TLDR
- Workday reported Q2 adjusted EPS of $2.75, beating the $2.61 estimate, on revenue of $2.65 billion.
- Subscription revenue hit $2.47 billion, up 13.9% year over year, above its own guidance.
- AI now accounts for more than 25% of new annual contract value, with over 5,500 customers using at least one AI agent.
- Full-year fiscal 2027 subscription revenue guidance raised to $9.94B-$9.95B, up 13%.
- Workday repurchased 9.8 million shares for $1.3 billion and authorized an additional $4 billion in buybacks.
Workday (WDAY) posted a solid second quarter, beating analyst estimates on both earnings and revenue. The stock closed up 1.5% at $193.57 in regular trading on Thursday, and was up another 1% in Friday’s premarket.
Adjusted earnings came in at $2.75 per share, ahead of the $2.61 Wall Street expected. Revenue rose 12.8% year over year to $2.65 billion, just above the $2.64 billion consensus estimate.
Subscription revenue was $2.47 billion, up 13.9% from a year ago. That came in above Workday’s own guidance of around $2.455 billion.
WORKDAY $WDAY Q2’27 EARNINGS HIGHLIGHTS
🔹 Revenue: $2.65B (Est. $2.64B) 🟢; +12.8% YoY
🔹 Adj. EPS: $2.75 (Est. $2.61) 🟢; +24% YoY
🔹 Free Cash Flow: $460M (Est. $621M) 🔴; -22% YoY
🔹 12-Month Subscription Revenue Backlog: $9.03B; +14.2% YoYQ3 Guide:
🔹 Subscription… pic.twitter.com/9U9SdSdwqE— Wall St Engine (@wallstengine) August 27, 2026
The 12-month subscription revenue backlog grew 14.2% to $9.03 billion. The total subscription backlog reached $27.4 billion, up 8% from last year.
Adjusted operating income rose to $824 million, or 31.1% of revenue, compared to $680 million, or 29%, in the same quarter last year.
Adjusted net income increased to $677 million from $598 million a year earlier.
AI Gaining Ground
AI is becoming a bigger part of Workday’s business. The company said AI drove more than 25% of new annual contract value in the quarter.
More than 5,500 customers are now using at least one of Workday’s organic AI agents, a jump of more than 35% from the prior quarter.
Co-founder and CEO Aneel Bhusri called it a strong Q2, pointing to AI as a key driver of new contract value. CFO Zane Rowe described the results as reflecting “continued momentum,” with AI emerging as a “strategic driver of customer expansion.”
Guidance and Buybacks
For Q3, Workday guided subscription revenue of $2.515 billion, up 12%, and adjusted operating margin of 30%. That came in slightly above the analyst estimate of $2.51 billion.
For the full fiscal year 2027, Workday raised the lower end of its subscription revenue guidance to a range of $9.94 billion to $9.95 billion, up 13%. This was a modest tweak from the prior range of $9.925 billion to $9.95 billion.
Workday also returned cash to investors, repurchasing 9.8 million shares for $1.3 billion during the quarter. The board then authorized an additional $4 billion in open-ended buybacks.
The company ended the quarter with $3.4 billion in cash, cash equivalents, and marketable securities.
Not everyone is jumping in though. Bank of America analysts reiterated a Neutral rating and $205 price target, saying AI initiatives are “gaining traction but reacceleration is still elusive.” They lowered their estimates to reflect a slower long-term growth trajectory.
Workday stock is down 9.9% so far this year and down 15.3% over the past 12 months. Earlier in August, the stock surged on takeover speculation involving private equity firm Silver Lake, though no deal has been announced.
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