Workday shares rose nearly 12% premarket on Friday after the enterprise software maker beat first-quarter revenue and anticipated earnings, easing concerns that AI competitors like Anthropic could quickly erode market share from legacy software providers.
The Pleasanton, California-based company’s subscription revenue rose 14.3% to $2.35 billion, according to Chief Commercial Officer Rob Ensulin. It set the new business standard driving 40% of that growth.
“We are not sure these results will be thesis changers, but will still provide a comforting data point,” Barclays analysts said.
It is observed that the stock has fallen by more than 43% year-to-date, while the S&P 500 Software & Services has also fallen by about 14% in the same period.
The US financial company is adding AI features to its platform, including the launch of its new conversational interface, to stay competitive.
Data compiled by LSEG said quarterly revenue came in at $2.54 billion, above analysts’ forecast of $2.52 billion. Notably, its quarterly adjusted profit per share came in at $2.66, which beat analysts’ estimates of $2.51.
“We believe Workday is relatively insulated from AI disruption due to its 80 million users, strong retention and position as the system of record,” Jefferies analysts said.
