Workday Beats Q1, Guides Cautiously Amid Restructuring

Workday reported first-quarter fiscal 2025 earnings that beat analyst estimates, posting adjusted EPS of $2.23 and revenue of $2.24 billion. Despite the strong results, shares declined after the company maintained full-year subscription revenue guidance at $8.8 billion, which matched forecasts but fell short of investor hopes amid macroeconomic uncertainty. Net income dropped to $68 million from $107 million a year earlier, partly due to restructuring expenses tied to an 8.5% workforce reduction. Workday highlighted strong demand and ongoing innovation, particularly in AI integration, as it seeks greater efficiency amid slower subscription revenue growth. The company also announced a new $1 billion share repurchase program. Overall, cautious guidance and decelerating growth led to a negative market reaction despite operational strength.