Workday Q1: AI Agent Growth Boosts Revenue & Shares

Workday's first quarter results show a positive early signal for AI agents in enterprise software. The company beat analyst expectations for revenue and adjusted earnings, causing shares to rise 5%. Total revenue reached $2.542 billion, up 13.5% year over year, with subscription revenue increasing 14.3% to $2.354 billion. Workday also raised its full-year non-GAAP operating margin forecast to 30.5%. What's interesting is the growing adoption of its AI agents. The number of customers using these agents more than doubled quarter over quarter, now exceeding 4,000. For example, the Recruiting Agent supported 14 million hiring processes, a 44% increase year over year. Workday also launched new agents, including Sana for IT Service Management and a Travel Agent. The company reported its best first quarter for new annual contract value growth in five years, with new annual contract value from agentic AI products growing over 200% year over year. This suggests that AI is starting to become a commercial driver for Workday, moving beyond just a strategic narrative.