Workday beat second-quarter earnings expectations with AI driving more than 25% of new annual contract value, signaling a major shift in how enterprise software customers are adopting the technology. The company reported total revenues of $2.649 billion for the quarter ended July 31, up 12.8% year-over-year, and adjusted earnings per share of $2.75, exceeding analyst estimates. More than 5,500 customers now use at least one of Workday’s organic agents, up more than 35% from the prior quarter.
The strong Q2 results reflect accelerating adoption of Workday’s agentic AI capabilities, which the company says customers trust to handle critical work in HR, finance, and IT operations. CEO Aneel Bhusri stated in the earnings call that “because of Workday’s deterministic rails, customers can trust our agents with the work that matters, and you’re seeing that in the numbers.” Subscription revenue reached $2.471 billion, up 13.9% year-over-year, and the company’s 12-month subscription revenue backlog grew 14.2% to $9.034 billion.
The earnings beat comes as enterprise software vendors increasingly compete on AI capabilities. ServiceNow, a direct competitor, crossed a $1 billion AI revenue milestone in Q2 2026, demonstrating that AI-driven revenue is no longer aspirational for large enterprise platforms. Workday’s 25% AI contribution to new contracts reflects a similar inflection point, where AI products are becoming material drivers of new customer deals and expansion within existing accounts.
Workday raised its full-year fiscal 2027 subscription revenue guidance to $9.940 billion to $9.950 billion, representing 13% growth, and increased its non-GAAP operating margin guidance to 31.0%. The company also announced that its board authorized an additional $4 billion share repurchase program. During the quarter, Workday repurchased approximately 9.8 million shares for $1.3 billion.
Beyond the headline numbers, Workday highlighted expansion of its agent ecosystem. The company unveiled Developer Agent, which allows developers to build AI apps and agents using natural language, and Agent Passport, which tests and verifies AI agents before production deployment. Workday Learning, powered by Sana, became generally available, combining Workday’s HR data with AI-native learning experiences. The company also released Adaptive Decision Intelligence, enabling finance and operations teams to model scenarios in minutes using natural language queries.
The earnings announcement underscores a broader trend in enterprise software: companies that can demonstrate AI is driving measurable revenue growth are attracting investor confidence. Workday’s ability to quantify AI’s contribution—more than 25% of new ACV—provides concrete evidence that the technology is moving beyond pilot projects into core business expansion. With more than 11,500 organizations worldwide relying on Workday, including over 65% of the Fortune 500, the company’s scale means its AI adoption metrics carry weight for the broader market.
Sources
- Workday Investor Relations — Official earnings announcement with Q2 FY2027 results, AI metrics, and full-year guidance
- Wall Street Journal — Earnings coverage and CEO commentary on AI agent adoption and customer trust
- Investing.com — Earnings call transcript with details on 5,500+ customers using organic agents and 35% quarterly growth
- Barron’s — Earnings beat confirmation and subscription revenue outlook
