Workday Q3 subscription growth outlook trails Q2 pace despite raised full-year view

Workday

27/08/2026 21:21

Overview
US enterprise AI platform's fiscal Q2 revenue grew 12.8% yr/yr, slightly beating analyst expectations
Adjusted EPS for fiscal Q2 beat analyst expectations
Company repurchased 9.8 mln shares for $1.3 bln, authorized additional $4.0 bln buyback

Outlook
Q3 subscription revenue growth guided at 12%, below Q2's actual 13.9% rate
Company expects Q3 non-GAAP operating margin of 30.0%
Workday raises full-year non-GAAP operating margin outlook to 31.0%
Company expects full-year subscription revenue between $9.940 bln and $9.950 bln, up 13%

Result Drivers
AI-DRIVEN GROWTH - Co said AI drove more than 25% of new annual contract value and fueled customer expansion
CUSTOMER ADOPTION - Co noted continued momentum across its platform with increased adoption of AI agents and customer expansion
NEW AI PRODUCTS - Co launched new AI-powered features and agents, including Developer Agent, Agent Passport, and Adaptive Decision Intelligence

Company press release: ID:nPn8tj1lYa

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Revenue
Slight Beat*
$2.65 bln
$2.64 bln (35 Analysts)
Q2 Adjusted EPS
Beat
$2.75
$2.61 (36 Analysts)
Q2 EPS
 
$2.57
 
Q2 Adjusted Operating income
Beat
$824 mln
$792.44 mln (33 Analysts)
Q2 Operating income
 
$313 mln
 
Q2 Subscription Revenue
 
$2.47 bln
 
*Applies to a deviation of less than 1%; not applicable for per-share numbers.

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)