Workday Inc. reports first-quarter earnings Thursday after the market close, facing one of the most skeptical investor environments in its history. Concerns mount over AI disruption and market saturation in its core human capital management business.
Analysts expect earnings of $2.52 per share on revenue of $2.52 billion, representing year-over-year growth of 13% and 12.5% respectively. The forecast is a modest improvement from last quarter, though revenue is expected to tick slightly lower from $2.53 billion in February.
Wall Street's muted optimism reflects a dramatic shift in sentiment toward the $31.6 billion company. Analysts maintain a Buy rating with a mean price target of $178.16, but recent actions tell a different story. Cantor Fitzgerald cut its price target to $160 from $200.
The stock has plunged roughly 40% year-to-date, trading at just 12.3 times forward fiscal 2027 earnings—a steep discount to the broader software sector. This reflects fears that AI agents could erode Workday's per-employee billing model.
Three themes will dominate Thursday's call: subscription revenue stabilization, AI's impact on HCM budgets, and the potential of Workday's new Agentic AI platform.
Thursday's results will offer critical insight into whether enterprise software demand is stabilizing or whether structural headwinds from AI disruption are materializing.
