Workday reported its Q1 earnings, beating analyst estimates with a tiny subscription revenue beat but falling short on revenue expectations and guidance. The company cited elevated sales scrutiny and lower customer headcount growth, particularly impacting large and net new deals in the EMEA region. Consequently, Workday lowered its full-year sales guidance, with subscription sales guidance now at $7.73 billion versus an earlier outlook of $7.78 billion, and slightly lowered Q2 guidance. Operating margins were bumped up by 50bps. The mixed financial results and cautious outlook led to a significant decline in Workday's stock, which saw its biggest single-day drop since 2020, falling by 16%, including a 9% drop after hours.