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 had been $2.649 billion, a rise of 12.8% from the second quarter of fiscal 2026. Subscription revenues had 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 internet earnings per share was $2.57, in comparison with diluted internet earnings per share of $0.84 in the identical interval final 12 months. Included inside diluted internet earnings per share for the present quarter is a tax good thing about $1.52 per share associated to an intra-entity switch of sure mental property rights as a part of an inside authorized entity restructuring. Non-GAAP diluted internet earnings per share was $2.75, in comparison with non-GAAP diluted internet 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, growing 8.0% year-over-year.
• Operating money flows had been $520 million in comparison with $616 million in the identical interval final 12 months. Free money flows had 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 had 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 prospects 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 approved 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 prospects 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 exams and verifies each AI agent, Workday-built or third-party, earlier than it goes into manufacturing, and repeatedly displays it after.
• Workday Learning, powered by Sana, which mixes Workday’s trusted individuals and expertise knowledge with Sana’s AI-native studying expertise, grew to become usually obtainable.
• Workday launched Adaptive Decision Intelligence, a brand new AI functionality that lets finance and operations groups ask questions in pure language, mannequin situations in minutes, and act on outcomes instantly.
• Workday’s Financial Audit Agent, which is designed to considerably reduce the time to construct audit proof packages, grew to become usually obtainable.
• Workday introduced a new research arm, which publishes peer-reviewed analysis tackling a few 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 knowledge and AI providers, and Workday’s HR and finance knowledge.
• Workday expanded its strategic partnership with Google Cloud to carry Workday brokers instantly 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 steerage 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 steerage 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 overview 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 could be accessed by way of webcast. The webcast will likely be obtainable reside, and a replay will likely be obtainable following completion of the reside broadcast for about 90 days.

Workday makes use of its blog.workday.com web site as a way of exposing materials personal data and for complying with its disclosure obligations underneath 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 emblem are emblems of Workday, Inc. All different model and product names are emblems or registered emblems of their respective holders.

Forward-Looking Statements

This press launch comprises 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 primarily based solely on at the moment obtainable data and our present beliefs, expectations, and assumptions. Because forward-looking statements relate to the long run, they’re topic to dangers, uncertainties, assumptions, and adjustments in circumstances which are tough to foretell and lots of of that are outdoors of our management. If the dangers materialize, assumptions show incorrect, or we expertise surprising adjustments in circumstances, precise outcomes may differ materially from the outcomes implied by these forward-looking statements, and subsequently you shouldn’t depend on any forward-looking statements. Risks embody, however aren’t restricted to: (i) breaches in our safety measures or these of our third-party suppliers, unauthorized entry to our prospects’ or different customers’ private knowledge, or disruptions in our knowledge middle 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 recent rivals and new purposes, developments in know-how, and advertising initiatives by our rivals; (iv) privateness issues and evolving home or overseas legal guidelines and laws; (v) any lack of key staff or the lack to draw, practice, and retain extremely expert staff; (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 potential to comprehend the anticipated enterprise or monetary advantages of any acquisitions of or investments in firms; (ix) adoption of our purposes and providers by prospects and people, together with any new options, enhancements, and modifications, in addition to our prospects’ and customers’ satisfaction with the deployment, coaching, and assist providers they obtain; (x) the regulatory dangers associated to new and evolving applied sciences corresponding to AI and our potential to comprehend a return on our improvement efforts; (xi) delays or reductions in data know-how spending; (xii) adversarial litigation outcomes; (xiii) adjustments in gross sales, which might not be instantly mirrored in our outcomes as a consequence of our subscription mannequin; and (xiv) the impression of constant world financial and geopolitical volatility and conflicts on our enterprise, in addition to on our prospects, prospects, companions, and repair suppliers. Further data 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-Ok and different experiences that we’ve filed and can file with the SEC every now and then, which may trigger precise outcomes to differ 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 providers, options, or features referenced on this doc, our web site, or different press releases or public statements that aren’t at the moment obtainable are topic to vary at Workday’s discretion and might not be delivered as deliberate or in any respect. Customers who buy Workday providers ought to make their buy choices primarily based upon providers, options, and features which are at the moment obtainable.

