Workday Q2 Earnings and Revenue Rise; Raises Revenue Outlook

Workday Inc.'s Q2 earnings and revenue increased, with the company also raising its revenue outlook. The cloud-based management software provider specializes in financial management and human resources solutions for various industries. Net sales primarily come from sales and subscriptions (91%) and professional services (9%), with the US accounting for 75.2% of net sales.

Workday Inc. (NASDAQ: WDAY), a leading provider of cloud-based management software, announced its fiscal 2026 second quarter financial results, showing significant growth in revenue and earnings. The company reported total revenues of $2.348 billion, an increase of 12.6% year-over-year, driven primarily by subscription revenues, which reached $2.169 billion, up 14.0% compared to the same period last year [1].

Operating income for the quarter was $248 million, or 10.6% of revenues, up from $111 million, or 5.3% of revenues, in the same period last year. Non-GAAP operating income for the quarter was $680 million, or 29.0% of revenues, compared to $518 million, or 24.9% of revenues, in the previous year. The company also reported diluted net income per share of $0.84, up from $0.49 in the second quarter of fiscal 2025, with non-GAAP diluted net income per share at $2.21, up from $1.75 [1].

Workday's 12-month subscription revenue backlog increased to $7.91 billion, up 16.4% from the same period last year, while total subscription revenue backlog grew to $25.37 billion, an increase of 17.6% year-over-year. Operating cash flows were $616 million, up from $571 million in the same period last year, and free cash flows were $588 million, up from $516 million [1].

The company also provided updated guidance for the fiscal 2026 third quarter and full year, expecting subscription revenues of $2.235 billion and $8.815 billion, respectively, representing growth of 14.1% and 14.2% year-over-year. Non-GAAP operating margin guidance for the third quarter and full year was 28.0% and 29.0%, respectively [1].

Workday's CEO, Carl Eschenbach, commented, "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 revenue growth was driven by new customer acquisitions and expansions, including Banamex, Carrefour, Masan Group, Memorial Health, and Red Coats, as well as the acquisition of Paradox and Flowise. The company also launched Workday Government and expanded its presence in India [1].

References:
[1] https://investor.workday.com/2025-08-21-Workday-Announces-Fiscal-2026-Second-Quarter-Financial-Results