Workday, a prominent software company specializing in Human Resources, saw its shares plunge by 11% on Friday. This downfall came on the heels of an unchanged full-year subscription revenue forecast amidst an "uncertain environment," as described by CFO Zane Rowe. Workday confirmed its prior fiscal 2026 subscription revenue projection at $8.80 billion, in line with Visible Alpha expectations. However, the company elevated its non-GAAP operating margin forecast from 28.0% to 28.5%.
"We're staying close to our customers as they navigate the macro environment. No company is immune to these challenges, and we’re watching it across particular markets," said CEO Carl Eschenbach. Bank of America, on reflecting on this outlook, noted, "the outlook is somewhat disappointing, though it does reflect an added degree of conservatism for potential macro pressure."
Despite the disappointing revenue forecast, Workday reported robust fiscal 2026 first-quarter results, with adjusted earnings per share hitting $2.23 and overall revenue increasing by 13% year-over-year to reach $2.24 billion. Subscription revenue also saw a 13% increase, totaling $2.06 billion. These figures surpassed analysts' forecasts.
Nevertheless, the shares of Workday slid into negative territory for 2025, post-report.