Workday Announces Fiscal 2027 Second Quarter Financial Results

Fiscal Second Quarter Total Revenues of $2.649 Billion, Up 12.8% Year-Over-Year

Subscription Revenues of $2.471 Billion, Up 13.9% Year-Over-Year

PLEASANTON, Calif., Aug. 27, 2026 /PRNewswire/ — Workday, Inc. (NASDAQ: WDAY), the enterprise AI platform for HR, finance, and IT, as we speak introduced outcomes for the fiscal 2027 second quarter ended July 31, 2026.

Fiscal 2027 Second Quarter Results

• Total revenues have been $2.649 billion, a rise of 12.8% from the second quarter of fiscal 2026. Subscription revenues have been $2.471 billion, a rise of 13.9% from the identical interval final 12 months.
• Operating earnings was $313 million, or 11.8% of revenues, in comparison with an working earnings of $248 million, or 10.6% of revenues, in the identical interval final 12 months. Non-GAAP working earnings for the second quarter was $824 million, or 31.1% of revenues, in comparison with a non-GAAP working earnings of $680 million, or 29.0% of revenues, in the identical interval final 12 months.¹
• Diluted web earnings per share was $2.57, in comparison with diluted web earnings per share of $0.84 in the identical interval final 12 months. Included inside diluted web earnings per share for the present quarter is a tax advantage of $1.52 per share associated to an intra-entity switch of sure mental property rights as a part of an inner authorized entity restructuring. Non-GAAP diluted web earnings per share was $2.75, in comparison with non-GAAP diluted web earnings per share of $2.21 in the identical interval final 12 months.¹
• 12-month subscription income backlog was $9.034 billion, up 14.2% from the identical interval final 12 months. Total subscription income backlog was $27.403 billion, rising 8.0% year-over-year.
• Operating money flows have been $520 million in comparison with $616 million in the identical interval final 12 months. Free money flows have been $460 million in comparison with $588 million in the identical interval final 12 months.¹
• Workday repurchased roughly 9.8 million shares of Class A typical inventory for $1.3 billion as a part of its share repurchase applications.
• Cash, money equivalents, and marketable securities have been $3.403 billion as of July 31, 2026.

Comments on the News

“We had a strong Q2, with AI driving more than 25% of our new ACV and more than 5,500 customers now using at least one of our organic agents,” stated Aneel Bhusri, co-founder, CEO, and chair, Workday. “Because of Workday’s deterministic rails, customers can trust our agents with the work that matters, and you’re seeing that in the numbers.”

“Our Q2 results reflect continued momentum across our platform, with AI emerging as a strategic driver of customer expansion,” stated Zane Rowe, CFO, Workday. “We now expect fiscal 2027 subscription revenue of $9.940 billion to $9.950 billion, growth of 13%, while increasing our fiscal 2027 non-GAAP operating margin guidance to 31.0%. We continue to prioritize investment in our agentic AI roadmap and our platform opportunity while driving operational efficiencies as we scale.”

