Track market-moving stories before they get noisy

Key Takeaways Workday shares gained 49.7% in three months as Q2 revenues rose 12.8% and non-GAAP EPS climbed 24.4%.AI products topped $100M in new ACV, while agentic AI ARR neared $600M after rising more than 200%.Workday raised fiscal 2027 non-GAAP margin guidance to 31%, as backlog and 97% retention support visibility. Workday, Inc. (WDAY - Free Report) shares have gained 49.7% in the past three months, sharply outpacing the broader market. The move puts the durability of the advance in focus as investors weigh stronger operating results against the speed of the recent share-price move.

Subscription growth, rising AI monetization and expanding margins provide fundamental support. Valuation, competitive pressure, longer sales cycles and implementation complexity remain important checks on how much of that operating improvement can translate into further upside.

Workday's 49.7% Rally Meets Stronger Q2 ResultsIn the second quarter of fiscal 2027, revenues increased 12.8% year over year to $2.65 billion. Non-GAAP earnings rose 24.4% to $2.75 per share. Both topped the Zacks Consensus Estimate, which called for revenues of $2.63 billion and earnings of $2.62 per share.

Subscription services generated $2.47 billion, up 13.9%, and represented about 93% of total revenues. That mix gives Workday a recurring-revenue base alongside the recent share-price advance.

WDAY's AI Adoption Is Turning Into Contract ValueAI products generated more than $100 million of new annual contract value in the quarter and accounted for more than 25% of total new ACV. Agentic AI annual recurring revenues approached $600 million, rising more than 200% year over year and 20% sequentially.

More than 5,500 customers were using at least one organic Workday agent, up more than 35% from the prior quarter. More than half of net new wins included one or more AI solutions, and more than 200 customers had signed up for Flex Credits.

Workday's Backlog and Retention Support VisibilityTwelve-month subscription revenue backlog increased 14.2% to $9.03 billion, while total subscription backlog rose 8% to $27.4 billion. Those contracted commitments add visibility to Workday's recurring subscription model.

Gross revenue retention held near 97%. Expansion among existing customers drove roughly 60% of subscription revenue growth, while the remaining 40% came from customers added after the start of the comparable prior-year period.

WDAY's Margin Gains Add Weight to the RallyNon-GAAP operating margin expanded to 31.1% from 29%, with non-GAAP operating income rising 21% to $824 million. Workday attributed the improvement to revenue growth outpacing headcount growth and moderated operating expenses.

Management raised fiscal 2027 non-GAAP operating margin guidance to 31% and expects at least two additional percentage points of expansion in fiscal 2028. The targets matter because total costs and expenses still increased 11% in the July quarter.

Workday's Valuation Tests How Much Upside Is LeftWorkday's forward 12-month price-to-sales ratio is 4.17, slightly above the sub-industry's 4.07 but below its five-year median of 6.73.

Image Source: Zacks Investment Research

Oracle Corporation (ORCL - Free Report) is a peer in human capital management (HCM), keeping competitive pressure on similar enterprise workflows. SAP SE (SAP - Free Report) is another HCM peer, adding to pricing and product competition. Longer sales cycles and complex implementations can also constrain growth and valuation support over time.

WDAY's Mixed Style Scores Temper the Momentum CaseThe near-term setup looks balanced. Operating momentum is improving, but competition, execution and valuation still matter when assessing whether the rally can extend.

WDAY carries a Zacks Rank #3 (Hold), which points to a middle-of-the-road short-term setup rather than a top-rated signal. Its Growth Score of A is favorable, but the Value Score of D and Momentum Score of F are weak. The VGM Score of C leaves the combined style profile mixed. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Workday's Q2 revenues rose 12.8% to $2.65B, while subscription revenues climbed 13.9% to $2.47B.AI products topped $100M in new ACV, while Workday's agentic AI ARR neared $600M, up more than 200%.Workday targets about 11% subscription growth in fiscal 2028 and at least two points of margin expansion. Workday, Inc. (WDAY - Free Report) combined second-quarter earnings beat with faster AI adoption and a higher margin outlook. Attention now turns to whether those trends can support fiscal 2028 growth.

The central issue is monetization. Core subscription growth is expected to moderate, making Workday's ability to convert expanding AI usage into incremental annual recurring revenues increasingly important.

Workday's Q2 Beat Shows Subscription StrengthSecond-quarter revenues rose 12.8% year over year to $2.65 billion, beating the Zacks Consensus Estimate of $2.63 billion by 0.6%. Non-GAAP earnings of $2.75 per share topped the consensus mark of $2.62 by 5%.

Subscription revenues increased 13.9% to $2.47 billion and accounted for about 93% of total revenues. Roughly 60% of subscription revenue growth came from expansion among existing customers.

WDAY's AI Sales Are Moving Beyond Product AvailabilityAI products generated more than $100 million of new annual contract value in the quarter, representing more than 25% of total new annual contract value. Agentic AI annual recurring revenues approached $600 million, rising more than 200% year over year.

Adoption is spreading across several offerings. More than 200 customers had signed up for Flex Credits, while 170 customers had purchased Adaptive Decision Intelligence. More than half of net new wins included one or more AI solutions.

Workday Raises Its Fiscal 2027 Margin OutlookWorkday raised its fiscal 2027 non-GAAP operating margin outlook to 31%. Management maintained operating cash flow guidance of $3.45 billion and expects free cash flow of $3.18 billion for the year.

Workday continues to prioritize investment in its agentic AI roadmap and platform opportunity while driving operating efficiencies. That combination keeps the focus on whether AI spending can scale without sacrificing the margin trajectory.

WDAY's Fiscal 2028 Framework Shifts Focus to AIManagement currently targets about 11% subscription revenue growth in fiscal 2028, consistent with the expected growth rate in the second half of fiscal 2027. Workday also expects non-GAAP operating margin to expand by at least two percentage points.

Potential upside could come from Sana Enterprise, Workday Extend with Data Cloud and AI agents, which are seeing strong early demand. Management is prioritizing adoption before full monetization and expects AI to become a more significant contributor to incremental annual recurring revenues from fiscal 2028 and beyond.

Workday's Costs and Sales Cycles Remain Key RisksTotal costs and expenses increased 11% year over year to $2.34 billion in the second quarter. The increase included $126 million of higher employee-related costs and $32 million of additional third-party hosted infrastructure spending.

Oracle Corporation (ORCL - Free Report) lists AI agents across Oracle Fusion Cloud HCM functions such as benefits, compensation and employee self-service. SAP SE (SAP - Free Report) has expanded suite-wide agentic AI across SAP SuccessFactors, including recruiting, payroll, learning and talent development. Workday has also cited greater deal scrutiny and longer sales cycles in some markets.

WDAY's Growth Score Supports a Cautious AI ViewThe fiscal 2028 setup is improving, but AI adoption still needs to translate into durable incremental revenues as core subscription growth moderates. Cost discipline and sales execution remain important to how much of the opportunity reaches reported results.

