OpenNashEarnings

Workday (WDAY) · Software

Workday Q2 FY2027 earnings: summary, key numbers & outlook

Results filed 27 Aug 2026 · Quarter ended 31 Jul 2026

Slides (24 pages)Press release ↗Investor relations ↗

Summaries and transcripts are machine-generated and can contain errors.

In brief

Workday reported fiscal 2027 second quarter total revenues of $2.649 billion, up 12.8% year-over-year, with subscription revenues of $2.471 billion, up 13.9% year-over-year.

Workday's second quarter revenue was $2.649 billion, up 12.8% from a year ago, and subscription revenue (the recurring part) was $2.471 billion, up 13.9%. Non-GAAP operating margin was 31.1% versus 29.0% a year earlier. Reported diluted EPS of $2.57 included a $1.52 per share tax benefit from an internal restructuring of intellectual property rights. Workday repurchased about 9.8 million shares for $1.3 billion, and operating cash flow fell to $520 million.

Management expects third quarter subscription revenue of $2.515 billion, up 12%, with a 30.0% non-GAAP operating margin. For the full year it now expects subscription revenue of $9.940 billion to $9.950 billion, up 13%, and raised its non-GAAP operating margin guidance to 31.0%. The main tension is that growth is slowing slightly while Workday keeps investing in agentic AI, and cash flow was lower than a year ago as buybacks continue.

Slides & documents

Open the slide deck (PDF, 24 pages) ↗

Workday Q2 FY2027 slide deck, page 1Workday Q2 FY2027 slide deck, page 2Workday Q2 FY2027 slide deck, page 3Workday Q2 FY2027 slide deck, page 4Workday Q2 FY2027 slide deck, page 5Workday Q2 FY2027 slide deck, page 6

Showing the first 6 of 24 pages.

From Workday investor relations

SEC filing

Key numbers

Total revenues · GAAP
$2.649 billion

up 12.8% from the second quarter of fiscal 2026

Net income · GAAP
$632.0M

up from $228 in the same period last year

Diluted net income per share · GAAP
$2.57

compared to $0.84 in the same period last year

Non-GAAP diluted net income per share · non-GAAP
$2.75

compared to $2.21 in the same period last year

Operating income · GAAP
$313 million

compared to $248 million in the same period last year

Non-GAAP operating margin · non-GAAP
31.1%

compared to 29.0% in the same period last year

Operating cash flows · GAAP
$520 million

compared to $616 million in the same period last year

Free cash flows · non-GAAP
$460 million

compared to $588 million in the same period last year

Segment or metricValueChange
12-month subscription revenue backlog$9.034 billionup 14.2% from the same period last year
Total subscription revenue backlog$27.403 billionincreasing 8.0% year-over-year
Customers using at least one organic agentmore than 5,500up more than 35% from last quarter
Professional services revenues$178.0Mcompared to $179 in the same period last year
Where each number comes from
  • Total revenues: “Total revenues were $2.649 billion, an increase of 12.8% from the second quarter of fiscal 2026.”
  • Net income: “Provision for (benefit from) income taxes | (305) | 76 | (172) | 111 Net income | $632 | $228 | $854 | $296”
  • Diluted net income per share: “Diluted net income per share was $2.57, compared to diluted net income per share of $0.84 in the same period last year.”
  • Non-GAAP diluted net income per share: “Non-GAAP diluted net income per share was $2.75, compared to non-GAAP diluted net income per share of $2.21 in the same period last year.”
  • Operating income: “Operating income was $313 million, or 11.8% of revenues, compared to an operating income of $248 million, or 10.6% of revenues, in the same period last year.”
  • Non-GAAP operating margin: “Non-GAAP operating income for the second quarter was $824 million, or 31.1% of revenues, compared to a non-GAAP operating income of $680 million, or 29.0% of revenues, in the same period last year.”
  • Operating cash flows: “Operating cash flows were $520 million compared to $616 million in the same period last year.”
  • Free cash flows: “Operating cash flows were $520 million compared to $616 million in the same period last year. Free cash flows were $460 million compared to $588 million in the same period last year.”
  • 12-month subscription revenue backlog: “12-month subscription revenue backlog was $9.034 billion, up 14.2% from the same period last year.”
  • Total subscription revenue backlog: “Total subscription revenue backlog was $27.403 billion, increasing 8.0% year-over-year.”
  • Customers using at least one organic agent: “More than 5,500 customers now use one or more of Workday’s organic agents, up more than 35% from last quarter.”
  • Professional services revenues: “Subscription services | $2,471 | $2,169 | $4,826 | $4,228 Professional services | 178 | 179 | 365 | 360 Total revenues | 2,649 | 2,348”

Copied from the press release ↗ and other documents in the SEC filing ↗. A figure is published only if its sentence is in the filing.

From the filingQ2 FY2027vs year agovs last quarter
Revenue$2.6B+12.8%+4.2%
Operating income$313.0M+26.2%−7.4%
Net income$632.0M+177.2%+184.7%
Diluted EPS$2.57+206.0%+195.4%
Free cash flow$460.0M−21.8%−25.3%
Operating margin11.8%+1.2 pts−1.5 pts

Calculated by code from XBRL, not by the model.

Outlook

MetricPeriodOutlook
Subscription revenuesfiscal 2027 third quarter ending October 31, 2026$2.515 billion
Non-GAAP operating marginfiscal 2027 third quarter ending October 31, 202630.0%
Subscription revenuesfiscal 2027 full year ending January 31, 2027$9.940 billion to $9.950 billion
Non-GAAP operating marginfiscal 2027 full year ending January 31, 202731.0%
Operating cash flowsfiscal 2027$3.450B
Capital expendituresfiscal 2027$270M
Free cash flowfiscal 2027$3.180B

Key takeaways

  1. Subscription revenue grew faster than total revenue

    Subscription revenues were $2.471 billion, an increase of 13.9%, while total revenues rose 12.8% to $2.649 billion. Professional services was flat at $178 versus $179.