Recent Business Highlights

• Workday welcomed new clients together with BWX Technologies, Inc., Guess, KPMG LLP, and S-E-B, and expanded present relationships with Caterpillar, Delivery Hero (Talibat), Lithia & Driveway, Merck & Co., Inc., and Novartis.
• Workday introduced that its Board of Directors licensed the open-ended repurchase of as much as an extra $4.0 billion of its excellent shares of Class A typical inventory.
• More than 5,500 clients now use a number of of Workday’s natural brokers, up greater than 35% from final quarter.
• Workday unveiled Developer Agent, which lets builders construct AI apps and brokers on Workday utilizing pure language in agentic instruments they already use, and Agent Passport, which assessments and verifies each AI agent, Workday-built or third-party, earlier than it goes into manufacturing, and constantly displays it after.
• Workday Learning, powered by Sana, which mixes Workday’s trusted individuals and expertise information with Sana’s AI-native studying expertise, grew to become typically accessible.
• Workday launched Adaptive Decision Intelligence, a brand new AI functionality that lets finance and operations groups ask questions in pure language, mannequin eventualities in minutes, and act on outcomes instantly.
• Workday’s Financial Audit Agent, which is designed to considerably minimize the time to construct audit proof packages, grew to become typically accessible.
• Workday introduced a new research arm, which publishes peer-reviewed analysis tackling a number of the hardest technical challenges in enterprise AI, and launched a primary wave of findings on making enterprise AI brokers extra dependable, reliable, and environment friendly.
• Workday introduced a brand new partnership with Amazon Web Services (AWS), the place Workday Data Cloud will combine with AWS to supply bi-directional, zero-copy entry between AWS information and AI companies, and Workday’s HR and finance information.
• Workday expanded its strategic partnership with Google Cloud to convey Workday brokers straight into Gemini Enterprise and create a single, trusted basis the place brokers from Workday, Google Cloud, and third-parties work collectively on actual HR and finance workflows.
• Workday was named a Leader within the 2026 Gartner® Magic Quadrant for Talent Acquisition (Recruiting) Suites.¹
• Workday VNDLY was named a Leader in Everest Group’s Vendor Management System PEAK Matrix® Assessment 2026 for the sixth consecutive 12 months.

Financial Outlook

Workday is offering steering for the fiscal 2027 third quarter ending October 31, 2026 as follows:

• Subscription revenues of $2.515 billion, representing development of 12%
• Non-GAAP working margin of 30.0%¹

Workday is updating steering for the fiscal 2027 full 12 months ending January 31, 2027 as follows:

• Subscription revenues of $9.940 billion to $9.950 billion, representing development of 13%
• Non-GAAP working margin of 31.0%¹

Earnings Call Details

Workday plans to host a convention name as we speak to evaluation its fiscal 2027 second quarter monetary outcomes and to debate its monetary outlook. The name is scheduled to start at 1:30 p.m. PT/4:30 p.m. ET and might be accessed through webcast. The webcast will probably be accessible stay, and a replay will probably be accessible following completion of the stay broadcast for roughly 90 days.

Workday makes use of its blog.workday.com web site as a method of exposing materials private info and for complying with its disclosure obligations beneath Regulation FD.

About Workday

Workday operates on the coronary heart of the enterprise – HR, finance, and IT – the place the margin for error is successfully zero. By tightly coupling AI with the context, guardrails, and trusted processes that run the enterprise, Workday goes past AI that assists with work to brokers which are able to driving measurable outcomes. More than 11,500 organizations worldwide, together with greater than 65% of the Fortune 500, belief Workday to ship. For extra details about Workday, go to workday.com.

© 2026 Workday, Inc. All rights reserved. Workday and the Workday brand are logos of Workday, Inc. All different model and product names are logos or registered logos of their respective holders.

