Why Workday Stock Is Soaring Today
Key Points
Workday's sales and earnings in fiscal Q1 beat Wall Street's expectations.
The company raised its adjusted operating income margin target for the year.
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Workday (NASDAQ: WDAY) stock is posting gains on Friday following the company's latest quarterly report. The software specialist's share price was up 3.7% as of 11 a.m. ET. Meanwhile, the S&P 500 and the Nasdaq Composite were both up 0.4%. The stock had been up as much as 9.7% earlier in trading.
Workday published its fiscal 2027 first-quarter results after the market closed yesterday and reported sales and earnings for the period that exceeded the average Wall Street forecasts. The company's fiscal first quarter ended April 30. The company also issued guidance that has investors feeling bullish on the stock.
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Workday rises on Q1 beats
Workday posted non-GAAP (adjusted) earnings of $2.66 per share on revenue of $2.54 billion in Q1. The company's adjusted earnings per share beat the average Wall Street analyst estimate by $0.14, and the sales for the period topped the average forecast by $20 million. Subscription revenues increased 14.3% year over year to come in at roughly $2.35 billion, helping to push overall sales in the quarter up 13.4% year over year.
What's next for Workday?
With its fiscal Q1 report, Workday reiterated guidance for subscription revenue to come in between $9.925 billion and $9.950 billion for the 2027 fiscal year. On the other hand, the company raised its adjusted operating margin guidance to 30.5% -- up from its previous guidance for a margin of 30%. While some investors have had concerns about Workday potentially being disrupted by new artificial intelligence software, the company's fiscal Q1 report, commentary, and forward guidance are seemingly helping to assuage those fears.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Workday. The Motley Fool has a disclosure policy.
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