WDAY F1Q27 Preview: A Cleaner Setup Into FY27

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WDAY F1Q27 Preview: A Cleaner Setup Into FY27

May 13, 2026

John DiFucci john.difucci@guggenheimpartners.com WDAY F1Q27 Preview: A Cleaner Setup Into FY27

212 518 9670

Jacob Smith Key Message: Workday has become a poster child for AI risk in the mind of some

jacob.smith@guggenheimpartners.com investors, both on the risk of AI replacing jobs (lower seat count) and AI replacing the

212 518 9286 software itself, thereby lowering WDAY's technology moat. We believe both of these

concerns are likely overblown, although we are seeing some layoffs being attributed

to AI even though many companies are probably just rightsizing after overhiring the

past 5 years. So where are we today? Workday’s traditional core business of large,

transformational HCM projects remains a low priority in today’s IT spending environment,WDAY BUY but we believe WDAY will be well positioned to accelerate growth when the environment Workday, Inc.

improves, as it is a better company than it was just a few years ago. Workday Sector: Software

has expanded internationally, had success going down market, acquired talent and

Earnings Preview technology that has spurred innovation, and now welcomes back co-founder Aneel Bhusri

whose product-led focus should drive further innovation through the AI era. The setup Share Price $116.50

into the F1Q27 print also looks more constructive than past years, as expectations were Price Target $275.00

reset lower in F4Q due to some delayed deals (and likely some added conservatism with

new leadership installed). The midpoint of FY27 Subscription revenue guidance (12.5%)

can also be achieved with mid-single-digit growth in New ARR, which is a reasonable bar, Revenue ($M)

(FY JAN) 1Q 2Q 3Q 4Q FY in our view.