Forward-Looking Statements

This press launch accommodates forward-looking statements together with, amongst different issues, statements concerning Workday’s third quarter and full 12 months fiscal 2027 subscription revenues and non-GAAP working margin, momentum, development, innovation, and investments. These forward-looking statements are based mostly solely on at the moment accessible info and our present beliefs, expectations, and assumptions. Because forward-looking statements relate to the longer term, they’re topic to dangers, uncertainties, assumptions, and modifications in circumstances which are troublesome to foretell and lots of of that are outdoors of our management. If the dangers materialize, assumptions show incorrect, or we expertise surprising modifications in circumstances, precise outcomes may differ materially from the outcomes implied by these forward-looking statements, and due to this fact you shouldn’t depend on any forward-looking statements. Risks embody, however will not be restricted to: (i) breaches in our safety measures or these of our third-party suppliers, unauthorized entry to our clients’ or different customers’ private information, or disruptions in our information heart or computing infrastructure operations; (ii) service outages, delays within the deployment of our purposes, and the failure of our purposes to carry out correctly; (iii) aggressive components, together with pricing pressures, business consolidation, entry of latest rivals and new purposes, developments in expertise, and advertising initiatives by our rivals; (iv) privateness considerations and evolving home or overseas legal guidelines and rules; (v) any lack of key workers or the shortcoming to draw, practice, and retain extremely expert workers; (vi) our reliance on our community of companions to drive further development of our revenues; (vii) the regulatory, financial, and political dangers related to our home and worldwide operations; (viii) our skill to comprehend the anticipated enterprise or monetary advantages of any acquisitions of or investments in firms; (ix) adoption of our purposes and companies by clients and people, together with any new options, enhancements, and modifications, in addition to our clients’ and customers’ satisfaction with the deployment, coaching, and assist companies they obtain; (x) the regulatory dangers associated to new and evolving applied sciences similar to AI and our skill to comprehend a return on our improvement efforts; (xi) delays or reductions in info expertise spending; (xii) adversarial litigation outcomes; (xiii) modifications in gross sales, which might not be instantly mirrored in our outcomes attributable to our subscription mannequin; and (xiv) the influence of continuous world financial and geopolitical volatility and conflicts on our enterprise, in addition to on our clients, prospects, companions, and repair suppliers. Further info on these and extra dangers that would have an effect on Workday’s outcomes is included in our filings with the Securities and Exchange Commission (“SEC”), together with our most up-to-date report on Form 10-Q or Form 10-Okay and different experiences that we have now filed and can file with the SEC every so often, which may trigger precise outcomes to fluctuate from expectations. Workday assumes no obligation to, and doesn’t at the moment intend to, replace any such forward-looking statements after the date of this launch, besides as required by regulation.

Any unreleased companies, options, or capabilities referenced on this doc, our web site, or different press releases or public statements that aren’t at the moment accessible are topic to alter at Workday’s discretion and might not be delivered as deliberate or in any respect. Customers who buy Workday companies ought to make their buy selections based mostly upon companies, options, and capabilities which are at the moment accessible.

About Non-GAAP Financial Measures

To present traders and others with further info concerning Workday’s outcomes, the next non-GAAP monetary measures are disclosed: non-GAAP working earnings, non-GAAP working margin, non-GAAP web earnings, non-GAAP diluted web earnings per share, and free money flows. Workday has supplied a reconciliation of every non-GAAP monetary measure used on this earnings launch to probably the most straight comparable GAAP monetary measure. Non-GAAP working earnings and non-GAAP working margin differ from GAAP in that they exclude share-based compensation expense, employer payroll tax-related objects on worker inventory transactions, amortization expense for acquisition-related intangible property, acquisition-related prices, and restructuring prices. Non-GAAP web earnings and non-GAAP diluted web earnings per share differ from GAAP in that they exclude share-based compensation expense, employer payroll tax-related objects on worker inventory transactions, amortization expense for acquisition-related intangible property, acquisition-related prices, restructuring prices, features and losses on strategic investments, and earnings tax results. Free money flows differ from GAAP money flows from working actions in that it treats capital expenditures as a discount to money flows.

Workday’s administration makes use of these non-GAAP monetary measures to know and evaluate working outcomes throughout accounting durations, for inner budgeting and forecasting functions, for short- and long-term working plans, and to guage Workday’s monetary efficiency. Management believes these non-GAAP monetary measures mirror Workday’s ongoing enterprise in a way that enables for significant period-to-period comparisons and evaluation of tendencies in Workday’s enterprise. Management additionally believes that these non-GAAP monetary measures present helpful info to traders and others in understanding and evaluating Workday’s working outcomes and prospects in the identical method as administration and in evaluating monetary outcomes throughout accounting durations and to these of peer firms.

Management believes excluding the next objects from the GAAP Condensed Consolidated Statements of Operations is beneficial to traders and others in assessing Workday’s working efficiency as a result of following components:

• Share-based compensation expense. Share-based compensation primarily consists of non-cash bills for worker restricted inventory models and our worker inventory buy plan. Although share-based compensation is a crucial facet of the compensation of our workers and executives, this expense is set utilizing a variety of components, together with our inventory value, volatility, and forfeiture charges, which are past our management and usually unrelated to operational selections and efficiency in any explicit interval. Further, share-based compensation expense just isn’t reflective of the worth finally obtained by the grant recipients.

