In This Article:
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Subscription Revenue: $2.059 billion, up 13% year-over-year.
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Total Revenue: $2.240 billion, growth of 13%.
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12-Month Subscription Revenue Backlog (cRPO): $7.63 billion, increasing 15.6%.
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Total Subscription Revenue Backlog: $24.62 billion, up 19%.
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Gross Revenue Retention Rate: 98%.
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Non-GAAP Operating Income: $677 million, representing a non-GAAP operating margin of 30.2%.
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GAAP Operating Income: $39 million, impacted by a $166 million restructuring charge.
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Operating Cash Flow: $457 million, growth of 23%.
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Cash and Marketable Securities: $8 billion at the end of the quarter.
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Headcount: Approximately 19,300 employees.
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Q2 FY26 Subscription Revenue Guidance: Approximately $2.160 billion, growth of 13%.
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FY26 Subscription Revenue Guidance: $8.8 billion.
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FY26 Non-GAAP Operating Margin Guidance: Approximately 28.5%.
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FY26 Operating Cash Flow Outlook: $2.75 billion.
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FY26 Capital Expenditures: Approximately $250 million.
Release Date: May 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Workday Inc (NASDAQ:WDAY) reported a solid first quarter with 13% subscription revenue growth and a non-GAAP operating margin of 30%.
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The company saw strong customer adoption across key verticals, geographies, and customer segments, including new HCM relationships with United Airlines and expansions with FedEx and CVS Health.
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Workday Inc (NASDAQ:WDAY) continues to innovate with AI, with new ACV across AI products more than doubling year over year in Q1.
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The company launched WorkdayGO to target the emerging and medium enterprise market, offering faster implementations and a clear pricing model.
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Workday Inc (NASDAQ:WDAY) has five industries exceeding $1 billion in annual recurring revenue, showcasing the strength and diversity of its business.
Negative Points
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The economic environment remains uncertain, with potential impacts on specific markets such as SLED and international business.
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There is a heightened macro uncertainty, particularly across certain markets and verticals, which could impact growth prospects.
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GAAP operating income was impacted by a $166 million charge related to restructuring earlier in the year.
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The company is keeping an eye on the international markets due to potential macro headwinds that could affect investment decisions.
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Despite strong results, Workday Inc (NASDAQ:WDAY) acknowledges that no company is immune to potential headwinds in the current economic climate.
Q & A Highlights
Q: Can you discuss the current macroeconomic environment and its impact on Workday's guidance? A: Carl Eschenbach, Co-CEO, emphasized that Workday's value proposition remains strong regardless of economic conditions due to the ROI and TCO benefits it provides. He noted that while they are monitoring certain sectors like SLED and international markets, the company's diverse opportunities and AI innovations give them confidence to maintain their full-year guidance.