AI Takeaway
Workday delivered strong Q2 FY2026 results with revenue growing 13.5% YoY to $2.54B and operating income surging 767% to $338M, while the company deployed $1.59B in share buybacks, reflecting robust profitability improvement and shareholder return activity.
Revenue
$2.54B
++13.48% YoY
EPS (Basic)
$0.87
++248.00% YoY
Operating Income
$338M
++766.67% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Workday generated $2.54B in revenue for Q2 FY2026, up 13.5% year-over-year from $2.24B, demonstrating continued demand for its cloud-based HCM and financial management platforms.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Operating income surged 766.7% YoY to $338M, pushing the operating margin from 1.7% to 13.3%, indicating significant improvement in cost efficiency and operating leverage relative to revenue growth.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
R&D expense totaled $705M in Q2 FY2026, up 6.3% YoY, representing approximately 27.7% of revenue, underscoring Workday's continued commitment to product innovation even as overall profitability improves.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
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Upgrade to unlockTotal liabilities rose 13.4% YoY to $9.41B while stockholders' equity fell 25.1% to $6.68B, pushing the debt-to-equity ratio to 1.41x. This elevated leverage, combined with $2.99B in long-term debt, increases Workday's financial risk if revenue growth decelerates or credit conditions tighten.
Source: Source: 10-Q Balance Sheet (XBRL Financial Data)
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Upgrade to unlockReported EPS of $2.66 versus the $2.56 analyst consensus — a +4.0% beat for Q1 FY2027.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $2.54B | $2.24B | +13.48% |
Operating Income | $338M | $39M | +766.67% |
Net Income | $222M | $68M | +226.47% |
EPS (Basic) | $0.87 | $0.25 | +248.00% |
EPS (Diluted) | $0.87 | $0.25 | +248.00% |
R&D Expense | $705M | $663M | +6.33% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $16.09B | $17.21B | -6.51% |
Current Assets | $6.59B | $9.96B | -33.84% |
Total Liabilities | $9.41B | $8.29B | +13.45% |
Current Liabilities | $6.54B | $4.82B | +35.55% |
Stockholders' Equity | $6.68B | $8.92B | -25.07% |
Cash & Equivalents | $559M | $972M | -42.49% |
Long-Term Debt | $2.99B | — | — |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $696M | $457M | +52.30% |
Investing Cash Flow | $97M | $-523M | +118.55% |
Financing Cash Flow | $-1.73B | $-501M | -245.91% |
Share Buybacks | $1.59B | $290M | +447.24% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 13.3% | 1.7% | +11.56% |
Net Margin | 8.7% | — | — |
ROE | 3.3% | — | — |
ROA | 1.4% | — | — |
Current Ratio | $1.009 | — | — |
Debt to Equity | $1.408 | — | — |
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Workday reported Q2 FY2026 EPS of $0.87 (basic and diluted), up 248% from $0.25 in the prior year period, and revenue of $2.54B, up 13.5% YoY. While specific consensus estimates are not included in the filing, the dramatic improvement in both revenue and profitability metrics signals a strong quarter relative to historical performance.
The headline takeaways are a 13.5% revenue increase to $2.54B, a 767% surge in operating income to $338M, and $1.59B in share buybacks that helped drive EPS up 248% to $0.87. Operating margin expanded from 1.7% to 13.3%, reflecting meaningful operating leverage in Workday's business model.
Workday repurchased $1.59B in shares during Q2 FY2026, a 447% increase from $290M in the same period last year. This aggressive buyback program contributed to a 42.5% decline in cash to $559M and a 25.1% reduction in stockholders' equity to $6.68B.
Based on the financial data, key risks include a tight current ratio of 1.01x following heavy buyback spending, a 35.6% surge in current liabilities to $6.54B, and a debt-to-equity ratio of 1.41x with $2.99B in long-term debt. Additionally, R&D spending of $705M (approximately 27.7% of revenue) continues to weigh on net margin expansion.
Workday's profitability improved significantly with operating income up 767% and operating cash flow up 52.3% to $696M, but its balance sheet shows some strain with a current ratio of just 1.01x and total liabilities rising 13.4% to $9.41B. The $1.59B buyback program has reduced cash reserves to $559M and compressed stockholders' equity, warranting close monitoring of liquidity in coming quarters.