# Workday (WDAY) Q2 FY2027 earnings

Results filed 2026-08-27 for the quarter ended 2026-07-31. Source page: https://earnings.opennash.com/companies/wday/2027-q2/
Press release and exhibits: https://www.sec.gov/Archives/edgar/data/1327811/000132781126000042/0001327811-26-000042-index.htm
> 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.

## Key numbers

| Metric | Value | Change | Basis |
| --- | --- | --- | --- |
| Total revenues | $2.649 billion | up 12.8% from the second quarter of fiscal 2026 | GAAP |
| Net income | $632 | up from $228 in the same period last year | GAAP |
| Diluted net income per share | $2.57 | compared to $0.84 in the same period last year | GAAP |
| Non-GAAP diluted net income per share | $2.75 | compared to $2.21 in the same period last year | non-GAAP |
| Operating income | $313 million | compared to $248 million in the same period last year | GAAP |
| Non-GAAP operating margin | 31.1% | compared to 29.0% in the same period last year | non-GAAP |
| Operating cash flows | $520 million | compared to $616 million in the same period last year | GAAP |
| Free cash flows | $460 million | compared to $588 million in the same period last year | non-GAAP |
| Subscription revenues | $2.471 billion | an increase of 13.9% from the same period last year | GAAP |

## Segments and operating metrics

| Name | Value | Change |
| --- | --- | --- |
| 12-month subscription revenue backlog | $9.034 billion | up 14.2% from the same period last year |
| Total subscription revenue backlog | $27.403 billion | increasing 8.0% year-over-year |
| Customers using at least one organic agent | more than 5,500 | up more than 35% from last quarter |
| Professional services revenues | $178 | compared to $179 in the same period last year |

## Outlook

| Metric | Period | Outlook |
| --- | --- | --- |
| Subscription revenues | fiscal 2027 third quarter ending October 31, 2026 | $2.515 billion |
| Non-GAAP operating margin | fiscal 2027 third quarter ending October 31, 2026 | 30.0% |
| Subscription revenues | fiscal 2027 full year ending January 31, 2027 | $9.940 billion to $9.950 billion |
| Non-GAAP operating margin | fiscal 2027 full year ending January 31, 2027 | 31.0% |
| Operating cash flows | fiscal 2027 | $3.450B |
| Capital expenditures | fiscal 2027 | $270M |
| Free cash flow | fiscal 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%.

## 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.

## Slides and investor documents

- [Q2 FY27 Investor Presentation](https://s21.q4cdn.com/950027458/files/content_files/Q2-FY27-Investor-Relations-Quarterly_vFINALFINAL.pdf) (Slide deck)
- [Q2 FY27 Earnings Prepared Remarks](https://s21.q4cdn.com/950027458/files/doc_earnings/2027/q2/generic/Q2-FY27-Earnings-Prepared-Remarks.pdf) (CFO commentary)
- [Q2 FY27 Earnings Conference Call](https://events.q4inc.com/attendee/644225303) (Webcast replay)
- [Q2 FY27 Financial Results](https://investor.workday.com/news-and-events/press-releases/news-details/2026/Workday-Announces-Fiscal-2027-Second-Quarter-Financial-Results/default.aspx) (Document)
- [Q2 FY27 10-Q](https://s21.q4cdn.com/950027458/files/content_files/b56e2c6f-2220-41e7-aa7c-b64bb3b0ca78.pdf) (Document)