Live: Will Worday Outperform Q4 Earnings Estimates Tonight?

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My takeaway from the quarter

4:23 pm

Metric	Prior FY26	Post-Guide FY26	Shift
Subscription Rev	~$8.78B	$8.815B	Higher
Margin	~28.5%	29.0%	Higher

Takeaways

• Bullish: AI adoption now tied directly to revenue and backlog; raised guide confirms momentum.

• Balanced: Still exposed to macro deal cycle elongation, but backlog growth suggests resilience.

  

• Bearish: Heavy reliance on subscription renewals and expansions — any slowdown in large-enterprise IT spend could bite.

Key Operating Highlights

4:22 pm

KPI	Q2 Result	YoY	Context
Total Revenue	$2.35B	+12.6%	Slight beat; driven by subscription growth
Subscription Revenue	$2.17B	+14.0%	Core driver, consistent acceleration
Backlog (12-mo cRPO)	$7.91B	+16.4%	Demand signals remain strong
Non-GAAP Operating Margin	29.0%	+410bps	Clear operating leverage
FCF	$588M	+14%	Cash conversion intact

Guidance Update

4:21 pm

Metric	FY26 Prior	FY26 New	Direction
Subscription Revenue	~$8.78B (implied)	$8.815B (+14.2%)	Raised
Non-GAAP Operating Margin	~28.5%	29.0%	Raised
Q3 Subscription Revenue	N/A	$2.235B (+14.1%)	Positive cadence

More highlights

4:15 pm

Revenue Forecast

• Subscription revenues of $2.235 billion for Q3 2026, representing growth of 14.1%

Product Segments

• Subscription revenues of $2.169 billion, up 14.0% year-over-year

Rnd Pipeline

• Unveiled a new AI developer toolset and introduced the Workday Agent Partner Network

Performance Drivers

• AI and platform innovation, international momentum

Growth Initiatives

• Acquisition of Paradox and Flowise, expansion in India

Industry Tailwinds

• Growing demand for AI-driven enterprise solutions

 

Numbers are in and stock up 4.65%

4:07 pm

After-Hours Stock Move: WDAY +4.65%; INTU –5% (contrast shows market rewarding WDAY’s beat while punishing INTU despite solid results).

• Earnings vs. Estimates

Metric	Reported	Consensus	Beat/Miss
Q2 Revenue	$2.35B	$2.34B	Beat
Q2 EPS (Non-GAAP)	$2.21	$2.12	Beat
Subscription Revenue	$2.17B	~$2.16B	Beat
cRPO (12-mo backlog)	$7.91B	~$7.85B implied	Beat

Quick Take: Workday beat across revenue, EPS, and backlog, with subscription growth +14% and margins expanding to 29%. Importantly, management raised FY26 subscription revenue and margin guidance, driving the stock higher.

Earnings History

3:05 am

Four straight beats, but mixed stock reactions—three negative and one strong positive—raising the bar for tangible proof that AI/platform initiatives can drive H2 acceleration and sustained margin delivery.

Quarter	EPS Surprise	1-Day Move	7-Day Move	14-Day Move
Q1 FY2026 (May 22, 2025)	+10.95%	–12.52%	–7.70%	–7.86%
Q4 FY2025 (Feb 25, 2025)	+7.87%	+6.22%	–0.57%	–1.80%
Q3 FY2025 (Nov 26, 2024)	+7.39%	–6.21%	–1.40%	+2.89%
Q2 FY2025 (Aug 22, 2024)	+6.06%	+12.49%	+12.65%	+8.70%

Worday (NASDAQ:WDAY) reports after the close. The setup: macro remains choppy, but Q1 showed healthy backlog, strong margins, and accelerating AI adoption across the suite. This print matters because management is guiding to faster growth in the back half and is leaning into AI agents, platform extensibility, and the medium-enterprise motion to sustain double-digit top-line with disciplined margins. Confirmation on demand signals (cRPO, win rates) and AI monetization is key.

Estimates Snapshot

• Revenue (Q2 FY26): $2.34B
• EPS (Q2 FY26, Normalized): $2.12
• FY2026 Revenue: $9.51B
• FY2026 EPS: $8.76

Key Areas to Watch

• AI agents monetization & attach – New ACV across AI products more than doubled YoY; ~25% of expansions included an AI SKU. Investors will look for contribution to cRPO and evidence that agents become needle-movers in H2.

• Platform leverage: ExtendPro & marketplace – ExtendPro more than doubled YoY; partner ecosystem expanding with 25 new marketplace apps in Q1 and increasing partner-sourced pipeline. Expect questions on ecosystem revenue and pull-through.

• Demand indicators & guidance cadence – Q1 cRPO up ~15.6%; FY26 subscription revenue guide reiterated with an expected H2 acceleration; Q2 cRPO guide +15–16% (incl. ~1-pt tenant impact). Update on billings vs. backlog will be scrutinized.

• WorkdayGO (mid-market) traction – Launch targeting 30–60-day implementations for emerging/medium enterprise; watch pipeline build and time-to-value as a growth vector.

• Margin discipline & capital return – FY26 non-GAAP margin outlook ~28.5% with continued AI and go-to-market investment; incremental buyback authorization underscores balance in capital allocation.

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