WDAY currently carries a Zacks Rank #3 (Hold), supporting a measured near-term stance. Its Growth Score of A is favorable for investors focused on growth characteristics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Value Score of D, Momentum Score of F and VGM Score of C make the broader quantitative profile less supportive. Since Zacks Style Scores complement the Zacks Rank, the mix indicates stronger growth characteristics than value and momentum attributes at present.

, /PRNewswire/ -- Workday, Inc. (NASDAQ: WDAY), the enterprise AI platform for HR, finance, and IT, has been named a Leader in the Gartner Magic Quadrant™ for Cloud HCM Suites for 1,000 Employee Enterprises for the eleventh consecutive year. A complimentary copy of the report is available here.

Workday Human Capital Management (HCM) brings HR data, business processes, and AI agents together on a single platform, giving organizations greater visibility into their workforce, reducing manual work, and enabling faster, more informed decisions. Workday is trusted by thousands of organizations around the world, including CCC Intelligence Solutions, OneDigital, Prudential plc, Radisson Hotel Group, and The University of Melbourne.

"Agentic HR is changing what organizations should expect from their HCM systems," said David Wachtel, general manager, core HR products, Workday. "With Workday, HR teams can move beyond managing transactions to orchestrating work, talent, and experiences with greater speed and confidence."

Workday brings AI into the flow of HR work in a way that is trusted, practical, and built for how organizations already operate:

AI agents where HR work happens. Workday agents are purpose-built for the roles and workflows HR teams rely on every day, from the Talent Acquisition Agent for recruiters and hiring managers to the Payroll Agent for payroll teams. Built on Workday's deterministic foundation of people data, business processes, permissions, and controls, they help teams move faster while maintaining accuracy and accountability.

A simpler, more personal experience with Sana. Sana gives employees and managers a conversational way to ask questions, find information, complete tasks, and navigate important moments at work, while creating personalized workflows across Workday and the tools they use every day. It helps reduce friction across common HR interactions, including benefits, time off, payroll, onboarding, and career growth.

More time for strategic HR. Workday AI agents help automate repetitive work, identify issues earlier, surface insights, and recommend next-best actions, giving HR teams more time to focus on human-centered work such as defining workforce strategy, hiring, and developing talent.

Tools to build and govern agents. With Developer Agent and Workday's Agent System of Record, organizations can build, deploy, manage, and govern AI agents across the enterprise while maintaining the trust, security, and control required for HR.

For More Information

Read a complimentary copy of the Gartner report on the Workday website.Read the blog, Workday Recognized as a Leader in 2026 Gartner® Magic Quadrant™ for Cloud HCM Suites for 1,000 Employee Enterprise.Gartner Disclaimer

Gartner, Inc., "Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises"; By Josie Xing, Ranadip Chandra, Ron Hanscome, Sam Grinter, Kate Jensen, Anand Chouksey; 31 August 2026.

Gartner and Magic Quadrant are trademarks of Gartner, Inc. and/or its affiliates.

This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Workday.

Gartner does not endorse any company, vendor, product or service depicted in its publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner publications consist of the opinions of Gartner's business and technology insights organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this publication, including any warranties of merchantability or fitness for a particular purpose.

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 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 plans, beliefs, and expectations. 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 inherent 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, risks described 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.

View original content to download multimedia:https://www.prnewswire.com/news-releases/workday-named-a-leader-in-2026-gartner-magic-quadrant-for-cloud-hcm-suites-for-1-000-employee-enterprises-for-eleventh-consecutive-year-302867869.html

SOURCE Workday Inc.

, /PRNewswire/ -- Workday, Inc. (NASDAQ: WDAY), the enterprise AI platform for HR, finance, and IT, has been named a Leader in the Gartner Magic Quadrant™ for Cloud HCM Suites for 1,000+ Employee Enterprises for the eleventh consecutive year. A complimentary copy of the report is available here.

Workday Human Capital Management (HCM) brings HR data, business processes, and AI agents together on a single platform, giving organizations greater visibility into their workforce, reducing manual work, and enabling faster, more informed decisions. Workday is trusted by thousands of organizations around the world, including CCC Intelligence Solutions, OneDigital, Prudential plc, Radisson Hotel Group, and The University of Melbourne.

"Agentic HR is changing what organizations should expect from their HCM systems," said David Wachtel, general manager, core HR products, Workday. "With Workday, HR teams can move beyond managing transactions to orchestrating work, talent, and experiences with greater speed and confidence."

Workday brings AI into the flow of HR work in a way that is trusted, practical, and built for how organizations already operate:

AI agents where HR work happens. Workday agents are purpose-built for the roles and workflows HR teams rely on every day, from the Talent Acquisition Agent for recruiters and hiring managers to the Payroll Agent for payroll teams. Built on Workday's deterministic foundation of people data, business processes, permissions, and controls, they help teams move faster while maintaining accuracy and accountability.

A simpler, more personal experience with Sana. Sana gives employees and managers a conversational way to ask questions, find information, complete tasks, and navigate important moments at work, while creating personalized workflows across Workday and the tools they use every day.  It helps reduce friction across common HR interactions, including benefits, time off, payroll, onboarding, and career growth.

More time for strategic HR. Workday AI agents help automate repetitive work, identify issues earlier, surface insights, and recommend next-best actions, giving HR teams more time to focus on human-centered work such as defining workforce strategy, hiring, and developing talent.

Tools to build and govern agents. With Developer Agent and Workday's Agent System of Record, organizations can build, deploy, manage, and govern AI agents across the enterprise while maintaining the trust, security, and control required for HR.

For More Information

Read a complimentary copy of the Gartner report on the Workday website. Read the blog, Workday Recognized as a Leader in 2026 Gartner® Magic Quadrant™ for Cloud HCM Suites for 1,000+ Employee Enterprise. Gartner Disclaimer

Gartner, Inc., "Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises"; By Josie Xing, Ranadip Chandra, Ron Hanscome, Sam Grinter, Kate Jensen, Anand Chouksey; 31 August 2026.

Gartner and Magic Quadrant are trademarks of Gartner, Inc. and/or its affiliates.

This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Workday.

Gartner does not endorse any company, vendor, product or service depicted in its publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner publications consist of the opinions of Gartner's business and technology insights organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this publication, including any warranties of merchantability or fitness for a particular purpose.

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 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 plans, beliefs, and expectations. 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 inherent 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, risks described 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.

SOURCE Workday Inc.

Swapping out an ERP system has been compared to open-heart surgery, which is exactly why Oracle, SAP, and Workday have held their ground through every technology wave. Now an AI-native startup backed by a former Sequoia partner is betting that…

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

On CNBC on August 31, Rillet co-founder and CEO Nicolas Kopp appeared alongside investor Roelof Botha, a former Sequoia partner, to share how his company is rebuilding enterprise resource planning (ERP) software around AI agents. Rillet is a private company, but the pitch is still relevant to incumbent software companies across the market.

Kopp described the product this way: “Rillet is an ERP that’s built for agents versus humans sort of clicking buttons and navigating around. Our agents help with that work 24/7 in the background, so CFOs have better financial information more quickly.”

