Workday shares jumped nearly 12% premarket on Friday after the enterprise software maker beat first-quarter revenue and profit estimates.
This eased concerns that AI rivals like Anthropic could rapidly disrupt demand for traditional software vendors.
Subscription revenue at the Pleasanton, California-based company jumped 14.3% to $2.35 billion, with net new business driving 40% of that growth.
Workday, however, retained its annual subscription revenue forecast. Barclays analysts said the results may not change the thesis but provide comforting data points.
The stock has fallen over 43% year-to-date, while the S&P 500 software and services index is down about 14% in the same period.
Workday has been adding AI features across its platform, including the March launch of Sana, its conversational AI layer.
Quarterly revenue came in at $2.54 billion, compared with analysts' average estimate of $2.52 billion. Adjusted per-share profit was $2.66, above estimates of $2.51.
Jefferies analysts believe Workday is relatively insulated from AI disruption due to its 80 million users, strong retention, and status as a system of record.
Workday's 12-month forward price-to-earnings multiple is 10.93, compared with peer Salesforce's 12.8.