• Employer payroll tax-related objects on worker inventory transactions. We exclude the employer payroll tax-related objects on worker inventory transactions with a view to present the total impact that excluding share-based compensation expense has on our working outcomes. Similar to share-based compensation expense, this tax expense depends on our inventory value and different components which are past our management and don’t correlate to the operation of our enterprise.

• Amortization of acquisition-related intangible property. For enterprise mixtures, we typically allocate a portion of the acquisition value to intangible property. The quantity of the allocation relies on estimates and assumptions made by administration and is topic to amortization. The quantity of buy value allotted to intangible property and the time period of the associated amortization can fluctuate considerably and are distinctive to every acquisition and thus we don’t consider this exercise is reflective of our ongoing operations. Although we exclude the amortization of acquisition-related intangible property from these non-GAAP monetary measures, we consider that it’s important for traders to know that such intangible property have been recorded as a part of buy accounting and contribute to income technology.

• Acquisition-related prices. Acquisition-related prices embody direct transaction prices, similar to due diligence and advisory charges, and sure compensation and integration-related bills. We exclude the consequences of acquisition-related prices as we consider these transaction-specific bills are inconsistent in quantity and frequency and don’t correlate to the operation of our enterprise.

• Restructuring prices. Restructuring prices are related to a proper restructuring plan and are primarily associated to workforce reductions, the closure of amenities, and different exit and disposal actions. We exclude these bills as a result of they don’t seem to be reflective of ongoing enterprise and working outcomes.

• Gains and losses on strategic investments. Our strategic investments embody investments in early stage firms which are worthwhile to Workday clients and complementary to Workday merchandise. Gains and losses on strategic investments might consequence from observable value changes and impairment prices on non-marketable fairness securities, ongoing mark-to-market changes on marketable fairness securities, and the sale of fairness investments. We don’t depend on these securities to fund our ongoing operations, and due to this fact we don’t think about the features and losses on these strategic investments to be reflective of our ongoing operations.

• Income tax results. We make the most of a hard and fast long-term projected tax charge in our computation of the non-GAAP earnings tax provision to supply higher consistency throughout the reporting durations. In projecting this long-term non-GAAP tax charge, we make the most of a 3 12 months monetary projection that excludes the direct influence of the objects excluded from GAAP earnings and sure discrete tax objects in calculating our non-GAAP earnings. The projected charge considers different components similar to our present working construction, present tax positions in varied jurisdictions, and key laws in main jurisdictions the place we function. For fiscal 2027 and 2026, we decided the projected non-GAAP tax charge to be 19%, which displays at the moment accessible info, in addition to different components and assumptions. We will periodically re-evaluate this tax charge, as vital, for vital occasions, related tax regulation modifications, materials modifications within the forecasted geographic earnings combine, and any vital acquisitions.

Additionally, as regards to free money flows, Workday’s administration believes that decreasing money supplied by working actions by capital expenditures is significant to traders and others as a result of it offers an enhanced view of money circulation technology from the continuing operations of our enterprise, and it balances working outcomes, money administration, and capital effectivity.

The use of those non-GAAP measures have sure limitations as they don’t mirror all objects of expense or money that have an effect on Workday’s operations. Workday compensates for these limitations by reconciling the non-GAAP monetary measures to probably the most comparable GAAP monetary measures. These non-GAAP monetary measures must be thought of along with, not as an alternative to or in isolation from, measures ready in accordance with GAAP. Further, these non-GAAP measures might differ from the non-GAAP info utilized by different firms, together with peer firms, and due to this fact comparability could also be restricted. Management encourages traders and others to evaluation Workday’s monetary info in its entirety and never depend on a single monetary measure.

Gartner Disclaimer

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SOURCE Workday, Inc.