Rillet Wants to Replace Batch Accounting With Real-Time Financials Legacy ERP systems, according to Kopp, calculate financials on a schedule via batch processing. Legacy companies like Oracle (NYSE:ORCL | ORCL Price Prediction), SAP (NYSE:SAP), and Workday (NASDAQ:WDAY) all sell batch-processing ERP solutions today.

His framing: “All these systems that people build around in the legacy space are based on batch processing. So numbers get calculated on a monthly basis, on a quarterly basis. We’re the only infrastructure system that does that on a real-time basis.“

In a batch model, a CFO’s view of revenue, cash, and margin reflects a period that has already closed. Kopp’s segment referenced organizations moving from financials updated every five to seven days to real-time daily visibility. This helps with preparing month-end and quarter-end reports, as well as making more informed real-time decisions.

Switching Accounting Systems Is Like “Open Heart Surgery” Botha, who disclosed he first invested in May 2025 and therefore has a direct financial interest in the company, put the switching problem plainly: “ERP is one of the most important categories of software. It’s hundreds of billions of dollars, and it’s the lifeblood of companies. It’s one of the last categories that would move to being in this new AI era, because changing your ERP or accounting system is like open-heart surgery.“

That switching cost cuts in both directions. It is why Oracle, SAP and Workday customer bases have been durable through prior technology waves. It is also, in Botha’s telling, why a genuine architectural rebuild is hard for anyone to copy quickly. Botha estimated: “When I first heard about the company, it sounded too good to be true, that the company had this fully baked system ready to go. They’d been building the company for a few years before they launched the service to customers. I think it’s a 4 or 5 year endeavor for anybody to catch up.“

AI Agents Could Let Companies Run Much Leaner On staffing, Kopp’s own framing was that Rillet fills a staffing gap: “We’re helping accountants. The teams that use it can usually scale more leanly. There’s definitely a component of scaling more leanly, but that is against the backdrop of absolute shortages on the accounting and finance side. So we’re kind of filling that gap today.”

Rillet also fits a broader pattern the market is trying to price. Agents running continuously in the background, as Kopp describes, are the same workload shape driving sustained infrastructure demand at the silicon layer, and every deployed finance agent becomes another identity to secure downstream.

The AI-native challenger question is the same one Rillet poses to ERP incumbents: does a rebuilt architecture eventually outweigh the pain of open heart surgery?

Key Takeaways Rillet’s challenge to legacy ERP is bigger than adding AI features to existing software. The company is betting that financial systems should run continuously rather than in batches. Oracle, SAP, and Workday still benefit from enormous switching costs, but if AI-native architecture proves materially better, those same switching costs may eventually become the only thing protecting the incumbents.

Contact [email protected] for any questions or corrections.

Key Takeaways Workday's non-GAAP operating margin expanded to 31.1% as operating income rose 21%.Subscription revenues grew 13.9%, while its 12-month backlog increased 14.2% to $9.034 billion.Workday's AI business gained momentum, with agentic AI ARR reaching about $600 million, up 200%. Workday, Inc. (WDAY - Free Report) delivered strong improvement in profitability in the fiscal second quarter. Non-GAAP operating income increased 21% to $824 million, while the corresponding margin expanded to 31.1% from 29%. Thus, operating profit grew substantially faster than revenue, which rose 12.8% to $2.649 billion. This indicates improving operating leverage.

Continued growth in its recurring subscription business is a strong contributor to the margin expansion. In the second quarter, subscription revenues increased 13.9% year over year to $2.471 billion. The company's subscription revenue backlog also remained healthy. The 12-month subscription revenue backlog rose 14.2% to $9.034 billion, while total subscription backlog reached $27.403 billion. This provides visibility into revenue growth for upcoming quarters.

Workday's expanding AI business is becoming an important growth driver. More than 5,500 customers were using at least one organic agent, indicating an increase of more than 35% from the previous quarter. Annual recurring revenues from agentic AI reached approximately $600 million, up more than 200% year over year.

Now, if we look beyond several non-GAAP adjustments such as share-based compensation, amortization, acquisition costs and restructuring expenses, GAAP profitability is improving steadily. GAAP operating income increased from $248 million to $313 million, while the margin rose from 10.6% to 11.8%. Going forward, the main test will be whether Workday can sustain its operating margin expansion in the long run or not. That will depend on its ability to expand its customer base, capitalize on cross-selling opportunities, top-line expansion and internal operational efficiency.

Other Tech Firms With Strong Margin ExpansionCorning Incorporated (GLW - Free Report) continues to enhance its financial profile under the Springboard initiative. In the second quarter, Corning’s core operating margin expanded 220 basis points to 20.2%, and ROIC improved 190 basis points to 13.5%. There are several factors driving this strong and consistent improvement in profitability. Optical Communications remains Corning's biggest growth engine. Strong hyperscale data-center investments and growing demand for GenAI networking infrastructure are driving revenues and profitability in this segment.

Another major player in the electronics manufacturing services industry, Sanmina Corporation (SANM - Free Report) , is benefiting from a strong improvement in profitability. Non-GAAP operating income rose to $275.8 million, while operating margin expanded to 8.0% from 5.7% in the prior-year quarter. Sanmina attributed the improvement to strong execution, disciplined cost management and higher contributions from non-recurring engineering services. Continued momentum in cloud and AI infrastructure as well as broad-based growth across the core Sanmina business is a positive.

Workday’s Price Performance, Valuation & EstimatesWorkday shares have lost 11.3% over the past year compared with the industry’s decline of 10.9%.

Image Source: Zacks Investment Research

From a valuation standpoint, WDAY trades at a forward price-to-earnings ratio of 17.22, below the industry average of 28.55.

Image Source: Zacks Investment Research

Earnings estimates for 2027 have increased 0.65% to $10.82 over the past 60 days, while the same for 2028 has declined 0.08% to $12.66.

Image Source: Zacks Investment Research

Workday currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Workday, Inc. (NASDAQ:WDAY) are giving back some of Friday’s gains. They rallied almost 6% after posting a strong earnings report. Now they are testing an important resistance level and could be on the verge of a breakout. This is why Workday is the Stock of the Day.

The term ‘market memory’ refers to how certain price levels can retain their significance for a long time. It could be months or even years.

As you can see on the chart, this has been the case with the $205 level for Workday. It has been important since April 2023. It was resistance then.

Some of the people who sold came to regret doing so when the resistance broke and the price headed higher.

A number of them decided to repurchase their shares if they could eventually do so at the selling price. As a result, when the shares fell back to this level in October 2023, they placed buy orders.

The large quantity of these orders created support at the former resistance level.

When the shares rallied, many of the people who sold at support regretted it. Some decided to buy back their shares if they could get them at the selling price.

When Workday fell back to $205 in the summer of 2024, they placed buy orders. This created support at the level again.

Similar dynamics occurred in April and August 2025.

When this support level broke in January, many of the people who bought shares at it regretted doing so. Some vowed to sell at break-even if they could eventually.

Now that Workday has rallied back to $205, they are placing sell orders. These orders have created resistance.

