic Developments - Workday introduced new Illuminate Agents aimed at enhancing hiring processes and improving employee experiences [8] - The company expanded its customer base, welcoming new clients such as Dover Corporation and United Airlines, while also strengthening existing relationships with major companies [8] - Workday was recognized as a leader in the 2025 Gartner Magic Quadrant for Higher Education Student Information System Software as a Service and Talent Acquisition Suites [8]

Core Insights - Workday, Inc. (WDAY) is expanding its AI-driven capabilities with the introduction of new Illuminate Agents aimed at enhancing productivity in Human Resource Management and finance functions [1][7] - The Illuminate platform utilizes a vast dataset from over one trillion transactions annually, providing a comprehensive understanding of business context to improve decision-making and workflow automation [2] Product Innovations - The Contingent Sourcing Agent accelerates the recruitment of temporary workers by optimizing candidate screening and improving quality [3] - The Contract Intelligence Agent aids legal and business teams by reviewing contracts quickly, identifying risks, and tracking milestones [3] - The Document Driven Accounting Agent automates billing and invoicing through direct data extraction from documents, enhancing efficiency for finance teams [4] - The Self-Service Agent empowers employees by providing instant answers and assisting with complex processes [5] Market Position and Growth - WDAY's revenue growth is driven by high demand for its Human Capital Management (HCM) and financial management solutions, with expansion into diverse industries such as education and public services [6] - The launch of the new Illuminate agents reinforces Workday's leadership in financial management and human resources, addressing the evolving needs of the industry [7] Competitive Landscape - The HCM and financial management software market is becoming increasingly competitive, which may lead to pricing pressures affecting Workday's margins [8] - Workday is facing legal challenges related to allegations of bias in its AI-powered screening tools, which could impact its commercial prospects [8] Stock Performance - Workday's stock has increased by 5.4% over the past year, while the industry has seen a growth of 30.6% [9]

Core Insights - Workday, Inc. has been recognized as a Leader in the 2025 Gartner Magic Quadrant for ERP for US Local Government, indicating its strong execution and vision in the market [1][5] - The Workday platform integrates Human Capital Management and Financial Management, enabling local governments to manage finances and resources effectively in a unified system [2][3] Company Performance - Workday's unified platform provides real-time insights, streamlines processes, and enhances decision-making capabilities for local governments [3] - Local government customers have reported significant improvements, including a 60% faster payroll process, a 15% reduction in unapproved spending, and annual savings of $1.6 million [4] Industry Impact - The platform addresses unique challenges faced by local governments, such as managing complex budgets and delivering essential services [3] - Workday's features, including self-service capabilities and real-time reporting, contribute to operational efficiency and improved service delivery [4][7]

Core Insights - Workday has appointed Edward Charter as the country leader for Canada to accelerate growth in the Canadian market [1][3] - Charter has over 20 years of experience in technology business development and sales leadership, with 18 years at Salesforce [2] - The Canadian market is significant for Workday, being one of its largest markets globally, with over 1,000 employees and more than 450 customers [4] Company Strategy - Charter will focus on deepening customer and partner relationships and directing Workday's regional sales strategy in Canada [3] - Workday aims to leverage modern cloud-based technologies to support Canadian businesses in their HR and finance transformations [5] - The company has been operating in Canada for over two decades, emphasizing its commitment to the region [4] Market Context - The appointment comes at a time when Canadian businesses are increasingly adopting cloud-based technologies [5] - Workday's platform is designed to help organizations manage people, money, and agents effectively [9] - The company serves over 11,000 organizations globally, including more than 60% of the Fortune 500 [10]