WDAY Stock Climbs After-Hours On Robust Margin Outlook, AI Developments

• Sales rose 13% to $2.54 billion in the period, topping analysts' projections of $2.52 billion.
• Earnings climbed to $2.66 a share, topping analyst expectations.
• WDAY introduced two AI agents on Thursday.

Workday (WDAY) share price soared 11% after-hours after the HR software maker beat revenue and earnings expectations for the fiscal first quarter and raised its margin outlook for the full year.

Workday’s revenue grew 13% in the first fiscal quarter, which ended on April 30, to $2.54 billion, beating expectations of $2.52 billion, as per data from Fiscal.ai. The company’s earnings, adjusted for items, climbed to $2.66 a share, also topping predictions of $2.58 per share. 

“This should be viewed as a solid quarter and an encouraging first step under Aneel’s return as CEO,” said Kirk Materne, an analyst at Evercore ISI, told Bloomberg. The report “should help alleviate some of the near-term concerns around execution and demand durability.” 

“Workday is ready for this AI moment,” said Aneel Bhusri, co-founder, CEO, and chair. Workday announced in February that Bhusri would return to run the company he had stepped back from in 2024. 

Workday on Wednesday introduced two new AI platforms — one to automate IT service requests and one to handle corporate travel booking and expenses. Both were meant to advance the capabilities of its Sana AI platform. 

Both agents are built on Workday's existing data infrastructure, meaning they draw on employee roles, reporting structures, approval chains, and company policies already stored in the platform, the company said. Expenses are automatically generated once travel is approved, eliminating manual report creation. 

WDAY Q2 And Full Year Guidance

With respect to guidance, Workday expects a 30% adjusted operating margin and $2.46 billion in subscription revenue for the fiscal second quarter. Analysts had anticipated a 30% margin and $2.45 billion in subscription revenue. 

The HR software maker also lifted its full-year margin forecast. The company is now projecting a 30.5% adjusted operating margin, up from 30% as of February. The company is still looking for 12% to 13% growth.  

WDAY Retail View 

Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘extremely high’ message volumes. 

One user expressed bullishness by shifting investments from stocks like NOW and ADBE into WDAY. 

The stock has lost 55% over the last 12-months.

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