Workday, Inc. · WDAY · FY2027 Q2 · Calendar Q3 2026

Workday Q2 FY27: AI ARR Reaches $600 Million as Margin Guidance Rises

Workday’s Q2 results support the case that AI adoption is becoming a meaningful growth driver, but the longer-term thesis still depends on converting usage into revenue while protecting margins.

Reported After market closeNASDAQTechnology $50.78B market cap
100quality score

Earnings scorecard

Reported versus consensus
Reported EPS $2.75 Consensus $2.61
EPS surprise +5.4% Reported versus consensus
Reported revenue $2.65B Consensus $2.64B
Revenue surprise +0.5% Reported versus consensus

Market reaction

event-close to next-session close
Stock move +5.8% Event window
SPY move -0.2% Same window
Abnormal move +6.0% Stock minus SPY
Volume 1.8× Versus trailing sessions
Subsequent drift -5.3% Up to 20 sessions
WDAYSPY benchmark

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Why did WDAY rise 5.8% after beating EPS estimates in FY2027 Q2?What changed in WDAY's guidance and outlook in FY2027 Q2?Give me the bull and bear case for WDAY after FY2027 Q2 earnings.

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Transcript intelligence

What changed

Compared with the prior quarter, AI-related ARR increased to $600 million, more than 5,500 customers used an organic AI agent, and FY27 non-GAAP operating-margin guidance rose to 31%. Management also emphasized flex-credit consumption pricing, whose revenue contribution may lag usage by 6–12 months.

Guidance delta

Management raised FY27 non-GAAP operating-margin guidance to 31%; subscription-revenue guidance was not specified in the supplied analysis.

Key takeaways

  • Subscription revenue grew 14% to $2.407 billion, while gross revenue retention remained 97%.
  • AI-related ARR reached $600 million, up more than 200% year over year.
  • AI products drove more than $100 million of new ACV in the quarter and roughly one-third of new ACV in EMEA.
  • Flex-credit adoption is underway, but management expects a 6–12 month lag before its revenue impact.

Management priorities

  • Make Sana Enterprise the default home screen at Workday Rising.
  • Scale Developer, Deployment, and Adoption Agents while expanding low-code capabilities.
  • Advance Data Cloud Pro, Adaptive Decision Intelligence, and AI-security partnerships.

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Earnings History

Estimate Beat Miss Match
WDAY EPS earnings history estimate and actual scatter chart 9 reported fiscal quarters and 2 future estimate-only quarters. Q4 '24 estimate $1.47 Q4 '24 actual $1.57, beat Q1 '25 estimate $1.60 Q1 '25 actual $1.74, beat Q2 '25 estimate $1.65 Q2 '25 actual $1.75, beat Q2 '26 estimate $2.11 Q2 '26 actual $2.21, beat Q3 '26 estimate $2.17 Q3 '26 actual $2.32, beat Q4 '26 estimate $2.32 Q4 '26 actual $2.47, beat Q1 '27 estimate $2.51 Q1 '27 actual $2.66, beat Q2 '27 estimate $2.61 Q2 '27 actual $2.75, beat Q3 '27 estimate $2.74 Q4 '27 estimate $2.94
Show 1 more >

Analyst Consensus ?

ConsensusHold78 ratings
Bullish3950.0%
Neutral3646.2%
Bearish33.8%

1 unmapped firm rating excluded from the percentages.

Analyst 52W Price Targets

$193.87Current
$125Low
$224.26Average
$320High

Latest persisted target per named analyst; persisted current price from FN2's market snapshot as of Sep 21, 2026. Not an FN2 forecast.

Firm-level rating actions

FMP grade actions identify the grading firm, not a named analyst.

