EX-99.1 2 wday-07312026x991.htm EX-99.1 Document Exhibit 99.1 Workday Announces Fiscal 2027 Second Quarter Financial Results Fiscal Second Quarter Total Revenues of $2.649 Billion, Up 12.8% Year-Over-Year Subscription Revenues of $2.471 Billion, Up 13.9% Year-Over-Year PLEASANTON, Calif., August 27, 2026 – Workday, Inc. (NASDAQ: WDAY), the enterprise AI platform for HR, finance, and IT, today announced results for the fiscal 2027 second quarter ended July 31, 2026. Fiscal 2027 Second Quarter Results • Total revenues were $2.649 billion, an increase of 12.8% from the second quarter of fiscal 2026. Subscription revenues were $2.471 billion, an increase of 13.9% from the same period last year. • Operating income was $313 million, or 11.8% of revenues, compared to an operating income of $248 million, or 10.6% of revenues, in the same period last year . Non-GAAP operating income for the second quarter was $824 million, or 31.1% of revenues, compared to a non-GAAP operating income of $680 million, or 29.0% of revenues, in the same period last year. 1 • Diluted net income per share was $2.57, compared to diluted net income per share of $0.84 in the same period last year. Included within diluted net income per share for the current quarter is a tax benefit of $1.52 per share related to an intra-entity transfer of certain intellectual property rights as part of an internal legal entity restructuring. Non-GAAP diluted net income per share was $2.75, compared to non-GAAP diluted net income per share of $2.21 in the same period last year. 1 • 12-month subscription revenue backlog was $9.034 billion, up 14.2% from the same period last year. Total subscription revenue backlog was $27.403 billion, increasing 8.0% year-over-year. • Operating cash flows were $520 million compared to $616 million in the same period last year. Free cash flows were $460 million compared to $588 million in the same period last year. 1 • Workday repurchased approximately 9.8 million shares of Class A common stock for $1.3 billion as part of its share repurchase programs. • Cash, cash equivalents, and marketable securities were $3.403 billion as of July 31, 2026. 1 See the section titled “About Non-GAAP Financial Measures” in the accompanying financial tables for further details. Comments on the News “We had a strong Q2, with AI driving more than 25% of our new ACV and more than 5,500 customers now using at least one of our organic agents,” said Aneel Bhusri, co-founder, CEO, and chair, Workday. “Because of Workday’s deterministic rails, customers can trust our agents with the work that matters, and you're seeing that in the numbers.” “Our Q2 results reflect continued momentum across our platform, with AI emerging as a strategic driver of customer expansion,” said Zane Rowe, CFO, Workday. “We now expect fiscal 2027 subscription revenue of $9.940 billion to $9.950 billion, growth of 13%, while increasing our fiscal 2027 non-GAAP operating margin guidance to 31.0%. We continue to prioritize investment in our agentic AI roadmap and our platform opportunity while driving operational efficiencies as we scale.” Recent Business Highlights • Workday welcomed new customers including BWX Technologies, Inc., Guess, KPMG LLP, and S-E-B, and expanded existing relationships with Caterpillar, Delivery Hero (Talibat), Lithia & Driveway, Merck & Co., Inc., and Novartis. • Workday announced that its Board of Directors authorized the open-ended repurchase of up to an additional $4.0 billion of its outstanding shares of Class A common stock. • More than 5,500 customers now use one or more of Workday’s organic agents, up more than 35% from last quarter. • Workday unveiled Developer Agent, which lets developers build AI apps and agents on Workday using natural language in agentic tools they already use, and Agent Passport, which tests and verifies every AI agent, Workday-built or third-party, before it goes into production, and continuously monitors it after. • Workday Learning, powered by Sana, which combines Workday’s trusted people and skills data with Sana’s AI-native learning experience, became generally available. • Workday introduced Adaptive Decision Intelligence, a new AI capability that lets finance and operations teams ask questions in natural language, model scenarios in minutes, and act on results right away. • Workday’s Financial Audit Agent, which is designed to significantly cut the time to build audit evidence packages, became generally available. • Workday announced a new research arm, which publishes peer-reviewed research tackling some of the hardest technical challenges in enterprise AI, and released a first wave of findings on making enterprise AI agents more reliable, trustworthy, and efficient. • Workday announced a new partnership with Amazon Web Services (AWS), where Workday Data Cloud will integrate with AWS to provide bi-directional, zero-copy access between AWS data and AI services, and Workday's HR and finance data. • Workday expanded its strategic partnership with Google Cloud to bring Workday agents directly into Gemini Enterprise and create a single, trusted foundation where agents from Workday, Google Cloud, and third-parties work together on real HR and finance workflows. • Workday was named a Leader in the 2026 Gartner® Magic Quadrant™ for Talent Acquisition (Recruiting) Suites. 