Total Revenue

+12.6% (from USD 1,990M in Q1 2025 to USD 2,240M in Q1 2026)

Total revenue growth is primarily driven by robust subscription revenue gains and geographic expansion. The increase reflects continued momentum in both renewals and new customer acquisitions compared to the previous period. " "

Subscription Services Revenue

+13% (from USD 1,815M in Q1 2025 to USD 2,059M in Q1 2026)

Subscription revenue increased due to higher demand for Workday’s cloud-based solutions. Expansion within existing accounts (60%) and new customer wins (40%) continued to drive growth, mirroring trends observed in the prior period. " "

Professional Services Revenue

+3.4% (from USD 175M in Q1 2025 to USD 181M in Q1 2026)

Professional services revenue saw modest growth reflecting steady demand for deployment and integration services. The small increase indicates stable market conditions, consistent with last year’s demand for professional implementation support. " "

U.S. Revenue

Approximately +12–13% YoY increase

U.S. revenue increased as strong subscription performance among enterprise customers—especially in key industries—propelled sales. This growth builds on last period’s momentum, driven by both expanded services to existing customers and new subscriptions. " "

Other Countries Revenue

Approximately +12–13% YoY increase

International revenue growth is likely due to expansion into new markets and higher sales to existing customers abroad. While detailed drivers aren’t specified, this increase aligns with the overall positive geographic trends observed in Q1. " "

Operating Income

–39% (from USD 64M in Q1 2025 to USD 39M in Q1 2026)

Operating income declined significantly primarily because of heavy restructuring expenses (including costs associated with employee transitions and office impairments) that outweighed the benefits from revenue growth. This drag reflects a shift from previous lower-cost operating models to one impacted by strategic investments and cost adjustments. " "

Net Income and EPS

–36% (Net Income: from USD 107M to USD 68M; EPS: from USD 0.40 to USD 0.25)

Net income and EPS dropped due to the burden of restructuring and higher operating expenses, despite improved revenue performance. The significant drop underscores the impact of additional strategic expenses that were not present in the prior period. " "

Liquidity Position

–44% (Cash and cash equivalents fell from USD 1,752M to USD 972M)

Liquidity weakened sharply as increased cash outflows for financing activities—such as stock repurchases and higher investing expenses—shifted asset allocation from cash to marketable securities. This reduction is consistent with strategic use of liquidity seen in the previous period but intensified in Q1 FY 2026. " "

Subscription Revenue

FY 2026

$8.8 billion, 14% growth "

$8.8 billion " "

no change

Professional Services Revenue

FY 2026

$700 million "

$700 million "

no change

Non-GAAP Operating Margin

FY 2026

28% "

28.5% "

raised

GAAP Operating Margin

FY 2026

Approximately 21 percentage points lower than non‐GAAP "

20 to 21 percentage points lower than non‐GAAP "

no change

Non-GAAP Tax Rate

FY 2026

19% "

19% "

no change

Operating Cash Flow

FY 2026

$2.75 billion "

$2.75 billion "

no change

Capital Expenditures

FY 2026

$250 million "

$250 million "

no change

Subscription Revenue

Q2 FY 2026

no prior guidance

$2.16 billion, 13% growth " "

no prior guidance

Professional Services Revenue

Q2 FY 2026

no prior guidance

$180 million "

no prior guidance

Non-GAAP Operating Margin

Q2 FY 2026

no prior guidance

28% "

no prior guidance

GAAP Operating Margin

Q2 FY 2026

no prior guidance

20 to 21 percentage points lower "

no prior guidance

CRPO Growth

Q2 FY 2026

no prior guidance

15% to 16%, including 1 percentage point from tenant contracts " "

no prior guidance

AI Adoption & Innovation

In Q3 2025, Workday emphasized strong customer adoption with metrics such as higher percentages of AI solutions in expansions and notable innovations like Recruiter Agent and new AI platforms. " " " " In Q4 2025, executives discussed launching the agent system of record, solid demand, and the growing role of AI SKUs like Xtend Pro and Recruiting Agent. " " "

In Q1 2026, the call highlighted even stronger adoption with impressive customer adoption rates (25%–30% of expansions include an AI SKU), doubling of certain revenue streams, and the announcement of seven new AI agents, along with a discussion of material impact over the next 6–12 months. " " " "

Increasing momentum and deeper integration. AI continues to be a core focus with growing customer interest and more aggressive innovation, indicating an upward trend in both adoption and monetization opportunities.

Execution Risks in Monetization

Q3 2025 discussions focused on a multipronged monetization strategy, pricing challenges, and penetration rates for AI solutions. " " Q4 2025 showcased concerns around balancing investments and margins while managing a delayed rollout of AI agents and associated revenue impacts. " "

Q1 2026 emphasized execution risks tied to macroeconomic uncertainty and the expectation that new AI agents’ monetization will be more material in the next 6–12 months, while the company remains confident in its ROI and TCO narrative. " " "

Consistent caution with a forward-looking perspective. While the monetization strategy remains robust, the sentiment highlights a continued need to manage risks and timing issues before the full financial impact is realized.

