[Fiscal 2026 Second Quarter Financial Results Announcement](index=1&type=section&id=Fiscal%202026%20Second%20Quarter%20Financial%20Results%20Announcement) [Financial Performance](index=1&type=section&id=Financial%20Performance) Workday reported strong Q2 FY2026 results with total revenues of $2.348 billion and subscription revenues of $2.169 billion, demonstrating significant year-over-year increases in operating income and EPS Q2 FY2026 Financial Performance Summary | Financial Metric | Q2 FY2026 | Q2 FY2025 | % Change YoY | | :--- | :--- | :--- | :--- | | Total Revenues | $2.348 B | $2.085 B | +12.6% | | Subscription Revenues | $2.169 B | $1.903 B | +14.0% | | Operating Income (GAAP) | $248 M | $111 M | +123.4% | | Operating Margin (GAAP) | 10.6% | 5.3% | +5.3 pts | | Non-GAAP Operating Income | $680 M | $518 M | +31.3% | | Non-GAAP Operating Margin | 29.0% | 24.9% | +4.1 pts | | Diluted EPS (GAAP) | $0.84 | $0.49 | +71.4% | | Non-GAAP Diluted EPS | $2.21 | $1.75 | +26.3% | | Operating Cash Flows | $616 M | $571 M | +7.9% | | 12-Month Subscription Backlog | $7.91 B | - | +16.4% | | Total Subscription Backlog | $25.37 B | - | +17.6% | - CEO Carl Eschenbach attributed the strong quarter to AI and platform innovation, international momentum, and a growing partner ecosystem[4](index=4&type=chunk) - CFO Zane Rowe announced an increase in fiscal 2026 guidance for both subscription revenue and non-GAAP operating margin, citing first-half momentum and the acquisition of Paradox[4](index=4&type=chunk) [Recent Business Highlights](index=1&type=section&id=Recent%20Business%20Highlights) Workday expanded its customer base and key relationships, strategically acquiring Paradox and Flowise to enhance AI capabilities, and launched new AI tools and a U.S. Government subsidiary - Workday announced key strategic acquisitions to enhance its AI capabilities: - **Paradox:** A definitive agreement to acquire the candidate experience agent that uses conversational AI - **Flowise:** Acquired a low-code platform for building AI agents[7](index=7&type=chunk) - The company is expanding its AI ecosystem by unveiling a new AI developer toolset and launching the Workday Agent Partner Network for building AI agents connected to its platform[7](index=7&type=chunk) - New customer wins include Banamex, Carrefour, Masan Group, Memorial Health, and Red Coats, with expanded relationships including Google, Nationwide Insurance, and Qantas Airways[7](index=7&type=chunk) - Workday launched Workday Government, a new subsidiary dedicated to serving the U.S. Government, and expanded its presence in India with a new president and commitment to a local data center[7](index=7&type=chunk)[12](index=12&type=chunk) [Financial Outlook](index=3&type=section&id=Financial%20Outlook) Workday raised its full-year fiscal 2026 guidance, projecting subscription revenues of $8.815 billion (14.2% growth) and a non-GAAP operating margin of approximately 29.0% Q3 Fiscal 2026 Outlook | Guidance Metric | Q3 Fiscal 2026 Outlook | | :--- | :--- | | Subscription Revenues | $2.235 billion (+14.1% growth) | | Non-GAAP Operating Margin | 28.0% | Full Year Fiscal 2026 Outlook (Updated) | Guidance Metric | Full Year Fiscal 2026 Outlook (Updated) | | :--- | :--- | | Subscription Revenues | $8.815 billion (+14.2% growth) | | Non-GAAP Operating Margin | ~29.0% | [Financial Statements](index=5&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of July 31, 2025, Workday's balance sheet shows stable total assets of $17.96 billion, with total liabilities at $8.79 billion and stockholders' equity at $9.17 billion Condensed Consolidated Balance Sheet Data (in millions) | Balance Sheet Item (in millions) | July 31, 2025 | January 31, 2025 | | :--- | :--- | :--- | | Cash, cash equivalents, and marketable securities | $8,186 | $8,017 | | Total Assets | $17,961 | $17,977 | | Unearned Revenue (Current) | $3,852 | $4,467 | | Total Liabilities | $8,789 | $8,943 | | Total Stockholders' Equity | $9,172 | $9,034 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 FY2026, Workday reported total revenues of $2.348 billion and net income of $228 million, a significant increase from the prior year, driven by strong subscription services revenue growth Condensed Consolidated Statements of Operations (in millions) | Income Statement (in millions) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :--- | :--- | :--- | | Subscription Services Revenue | $2,169 | $1,903 | | Total Revenues | $2,348 | $2,085 | | Total Costs and Expenses | $2,100 | $1,974 | | Operating Income | $248 | $111 | | Net Income | $228 | $132 | | Diluted Net Income per Share | $0.84 | $0.49 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q2 FY2026, net cash provided by operating activities was $616 million, leading to free cash flow of $588 million after capital expenditures, with $348 million used in financing activities Condensed Consolidated Statements of Cash Flows (in millions) | Cash Flow (in millions) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $616 | $571 | | Capital expenditures | $(28) | $(55) | | Net cash used in financing activities | $(348) | $(347) | | Repurchases of common stock | $(298) | $(312) | [Non-GAAP Financial Measures](index=8&type=section&id=Non-GAAP%20Financial%20Measures) [Reconciliation of GAAP to Non-GAAP Data](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Data) For Q2 FY2026, non-GAAP operating income was $680 million (29.0% margin) and non-GAAP diluted EPS was $2.21, significantly higher than GAAP figures, primarily adjusted for share-based compensation Reconciliation of GAAP to Non-GAAP Operating Income (in millions) | Reconciliation (in millions) | Three Months Ended July 31, 2025 | | :--- | :--- | | **GAAP Operating Income** | **$248** | | Share-based compensation expense | $391 | | Amortization of acquisition-related intangible assets | $21 | | Other adjustments | $20 | | **Non-GAAP Operating Income** | **$680** | Reconciliation of GAAP to Non-GAAP Diluted Net Income per Share | Reconciliation | Three Months Ended July 31, 2025 | | :--- | :--- | | **GAAP Diluted Net Income per Share** | **$0.84** | | Share-based compensation expense | $1.45 | | Income tax effects | $(0.24) | | Other adjustments | $0.16 | | **Non-GAAP Diluted Net Income per Share** | **$2.21** | Free Cash Flow (in millions) | Free Cash Flow (in millions) | Three Months Ended July 31, 2025 | | :--- | :--- | | Net cash provided by operating activities | $616 | | Less: Capital expenditures | $(28) | | **Free cash flows** | **$588** | [Explanation of Non-GAAP Measures](index=9&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Management uses non-GAAP measures to evaluate financial performance by excluding items not reflective of ongoing operations, such as share-based compensation, to provide a clearer view of core business - Management uses non-GAAP financial measures for internal budgeting, forecasting, and evaluating the company's financial performance, believing it allows for more meaningful trend analysis[29](index=29&type=chunk) - Key items excluded from GAAP results to calculate non-GAAP measures include: - Share-based compensation expense - Employer payroll tax on employee stock transactions - Amortization of acquisition-related intangible assets - Acquisition-related costs - Restructuring costs - Gains and losses on strategic investments[28](index=28&type=chunk)[30](index=30&type=chunk)[34](index=34&type=chunk) [Other Information](index=3&type=section&id=Other%20Information) [About Workday](index=3&type=section&id=About%20Workday) Workday is an AI platform for managing people, money, and agents, serving over 11,000 organizations globally, including over 65% of the Fortune 500, with more than 75 million users under contract - Workday is an AI platform for managing people, money, and agents, built with AI at the core[10](index=10&type=chunk) - The company serves over **11,000 organizations worldwide**, including more than **65% of the Fortune 500**, and has over **75 million users** under contract[10](index=10&type=chunk)[12](index=12&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section cautions investors that the press release contains forward-looking statements, including financial guidance and acquisition plans, which are subject to various risks and uncertainties - The press release contains forward-looking statements regarding financial guidance (subscription revenues, non-GAAP operating margin) and the planned acquisition of Paradox[13](index=13&type=chunk) - These statements are subject to risks and uncertainties, including security breaches, economic volatility, competition, regulatory risks related to AI, and the ability to realize benefits from acquisitions[13](index=13&type=chunk)