1 • Workday VNDLY was named a Leader in Everest Group’s Vendor Management System PEAK Matrix® Assessment 2026 for the sixth consecutive year. 1 Gartner, Magic Quadrant for Talent Acquisition (Recruiting) Suites, Rania Stewart, Jackie Watrous, Hiten Sheth, 8 May 2026 Financial Outlook Workday is providing guidance for the fiscal 2027 third quarter ending October 31, 2026 as follows: • Subscription revenues of $2.515 billion, representing growth of 12% • Non-GAAP operating margin of 30.0% 1 Workday is updating guidance for the fiscal 2027 full year ending January 31, 2027 as follows: • Subscription revenues of $9.940 billion to $9.950 billion, representing growth of 13% • Non-GAAP operating margin of 31.0% 1 1 The Company has not provided a reconciliation of its forward outlook for non-GAAP operating margin with its forward-looking GAAP operating margin in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company is unable to predict with reasonable certainty the amount and timing of adjustments that are used to calculate this non-GAAP financial measure, particularly related to stock-based compensation and its related tax effects, acquisition-related costs, and restructuring costs. Earnings Call Details Workday plans to host a conference call today to review its fiscal 2027 second quarter financial results and to discuss its financial outlook. The call is scheduled to begin at 1:30 p.m. PT/4:30 p.m. ET and can be accessed via webcast. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 90 days. Workday uses its blog.workday.com website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. About Workday Workday operates at the heart of the enterprise – HR, finance, and IT – where the margin for error is effectively zero. By tightly coupling AI with the context, guardrails, and trusted processes that run the business, Workday goes beyond AI that assists with work to agents that are capable of driving measurable outcomes. More than 11,500 organizations worldwide, including more than 65% of the Fortune 500, trust Workday to deliver. For more information about Workday, visit workday.com . © 2026 Workday, Inc. All rights reserved. Workday and the Workday logo are trademarks of Workday, Inc. All other brand and product names are trademarks or registered trademarks of their respective holders. Forward-Looking Statements This press release contains forward-looking statements including, among other things, statements regarding Workday’s third quarter and full year fiscal 2027 subscription revenues and non-GAAP operating margin, momentum, growth, innovation, and investments. These forward-looking statements are based only on currently available information and our current beliefs, expectations, and assumptions. Because forward-looking statements relate to the future, they are subject to risks, uncertainties, assumptions, and changes in circumstances that are difficult to predict and many of which are outside of our control. If the risks materialize, assumptions prove incorrect, or we experience unexpected changes in circumstances, actual results could differ materially from the results implied by these forward-looking statements, and therefore you should not rely on any forward-looking statements. Risks include, but are not limited to: (i) breaches in our security measures or those of our third-party providers, unauthorized access to our customers’ or other users’ personal data, or disruptions in our data center or computing infrastructure operations; (ii) service outages, delays in the deployment of our applications, and the failure of our applications to perform properly; (iii) competitive factors, including pricing pressures, industry consolidation, entry of new competitors and new applications, advancements in technology, and marketing initiatives by our competitors; (iv) privacy concerns and evolving domestic or foreign laws and regulations; (v) any loss of key employees or the inability to attract, train, and retain highly skilled employees; (vi) our reliance on our network of partners to drive additional growth of our revenues; (vii) the regulatory, economic, and political risks associated with our domestic and international operations; (viii) our ability to realize the expected business or financial benefits of any acquisitions of or investments in companies; (ix) adoption of our applications and services by