Workday (WDAY) Q2 2025 earnings summary

Executive summary

• Q2 FY25 total revenue reached $2.085B, up 16.7%–17% year-over-year, with subscription revenue at $1.903B, up 17%–17.2% year-over-year, and over 2,000 Financial Management customers.

• Non-GAAP operating income was $518M (24.9% margin), GAAP operating income was $111M (5.3% margin), and diluted EPS was $0.49; non-GAAP diluted EPS was $1.75.

• 12-month subscription revenue backlog grew 16.1% to $6.8B; total subscription backlog rose 20.9% to $21.58B.

• Joined the Fortune 500 for the first time, now serving over 70M users and 60%+ of Fortune 500 companies.

• Launched new AI innovations, completed the HiredScore acquisition, and announced strategic partnerships with Equifax, Salesforce, and Kainos.

Financial highlights

• Q2 subscription revenue: $1.903B, up 17%–17.2% year-over-year; total revenue: $2.085B, up 16.7%–17%.

• U.S. revenue: $1.56B; international revenue: $524M.

• Operating cash flow: $571M, up 34%; free cash flow: $516M, up 43%.

• Cash, cash equivalents, and marketable securities totaled $7.4B as of July 31, 2024.

• Share repurchases: $309M in Q2; new $1B buyback program authorized.

Outlook and guidance

• FY25 subscription revenue guidance reiterated at $7.7B–$7.725B (approx. 17% growth); total revenue guidance at $8.38B–$8.415B.

• Q3 FY25 subscription revenue expected at $1.955B (16% growth); non-GAAP operating margin at 25.25%.

• FY25 non-GAAP operating margin expected at 25.25%; GAAP margin expected ~20 points lower.

• FY25 operating cash flow guidance raised to $2.35B; capital expenditures expected at $330M.

• Mid-term (FY26–FY27) subscription revenue growth expected in mid-teens, with non-GAAP operating margin expanding to 30%.