Workday Reports Strong Q2 2026 Profit and Raises Full-Year Outlook

Workday (WDAY.US) reported a solid fiscal 2026 second quarter, with total revenues reaching $2.348 billion, marking a 12.6% increase from the prior year. Non-GAAP diluted net income per share was $2.21, significantly exceeding the analyst estimate of $2.09 per share, and up from $1.75 in the same period last year. These results highlight the company's strong performance in Q2 2026.

Strong Subscription Revenue Growth and Profitability

Subscription revenues were a key driver, growing 14.0% year-over-year to $2.169 billion. Non-GAAP operating income for the quarter stood at $680 million, representing 29.0% of revenues, an increase from 24.9% in the prior year. This strong profitability was supported by an increase in 12-month subscription revenue backlog to $7.91 billion, up 16.4% year-over-year.

Strategic Business Highlights and Acquisitions

Workday made significant strategic moves in the quarter, including welcoming new customers like Banamex and Carrefour, and expanding relationships with existing clients such as Google. The company also announced its definitive agreement to acquire Paradox and acquired Flowise, enhancing its AI capabilities. These acquisitions and customer expansions demonstrate Workday's focus on strengthening its platform and market presence.

Management Raises Fiscal 2026 Outlook

Building on its strong first-half momentum, Workday's management has raised its fiscal 2026 subscription revenue guidance to $8.815 billion, representing 14% growth. The non-GAAP operating margin guidance for fiscal 2026 has also been increased to approximately 29%. This positive outlook signals confidence in continued growth and operational efficiency for the remainder of the fiscal year.