Core Insights - Workday, Inc. reported total revenues of $2.348 billion for the fiscal second quarter of 2026, reflecting a year-over-year increase of 12.6% [1][6] - Subscription revenues reached $2.169 billion, marking a 14.0% increase compared to the same period last year [1][6] - The company has raised its fiscal 2026 subscription revenue guidance to $8.815 billion, indicating a growth of 14% [4] Financial Performance - Operating income for the second quarter was $248 million, representing 10.6% of total revenues, compared to $111 million (5.3% of revenues) in the same quarter of the previous year [6] - Non-GAAP operating income was $680 million, or 29.0% of revenues, up from $518 million (24.9% of revenues) year-over-year [6][21] - Diluted net income per share increased to $0.84 from $0.49 in the same quarter last year, while non-GAAP diluted net income per share rose to $2.21 from $1.75 [6][21] Subscription Backlog - The 12-month subscription revenue backlog stood at $7.91 billion, a 16.4% increase year-over-year [6] - Total subscription revenue backlog reached $25.37 billion, reflecting a 17.6% growth compared to the previous year [6] Cash Flow and Share Repurchase - Operating cash flows were $616 million, compared to $571 million in the same period last year [6] - Free cash flows amounted to $588 million, up from $516 million year-over-year [6] - The company repurchased approximately 1.2 million shares of Class A common stock for $299 million as part of its share repurchase program [6] Strategic Initiatives - Workday's growth is attributed to its AI and platform innovation, as well as international momentum and an expanding ecosystem [4] - The acquisition of Paradox is expected to contribute positively to the company's growth initiatives [4]