About Non-GAAP Financial Measures

To present traders and others with further data concerning Workday’s outcomes, the next non-GAAP monetary measures are disclosed: non-GAAP working earnings, non-GAAP working margin, non-GAAP internet earnings, non-GAAP diluted internet earnings per share, and free money flows. Workday has offered a reconciliation of every non-GAAP monetary measure used on this earnings launch to probably the most instantly 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 belongings, acquisition-related prices, and restructuring prices. Non-GAAP internet earnings and non-GAAP diluted internet 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 belongings, 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 grasp and examine working outcomes throughout accounting intervals, for inside budgeting and forecasting functions, for short- and long-term working plans, and to judge Workday’s monetary efficiency. Management believes these non-GAAP monetary measures replicate Workday’s ongoing enterprise in a way that permits 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 data 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 intervals and to these of peer firms.

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

• Share-based compensation expense. Share-based compensation primarily consists of non-cash bills for worker restricted inventory items and our worker inventory buy plan. Although share-based compensation is a vital facet of the compensation of our staff and executives, this expense is decided utilizing various components, together with our inventory value, volatility, and forfeiture charges, which are past our management and usually unrelated to operational choices and efficiency in any specific interval. Further, share-based compensation expense will not be reflective of the worth finally acquired 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 so as 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 belongings. For enterprise mixtures, we usually allocate a portion of the acquisition value to intangible belongings. The quantity of the allocation is predicated on estimates and assumptions made by administration and is topic to amortization. The quantity of buy value allotted to intangible belongings and the time period of the associated amortization can differ considerably and are distinctive to every acquisition and thus we don’t imagine this exercise is reflective of our ongoing operations. Although we exclude the amortization of acquisition-related intangible belongings from these non-GAAP monetary measures, we imagine that it will be important for traders to grasp that such intangible belongings had been recorded as a part of buy accounting and contribute to income era.

• Acquisition-related prices. Acquisition-related prices embody direct transaction prices, corresponding to due diligence and advisory charges, and sure compensation and integration-related bills. We exclude the consequences of acquisition-related prices as we imagine 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 prospects and complementary to Workday merchandise. Gains and losses on strategic investments could outcome from observable value changes and impairment costs 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 subsequently we don’t take into account 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 price in our computation of the non-GAAP earnings tax provision to supply higher consistency throughout the reporting intervals. In projecting this long-term non-GAAP tax price, we make the most of a 3 12 months monetary projection that excludes the direct impression of the objects excluded from GAAP earnings and sure discrete tax objects in calculating our non-GAAP earnings. The projected price considers different components corresponding to our present working construction, present tax positions in numerous jurisdictions, and key laws in main jurisdictions the place we function. For fiscal 2027 and 2026, we decided the projected non-GAAP tax price to be 19%, which displays at the moment obtainable data, in addition to different components and assumptions. We will periodically re-evaluate this tax price, as crucial, for important occasions, related tax regulation adjustments, materials adjustments within the forecasted geographic earnings combine, and any important acquisitions.

Additionally, as regards to free money flows, Workday’s administration believes that decreasing money offered by working actions by capital expenditures is significant to traders and others as a result of it gives an enhanced view of money movement era 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 replicate 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 ought to 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 could differ from the non-GAAP data utilized by different firms, together with peer firms, and subsequently comparability could also be restricted. Management encourages traders and others to overview Workday’s monetary data in its entirety and never depend on a single monetary measure.

Gartner Disclaimer

GARTNER & MAGIC QUADRANT are emblems of Gartner, Inc. and/or its associates. Gartner doesn’t endorse any firm, vendor, services or products depicted in its publications, and doesn’t advise know-how customers to pick solely these distributors with the best scores or different designation. Gartner publications encompass the opinions of Gartner’s enterprise and know-how insights group and shouldn’t be construed as statements of reality. Gartner disclaims all warranties, expressed or implied, with respect to this publication, together with any warranties of merchantability or health for a selected goal. The Gartner content material described herein (the “Gartner Content”) represents analysis opinion or viewpoints revealed, as a part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and isn’t a illustration of reality. Gartner Content speaks as of its unique publication date (and never as of the date of this press launch), and the opinions expressed within the Gartner Content are topic to vary with out discover.

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SOURCE Workday, Inc.