Workday (NASDAQ:WDAY) reported quarterly results that exceeded Wall Street estimates for both profit and revenue, yet its shares fell more than 4% in premarket trading Friday after issuing a cautious revenue forecast for the current quarter.
The company posted second-quarter earnings of $2.21 per share, surpassing analysts’ expectations of $2.11. Revenue reached $2.35 billion, slightly above the anticipated $2.34 billion, with subscription revenue climbing 14% to $2.17 billion.
Workday’s 12-month subscription backlog (cRPO) came in at $7.91 billion, up 16.4% year over year and modestly exceeding management’s guidance of 15%–16%.
Looking ahead, the company projected revenue of $2.235 billion for the current quarter, below the analyst consensus of $2.423 billion. Full-year fiscal 2026 revenue guidance was set at $8.815 billion, under Wall Street’s estimate of $9.51 billion. Intuit (NASDAQ:INTU) meanwhile raised its FY26 subscription revenue forecast to $8.82 billion from $8.80 billion.
“While Workday delivered a modest topline beat and ~50 bps of cRPO upside, it does not appear that the underlying momentum of the business is showing any real signs of acceleration,” Stifel analysts said, lowering their price target to $255 from $275.
“We note FY26 guidance was raised primarily due to the announced Paradox acquisition; absent this, subscription revenue guidance would have been unchanged from last quarter, suggesting a softer 2H following this quarter’s beat,” they added.
TD Cowen analysts offered a more positive take, noting that the maintained organic revenue guidance for FY26 still signals a reacceleration in growth during the second half. They added that AI momentum “seems strong,” and that while selling pressure on “good” SaaS results remains, they believe a “strong valuation floor” is in place.
CEO Carl Eschenbach highlighted that growth was driven by artificial intelligence and international demand, while CFO Zane Rowe said the company increased its subscription revenue outlook to $8.815 billion—reflecting 14% growth—and raised its operating margin forecast to 29%.
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