If you’ve ever had to request time off, log expenses, or check your paystub at a medium-to-large company, there’s a very good chance you’ve used Workday. They are one of the biggest names in cloud software for HR and Finance.
Workday just released its financial results for the first quarter of fiscal year 2027 (which covers the period ending April 30, 2026). Let’s peel back the corporate jargon and look at how the company is actually doing, in plain English.
1. The Headlines: Revenue is Up
The most basic health check for any tech company is whether it’s making more money than it did last year. For Workday, the answer is a resounding yes.
- Total Revenue: $2.542 billion. This is up 13.5% compared to the same time last year.
- Subscription Revenue: $2.354 billion. This is the core of Workday’s business. Instead of selling software once, they charge companies an ongoing fee to use it. This subscription money grew by 14.3% and makes up the vast majority of their total income.
What this means: Workday is still successfully signing up new customers and keeping old ones. Their revenue growth topped Wall Street’s expectations, pushing their stock price up by roughly 10% following the announcement.
2. Profitability is Soaring (The “GAAP” vs. “Non-GAAP” Trick)
When looking at corporate earnings, you will always see two sets of profit numbers: GAAP (official accounting rules) and Non-GAAP (adjusted numbers where companies pull out one-time or unusual expenses to show how the core business is running).
- Official Profit (GAAP Operating Income): $338 million. Last year, they only made $39 million. Why the giant leap? Last year, Workday had to spend $166 million on “restructuring expenses” (severance and corporate reshuffling), which dragged down their profits. This year, without those heavy costs, their margins looked drastically healthier.
- Adjusted Profit (Non-GAAP Operating Income): $809 million. When you strip out things like employee stock payouts and one-time costs, Workday’s adjusted operating margin hit 31.8% (up from 30.2% last year).
What this means: Workday is becoming a leaner, more efficient machine. They are generating a lot more cash from every dollar they bring in.
3. The Piggy Bank: Backlog and Cash Flow
To see how a software company will perform in the future, look at its backlog—money that customers have legally committed to pay, but haven’t actually handed over yet.
- 12-Month Backlog: Workday has $8.806 billion locked in for the next year alone (up 15.5%).
- Total Backlog: Their total pile of future contracts sits at a massive $27.294 billion.
- Free Cash Flow: They brought in $616 million in pure cash this quarter.
What this means: Workday has immense financial security. Even if they didn’t sign a single new customer tomorrow, they have billions in guaranteed revenue lined up for years to come. They also used $1.6 billion of their cash to buy back 12 million shares of their own stock, a move companies make when they want to reward investors and signal that they believe their stock is undervalued.
4. The Big Story: “Agentic AI”
Before this report came out, many Wall Street analysts were nervous. They worried that independent artificial intelligence tools might make traditional HR and finance software obsolete. Co-founder and CEO Aneel Bhusri explicitly addressed this, stating: “Workday is ready for this AI moment.”
Workday is leaning heavily into “Agentic AI”—which essentially means AI agents that don’t just answer questions, but actually complete tasks for you.
- They revealed that over 4,000 customers are now using at least one of Workday’s AI agents.
- The use of their organically built agents doubled compared to last quarter.
- Their Recruiting Agent alone helped power 14 million hiring processes this quarter, which is a 44% spike from last year.
- They also announced new partnerships to weave their HR agents directly into tools employees already use, like Microsoft 365 Copilot.
What this means: Workday is successfully convincing companies that AI is a reason to buy more Workday products, rather than a reason to ditch them.
5. Looking Ahead
When companies report earnings, they also give a “guidance” forecast for the rest of the year.
Workday’s CFO, Zane Rowe, announced they are sticking to their full-year subscription revenue target of $9.925 billion to $9.950 billion. More importantly, because they are keeping costs low, they actually raised their profit margin expectations for the full year to 30.5%.
The Bottom Line
Workday delivered a rock-solid quarter. They proved they can grow their sales at double-digit percentages, drastically improve their profit margins, and successfully roll out AI tools that customers are actually willing to pay for. For a legacy tech giant, it’s about as good a report card as they could have hoped for.