Successful traders understand how important psychology is in the markets. Remorseful sellers can create support. Remorseful buyers can create resistance.

This understanding creates profit opportunities.

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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

, /PRNewswire/ -- 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

Workday's Q2 earnings 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)

Income tax effects includes the impact of an intra-entity transfer of certain intellectual property rights as part of an internal legal entity restructuring completed during the three months ended July 31, 2026, which resulted in the recognition of a deferred tax asset and related tax benefit of $374 million.

(4)

Weighted-average shares used to calculate GAAP and non-GAAP diluted net income per share were 246,307 and 270,180 for the three months ended July 31, 2026, and 2025, respectively, and 250,238 and 270,240 for the six months ended July 31, 2026, and 2025, respectively.

Reconciliation of Workday's GAAP cash flows from operating activities to non-GAAP free cash flow is as follows (in millions). 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

Net cash provided by operating activities

$           520

$           616

$         1,215

$         1,073

Less: Capital expenditures

(60)

(28)

(139)

(64)

Free cash flows

$           460

$           588

$         1,076

$         1,009

About Non-GAAP Financial Measures

To provide investors and others with additional information regarding Workday's results, the following non-GAAP financial measures are disclosed: non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP diluted net income per share, and free cash flows. Workday has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. Non-GAAP operating income and non-GAAP operating margin differ from GAAP in that they exclude share-based compensation expense, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, acquisition-related costs, and restructuring costs. Non-GAAP net income and non-GAAP diluted net income per share differ from GAAP in that they exclude share-based compensation expense, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, acquisition-related costs, restructuring costs, gains and losses on strategic investments, and income tax effects. Free cash flows differ from GAAP cash flows from operating activities in that it treats capital expenditures as a reduction to cash flows.

Workday's management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Workday's financial performance. Management believes these non-GAAP financial measures reflect Workday's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in Workday's business. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Workday's operating results and prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.

Management believes excluding the following items from the GAAP Condensed Consolidated Statements of Operations is useful to investors and others in assessing Workday's operating performance due to the following factors:

Share-based compensation expense. Share-based compensation primarily consists of non-cash expenses for employee restricted stock units and our employee stock purchase plan. Although share-based compensation is an important aspect of the compensation of our employees and executives, this expense is determined using a number of factors, including our stock price, volatility, and forfeiture rates, that are beyond our control and generally unrelated to operational decisions and performance in any particular period. Further, share-based compensation expense is not reflective of the value ultimately received by the grant recipients. Employer payroll tax-related items on employee stock transactions. We exclude the employer payroll tax-related items on employee stock transactions in order to show the full effect that excluding share-based compensation expense has on our operating results. Similar to share-based compensation expense, this tax expense is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of our business. Amortization of acquisition-related intangible assets. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of the related amortization can vary significantly and are unique to each acquisition and thus we do not believe this activity is reflective of our ongoing operations. Although we exclude the amortization of acquisition-related intangible assets from these non-GAAP financial measures, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Acquisition-related costs. Acquisition-related costs include direct transaction costs, such as due diligence and advisory fees, and certain compensation and integration-related expenses. We exclude the effects of acquisition-related costs as we believe these transaction-specific expenses are inconsistent in amount and frequency and do not correlate to the operation of our business. Restructuring costs. Restructuring costs are associated with a formal restructuring plan and are primarily related to workforce reductions, the closure of facilities, and other exit and disposal activities. We exclude these expenses because they are not reflective of ongoing business and operating results. Gains and losses on strategic investments. Our strategic investments include investments in early stage companies that are valuable to Workday customers and complementary to Workday products. Gains and losses on strategic investments may result from observable price adjustments and impairment charges on non-marketable equity securities, ongoing mark-to-market adjustments on marketable equity securities, and the sale of equity investments. We do not rely on these securities to fund our ongoing operations, and therefore we do not consider the gains and losses on these strategic investments to be reflective of our ongoing operations. Income tax effects. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. In projecting this long-term non-GAAP tax rate, we utilize a three year financial projection that excludes the direct impact of the items excluded from GAAP income and certain discrete tax items in calculating our non-GAAP income. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate. For fiscal 2027 and 2026, we determined the projected non-GAAP tax rate to be 19%, which reflects currently available information, as well as other factors and assumptions. We will periodically re-evaluate this tax rate, as necessary, for significant events, relevant tax law changes, material changes in the forecasted geographic earnings mix, and any significant acquisitions. Additionally, with regards to free cash flows, Workday's management believes that reducing cash provided by operating activities by capital expenditures is meaningful to investors and others because it provides an enhanced view of cash flow generation from the ongoing operations of our business, and it balances operating results, cash management, and capital efficiency.

The use of these non-GAAP measures have certain limitations as they do not reflect all items of expense or cash that affect Workday's operations. Workday compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review Workday's financial information in its entirety and not rely on a single financial measure.

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SOURCE Workday, Inc.

Workday (WDAY - Free Report) came out with quarterly earnings of $2.75 per share, beating the Zacks Consensus Estimate of $2.62 per share. This compares to earnings of $2.21 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +4.96%. A quarter ago, it was expected that this maker of human resources software would post earnings of $2.49 per share when it actually produced earnings of $2.66, delivering a surprise of +6.83%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Workday, which belongs to the Zacks Internet - Software industry, posted revenues of $2.65 billion for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 0.57%. This compares to year-ago revenues of $2.35 billion. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Workday shares have lost about 11.2% since the beginning of the year versus the S&P 500's gain of 12.1%.

What's Next for Workday?While Workday has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Workday was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.65 on $2.69 billion in revenues for the coming quarter and $10.81 on $10.66 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, UiPath (PATH - Free Report) , is yet to report results for the quarter ended July 2026. The results are expected to be released on September 3.

This enterprise automation software developer is expected to post quarterly earnings of $0.15 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

UiPath's revenues are expected to be $397.59 million, up 9.9% from the year-ago quarter.

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.US

Workday (WDAY) has seen its stock rise modestly following Q2 results that surpassed FactSet earnings expectations and slightly exceeded revenue estimates. Inves

Workday shares WDAY rose about 5% on Friday after the enterprise software company delivered stronger-than-expected second-quarter results, although mixed guidance and uncertainty over the pace of AI-driven growth prompted sharply different views among analysts.

The company reported revenue of $2.649 billion for the quarter ended July 31, up 12.8% from $2.348 billion a year earlier.

Adjusted diluted earnings per share climbed to $2.75 from $2.21.

The results exceeded Wall Street expectations for revenue of $2.64 billion and adjusted earnings of $2.61 per share.

Workday's results highlighted growing demand for its artificial intelligence products as the company seeks to turn AI adoption into higher-value customer relationships.

The company said AI accounted for more than 25% of new annual contract value during the quarter.

More than 5,500 customers were using at least one of Workday's internally developed AI agents, representing an increase of more than 35% from the previous quarter.

AI annual recurring revenue also exceeded $600 million, reflecting rising interest in so-called agentic solutions.

However, the financial impact of that adoption is taking time to materialize.

