Workday delivered fiscal first-quarter results that surpassed analyst expectations, helped by strong demand for its AI-powered finance and human resources software services.
The enterprise HR and finance software company posted subscription revenue growth of 14.3% year-over-year, driven by continued customer adoption across its platform, according to CFO Zane Rowe.
This was the first quarterly report under CEO Aneel Bhusri after his return to the company. Shares rallied more than 11% in premarket trading Friday.
The company reported quarterly revenue of $2.54 billion, compared with the estimate of $2.52 billion. Its AI agent user base more than doubled from the previous quarter. Its Recruiting Agent supported 14 million hiring processes, marking a 44% increase year-over-year.
"The return of Aneel Bhusri to the CEO role heightened investor concerns on the durability of growth and defensibility of margins at Workday. In his first quarter back in the role, Workday provided solid evidence to counter those concerns," Morgan Stanley analysts said.
For the fiscal second quarter, Workday projected subscription revenue of $2.455 billion, representing 13% growth. The company forecast full-year subscription revenue between $9.925 billion and $9.950 billion, reflecting growth of 12% to 13%.
Workday raised its full-year non-GAAP operating margin guidance to 30.5%, attributing the improvement to operational efficiencies as it scales.
