Key Stats for Workday Stock
- Current Price: ~$128 (May 22, 2026)
- Q1 FY27 Total Revenue: $2.5B, +13% YoY
- Q1 FY27 Subscription Revenue: $2.4B, +14% YoY
- Q1 FY27 Adjusted EPS: $2.66, +19% YoY
- Q1 FY27 Non-GAAP Operating Margin: 32%
- FY27 Subscription Revenue Guidance: $9.93B–$9.95B, +12%–13%
- FY27 Non-GAAP Operating Margin Guidance (raised): 31%
- TIKR Model Price Target: $218
- Implied Upside: ~70%
Workday Posts Best Q1 New ACV Growth in Five Years as AI Agents Reach 4,000 Customers
Workday, Inc. (WDAY) reported Q1 FY27 total revenue of $2.542B, up 13% year over year, on May 21, 2026, beating Street estimates of $2.517B.
Subscription revenue of $2.354B grew 14%, with 12-month subscription revenue backlog (cRPO) reaching $8.81B, up 15.5%.
Adjusted EPS came in at $2.66, above the prior-year figure of $2.23 and ahead of the Street estimate of $2.52.
The quarter’s standout was new annual contract value growth, which Aneel Bhusri, CEO, stated on the Q1 earnings call: “our best first quarter of new ACV growth in 5 years, anchored by the strength of our core business and the traction we’re seeing with AI.”
Agentic AI drove the commercial momentum: new ACV from agentic AI products grew more than 200% year over year, and Workday stock now counts over 4,000 customers using at least one organically developed agent.
Expansions continued to account for roughly 60% of subscription revenue growth, with the balance driven by net new logos including Harley-Davidson, Del Monte, and the State of Delaware.
International revenue of $649M grew 16%, outpacing U.S. revenue growth of 13%, with EMEA emerging as the second-largest region for medium enterprise and new ACV in that segment growing more than 50% in the quarter.
Non-GAAP operating income reached $809M, with margin expanding to 31.8% from 30.2% in the prior-year period, prompting management to raise its full-year non-GAAP operating margin guide by 50 basis points to 30.5%.
Q1 operating cash flow was $696M, up 52% year over year, and Workday repurchased $1.6B of shares during the quarter.
Workday Stock Revenue Accelerates Back Above 13% While GAAP Operating Margins Keep Climbing
Workday’s income statement tells a story of reacceleration rather than stability.
Total revenue growth stepped up from 12.6% in both Q2 and Q3 FY26 to 14.5% in Q1 FY26 and 13.5% in Q1 FY27, recovering from the trough that defined much of fiscal year 2026.
Gross profit reached $1.94B in Q1 FY27, with gross margins expanding to 76.2% from 76.0% in the prior-year period.
The more significant move is happening in operating income: GAAP operating income grew 65% year over year to $340M, with operating margins reaching 13.3%, up from 9.2% a year ago.
That 13.3% GAAP operating margin compares to 5.4% in Q3 FY24 and 7.6% in Q4 FY24, a sustained structural improvement across eight consecutive quarters.
Total operating expenses held at $1.60B in Q1 FY27, slightly below the $1.62B recorded in Q1 FY26, while revenue grew, producing the operating leverage visible in the margin trajectory.
Zane Rowe, CFO, attributed the improvement on the Q1 earnings call to “revenue outperformance, combined with favorable spend versus expectations” and cited productivity gains from Workday’s own AI tools across R&D, customer success, and go-to-market as a structural driver.
TIKR’s $218 Target on Workday Stock Requires Sustained Double-Digit Revenue Growth Through 2031
TIKR’s valuation model prices Workday, Inc. at $218 by January 2031, implying a 70% total return from the current price of ~$128, or 12% annualized.
The mid-case assumes a revenue CAGR of 9.6% and net income margins expanding to 27.7%, both meaningful step-ups from Workday’s trailing 12-month net income margin of 23.3%, and the model also embeds a P/E multiple compression of 4.4% annually, meaning the stock needs earnings growth to outrun a shrinking multiple to deliver those returns.
The Q1 print strengthens the mid-case framework in at least one dimension: the margin expansion already underway tracks ahead of the model’s assumptions, and the best new ACV quarter in five years provides early evidence that the AI monetization cycle is becoming load-bearing for the growth thesis.
The low case prices Workday stock at $235.44 by January 2031, producing a 7.2% IRR, a scenario consistent with revenue CAGR slowing to 8.7% and net income margins reaching 25.9% as the AI build-out costs compress near-term profitability.
The mid case at $308 and a 10.6% IRR requires the 9.6% revenue CAGR and 27.7% margin to materialize in tandem, conditions that now look more plausible after Q1’s agentic ACV acceleration but still depend on Flex Credits scaling meaningfully in the second half of FY27.
The high case at $391.98 and a 13.7% IRR requires 10.6% revenue CAGR and net income margins of 29.2%, a combination that implies the travel agent, ITSM agent, and Extend Pro expansions each reach meaningful scale before January 2031.
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