Workday has been using promotional Flex Credits to encourage customers to experiment with its AI offerings, weighing on total subscription backlog growth, which rose 8% year over year.

Bank of America analysts said Workday's AI strategy was “gaining traction but reacceleration is still elusive.”

"The company’s AI initiatives remain early-stage and may require time to drive meaningful financial impact. We lower our estimates to reflect a slower long-term growth trajectory and reiterate our Neutral rating and $205 PO," they wrote.

Workday forecasts third-quarter subscription revenue of $2.515 billion, slightly above Wall Street's $2.51 billion estimate.

For the full fiscal year, the company expects subscription revenue of between $9.940 billion and $9.950 billion, broadly matching analysts' forecast of $9.95 billion.

While the outlook did not indicate a major deterioration in demand, analysts remained divided over whether Workday can accelerate growth as AI becomes a larger part of its product portfolio.

Freedom Broker downgraded the stock to Hold from Buy while raising its price target to $200 from $180.

The firm cited valuation concerns despite Workday's strong operational performance.

It expects subscription revenue growth to slow to about 11% year over year during the second half of fiscal 2027 and fiscal 2028, partly because bookings are shifting toward Workday's existing customer base.

The brokerage nevertheless raised its operating-margin forecast, citing the company's progress on cost management.

Analysts remain split on Workday stockWall Street's reaction to the earnings report has been unusually divided.

Capital One downgraded Workday to Equalweight from Overweight while maintaining a $219 price target, according to a note cited by TheFly.

Citi, meanwhile, raised its price target to $201 from $139 but maintained a Neutral rating.

The firm described the quarter as delivering a “more modest subscription revenue beat” and warned about the potential for another “guide down.”

Barclays was more positive, lifting its target to $224 from $200 and retaining an Overweight rating.

However, it expects a “muted” reaction, saying the “quarter itself was fine and suggests solid execution in a stable macro, but mixed guidance will raise questions.”

Morgan Stanley remained the most cautious among the major brokerages.

Analyst Adam Wood raised his target to $180 from $145 but retained an Underweight rating.

He said Workday's in-line quarter and early fiscal 2028 guidance “set a growth floor and likely mark a clearing event,” but added that the firm continues to favor companies with more direct AI exposure.

Wells Fargo offered the most bullish assessment, raising its price target to $225 from $215 and maintaining an Overweight rating.

Analyst Michael Turrin said management's surprise fiscal 2028 guidance helped anchor the firm's model, although third-quarter cRPO guidance came in below expectations.

Wells Fargo continues to regard Workday as a high-quality asset with increasing terminal value.

The contrasting analyst views highlight the challenge facing Workday as it attempts to balance AI investment, customer adoption and growth expectations.

The company's expanding AI revenue and rapid growth in customer adoption suggest its strategy is gaining traction. But analysts remain uncertain about how quickly those developments will translate into accelerated subscription growth.

For investors, the key question is whether Workday can convert its growing AI footprint into stronger bookings and recurring revenue without relying heavily on promotional incentives.

Friday's share-price jump suggests investors initially focused on the earnings beat and improving AI adoption. The divided analyst outlook, however, indicates that the market remains cautious about whether Workday's AI opportunity can produce a meaningful reacceleration in growth.

Key Takeaways WDAY is expected to post fiscal Q2 revenues of $2.63B and adjusted EPS of $2.62.AI-powered Learning, Microsoft 365 Copilot integration and new agents may support revenue growth.Competition, product development costs and cautious AI spending may pressure margins and profitability. Workday, Inc. (WDAY - Free Report) is set to release second-quarter fiscal 2027 results on Aug. 27, after the closing bell. In the trailing four quarters, the company delivered an earnings surprise of 7.22%, while in the last reported quarter, it delivered an earnings surprise of 6.83%.

The company is expected to report year-over-year revenue growth, supported by increased adoption of its artificial intelligence (AI)-powered products and expansion across HR, finance and other enterprise workflows. However, higher AI-related expenses, competitive pressure and cautious enterprise spending are likely to have weighed on margins and profitability.

Factors at PlayDuring the quarter, the company expanded Workday Learning, powered by Sana, as an AI-native learning solution. The offering is likely to have supported fiscal second-quarter revenues by increasing AI adoption and creating additional opportunities to expand sales among existing HCM customers.

During the quarter under review, Workday brought its Sana Self-Service Agent for HR and Finance into Microsoft 365 Copilot, expanding access to its AI capabilities. The integration is likely to have supported revenue growth by driving Sana adoption and strengthening demand for Workday’s HR and finance solutions.

Workday also announced Sana for IT Service Management and a new Travel Agent, expanding its AI offerings into additional enterprise workflows. The new products are expected to have a positive impact on revenues in the July quarter by increasing cross-selling opportunities and broadening Workday’s addressable market.

However, strong competition and rising product development expenses might have created pressure on Workday’s performance during the to-be-reported quarter. Implementation challenges could have delayed customer adoption, while AI-related legal, privacy and trust concerns might have led some customers to remain cautious about AI investments.

For the July quarter, the Zacks Consensus Estimate for revenues is pegged at $2.63 billion, indicating an increase from the year-ago quarter’s $2.35 billion. The consensus estimate for adjusted earnings per share is pegged at $2.62, implying growth from $2.21 reported in the prior-year quarter.

Earnings WhispersOur proven model does not conclusively predict an earnings beat for Workday for the fiscal second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, this is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Workday carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to ConsiderHere are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Oracle Corporation (ORCL - Free Report) has an Earnings ESP of +2.08% and carries a Zacks Rank of 2 at present. It is set to release its first-quarter fiscal 2027 numbers on Sept. 8.

The Earnings ESP for NetApp, Inc. (NTAP - Free Report) is +3.77%, and it carries a Zacks Rank of 2 at present. The company is scheduled to report first-quarter fiscal 2027 numbers on Sept. 2.

The Earnings ESP for Hewlett Packard Enterprise Company (HPE - Free Report) is +9.96%, and it carries a Zacks Rank of 2 at present. The company is scheduled to report third-quarter fiscal 2026 numbers on Sept. 2.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of WDAY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?

Let's take a look at what these Wall Street heavyweights have to say about Workday (WDAY - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

Workday currently has an average brokerage recommendation (ABR) of 1.99, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 43 brokerage firms. An ABR of 1.99 approximates between Strong Buy and Buy.

Of the 43 recommendations that derive the current ABR, 21 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 48.8% and 7% of all recommendations.

Brokerage Recommendation Trends for WDAY

Check price target & stock forecast for Workday here>>>

While the ABR calls for buying Workday, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.

Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.

On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.

Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.

Should You Invest in WDAY?Looking at the earnings estimate revisions for Workday, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $10.81.

Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Workday. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Workday.

WDAY's 62.9% three-month surge reflects strong HCM demand and its AI push, but slower growth, saturation and competition cloud the outlook.