Core Insights - Workday has entered into a definitive agreement to acquire Paradox, enhancing its AI-powered talent acquisition capabilities for various types of workers [1][5] - The acquisition aims to streamline the hiring process, particularly for high-volume frontline industries, which employ nearly 3 billion workers globally [1][3] - Paradox's AI-driven candidate experience agent is designed to improve candidate engagement and accelerate hiring processes, achieving employee conversion rates over 70% and reducing time-to-hire to as low as three and a half days [4][6] Company Overview - Workday is an AI platform that manages people, money, and agents, serving over 11,000 organizations globally, including more than 65% of the Fortune 500 [8] - Paradox, launched in 2016, specializes in conversational recruiting through its AI assistant, Olivia, and has been recognized as one of the fastest-growing companies in HR Tech [9] Strategic Implications - The acquisition positions Workday as a leader in high-volume, frontline hiring, which encompasses 70% of jobs worldwide, and integrates a pioneering AI product team into its operations [6] - Workday's comprehensive platform will unify various capabilities, including AI-driven talent discovery and streamlined hiring processes, to enhance the overall talent journey for organizations [5][6] Expected Outcomes - The transaction is anticipated to close in the third quarter of Workday's fiscal year 2026, subject to regulatory approvals [7] - Workday's partnership with Paradox has already demonstrated significant improvements, such as reducing time-to-hire by 75% and doubling applicant flow for clients like Chipotle [6][7]

Workday, Inc. WDAY will release financial results for the second quarter after the closing bell on Thursday, Aug. 21. Analysts expect the Pleasanton, California-based company to report quarterly earnings at $2.12 per share, up from $1.75 per share in the year-ago period. Workday projects to report quarterly revenue at $2.34 billion, compared to $2.08 billion a year earlier, according to data from Benzinga Pro. On Aug. 14, Workday, announced it has acquired Flowise. Workday shares fell 1% to close at $227.49 ...

Core Insights - Workday, Inc. (WDAY) is expected to report second-quarter fiscal 2026 results on August 21, with a history of earnings surprises, including a 12.06% surprise in the last quarter [1][6] Financial Performance - Subscription Services revenues are estimated at $2.16 billion, reflecting a year-over-year growth of 13.5% [6] - Professional Services revenues are projected at $180 million [6] - The Zacks Consensus Estimate for total revenues in the July quarter is $2.34 billion, up from $2.09 billion in the same quarter last year [6] - The consensus estimate for adjusted earnings per share is $2.09, an increase from $1.75 reported in the prior year [6] Business Developments - Workday has launched AI-driven capabilities with new Illuminate Agents aimed at enhancing productivity in Human Resource Management and finance functions [3] - A new unified AI developer toolset has been introduced to empower developers in customizing and connecting AI applications on the Workday platform [4] - Seattle University has chosen to implement Workday HCM, Financial Management, and Workday Student solutions, which is expected to positively impact third-quarter earnings [5] Market Position - The company maintains a strong focus on AI integration across its product suite, which is a significant growth driver [9] - Workday is experiencing healthy traction in various sectors, including education, financial services, and retail, likely boosting net sales [9] Earnings Expectations - The Earnings ESP for Workday is currently at 0.00%, indicating no clear prediction for an earnings beat [7][8] - Workday holds a Zacks Rank of 3, suggesting a hold position [8]

