Workday Reports 13% Revenue Growth to $2.649 Billion in Q2 Fiscal 2027

Workday, Inc. reported significant financial performance for the second quarter of fiscal 2027, with total revenues reaching $2.649 billion, a 13% increase from $2.348 billion in the same period last year. Subscription services, which constitute the bulk of the company's revenue, grew by 14% to $2.471 billion, up from $2.169 billion. For the first half of the fiscal year, total revenues were $5.191 billion, also reflecting a 13% increase compared to $4.588 billion in the prior year. The company achieved a net income of $632 million for the quarter, translating to a diluted earnings per share of $2.57, compared to $228 million and $0.84 per share in the previous year.

In terms of operational metrics, Workday's subscription revenue backlog increased to $27.4 billion as of July 31, 2026, up from $25.4 billion a year earlier. The company reported a gross revenue retention rate of approximately 97%, indicating strong customer loyalty and satisfaction. Workday's headcount also grew by 7% year-over-year, reaching 20,896 employees, reflecting its ongoing investment in talent to support growth initiatives.

The company has been actively managing its costs, with total expenses rising to $2.336 billion for the quarter, an increase of 11% from $2.1 billion in the prior year. Notably, costs associated with subscription services rose by 18% to $436 million, driven by increased third-party infrastructure expenses and employee-related costs. Workday's operating income for the quarter was $313 million, representing an operating margin of 11.8%, an improvement from 10.6% in the same quarter last year.

Strategically, Workday has focused on expanding its product offerings and enhancing customer engagement. The company has also initiated a new share repurchase program, authorizing the buyback of up to $4 billion of its Class A common stock, which reflects its commitment to returning value to shareholders. Additionally, Workday is exploring further international expansion and strategic acquisitions to complement its organic growth.

Looking ahead, Workday anticipates continued revenue growth, although it acknowledges potential challenges from macroeconomic conditions, including inflation and fluctuating interest rates. The company remains committed to optimizing its resource allocation and investing in areas that will drive long-term growth, including AI solutions and expanding its partner ecosystem.