Peer-Reviewed Research Tackles Some of the Hardest Technical Challenges in Enterprise AI

Recent Findings Reveal What It Takes to Ensure Agents Retain Only What Matters, Collaborate for Greater Accuracy, and Delete Without a Trace

, /PRNewswire/ -- Workday, Inc. (NASDAQ: WDAY), the enterprise AI platform for HR, finance, and IT, today announced Workday AI Research, a dedicated technical research team focused on advancing reliable, trustworthy, and efficient AI for the enterprise. Workday AI Research findings help shape AI development at Workday and contribute new evidence, methods, and evaluation practices to the broader research community.

Workday researchers have produced a growing body of work on challenges central to enterprise AI, including persistent agent memory, explainability, multi-agent orchestration, reward overoptimization in AI training, recommendation systems, and adaptive resource control. Recent work has been accepted by top conferences including the International Conference on Machine Learning, the International Conference on Learning Representations, the ACM Web Conference, and the Association for Computational Linguistics.

"As AI agents evolve to remember context and take action on behalf of employees, enterprises are facing complex challenges around privacy, auditability, efficiency, and enterprise-grade accuracy that off-the-shelf models simply cannot solve," said Gerrit Kazmaier, president, product and technology, Workday. "Workday AI Research is dedicated to solving these exact problems, delivering the rigorous science needed to build intelligent, reliable systems that organizations can actually trust and deploy at scale."

Developing the Next Generation of Enterprise AI Researchers

To help fuel this research and deepen Workday's collaboration with the academic community, the company is also introducing the Workday AI Research PhD Fellowship to support exceptional doctoral students working at the intersection of AI and enterprise software. Fellows receive $50,000 in annual research funding through an unrestricted gift to their university, dedicated mentorship and direct collaboration with a Workday AI researcher, and early access to relevant career opportunities at Workday. Interested PhD candidates can find more details at workday.com/ai-research.

Recent Breakthroughs from Workday AI Research

Workday AI Research is exploring some of the most important questions organizations face as they adopt AI:

Can AI agents remember the right things without storing everything? 
Workday researchers developed a more selective approach to agent memory that helps AI keep useful information while filtering out outdated, duplicate, or unreliable details. In testing, the method delivered 12% higher precision and approximately 8% better overall memory quality, while retaining 97% of the memories that mattered. It also ran about 31% faster than the leading AI-driven comparison—showing that better memory can be both more useful and more efficient.

Can multiple AI agents make better decisions than one? 
Workday researchers found that splitting complex work among specialized agents improved both answer quality and compliance. In the study, one agent explored options, another focused on following the rules, and a coordinating agent directed their work. The approach improved accuracy by 5.8%, and every final answer met the study's defined constraints. The finding suggests that organizations do not have to choose between higher-quality AI recommendations and strong guardrails.

Does asking an AI agent to forget something actually make it forget? 
Workday researchers found that deleting information from an AI agent's memory does not always remove it for good. When researchers asked an agent to forget something, a copy of it was still recoverable from an old summary about one in five times. Fully erasing the information meant also deleting every summary that mentioned it—showing that "forgetting" in AI agents requires clearing every copy, not just the original record.

While AI is quickly changing how businesses operate, organizations need systems they can trust to retain the right context, explain their recommendations dependably, and follow clear guardrails. By connecting rigorous AI science with real-world enterprise needs, Workday AI Research is helping build a new generation of AI tools that are useful, efficient, transparent, and ready for work.

For More Information

Visit workday.com/ai-research for a complete list of Workday AI research papers. Read our blog posts spotlighting recent Workday AI research: "What Makes AI Dependable? New Workday Study Puts This Question to The Test". "For Better AI Results, Split The Work Across Agents" "Research Shows The Best AI Memory Isn't Bigger. It's More Selective." 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 plans, beliefs, and expectations. 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 inherent 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, risks described 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.

SOURCE Workday Inc.

Workday (WDAY - Free Report) closed the most recent trading day at $191.18, moving -3.77% from the previous trading session. The stock trailed the S&P 500, which registered a daily loss of 0.52%. Elsewhere, the Dow lost 0.51%, while the tech-heavy Nasdaq lost 0.32%.

Heading into today, shares of the maker of human resources software had gained 37.23% over the past month, outpacing the Computer and Technology sector's gain of 1.99% and the S&P 500's gain of 3.3%.

Analysts and investors alike will be keeping a close eye on the performance of Workday in its upcoming earnings disclosure. The company's earnings report is set to go public on August 27, 2026. The company's upcoming EPS is projected at $2.63, signifying a 19.00% increase compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $2.63 billion, indicating a 12.18% upward movement from the same quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $10.81 per share and a revenue of $10.66 billion, representing changes of +17.12% and +11.58%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Workday. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.57% higher. Workday is holding a Zacks Rank of #3 (Hold) right now.

In the context of valuation, Workday is at present trading with a Forward P/E ratio of 18.38. This valuation marks a discount compared to its industry average Forward P/E of 21.52.

Investors should also note that WDAY has a PEG ratio of 1.05 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 1.05.

The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 86, this industry ranks in the top 35% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

Workday (WDAY -3.76%) had its best day since 2016 last Thursday. Shares jumped nearly 18% (trading was halted multiple times along the way) after Reuters reported that private equity firm Silver Lake has spent recent months in talks to take the human resources and finance software maker private. The move lifted Workday's market value from about $43 billion to nearly $51 billion.

What nobody has reported is a price, or terms, or any assurance a deal gets done. Neither Workday nor Silver Lake immediately responded to CNBC's request for comment. And reported talks don't always turn into offers.

So the exercise worth doing is valuing the business on its own -- as if no buyer ever shows up.

Image source: Getty Images.

What Thursday changed Before the report, Workday was a stock the market had spent much of the year marking down. Concerns that artificial intelligence (AI) will upend the business model of seat-based software have weighed on the shares for months. The company also changed leaders in February, when co-founder Aneel Bhusri returned as CEO, replacing Carl Eschenbach. And even after Thursday's jump, the stock remains about 17% below its 52-week high of $249.85.

That context matters for handicapping the talks. A private equity firm circling a company like this is a bet that the market's AI fears are overdone, and that the cash flows are durable enough to carry a leveraged deal. Even if no offer ever comes, the report says a deep-pocketed buyer has been in talks about a deal for months.

The stand-alone business The business under all this is slower than it was, and considerably more profitable. Workday's revenue over the trailing 12 months came to $9.85 billion, up 13.3%. Fiscal 2026 (the year ended Jan. 31, 2026) showed the same shape, with revenue up 13.1%, a step down from 16.4% growth the year before and from the high-teens rates of a few years ago.

Profitability is moving the other way. Operating margin has climbed from 2.5% in fiscal 2024 to 4.9% in fiscal 2025 to 7.5% in fiscal 2026, and trailing-12-month net income rose about 74% to $847 million.

Free cash flow is the more useful measure for a software company, though. Workday generated about $2.97 billion of it over the trailing 12 months, about 30% of revenue.

The AI question hangs over the growth line specifically. Workday prices mostly on its customers' headcount, and if AI lets them run leaner back offices, that headcount could stagnate even while the software stays essential. That risk helped push the stock lower through the first half of the year, before a sharp rebound took hold in July.