FirmRatingPrior ratingActionDate
Goldman Sachs Neutral NeutralMaintainAug 31, 2026
Wells Fargo Overweight OverweightMaintainAug 28, 2026
TD Cowen Hold HoldMaintainAug 28, 2026
Stifel Hold HoldMaintainAug 28, 2026
RBC Capital Outperform OutperformMaintainAug 28, 2026
Show 74 more rating actions

Named analyst price targets

Upside is calculated against the persisted current price $193.87. FMP does not supply a rating on these named-analyst rows.

FirmAnalyst52W targetPrice when postedUpsideDate
Goldman SachsAnalyst unavailable$164$198.08 -15.4%Aug 31, 2026
JefferiesBrent Thill$220$194.31 +13.5%Aug 28, 2026
D.A. DavidsonAnalyst unavailable$190$194.37 -2.0%Aug 28, 2026
BMO CapitalAnalyst unavailable$230$195.42 +18.6%Aug 28, 2026
Cantor FitzgeraldAnalyst unavailable$205$194.7 +5.7%Aug 28, 2026
See 167 more

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Company context

Snapshot as of publication

Workday, Inc. delivers comprehensive, cloud-hosted enterprise software solutions to clients worldwide. These platforms empower organizations to strategize, operate, examine performance, integrate with existing systems, and oversee their overall business functions. A core offering includes a robust suite of financial management tools. These are designed to assist Chief Financial Officers (CFOs) in meticulously maintaining general ledger accounting data, streamlining financial workflows, gaining instant insights into financial and operational metrics, optimizing consolidation, accelerating month-end closes, bolstering internal controls and audit readiness, and ensuring uniformity throughout their financial activities. Workday also provides cloud-based spend management solutions. These facilitate smoother supplier engagement and contract administration, optimize the handling of indirect expenditures, and enable the effective execution of sourcing initiatives, including requests for proposals (RFPs).…

Historical context

All WDAY earnings
+5.2%FY2027 Q1 · Calendar Q2 2026

Technology peers this season

Latest reports in the same sector
CompanyQuarterEPS surpriseMarket moveHeadline
ADBE Adobe Inc. FY2026 Q3 · Calendar Q3 2026 +0.8% +1.4% Adobe raises FY26 outlook as AI strategy broadens
ORCL Oracle Corporation FY2027 Q1 · Calendar Q3 2026 +10.3% -1.7% Oracle raises FY27 outlook as AI demand accelerates cloud growth
SAIL SailPoint, Inc. FY2027 Q2 · Calendar Q3 2026 +13.8% -1.2% SailPoint pairs 25% ARR growth with accelerating AI-driven adoption
CIEN Ciena Corporation FY2026 Q3 · Calendar Q3 2026 +22.0% -10.4% Ciena raises outlook as AI networking demand lifts backlog
DOCU DocuSign, Inc. FY2027 Q2 · Calendar Q3 2026 +6.4% +3.7% DocuSign Q2 FY27: IAM momentum supports a raised outlook
IOT Samsara Inc. FY2027 Q2 · Calendar Q3 2026 +25.0% +3.7% Samsara: AI adoption expands as FY27 guidance holds

Latest beats and misses

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Sources

  1. Earnings call transcript and parsed analysis · 2026-08-28T13:22:21.565740+00:00
  2. FN2 earnings calendar · 2026-09-21T01:23:13.071796+00:00
  3. Polygon adjusted daily market bars · 2026-09-21T03:20:47.430233+00:00
  4. Financial Modeling Prep analyst price-target consensus and quote snapshot · 2026-09-21T03:20:47.427433+00:00

Methodology

Reported and consensus figures come from FN2's earnings event records. Market reaction and volume are calculated from daily adjusted bars around the event; abnormal move subtracts the SPY move over the same window.

Analyst target low, average, and high values are derived at request time from each named analyst's latest persisted FMP target. The current-price marker comes from FN2's persisted market snapshot. They are sell-side estimates, not an FN2 valuation or recommendation.

Transcript intelligence is a structured synthesis of the current and prior earnings-call analyses. Missing values stay missing and are never estimated.

By FN2 Research · Updated . For educational purposes only; not investment advice.