The combination of a modest EPS beat, raised full-year guidance, accelerating subscription backlog growth, and a new $4B buyback authorization is a strong signal of confidence. Traders should watch for upside momentum in subscription revenue growth and AI-driven deal conversion in coming quarters, as the raised margin guidance suggests improving operating leverage.
Price Chart
Executive Summary
Workday reported Q2 FY2027 results with total revenue of $2.649B (+12.8% YoY), slightly above consensus, and non-GAAP EPS of $2.75 vs $2.61 consensus. The company raised its full-year subscription revenue guidance to $9.940-9.950B (13% growth) and increased non-GAAP operating margin guidance to 31.0%, while also authorizing a new $4B share repurchase program. AI is driving >25% of new ACV, and subscription backlog grew 14.2% YoY, signaling sustained demand momentum.
Key Financial Metrics
Key Facts
- Total revenue $2.649B, +12.8% YoY, slightly above $2.64B consensus
- Non-GAAP diluted EPS $2.75 vs consensus $2.61 (5.4% beat)
- Subscription revenue $2.471B, +13.9% YoY
- 12-month subscription backlog $9.034B, +14.2% YoY
- Raised FY2027 subscription revenue guidance to $9.940-9.950B (13% growth)
- Raised FY2027 non-GAAP operating margin guidance to 31.0% from prior
- Board authorized new $4B open-ended share repurchase program
- AI drove >25% of new ACV; >5,500 customers using organic agents (+35% QoQ)
- Operating cash flow $520M; free cash flow $460M
Financial Impact
Revenue beat by ~$9M vs consensus; EPS beat by $0.14; raised guidance implies ~$100M incremental subscription revenue at midpoint
Risk Factors
- Free cash flow declined to $460M from $588M YoY, partly due to higher capex
- GAAP EPS benefited from a $1.52/share one-time tax benefit from IP restructuring
- Macroeconomic uncertainty could slow enterprise software spending
- Competitive pressure from Oracle, SAP, and other cloud HCM/finance vendors
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 1 press release from GlobeNewswire.
| Document | Accession Number |
|---|---|
| PRESS-RELEASE Data (Synthetic) | press-prn-302862164 |
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Aug 27, 2026 5w ago | Press Release | $204.72 $188.60 | ▼ −7.87% | ▼ −8.13% | $186.14 (−9.08%) |
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Jun 9, 2026 16w ago | 144 | $137.47 $138.34 | ▲ +0.63% | ▼ −2.99% | $186.14 (+35.40%) |
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