The numbers haven't settled it either way. Fiscal 2026's 13% growth is slower than the past, but it isn't the shrinkage the skeptics expect.

Today's Change

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A five-year forecast A forecast is only as honest as its assumptions, so here are mine. Assume revenue growth eases from 13% toward single digits, averaging about 10% a year. That puts revenue near $16 billion in five years. Assume free cash flow margin holds around 30%, which requires no improvement from today. That produces about $4.8 billion of annual free cash flow.

The last assumption is the multiple. Put a mature-software valuation of 18 to 20 times free cash flow on those dollars, and the business would be worth about $85 billion to $95 billion, or about $340 to $385 per share before accounting for changes in the share count. The stock trades at about $206 as of this writing.

From the current $51 billion value, that works out to annualized returns of about 11% to 13%.

Of course, the bear branch is the one the AI skeptics would draw. If headcount pressure caps growth at about 6% a year and the multiple compresses to 15 times free cash flow, the value lands near $60 billion, or about $240 per share -- closer to a 3% annualized return from here. Slower, but not a disaster, with free cash flow still growing the whole way.

I'd put more weight on the first branch than the second. Workday's margin climb is recent and steep, and a business converting 30% of revenue to cash can fund its own transition into whatever AI makes of enterprise software. If the talks end without a deal, part of Thursday's jump would likely reverse, and quickly. But the five-year case was never about the talks. It rests on growth near 10% and a free cash flow margin that holds where it is, and today, both assumptions still look reasonable to me.

LOS ANGELES--(BUSINESS WIRE)---- $WDAY--WDAY Investors Have Opportunity to Join Workday, Inc. Fraud Investigation with SBS Law.

4:10pm: Third straight week of gains Wall Street ended Friday slightly lower as investors took a cautious approach near record levels, with the S&P 500 slipping 0.2% to 7,786 and pulling back from its latest high.

The Dow Jones fell 108 points, or 0.2%, to 53,732, while the Nasdaq dropped 0.3% to 26,729.

The modest declines came as surprisingly weak economic data raised concerns about the health of the US consumer, with softer spending and sentiment weighing on market confidence.

Still, the pullback was hardly enough to derail the broader rally. The S&P 500 capped its third straight week of gains, keeping Wall Street close to record territory despite growing caution over the economic outlook.

2:40pm: Proactive news headlines Snail Inc (NASDAQ:SNAL) has released new content across its indie game portfolio and set an August 26 launch date for a PixARK expansion, while Stoneguard has entered Steam Early Access with a “Mostly Positive” user rating. Dune Oil Corp (CSE:DUNE, OTCQB:TRLEF, FRA:Z620) said prospective seismic contractors completed site visits at its Gabar Block in southeastern Türkiye ahead of a planned 2D seismic survey, reviewing field conditions, logistics and equipment needs. Replenish Nutrients Holding Corp (CSE:ERTH, OTC:VVIVF, FRA:7KE) received gross proceeds of $104,508 in the first monthly settlement under its $1.95 million financing agreement with Sorbie Bornholm LP. Digi Power X Inc (NASDAQ:DGXX, FRA:1NQ0, NEO:DGX) reported second-quarter revenue of about $6.6 million, including its first $1.1 million in AI compute revenue, while investing roughly $30 million in GPU infrastructure and turning adjusted EBITDA positive at about $3.3 million. Touchstone Exploration Inc (AIM:TXP, TSX:TXP, OTC:PBEGF) shares jumped nearly 19% after the Trinidad-focused oil and gas producer reported a sharp improvement in second-quarter earnings and stronger early performance from its Cascadura compression project. London BTC Company Ltd (LSE:BTC, OTCQB:VINZF) is expanding its Nevada exploration strategy to target antimony alongside gold and silver, adding exposure to a US-designated critical mineral across its portfolio. Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) has acquired a 100% working interest in the Thorsby oil property in central Alberta for C$12.15 million, marking its first producing asset outside Colombia and funded entirely from cash reserves. 1:05pm: Market movers Reddit Inc (NYSE:RDDT) shares surged more than 16% after the company was announced as a new addition to the S&P 500, a move expected to drive buying from index-tracking funds. Applied Materials Inc (NASDAQ:AMAT, XETRA:AP2) shares fell about 4% despite the chip equipment maker beating third-quarter revenue and profit estimates and issuing stronger-than-expected fourth-quarter guidance. Bitcoin is facing a potentially volatile August, with prediction markets putting the odds of the cryptocurrency reaching $65,000 at about 59% but seeing little chance of a new record. 11:45am: Workday in takeover talks Workday Inc (NASDAQ:WDAY) (Workday Inc (NASDAQ:WDAY)) has held discussions with private equity firm Silver Lake in recent months about a potential acquisition, Reuters reported, with the enterprise software company carrying a market value of about $43 billion.

While talks are ongoing and there is no guarantee a deal will be reached, Jefferies analysts said they see several reasons why Silver Lake might be interested.

Following the stock's move on the news, Workday's valuation of 4 times calendar year 2027 revenue and 14 times free cash flow sits near the bottom of an already beaten-down large-cap software group.

The analysts also pointed to Workday's sticky ERP business, its trove of data valuable for AI, room to lift operating margins closer to peer levels, and a maturing AI vision under CEO Aneel Bhusri.

"While we question where Workday's next leg of growth will come from, being private might enable more aggressive AI transition and revenue reacceleration,” analysts wrote.

10:00am: Workday jumps, Reddit rallies Wall Street is treading water to start Friday, with the major averages little changed as investors weigh a weaker-than-expected retail sales report against a fresh round of company news.

The Dow Jones is up 6 points at 53,846, while the S&P 500 has edged 3 points higher to 7,802. The Nasdaq is down 6 points at 26,797.

Consumers pulled back on spending in July, with retail sales falling 0.6% month over month, well below expectations for a 0.1% gain. Core retail sales, which exclude autos, gasoline, building materials and food services, fell 0.3%, versus estimates for a 0.2% increase.

Still, the details were not quite as gloomy as the headline. Fifth Third Commercial Bank chief economist Bill Adams noted that lower gas station sales partly reflected falling prices, while the timing of Amazon Prime Day also weighed on non-store sales. Even after accounting for those factors, however, spending was softer last month.

One bright spot was food service and drinking place sales, which rose 0.5%, potentially helped by World Cup-related spending.

On the corporate front, Workday shares are surging after Reuters reported that private-equity firm Silver Lake is in talks to acquire the business software company.

Applied Materials is heading lower after its latest earnings were judged insufficient to justify a stock that has already gained 108% in 2026.

Reddit, meanwhile, is jumping after news that the social-media platform will join the S&P 500 next week.

With the major indexes sitting near record highs, investors are looking for fresh catalysts to keep the rally going, while the retail sales data offers another reminder that higher prices and elevated borrowing costs are still weighing on parts of the US economy.

Ahead of the bell Wall Street looks set for a calm end to the week, with US stock futures drifting close to flat on Friday.

