PLEASANTON, California, May 21, 2026, 14:04 PDT
Workday shares climbed 7% in after-hours trading Thursday. The HR and finance software company topped Wall Street’s first-quarter revenue and profit estimates. Investors are watching demand for its AI-focused products after software stocks struggled over the last year, Reuters reported.
Timing is important here. Workday has faced pressure as some investors ask if artificial intelligence will boost big software companies or challenge the seat-based subscription model they use. The company started a founder-led overhaul a few months ago after co-founder Aneel Bhusri came back as CEO in February.
Workday posted quarterly revenue of $2.542 billion for the period ended April 30, a 13.5% increase over last year. Subscription revenue was up 14.3% to $2.354 billion. Wall Street had been looking for $2.52 billion in revenue and $2.34 billion in subscription revenue, LSEG numbers cited by Reuters showed. Adjusted earnings came to $2.66 per share, beating the $2.51 consensus.
Workday kept its full-year subscription revenue target at $9.925 billion to $9.950 billion, pointing to 12% to 13% growth. It bumped its non-GAAP operating margin forecast for the year to 30.5%. The non-GAAP margin does not count some costs such as stock-based pay and expenses from deals. For this quarter, Workday is calling for subscription revenue of $2.455 billion.
Workday co-CEO Aneel Bhusri said the company was “ready for this AI moment.” CFO Zane Rowe said Workday is still focused on “executing on our agentic AI roadmap.” Agentic AI here means software that takes action, not just giving answers. Workday said over 4,000 customers now use at least one of its in-house AI agents, up more than 2x from last quarter. Its Recruiting Agent handled 14 million hiring processes in the latest quarter. Workday Investor Relations
Workday on the same day rolled out Sana for IT Service Management and a Travel Agent tool, pushing its AI tech past HR and finance. The software can manage onboarding, access, IT help, travel bookings and expenses, all while sticking with Workday’s controls and approval process. “Customers want AI spending to deliver more value from the systems they already rely on,” said Bob Evans, founder of Cloud Wars. Newsroom | Workday
Workday’s new focus shifts its competitive ground. The company’s main business goes up against Oracle and SAP in HR and finance software, but with the IT service tool, it gets closer to ServiceNow. Investors in recent sessions have begun to split software firms into those expected to benefit from AI and those they see at risk from it.
Workday pointed to its cash returns this quarter. The company bought back roughly 12 million Class A shares for $1.6 billion. Operating cash flow was up to $696 million from $457 million a year ago. Free cash flow climbed to $616 million from $421 million.
The quarter didn’t solve everything. Workday flagged pricing, new rivals, tech changes, and possible IT spending cuts as risks. Those aren’t the usual warnings for this sector. Investors have debated those same issues for enterprise software all year.
Workday’s jump after hours isn’t enough to erase recent losses. Investor’s Business Daily noted the stock was down 36% in 2026 before earnings. Thursday’s report gives Bhusri a bit of a cushion, but the focus now is on whether customers will pick up more AI features without missing renewals, trimming licenses or delaying projects.