Core Insights - Workday (NASDAQ: WDAY) is scheduled to report its earnings on August 21, 2025, with historical data indicating a 55% chance of a positive one-day return post-earnings, averaging a median gain of 9.1% [2][7] - The consensus for the upcoming quarter anticipates earnings per share of $2.11 on revenue of $2.34 billion, compared to $1.75 on $2.08 billion in the same quarter last year [3] - Workday's current market capitalization is $62 billion, with trailing twelve months revenue of $8.7 billion, an operating profit of $640 million, and net income of $487 million [4] Historical Performance - Over the last five years, Workday has had 20 earnings observations, resulting in 11 positive and 9 negative one-day moves, with a positive return occurring 55% of the time [7] - The likelihood of a positive return increases to 67% when focusing on the last three years, with a median of 9.1% for positive returns and -5.6% for negative returns [7] Trading Strategies - Event-driven traders can utilize historical patterns to inform their positions, assessing both pre-earnings and post-earnings strategies [6] - A correlation analysis between one-day, five-day, and twenty-one-day returns can help traders identify the best timing for trades following earnings announcements [8] Peer Influence - Workday's post-earnings reaction may be influenced by the earnings results of its peers, with pricing often adjusting before Workday's own report [9]

Core Insights - DailyPay has been named Workday's Strategic Partner for On-Demand Pay in the U.S. and Canada, enabling real-time access to earned wages for employees [1][5] - The integration of DailyPay's solution with Workday Human Capital Management and Payroll since 2023 enhances the employee experience by allowing access to earnings on their own schedule [2] - The partnership aims to alleviate financial stress for employees, particularly frontline and hourly workers, who often live paycheck-to-paycheck, with over half of U.S. workers reporting this situation [3][4] Company Overview - Workday is an AI platform that manages people, money, and agents, serving over 11,000 organizations globally, including more than 60% of the Fortune 500 [6] - DailyPay is a leader in On-Demand Pay, providing instant access to earned wages and financial wellness solutions, aimed at enhancing employee financial health [8]

Core Insights - Workday experienced a data breach where fraudsters accessed information from its third-party CRM platform, specifically targeting employees through social engineering tactics [1][2] - The accessed data included business contact information such as names, email addresses, and phone numbers, which could be exploited for further scams [3] - Workday has implemented additional safeguards to prevent similar incidents in the future and clarified that it will not request secure details via phone [3] Industry Context - Data breaches often stem from vulnerabilities in third-party service providers rather than the companies themselves, highlighting a significant risk in the digital supply chain [4] - Verizon's 2025 Data Breach Investigations Report indicated that the proportion of data breaches involving third parties rose to 30% in the year ending October 31, up from 15% the previous year [5] - The increasing frequency and severity of breaches linked to third-party vendors have become a widespread issue, posing serious risks to enterprises [6]

Core Viewpoint - Workday (WDAY) is expected to report quarterly earnings of $2.09 per share, a 19.4% increase year-over-year, with revenues projected at $2.34 billion, reflecting a 12.2% year-over-year growth [1]. Financial Projections - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating analysts have not revised their initial projections [2]. - The consensus estimate for 'Revenues- Subscription services' is $2.16 billion, suggesting a year-over-year increase of 13.5% [5]. - Analysts predict 'Revenues- Professional services' to be $180.17 million, indicating a decrease of 1% from the prior-year quarter [5]. - The 'Subscription Revenue Backlog' is expected to reach $26.48 billion, up from $21.58 billion reported in the same quarter last year [5]. Market Performance - Workday shares have decreased by 3% over the past month, contrasting with a 3.5% increase in the Zacks S&P 500 composite [6]. - Workday holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [6].

Core Insights - Workday has acquired Flowise, a low-code platform for building AI agents, enhancing its capabilities in HR and finance [1][3] - The acquisition aims to accelerate innovation and empower customers and partners to design and manage AI agents with increased speed and flexibility [1][7] Company Overview - Workday is an AI platform focused on managing people, money, and agents, utilized by over 11,000 organizations globally, including more than 60% of the Fortune 500 [4] - Flowise democratizes AI development, allowing users to create AI agents easily, supported by an open-source foundation and rapid adoption across various industries [2][6] Benefits of the Acquisition - Accelerated AI Innovation: Workday customers will have access to a user-friendly platform for quickly building and deploying AI agents tailored for HR and finance [7] - Customization and Control: Flowise provides developers with the ability to customize AI agents and workflows, ensuring scalability and control [7] - Responsible AI Development: The integration reinforces Workday's commitment to responsible AI through enterprise-grade observability and secure deployment options [7]