01—Abstract
Summary
Summary of the 10-Q filed May 22, 2026. Cited figures are marked; the original filing is the authoritative source.
Workday, Inc. reported strong financial results for the first quarter of fiscal year 2027 (ended April 30, 2026).
Total revenues increased by 13% year-over-year to $2.54 billiona, driven by a 14% increase in subscription services revenue. The company demonstrated significant operational leverage, with GAAP operating income soaring to $338 million, up from $39 million in the prior year period. This improvement was fueled by revenue growth outpacing expense growth and a substantial reduction in restructuring costs.
Key financial strengths include robust operating cash flow of $696 millionb and free cash flow of $616 million, both showing significant year-over-year improvements. The company's subscription revenue backlog stands at a healthy $27.3 billion, indicating strong future revenue potential. Workday continues to actively manage its capital, evidenced by substantial share repurchases totaling $1.6 billion during the quarter, while maintaining a strong liquidity position with $4.4 billion in cash, cash equivalents, and marketable securities.
02—Key points
Key Highlights
- Total revenues grew 13% to $2.54 billion, with subscription services revenue up 14% to $2.35 billion.
- GAAP operating income surged to $338 million (13.3% operating margin), a significant improvement from $39 million (1.8% operating margin) in the prior year.
- Net income increased substantially to $222 million, resulting in diluted EPS of $0.87, compared to $68 million and $0.25, respectively, in the prior year.
- Operating cash flow was strong at $696 million, up 52% year-over-year.
- Free cash flow increased by 46% to $616 million.
- Total subscription revenue backlog reached $27.3 billion, indicating robust future revenue streams.
- The company repurchased $1.6 billion of its Class A common stock during the quarter, demonstrating a commitment to returning capital to shareholders.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2027filed May 22, 2026Financial Statements
Q1 FY2027 against Q1 FY2026
| Line item | Q1 FY2027Q1 FY2026 | Change |
|---|---|---|
| Revenue | $2.54B$2.24B | +13.5% |
| R&D Expenses | $705.00M$663.00M | +6.3% |
| Operating Expenses | $2.20B$2.20B | +0.1% |
| Operating Income | $338.00M$39.00M | +766.7% |
| Interest Expense | $29.00M$29.00M | 0.0% |
| Net Income | $222.00M$68.00M | +226.5% |
| EPS (Basic) | $0.87$0.25 | +248.0% |
| EPS (Diluted) | $0.87$0.25 | +248.0% |
| Shares Outstanding (Basic) | 253.89M266.52M | −4.7% |
| Shares Outstanding (Diluted) | 254.31M270.30M | −5.9% |
05—Questions
Frequently Asked Questions
What is Workday's revenue performance for the quarter?
Workday reported a 13% increase in total revenues to $2.54 billion for the three months ended April 30, 2026, compared to $2.24 billion in the prior year period. Subscription services revenue, the primary driver of growth, increased by 14% to $2.35 billion.
How did Workday's profitability change compared to the previous year?
Profitability saw a significant improvement. GAAP operating income rose to $338 million (13.3% of revenue) from $39 million (1.8% of revenue) in the prior year. This was driven by strong revenue growth, improved operational leverage, and a reduction in restructuring expenses.
What is the company's cash flow situation?
Workday generated robust cash flow from operations of $696 million, a 52% increase year-over-year. Free cash flow also saw substantial growth, reaching $616 million, up 46% from the previous year, indicating strong cash generation capabilities.
How is Workday managing its capital and shareholder returns?
Workday demonstrated a commitment to capital management through significant share repurchases, totaling $1.6 billion during the quarter. The company also maintains a strong liquidity position, with $4.4 billion in cash, cash equivalents, and marketable securities as of April 30, 2026, providing flexibility for future investments and operations.
06—Continue