Workday Inc. (WDAY) shares surged as much as 14% in extended trading after the enterprise software firm reported fiscal first-quarter results that beat analyst estimates and raised its full-year margin guidance.
"Our core business is strong, our AI strategy is working, and we're moving with the speed and focus required to lead," Aneel Bhusri, who was recently re-appointed as Chief Executive Officer, said in a statement.
The human resources software maker posted revenue of $2.54 billion, a 13% increase from the year-ago period, and delivered adjusted earnings per share of $2.66. The results topped analysts' consensus estimates for $2.52 billion in revenue and $2.51 in earnings per share.
The strong report provided a boost to the stock, which had fallen 43% in 2026 through Thursday's close on investor concerns that generative AI could disrupt the company's growth. For the second quarter, Workday expects subscription revenue of $2.46 billion, slightly ahead of the $2.45 billion consensus.
A key focus for investors was the company's progress in artificial intelligence. Workday said the number of clients using its AI agents more than doubled from the previous quarter to over 4,000. Gerrit Kazmaier, president of product and technology, told analysts that annualized revenue from these AI solutions is approaching $500 million.
Bhusri, a co-founder who returned to the CEO role during the quarter, emphasized the shift in focus. "The 150th feature in HR or finance is not going to move the needle for our business," he said. "The next agentic application will."
For its full fiscal year, Workday lifted its adjusted operating margin forecast to 30.5%, up from a previous 30%. The company maintained its full-year growth outlook of 12% to 13%.
The earnings beat from Workday follows strong results from peers in the finance and HR software space. BILL saw its revenue grow 13.5% and Flywire reported a 42.9% revenue increase in their recent quarters.
The stronger margin outlook and accelerating AI adoption signal that Workday's strategy to embed artificial intelligence is gaining traction with customers. Investors will watch the company's next earnings report to see if the AI revenue run-rate and client growth can be sustained.
This article is for informational purposes only and does not constitute investment advice.
