Workday Inc (WDAY) Q2 2026 Earnings Report

Workday reported a solid QQ2 2026 performance with sustained top-line momentum and meaningful margin expansion against the prior year. Revenue rose to $2.348B, up 12.6% YoY and 5.2% QoQ, while gross profit reached $1.978B for an 84.24% gross margin. Operating income was $248M (11.06% of revenue on an implied basis from the reported margin), and net income was $228M, yielding an EPS of $0.86 (GAAP) and $0.84 diluted. The quarter benefited from a disciplined cost structure alongside ongoing investment in R&D and go-to-market initiatives that support Workday’s multi‑module strategy (HCM, financial management, planning, and spend management). Free cash flow was robust at $588M, with operating cash flow of $616M, underscoring strong cash generation in a period of continued product investment. Cash and short-term investments totaled approximately $8.19B, yielding a net cash position of about $473M after debt, with strong liquidity to fund existing buybacks and future product development. Deferred revenue stood at $3.852B, signaling durable revenue visibility and a healthy plug for continued ARR growth. However, the quarter also reflects substantial stock-based compensation ($851M) and ongoing investment in R&D and SG&A, which keep near-term profitability buoyant but not explosive. Over the longer horizon, Workday appears well‑positioned to leverage its cloud-native stack to cross-sell modules and expand international penetration, while maintaining a solid balance sheet to weather competitive and macro challenges.