Macroeconomic Headwinds & Regional Uncertainty

Q3 2025 noted economic headwinds in EMEA with some caution around deal scrutiny. " Q4 2025 discussed challenges in EMEA along with detailed regional performance in Europe and APAC while underlining persistent headwinds. "

In Q1 2026, executives again acknowledged an uncertain macro environment and regional challenges—especially in SLED and international markets—yet pointed to strong performance and customer consolidation on the platform. " " "

Steady awareness and measured response. Market uncertainties remain a consistent concern across periods, but Workday continues to address them with strategic investments and reinforcing customer value propositions.

International Market Performance & Currency Headwinds

Q3 2025 mentioned international revenue growth and key wins in EMEA and APAC with minimal FX concerns. " " " Q4 2025 provided detailed figures, noted significant revenue contributions from key regions, and stressed that currency headwinds (a $20 million impact) were a factor. " " "

Q1 2026 noted solid international wins across EMEA, APAC, and Japan and, notably, a shift from a previously observed FX headwind ($20 million) to an expected tailwind ($10 million), indicating an improved currency impact over the remainder of the year. " " "

Improving currency sentiment and expanding global traction. Although international growth remains a focus, the shift from headwinds to tailwinds signals an encouraging adjustment in currency impact amidst strong regional performance.

Partner Ecosystem Expansion

Q3 2025 highlighted rapid ecosystem growth with a “build on Workday” program, noting a nearly 5× expansion in 18 months and over 40 partners onboard. " " Q4 2025 detailed how partner contributions drove more than 15% of net new ACV, with multiple initiatives such as Global Payroll Connect and strategic partnerships. " "

Q1 2026 showcased continued expansion with over 20% year-over-year partner impact growth, strong performance of Extend Pro, and a broad strategy to leverage global partnerships, further cementing the partner ecosystem’s relevance. " "

Robust and continuously expanding. The partner ecosystem remains a key growth driver, with consistent expansion and deeper integrations reflected across all periods.

Medium Enterprise Market Expansion

Not mentioned in Q3 2025 or Q4 2025 earnings discussions.

Q1 2026 introduced “Workday Go,” a new initiative aimed at medium/emerging enterprises through improved pricing, packaging, and faster deployments (as quick as 60 days), representing a targeted approach to a previously untapped market segment. "

New focus area. The medium enterprise market expansion is an emerging topic in Q1 2026, indicating a strategic shift to capture growth opportunities in smaller enterprises that were not previously emphasized.

Financial Discipline & Margin Expansion

Q3 2025 reported a non‐GAAP operating margin of 26.3% and outlined cost management initiatives with guidance improvements, setting targets for FY 2026 margins around 27.5% and long-term goals of 30% by FY 2027. " " Q4 2025 emphasized margin improvements with 26.4% non‐GAAP operating margin, adjustments through restructuring, and an expected push toward 28% in FY 2026. " " " "

In Q1 2026, margins improved further with a non‐GAAP operating margin of 30%, underpinned by moderated headcount growth and revenue outperformance. The discussion also covered operating challenges such as a restructuring charge and targeted growth investments. " " " "

Clear upward trend in efficiency and financial discipline. The company shows consistent improvement in margins and effective management of operating metrics despite short-term restructuring impacts, positioning it well for future growth.

Decline in Emphasis on SLED Markets

Q3 2025 did not mention SLED specifically, while Q4 2025 emphasized strong momentum in SLED markets with record wins in cities and higher education deals. "

In Q1 2026, there is a subtle shift where executives note that while they are monitoring SLED markets (especially higher education), there are emerging headwinds related to federal funding and grants, suggesting less emphasis compared to prior strong performance. " "

Reduced focus relative to previous strong momentum. Although SLED remains important, Q1 2026 reflects a more cautious sentiment due to funding challenges, indicating a potential decline in emphasis compared to the robust spotlight in Q4 2025.

Emerging Trend in Full Suite Sales

Q3 2025 reported over 35% of new customers opting for full suite solutions, with particularly high percentages (up to 90% in government and education sectors). " " Q4 2025 noted that more than 30% of Q4 new business was full suite, soaring above 50% in key verticals such as state/local government and higher education. " "

In Q1 2026, Workday continued to note strong momentum in full suite sales, with more than 30% of net new wins being full suite—over 50% in focused industries such as SLED and healthcare, reinforcing the attractiveness of comprehensive solutions. " " "

Sustained emphasis and growing customer preference. Full suite sales remain a consistent and increasingly dominant trend, reflecting strong customer demand for integrated solutions across key sectors.