Workday Stock Earnings Reports

Workday reported a solid Q2 FY2026: subscription revenue grew 14% to $2.169B, total revenue grew 13% to $2.348B, and non-GAAP operating margin was 29%. Key operational highlights include strong customer adoption (over 75M users under contract, 1 trillion transactions last year), accelerating AI adoption (Illuminate usage, >70% of net-new deals include AI SKUs, net-new AI ACV more than doubled year-over-year), and meaningful product/platform momentum (Extend Pro and marketplace growth, developer community doubled YoY). Strategic moves include the announced acquisitions of Paradox and Flowise, launch of Workday Government as a subsidiary to pursue U.S. federal opportunities, expanded partner ecosystem (over 20% of net new ACV from partners), and continued international expansion (notable wins in EMEA, APAC, Japan, first deal in Vietnam, entry into India). Financial backlog (12-month cRPO) grew 16.4% to $7.91B, total subscription backlog up 18% to $25.37B, gross retention at 97%. Cash flow remains strong ($616M operating cash flow in Q2; $8.2B cash & marketable securities). The company raised FY'26 subscription revenue guidance to $8.815B (14% growth) and increased non-GAAP operating margin guidance to ~29%, expecting FY '26 operating cash flow of $2.85B and free cash flow of $2.65B. Management emphasized AI as a growth catalyst and competitive advantage, with continued investments (organic and inorganic) while driving operating efficiencies.