Workday Ups Fiscal 2026 Guidance to $8.815 Billion, 14.2% Growth

Workday, Inc. has updated its earnings guidance for the fiscal year ending January 31, 2026, increasing its subscription revenue guidance to $8.815 billion, representing 14.2% growth. The update comes after a strong first half performance and the acquisition of Paradox.

Workday, Inc. (NASDAQ: WDAY) has revised its earnings guidance for the fiscal year ending January 31, 2026, reflecting a strong performance in the first half of the year and the recent acquisition of Paradox. The company has increased its subscription revenue guidance to $8.815 billion, representing a 14.2% year-over-year growth. This update comes after a robust second quarter, where Workday reported total revenues of $2.348 billion, a 12.6% increase from the same period last year [1].

The company's operating income for the second quarter was $248 million, or 10.6% of revenues, compared to $111 million, or 5.3% of revenues, in the same period last year. Non-GAAP operating income was $680 million, or 29.0% of revenues, compared to $518 million, or 24.9% of revenues, in the same period last year. The company's diluted net income per share was $0.84, compared to $0.49 in the second quarter of fiscal 2025, with non-GAAP diluted net income per share at $2.21 [1].

Workday's 12-month subscription revenue backlog increased to $7.91 billion, a 16.4% increase from the same period last year, while total subscription revenue backlog reached $25.37 billion, up 17.6% year-over-year. The company's operating cash flows were $616 million, compared to $571 million in the same period last year, with free cash flows at $588 million, up from $516 million [1].

The company's CEO, Carl Eschenbach, commented on the results, stating, "Workday delivered another solid quarter, driven by our AI and platform innovation, international momentum, and an ecosystem that continues to grow alongside us." CFO Zane Rowe added, "Our second quarter results reflect the strength of our platform and our continued progress across several of our growth initiatives" [1].

Workday's guidance update follows a strong first half of the fiscal year and the acquisition of Paradox, a candidate experience agent that uses conversational AI to simplify the job application journey. The company also acquired Flowise, a low-code platform that makes it easy to build AI agents. Additionally, Workday unveiled a new AI developer toolset and introduced the Workday Agent Partner Network, a global ecosystem of partners building AI agents that will connect with the Workday Agent System of Record [1].

Workday's customer community now represents more than 75 million users under contract and more than 65% of the Fortune 500. The company has expanded its presence in India, appointing Sunil Jose as President of India and committing to offer services from a local data center. Workday has also been recognized as a Leader in several Gartner Magic Quadrants and Everest Group PEAK Matrix assessments [1].

Workday's updated guidance for the fiscal 2026 third quarter ending October 31, 2025, includes subscription revenues of $2.235 billion, representing a 14.1% growth, and a non-GAAP operating margin of 28.0% [1].

References:
[1] https://finance.yahoo.com/news/workday-announces-fiscal-2026-second-200200654.html