Key Takeaways for Workday Stock as of August 2026
- Double-Digit Beat: Revenue hit $2.649 billion, up 12.82% YoY and 0.52% above estimates, while adjusted EPS of $2.75 beat by 5.27% and climbed 24.43% YoY.
- Margin Guide Raised: Workday lifted its FY27 non-GAAP operating margin outlook to 31% and guided Q3 subscription revenue to ~$2.515B, ~12% growth.
- AI ARR Triples: AI annual recurring revenue reached ~$600M, up over 200% YoY.
- No Replacement in Sight: CEO Aneel Bhusri said he hasn’t met a single customer building or buying an alternative to Workday, calling the platform’s deterministic rails a durable moat against internal AI builds.
Workday’s AI ARR is compounding at triple-digit rates while FY28 guidance stays conservative. See the model behind WDAY stock on TIKR for free →
Workday Stock Rides a $600 Million AI Ramp Past Estimates in Q2
Workday (WDAY) closed its fiscal second quarter on July 31 with revenue of $2.649 billion, up 12.82% year over year and 0.52% ahead of estimates. Adjusted earnings per share reached $2.75, beating estimates by 5.27% and climbing 24.43% from a year ago, while non-GAAP operating margin expanded 102 basis points to 31.1%. Subscription revenue, the core of Workday stock’s growth story, rose 14% to $2.471 billion.
That top-line strength increasingly carries an AI signature. Annual recurring revenue tied to Workday’s AI products neared $600 million in the quarter, up more than 200% year over year and 20% sequentially, with AI products alone generating over $100 million of new annual contract value, more than 25% of everything closed in the period. More than 5,500 customers now run at least one organic Workday agent, up 35% from the prior quarter.
Executives point to the same trust to explain why so few customers are looking elsewhere. CEO Aneel Bhusri addressed that directly on the Q2 earnings call: “I hadn’t met a single customer looking to replace Workday with something they’re building internally or buying from a start-up. A quarter later, that hasn’t changed.” He credited the retention to what he calls deterministic rails, agents that operate strictly inside a company’s existing permissions and business processes.
Backlog data backs that claim. Twelve-month subscription backlog, or cRPO, climbed 14.2% to $9.03 billion, and gross revenue retention held at 97%, with existing customers driving roughly 60% of subscription growth through expansion alone. Total subscription backlog reached $27.4 billion, up 8%, though the growth rate cooled against a tougher mix of net new bookings.
Management raised its FY27 non-GAAP operating margin guide to 31% and lifted full-year subscription revenue guidance to a range of $9.94 billion to $9.95 billion, 13% growth. Yet the early look at fiscal 2028 called for subscription growth of 11%, a deceleration from this year’s pace. CFO Zane Rowe was careful to note that figure excludes upside from Sana Enterprise, Data Cloud and the AI agent portfolio, all of which are still ramping and only partly reflected in the current guide.
Backlog just hit $9.03 billion and AI ARR neared $600 million. Track WDAY’s backlog and retention trends on TIKR for free →
TIKR Values Workday Stock at $332, Pricing In an AI-Driven Re-Rating
TIKR’s mid-case model values Workday stock at $332 by January 2031, implying a 71% total return from the current price of $194, or 13% annualized over 4.4 years.
A path to more than 70% total return over four years places Workday stock among the more compelling compounding stories in enterprise software, where double-digit annualized returns from a mega-cap platform are rare.
The target assumes the AI ramp evident in this quarter’s $600 million in AI ARR and 5,500-customer agent adoption continues to convert into subscription growth and margin expansion. With cRPO already climbing 14.2% and operating margin guidance raised to 31%, Workday stock has the underlying momentum to close that gap.
TIKR’s model puts WDAY stock’s target at $332 with 71% total return. Explore the full valuation model on TIKR for free →
Should You Invest in Workday, Inc.?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