customers and individuals, including any new features, enhancements, and modifications, as well as our customers’ and users’ satisfaction with the deployment, training, and support services they receive; (x) the regulatory risks related to new and evolving technologies such as AI and our ability to realize a return on our development efforts; (xi) delays or reductions in information technology spending; (xii) adverse litigation results; (xiii) changes in sales, which may not be immediately reflected in our results due to our subscription model; and (xiv) the impact of continuing global economic and geopolitical volatility and conflicts on our business, as well as on our customers, prospects, partners, and service providers. Further information on these and additional risks that could affect Workday’s results is included in our filings with the Securities and Exchange Commission (“SEC”), including our most recent report on Form 10-Q or Form 10-K and other reports that we have filed and will file with the SEC from time to time, which could cause actual results to vary from expectations. Workday assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release, except as required by law. Any unreleased services, features, or functions referenced in this document, our website, or other press releases or public statements that are not currently available are subject to change at Workday’s discretion and may not be delivered as planned or at all. Customers who purchase Workday services should make their purchase decisions based upon services, features, and functions that are currently available. Workday, Inc. Condensed Consolidated Balance Sheets (in millions) (unaudited) July 31, 2026 January 31, 2026 Assets Current assets: Cash and cash equivalents $ 661  $ 1,501  Marketable securities 2,742  3,942  Trade and other receivables, net 1,895  2,332  Deferred costs 320  306  Prepaid expenses and other current assets 351  348  Total current assets 5,969  8,429  Property and equipment, net 1,126  1,093  Operating lease right-of-use assets 680  719  Deferred costs, noncurrent 654  634  Acquisition-related intangible assets, net 611  681  Deferred tax assets 1,129  829  Goodwill 5,227  5,229  Other assets 461  460  Total assets $ 15,857  $ 18,074  Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 102  $ 142  Accrued expenses and other current liabilities 462  454  Accrued compensation 493  642  Unearned revenue 4,387  5,010  Operating lease liabilities 130  130  Debt, current 999  0  Total current liabilities 6,573  6,378  Debt, noncurrent 1,990  2,987  Unearned revenue, noncurrent 72  71  Operating lease liabilities, noncurrent 653  704  Other liabilities 109  129  Total liabilities 9,397  10,269  Stockholders’ equity: Common stock 0  0  Additional paid-in capital 13,365  12,673  Treasury stock (7,151) (4,220) Accumulated other comprehensive loss (96) (136) Retained earnings (accumulated deficit) 342  (512) Total stockholders’ equity 6,460  7,805  Total liabilities and stockholders’ equity $ 15,857  $ 18,074  Workday, Inc. Condensed Consolidated Statements of Operations (in millions, except number of shares which are reflected in thousands and per share data) (unaudited) Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 Revenues: Subscription services $ 2,471  $ 2,169  $ 4,826  $ 4,228  Professional services 178  179  365  360  Total revenues 2,649  2,348  5,191  4,588  Costs and expenses (1) : Costs of subscription services 436  370  848  720  Costs of professional services 216  212  408  399  Product development 747  660  1,451  1,322  Sales and marketing 706  641  1,386  1,264  General and administrative 231  216  447  429  Restructuring 0  1  0  167  Total costs and expenses 2,336  2,100  4,540  4,301  Operating income 313  248  651  287  Other income, net 14  56  31  120  Income before provision for (benefit from) income taxes 327  304  682  407  Provision for (benefit from) income taxes (305) 76  (172) 111  Net income $ 632  $ 228  $ 854  $ 296  Net income per share, basic $ 2.58  $ 0.86  $ 3.42  $ 1.11  Net income per share, diluted $ 2.57  $ 0.84  $ 3.41  $ 1.09  Weighted-average shares used to compute net income per share, basic 245,181  266,777  249,464  266,649  Weighted-average shares used to compute net income per share, diluted 246,307  270,180  250,238  270,240       (1) Costs and expenses include share-based compensation expense as follows: Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 Costs of subscription services $ 44  $ 39  $ 80  $ 81  Costs of professional services 30  28  56  58  Product development 217  170  401  353  Sales and marketing 93  84  183  177  General and administrative 78  70  151  140  Restructuring 0  0  0  42  Total share-based compensation expense $ 462  $ 391  $ 871  $ 851  Workday, Inc. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 Cash flows from operating activities: Net income $ 632  $ 228  $ 854  $ 296  Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 92  81  183  165  Share-based compensation expense 462  391  871  851  Amortization of deferred costs 83  72  162  140  Non-cash lease expense 32  28  64  54  Net losses on investments (3) 2  5  2  Accretion of discounts on marketable debt securities, net (7) (18) (15) (38) Deferred income taxes (386) 66  (293) 84  Asset impairments 0  0  0  34  Other (6) 0  (2) 13  Changes in operating assets and liabilities: Trade and other receivables, net (326) (264) 421  337  Deferred costs (131) (100) (195) (152) Prepaid expenses and other assets 20  54  (11) 15  Accounts payable (12) 3  (13) 0  Accrued expenses and other liabilities 6  32  (194) (99) Unearned revenue 64  41  (622) (629) Net cash provided by operating activities 520  616  1,215  1,073  Cash flows from investing activities: Purchases of marketable securities (14) (866) (215) (2,211) Maturities of marketable securities 305  793  536  1,515  Sales of marketable securities 729  125  824  265  Capital expenditures (60) (28) (139) (64) Purchases of non-marketable equity and other investments (13) (11) (13) (15) Sales of non-marketable equity and other investments 0  0  42  0  Other 0  0  8  0  Net cash provided by (used in) investing activities 947  13  1,043  (510) Cash flows from financing activities: Repurchases of common stock (1,337) (298) (2,924) (589) Proceeds from issuance of common stock from employee equity plans 98  111  98  111  Taxes paid related to net share settlement of equity awards (128) (161) (273) (372) Net cash used in financing activities (1,367) (348) (3,099) (850) Effect of exchange rate changes 0  0  0  2  Net increase (decrease) in cash, cash equivalents, and restricted cash 100  281  (841) (285) Cash, cash equivalents, and restricted cash at the beginning of period 568  988  1,509  1,554  Cash, cash equivalents, and restricted cash at the end of period $ 668  $ 1,269  $ 668  $ 1,269  Workday, Inc. Reconciliations of GAAP to Non-GAAP Data Reconciliations of Workday’s GAAP to non-GAAP operating results are included in the following tables (in millions, except number of shares which are reflected in thousands, percentages, and per share data). See the section titled “About Non-GAAP Financial Measures” below for further details. Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 Non-GAAP operating income Operating income $ 313  $ 248  $ 651  $ 287  Share-based compensation expense (1) 462  391  871  809  Employer payroll tax-related items on employee stock transactions 13  12  32  39  Amortization of acquisition-related intangible assets 34  21  70  42  Acquisition-related costs 2  7  9  14  Restructuring costs 0  1  0  167  Non-GAAP operating income $ 824  $ 680  $ 1,633  $ 1,358  Non-GAAP operating margin (2) Operating margin 11.8  % 10.6  % 12.5  % 6.3  % Share-based compensation expense (1) 17.4  % 16.7  % 16.8  % 17.6  % Employer payroll tax-related items on employee stock transactions 0.5  % 0.5  % 0.6  % 0.8  % Amortization of acquisition-related intangible assets 1.3  % 0.9  % 1.4  % 0.9  % Acquisition-related costs 0.1  % 0.3  % 0.2  % 0.3  % Restructuring costs 0.0  % 0.0  % 0.0  % 3.7  % Non-GAAP operating margin 31.1  % 29.0  % 31.5  % 29.6  % Non-GAAP net income Net income $ 632  $ 228  $ 854  $ 296  Share-based compensation expense (1) 462  391  871  809  Employer payroll tax-related items on employee stock transactions 13  12  32  39  Amortization of acquisition-related intangible assets 34  21  70  42  Acquisition-related costs 2  7  9  14  Restructuring costs 0  1  0  167  Net (gains) losses on strategic investments (2) 2  7  3  Income tax effects (3) (464) (64) (489) (170) Non-GAAP net income $ 677  $ 598  $ 1,354  $ 1,200  Non-GAAP diluted net income per share (2)(4) Diluted net income per share $ 2.57  $ 0.84  $ 3.41  $ 1.09  Share-based compensation expense (1) 1.88  1.45  3.48  2.99  Employer payroll tax-related items on employee stock transactions 0.05  0.04  0.13  0.14  Amortization of acquisition-related intangible assets 0.14  0.08  0.28  0.15  Acquisition-related costs 0.01  0.03  0.04  0.05  Restructuring costs 0.00  0.00  0.00  0.62  Net (gains) losses on strategic investments (0.01) 0.01  0.03  0.01  Income tax effects (3) (1.89) (0.24) (1.96) (0.61) Non-GAAP diluted net income per share $ 2.75  $ 2.21  $ 5.41  $ 4.44  (1) Share-based compensation expense in the GAAP to non-GAAP reconciliation tables above excludes share-based compensation associated with restructuring activities of $42 million for the six months ended July 31, 2025. These expenses are included in Restructuring costs. There was no comparable activity for the six months ended July 31, 2026. (2) Operating margin and diluted net income per share are calculated using unrounded data. (3) In