That comes after the S&P 500 powered to a fresh record high on Thursday, buoyed by softer-than-expected inflation figures and receding worries about further Federal Reserve interest rate rises.

Futures on the benchmark index were barely budging in premarket trade.

Contracts tied to the Dow Jones Industrial Average nudged up 0.1%, while those on the tech-heavy Nasdaq 100 dipped just below the waterline.

Both the S&P 500 and Nasdaq were on course for weekly gains.

The mood was helped by a bright session in Asia, where South Korea's KOSPI jumped more than 1.4% and Japan's Nikkei added 0.8%.

A run of strong corporate earnings has done much of the heavy lifting for stocks lately.

With the Friday calendar looking thin, traders are already glancing ahead to next week's crop of retail results, including Target and Walmart, before Nvidia takes centre stage with its keenly awaited numbers on August 26.

Before then, investors will get a fresh read on the shopper via retail sales figures and the University of Michigan's consumer sentiment survey.

Dan Ives, Yorkville Ives partner and senior managing director, joins 'Closing Bell Overtime' to discuss the state of tech stocks.

Scott Martin addresses reports that private equity firm Silver Lake seeks to acquire Workday (WDAY), a headline that gave the stock its best day in ten years. He believes the alleged $43 billion deal would be a steal for Silver Lake, as he explains why "the business is not going anywhere.

Silver Lake's potential Workday buyout could bolster battered software valuations by showing that private equity remains confident in the industry's prospects ​despite fears of AI disruption, analysts and investors said on Friday.

Junior miners spend most of their existence chasing grade. Nine Mile Metals Ltd. (CSE:NINE, OTCQB:VMSXF, FRA:KQ9) has the opposite problem at parts of its Bathurst Mining Camp land package: ore so rich that the region's processing infrastructure isn't built to handle it.

It's a strange complaint for a resource company to have. At Nine Mile Brook, drilling has returned intervals grading as high as 15% copper alongside significant lead, zinc, silver and gold. That grade is high enough that the company has entered an agreement with commodities giant Glencore to test whether some of the material could bypass conventional milling altogether and go straight to a smelter.

As Nine Mile CEO Patrick Cruickshank explains, a mill is optimized around a specific type of ore, so it would need to make adjustments for different material.

"The biggest concern is impurities, because the milling process typically helps separate and remove those elements," Cruickshank told Proactive.

Whole drill core has already been shipped to Glencore for direct-to-smelter testing, while two additional bulk samples are undergoing metallurgical and gravity separation testing, a roughly three-month process. Depending on the outcome, the lead-zinc component could ultimately be routed to a Glencore facility in Quebec, with copper-gold material potentially destined for the Horne Smelter.

Even logistics become a variable at this scale. A 3,000-tonne bulk sample carries an estimated contained metal value of roughly $4,000 per tonne, by Cruickshank's estimate, but shipping that tonnage to a facility like Kidd Creek in northern Ontario could cost close to $1 million on its own, and most mills want closer to 10,000 tonnes to justify dedicating a processing shift to unfamiliar ore. "Bulk sampling is not intended to be a revenue-generating activity, so it's a sensitive topic from a regulatory standpoint," Cruickshank noted. "The purpose is to test and validate the metallurgy and processing options."

The grade problem is really a symptom of a broader thesis Cruickshank has been building for two and a half years: that the Bathurst Mining Camp's most efficient path to new production doesn't run through greenfield discovery alone, it runs through mines that were shut down decades ago for reasons that no longer apply.

The Wedge Mine is the clearest example. Operated by Cominco through the 1950s and into the early 1960s before Teck took it over, Wedge produced an estimated 1.5 to 2.5 million tonnes of ore, almost entirely valued for lead and zinc. Silver was trading near $1 an ounce at the time, copper wasn't especially valuable, and gold assays weren't routinely run. "If miners couldn't see the gold, they generally ignored it," Cruickshank said.

Operations ended not because the deposit was exhausted, but because a support pillar collapsed after roughly a third of the vertical deposit had been mined. Repairing it wasn't economical at the commodity prices of the era, so the mine was abandoned with an estimated two-thirds of the system still in the ground.

Six decades later, Nine Mile is revisiting that resource with tools the original operators never had. Drone surveys and geophysical work over the past two years have effectively produced what Cruickshank calls a treasure map of the property. Drilling on the mine's undrilled eastern side added several million tonnes of mineralization, and last year's drilling on the southern portion of the deposit returned copper grades up to 8%. Borehole electromagnetic crews will soon be on site to survey seven holes, generating three-dimensional imagery that extends 300 to 400 metres in every direction from each hole and can distinguish new mineralization from old workings and voids.

The company has already identified three mineralized lenses at Wedge where historically only one was recognized. Cruickshank's stated goal is to demonstrate five to 10 million tonnes remaining, at grades strong enough, when combined with the silver and gold values showing up in recent drilling, to support a return to production.

The same logic underpins the company's approach at Nine Mile Brook, home to what Cruickshank describes as the highest-grade VMS lens ever discovered in the Bathurst camp, and at Canoe Landing, where Nine Mile's ground abuts a 32-million-tonne deposit owned by Wolfden Resources. "Whoever ultimately develops that deposit will almost certainly have to work with us, or vice versa, because together we control the full mineralized system," Cruickshank said, adding that a joint venture or acquisition are both options the company is watching.

It's a strategy built on a simple mining adage Cruickshank likes to repeat: the best place to find a new deposit is in the shadow of an existing one. With 45 known deposits already mapped across the Bathurst camp, he sees more value in applying modern geophysics and AI-assisted target modeling to old, well-understood ground than in searching blind.

Underlying all of it is a change in Nine Mile's financial position that Cruickshank argues is as important as any drill result.

Having raised just over $5.6 million recently, Cruickshank says the company doesn't expect to need additional financing for more than two years, freeing it to run a multi-target drill program across Wedge, Nine Mile Brook, California Lake and Canoe Landing Lake without the dilution pressure that has historically capped its share price rallies. A second drill rig is being mobilized directly to the West Wedge and Tribag targets, part of six priority drill targets identified since January.

That funding also changes the company's appetite for risk. "Previously, we didn't want to start drilling every target because our funding was limited," Cruickshank said. "Now we're fully funded, and we have access to better technology and more advanced algorithms, which gives us the confidence to be much more aggressive."

The bigger picture
Nine Mile's approach is unfolding against a favourable backdrop in New Brunswick, where the provincial government has stated its ambition to become Canada's leading jurisdiction for critical minerals and has pointed to the planned restart of the Lake George antimony project as evidence of that commitment. Cruickshank also points to the arrival of Kinross in the district, growing interest from companies like Rio Tinto and Glencore, and roughly 15 public companies now active in the camp as signs that capital is returning to a region long defined as a lead-zinc district but increasingly valued for its copper, silver and gold.

Whether that momentum translates into a producing mine at Wedge, a fifth lens at Nine Mile Brook, or a resolution to the Canoe Landing overlap with Wolfden, Cruickshank frames the company's task in straightforward terms: "At this point, it's about execution: drilling the programs, delivering results, and creating value."