Workday (WDAY) Q2 FY2027 Earnings Call: AI ARR Nears $600 Million
Source Tradingkey
Key Takeaways
- Workday reported fiscal Q2 2027 revenue of $2.649 billion, up 13%, including subscription revenue of $2.471 billion, up 14%.
- AI products generated more than $100 million in new ACV and represented over 25% of total new ACV. AI SKU ARR approached $600 million, rising more than 200% year over year and over 20% sequentially.
- More than 5,500 customers were using at least one organic Workday agent, up more than 35% from the prior quarter. Over half of net-new customer wins included one or more AI solutions.
- Current remaining performance obligations, or cRPO, reached $9.03 billion, up 14.2%. Total subscription revenue backlog increased 8% to $27.4 billion.
- Non-GAAP operating margin was 31.1%. Workday raised its fiscal 2027 non-GAAP operating margin guidance to 31% while maintaining its operating cash flow outlook of $3.45 billion.
- Management expects fiscal 2027 subscription revenue of $9.94 billion to $9.95 billion, representing 13% growth. It also expects non-GAAP operating margin to expand by at least 2 percentage points in fiscal 2028.
Core Financial Results
| Metric | Fiscal Q2 2027 result | Change or context |
|---|---|---|
| Subscription revenue | $2.471 billion | Up 14% year over year |
| Professional services revenue | $178 million | — |
| Total revenue | $2.649 billion | Up 13% year over year |
| U.S. revenue | $1.97 billion | Up 12% year over year |
| International revenue | $682 million | Up 17% year over year |
| cRPO | $9.03 billion | Up 14.2% year over year |
| Total subscription revenue backlog | $27.4 billion | Up 8% year over year |
| Gross revenue retention | 97% | Existing customers contributed about 60% of subscription revenue growth |
| Non-GAAP operating income | $824 million | 31.1% non-GAAP operating margin |
| Operating cash flow | $520 million | Year-over-year decline reflected an additional payroll run in the quarter |
| Free cash flow | $460 million | Affected by payroll calendar timing |
| Cash and marketable securities | $3.4 billion | At quarter-end |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
Recommended Articles
Bitcoin (BTC) has flipped into a new bull market regime, according to CryptoQuant, after its Bull Score surged from 30 to 80 in a single week. The firm calls it the fastest reversal in a year.One hurd
Nvidia’s Q2 earnings topped expectations on August 26, with revenue of $96.2 billion beating the $92.2 billion Wall Street estimate. The chipmaker guided the current quarter to $108 billion. Nvidia (N
Peter Schiff renewed his “death spiral” warning on Strategy (MSTR), even as the stock jumped to $137.40 during a broader Bitcoin (BTC) rally. Michael Saylor answered with an AI-generated video of hims
Elon Musk says SpaceX could reach about $3.5 trillion in annual revenue by 2033. Morgan Stanley’s model does not get there until 2040.His estimate beats the bank by seven years and lands slightly high
President Donald Trump praised Micron on Truth Social Thursday afternoon. He called it one of the “hottest” companies in the world. Micron Technology (MU) stock fell anyway.The post cheered a $10 bill