  2. Non-GAAP operating margin expanded to 31.1%

    Non-GAAP operating margin was 31.1% compared to 29.0% a year earlier. GAAP operating margin was 11.8% versus 10.6%.

  3. Reported EPS inflated by a one-time tax benefit

    Diluted net income per share was $2.57, including a tax benefit of $1.52 per share from an intra-entity IP transfer. Non-GAAP diluted EPS was $2.75 versus $2.21.

  4. Cash flow fell while buybacks accelerated

    Operating cash flows were $520 million versus $616 million, and free cash flows were $460 million versus $588 million. Workday repurchased approximately 9.8 million shares for $1.3 billion and authorized up to an additional $4.0 billion.

  5. AI adoption rising; full-year outlook nudged up

    AI drove more than 25% of new ACV and more than 5,500 customers use an organic agent. Full-year subscription revenue guidance is $9.940 billion to $9.950 billion with non-GAAP operating margin raised to 31.0%.

Charts

Revenue$2.6B+12.8% y/yQ2 FY27
Q3 FY25: $2.2BQ3 25$2.2BQ4 FY25: $2.2B (worked out from the annual figure)Q4 25$2.2BQ1 FY26: $2.2BQ1 26$2.2BQ2 FY26: $2.3BQ2 26$2.3BQ3 FY26: $2.4BQ3 26$2.4BQ4 FY26: $2.5B (worked out from the annual figure)Q4 26$2.5BQ1 FY27: $2.5BQ1 27$2.5BQ2 FY27: $2.6BQ2 27$2.6B

Fourth quarter worked out from the annual figure.

Data
Q3 FY25$2.2B
Q4 FY25$2.2B *
Q1 FY26$2.2B
Q2 FY26$2.3B
Q3 FY26$2.4B
Q4 FY26$2.5B *
Q1 FY27$2.5B
Q2 FY27$2.6B
Diluted EPS (GAAP)$2.57+206.0% y/yQ2 FY27
Q3 FY25: $0.72Q3 25$0.72Q1 FY26: $0.25Q1 26$0.25Q2 FY26: $0.84Q2 26$0.84Q3 FY26: $0.94Q3 26$0.94Q1 FY27: $0.87Q1 27$0.87Q2 FY27: $2.57Q2 27$2.57
Data
Q3 FY25$0.72
Q1 FY26$0.25
Q2 FY26$0.84
Q3 FY26$0.94
Q1 FY27$0.87
Q2 FY27$2.57

Fourth-quarter EPS appears once the press release is read; filings report it only for the full year.

Operating margin11.8%+1.2 pts y/yQ2 FY27
Q3 FY25: 7.6%Q3 257.6%Q4 FY25: 3.4%Q4 253.4%Q1 FY26: 1.7%Q1 261.7%Q2 FY26: 10.6%Q2 2610.6%Q3 FY26: 10.6%Q3 2610.6%Q4 FY26: 6.9%Q4 266.9%Q1 FY27: 13.3%Q1 2713.3%Q2 FY27: 11.8%Q2 2711.8%
Data
Q3 FY257.6%
Q4 FY253.4%
Q1 FY261.7%
Q2 FY2610.6%
Q3 FY2610.6%
Q4 FY266.9%
Q1 FY2713.3%
Q2 FY2711.8%
Free cash flow$460.0M−21.8% y/yQ2 FY27
Q3 FY25: $359.0MQ3 25$359.0MQ4 FY25: $1.0BQ4 25$1.0BQ1 FY26: $421.0MQ1 26$421.0MQ2 FY26: $588.0MQ2 26$588.0MQ3 FY26: $550.0MQ3 26$550.0MQ4 FY26: $1.2BQ4 26$1.2BQ1 FY27: $616.0MQ1 27$616.0MQ2 FY27: $460.0MQ2 27$460.0M
Data
Q3 FY25$359.0M
Q4 FY25$1.0B
Q1 FY26$421.0M
Q2 FY26$588.0M
Q3 FY26$550.0M
Q4 FY26$1.2B
Q1 FY27$616.0M
Q2 FY27$460.0M

Operating cash flow minus capital expenditure, from cash flow statements.

Questions

How did Workday perform in Q2 fiscal 2027?

Total revenues were $2.649 billion, up 12.8% year-over-year, and subscription revenues were $2.471 billion, up 13.9%. Non-GAAP operating margin was 31.1% versus 29.0% a year earlier.

Why was GAAP EPS so much higher than last year?

Diluted EPS was $2.57 versus $0.84, including a $1.52 per share tax benefit from an intra-entity transfer of intellectual property rights in an internal restructuring. Non-GAAP diluted EPS was $2.75 versus $2.21.

What is Workday's outlook for fiscal 2027?

Workday expects full-year subscription revenue of $9.940 billion to $9.950 billion, growth of 13%, and raised non-GAAP operating margin guidance to 31.0%. Its slide also shows operating cash flows of $3.450B and free cash flow of $3.180B.

What is guidance for the third quarter?

Workday guided fiscal Q3 subscription revenues to $2.515 billion, growth of 12%, with a non-GAAP operating margin of 30.0%. Total revenues are guided to $2.690B, up 11%, per the investor presentation.

How is Workday returning capital and what happened to cash flow?

Workday repurchased about 9.8 million Class A shares for $1.3 billion and its board authorized up to $4.0 billion more. Operating cash flows were $520 million versus $616 million a year earlier, and free cash flows were $460 million versus $588 million.

Call recording

Call recording on YouTube ↗. Official replay ↗.