Workday pops as Q2 results, guidance top expectations

[Workday Headquarters Building]
hapabapa

Workday (NASDAQ:WDAY [https://seekingalpha.com/symbol/WDAY]) shares rose 4.5% in extended-trading on Wednesday after the back-office software provider reported fiscal second-quarter results and guidance that topped expectations.

For the period ending July 31, Workday said it earned an adjusted $2.21 per share as revenue rose 13% year-over-year to $2.35B. Included in that was $2.17B from subscriptions and $179M from professional services. Workday also ended the period with a 12-month subscription backlog of $25.37B, up 18% year-over-year.

Analysts were expecting adjusted earnings of $2.11 per share on $2.34B in revenue.

"Workday delivered another solid quarter, driven by our AI and platform innovation, international momentum, and an ecosystem that continues to grow alongside us," said Carl Eschenbach, CEO, Workday in a statement [https://seekingalpha.com/pr/20208659-workday-announces-fiscal-2026-second-quarter-financial-results]. "Customers are choosing Workday because we help them unlock value today and prepare for what's next—whether that's navigating AI transformation, streamlining operations, or creating more meaningful work for their people."

Looking to the third-quarter of fiscal 2026, Workday expects subscription revenue of $2.24B, in-line with the estimate. For the full-year, subscription revenue is now expected to be $8.82B, a touch above Wall Street's forecast of $8.8B, due in part to its acquisition of artificial intelligence company Paradox [https://seekingalpha.com/pr/20208657-workday-signs-definitive-agreement-to-acquire-paradox-the-ai-company-redefining-the-frontline]. Adjusted operating margin is forecast to be 29%, above the company's prior view of 28% and Wall Street's view of 28.5%.

The company is slated to hold a conference call at 4:30 p.m. EST to discuss the results.

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