| Metric | Prior FY26 | Post-Guide FY26 | Shift |
|---|---|---|---|
| Subscription Rev | ~$8.78B | $8.815B | ✅ Higher |
| Margin | ~28.5% | 29.0% | ✅ Higher |
Takeaways
Bullish: AI adoption now tied directly to revenue and backlog; raised guide confirms momentum.
Balanced: Still exposed to macro deal cycle elongation, but backlog growth suggests resilience.
Bearish: Heavy reliance on subscription renewals and expansions — any slowdown in large-enterprise IT spend could bite.
| KPI | Q2 Result | YoY | Context |
|---|---|---|---|
| Total Revenue | $2.35B | +12.6% | Slight beat; driven by subscription growth |
| Subscription Revenue | $2.17B | +14.0% | Core driver, consistent acceleration |
| Backlog (12-mo cRPO) | $7.91B | +16.4% | Demand signals remain strong |
| Non-GAAP Operating Margin | 29.0% | +410bps | Clear operating leverage |
| FCF | $588M | +14% | Cash conversion intact |
| Metric | FY26 Prior | FY26 New | Direction |
|---|---|---|---|
| Subscription Revenue | ~$8.78B (implied) | $8.815B (+14.2%) | 📈 Raised |
| Non-GAAP Operating Margin | ~28.5% | 29.0% | 📈 Raised |
| Q3 Subscription Revenue | N/A | $2.235B (+14.1%) | 📈 Positive cadence |
Revenue Forecast
• Subscription revenues of $2.235 billion for Q3 2026, representing growth of 14.1%
Product Segments
• Subscription revenues of $2.169 billion, up 14.0% year-over-year
Rnd Pipeline
• Unveiled a new AI developer toolset and introduced the Workday Agent Partner Network
Performance Drivers
• AI and platform innovation, international momentum
Growth Initiatives
• Acquisition of Paradox and Flowise, expansion in India
Industry Tailwinds
• Growing demand for AI-driven enterprise solutions
After-Hours Stock Move: WDAY +4.65%; INTU –5% (contrast shows market rewarding WDAY’s beat while punishing INTU despite solid results).
Earnings vs. Estimates
| Metric | Reported | Consensus | Beat/Miss |
|---|---|---|---|
| Q2 Revenue | $2.35B | $2.34B | ✅ Beat |
| Q2 EPS (Non-GAAP) | $2.21 | $2.12 | ✅ Beat |
| Subscription Revenue | $2.17B | ~$2.16B | ✅ Beat |
| cRPO (12-mo backlog) | $7.91B | ~$7.85B implied | ✅ Beat |
Quick Take: Workday beat across revenue, EPS, and backlog, with subscription growth +14% and margins expanding to 29%. Importantly, management raised FY26 subscription revenue and margin guidance, driving the stock higher.
Four straight beats, but mixed stock reactions—three negative and one strong positive—raising the bar for tangible proof that AI/platform initiatives can drive H2 acceleration and sustained margin delivery.
| Quarter | EPS Surprise | 1-Day Move | 7-Day Move | 14-Day Move |
|---|---|---|---|---|
| Q1 FY2026 (May 22, 2025) | +10.95% | –12.52% | –7.70% | –7.86% |
| Q4 FY2025 (Feb 25, 2025) | +7.87% | +6.22% | –0.57% | –1.80% |
| Q3 FY2025 (Nov 26, 2024) | +7.39% | –6.21% | –1.40% | +2.89% |
| Q2 FY2025 (Aug 22, 2024) | +6.06% | +12.49% | +12.65% | +8.70% |
Live coverage has ended. The full story is below.
Worday (NASDAQ:WDAY | WDAY Price Prediction) reports after the close. The setup: macro remains choppy, but Q1 showed healthy backlog, strong margins, and accelerating AI adoption across the suite. This print matters because management is guiding to faster growth in the back half and is leaning into AI agents, platform extensibility, and the medium-enterprise motion to sustain double-digit top-line with disciplined margins. Confirmation on demand signals (cRPO, win rates) and AI monetization is key.
AI agents monetization & attach – New ACV across AI products more than doubled YoY; ~25% of expansions included an AI SKU. Investors will look for contribution to cRPO and evidence that agents become needle-movers in H2.
Platform leverage: ExtendPro & marketplace – ExtendPro more than doubled YoY; partner ecosystem expanding with 25 new marketplace apps in Q1 and increasing partner-sourced pipeline. Expect questions on ecosystem revenue and pull-through.
Demand indicators & guidance cadence – Q1 cRPO up ~15.6%; FY26 subscription revenue guide reiterated with an expected H2 acceleration; Q2 cRPO guide +15–16% (incl. ~1-pt tenant impact). Update on billings vs. backlog will be scrutinized.
WorkdayGO (mid-market) traction – Launch targeting 30–60-day implementations for emerging/medium enterprise; watch pipeline build and time-to-value as a growth vector.
Margin discipline & capital return – FY26 non-GAAP margin outlook ~28.5% with continued AI and go-to-market investment; incremental buyback authorization underscores balance in capital allocation.
Contact [email protected] for any questions or corrections.
Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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