Welcome to Workday's First Quarter, Full Year 2026 Earnings Call. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of the call. During the Q&A, please limit your questions to one. I will now hand it over to Justin Furby, Vice President of Investor Relations.
Thank you, Operator. Welcome to Workday's first quarter fiscal 2026 earnings conference call. On the call, we have Carl Eschenbach, our CEO; Zane Rowe, our CFO; and Gerrit Kazmaier, our President, Product and Technology. Following prepared remarks, we will take questions. Our press release was issued after close of market and is posted on our website, where this call is being simultaneously webcast. Before we get started, we want to emphasize that some of our statements on this call, particularly our guidance, are based on the information we have as of today and include forward-looking statements regarding our financial results, applications, customer demand, operations, and other matters. These statements are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially.
Please refer to the press release and the risk factors in the documents we file with the Securities and Exchange Commission, including our fiscal 2025 annual report on Form 10-K, for additional information on risks, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Workday's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results, in our earnings press release, in our investor presentation, and on the investor relations page of our website.
The webcast replay of this call will be available for the next 90 days on our company website under the investor relations link. Additionally, the transcript of this call and our quarterly investor presentation will be posted on our investor relations website following this call. Our second quarter fiscal 2026 quiet period begins on July 15th, 2025. Unless otherwise stated, all financial comparisons in this call will be to our results for the comparable period of our fiscal 2025. With that, I'll hand the call over to Carl.
Thank you, Justin, and hello to everyone joining us on our call today. I'm pleased to report that Workday delivered a solid first quarter. We drove 13% subscription revenue growth and a non-GAAP operating margin of 30%. This performance was fueled by strong customer adoption across key verticals, geographies, and customer segments. We all know the economic environment remains a bit uncertain, but I'm incredibly proud of how our teams are staying focused on our customer success, and that is driving our results. Workday's value proposition remains highly relevant in today's market. The CEOs I meet have three key priorities. They want to drive efficiencies. They need to be agile and responsive to market shifts, and they want to unlock growth with innovation. From our perspective, they're turning to Workday for all three. We help manage and optimize their most critical assets.
That is their people and money on one platform with AI at the core. This unified approach reduces total cost of ownership and helps them move faster with greater precision. Our customers trust that Workday's AI is powered by the largest and cleanest finance and HR data set. Our AI is fueled by more than 70 million users under contract and 1 trillion transactions processed on the platform last year, which gives us a deep understanding of how people work. This enables us to deliver highly differentiated value to our customers. I'll speak more about that in a moment. First, let's turn to our customer highlights for the quarter. In Q1, we established new HCM relationships with United Airlines, Pilot Travel Centers, and Mutual of Omaha Insurance Company. It was another strong quarter of expansions with customers such as FedEx, CVS Health, ASDA Stores, and Chipotle.
Our investments in financials continue to pay off, with solid growth in both net new ACV and customers. More than 30% of our net new wins this quarter were once again full sweep. In our focused industries of SLED and healthcare, it was more than 50%. We also had some strategic financials go live this quarter, including BJ's Restaurants, Essentia Health, and Genesis Cloud Services. Our AI innovation continues to gain traction. New ACV across our AI products more than doubled year over year in Q1. Roughly 25% of our customer expansions in the quarter included one or more of these products, such as Recruiting Agent, Talent Mobility Agent, Evisort, and Extend Pro. Fantastic companies including Visa, LabCorp, and Aeon all selected our AI products. I'm also excited about the momentum we're building with the Office of the CIO.
We're driving increasing demand for Extend Pro, which enables our customers to build AI applications on top of our platform. This continues to be one of our fastest-growing products, and it's amplifying innovation for our customers. While Workday serves more than 60% of the Fortune 500, 75% of our customers have fewer than 3,500 employees. We see a significant growth opportunity in the emerging and medium enterprise markets. In Q1, we launched Workday Go specifically for these companies. It gets them up and running on our enterprise-grade platform fast. We're talking implementations in as little as 30-60 days with pre-configured deployments. It's not just the software. They get the full support of our partner ecosystem in a clear, fixed pricing model. It really moved the needle for us in Q1, helping our emerging and medium enterprise teams deliver a strong quarter.
Now, let's talk about industries. I'm excited to share that we now have five industries exceeding $1 billion in annual recurring revenue. Manufacturing and tech and media, two industries that had a solid quarter in Q1, recently reached this milestone. They joined our three other billion-dollar industries: financial services, retail and hospitality, and professional and business services. Like I've mentioned many times, this shows the strength and diversity of our business. Our focus on the federal sector continues to pay off. We are building a foundation for long-term growth in this market. This was clear in the huge success of our third annual federal forum. Attendance was up 65% at this year's event, and we had some great conversations with senior government leaders about the critical need for transforming the federal workforce, especially in the key areas such as AI, security, and skills. We're also very proud of our leadership in higher education.