Workday Set to Report Q1 Results: Will Revenue Growth Boost Earnings?

Workday, Inc. WDAY is set to release first-quarter fiscal 2026 results on May 22, after the closing bell. In the trailing four quarters, the company delivered an earnings surprise of 9.45%, while in the last reported quarter, it delivered an earnings surprise of 9.71%.

Based in Pleasanton, CA, WDAY is expected to have recorded higher revenues on the back of solid demand for its human capital management and financial management solutions across different end markets. A strong focus on AI integration across the portfolio is a positive.

Factors at Play

During the quarter, Workday introduced the Workday Agent System of Record, powered by Workday Illuminate, which offers a centralized system for managing enterprises’ entire fleet of AI agents. The solution brings numerous benefits for enterprises looking to streamline the use of AI across their operations and unlock the full potential of AI agents. The company also introduced features such as AI-Powered Talent Rediscovery, Personalized Preboarding and Onboarding Experiences, Document Intelligence, AI-Powered Accounts Payable, Workday Help, Made Easier and more. These innovative features are designed to streamline various business processes, including recruitment, workforce management, finance and more.

In the to-be-reported quarter, Sovereign Network Group, one of the U.K.’s largest housing associations, opted to deploy WDAY solutions to improve operational efficiency, boost employee experience and enhance its ability to serve customers. These factors are likely to have positively impacted Workday’s fiscal first-quarter performance.

Our estimate for Subscription Services revenues is pegged at $2.05 billion, suggesting 13% year-over-year growth. Our estimate for Professional Services revenues is pegged at $165 million.

For the April quarter, the Zacks Consensus Estimate for revenues is pegged at $2.22 billion, suggesting an increase from the year-ago quarter’s reported figure of $1.99 billion. The consensus estimate for adjusted earnings per share is pegged at $1.99, indicating an increase from $1.74 reported in the prior year.

Earnings Whispers for Workday Stock

Our proven model does not conclusively predict an earnings beat for Workday for the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, this is not the case here.

WDAY’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.99. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Workday, Inc. Price and EPS Surprise

Workday, Inc. price-eps-surprise | Workday, Inc. Quote

WDAY’s Zacks Rank: Workday currently carries a Zacks Rank #3.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Salesforce CRM is set to release quarterly numbers on May 28. It has an Earnings ESP of +0.57% and carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutanix NTNX is scheduled to report quarterly numbers on May 28. It has an Earnings ESP of +5.26% and currently carries a Zacks Rank of 3.

The Earnings ESP for Seanergy Maritime Holdings SHIP is +12.64% and it has a Zacks Rank of 3 at present. The company is scheduled to report quarterly numbers on May 21.

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This article originally published on Zacks Investment Research (zacks.com).

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