# Workday (WDAY)

Sector: Enterprise software

| Field | Value |
|---|---|
| Price | $191.16 |
| Market cap | $46B |
| Intrinsic value source | Analysts |
| Data as of | 2026-11-12 |
| Next earnings | 2026-11-24 (estimate) |

Analysts: Leaning bullish

Picks: Research only

Discount category: Far above intrinsic value

## In short

Workday trades above its intrinsic value because investors pay for steady subscription growth and a high operating margin, and only steady growth with AI adding revenue can support this price.

## Themes and gap

- Themes: AI disruption risk (ai-disruption), New management (management-change)
- Gap type: Can close (closable)
- Why: The Q3 fiscal 2027 report in November 2026 and the fiscal 2028 guidance in February 2027 show whether AI adds revenue and whether customer seats hold.

## About

Workday, Inc. (Workday) is a U.S. software company based in Pleasanton, California. It sells cloud applications for human resources, finance and IT as subscriptions, and it calls itself an enterprise AI platform for these areas. More than 11,500 organizations, including more than 65% of the Fortune 500, use it. In fiscal 2026, which ended January 31, 2026, revenue was $9.552 billion, of which subscription revenue was $8.833 billion, and free cash flow was $2.777 billion. At July 31, 2026, total subscription revenue backlog was $27.403 billion. Workday has Class A and Class B shares, with about 196 million and 45 million outstanding at August 25, 2026. Aneel Bhusri, a co-founder, has been Chief Executive Officer since February 6, 2026. Zane Rowe is Chief Financial Officer.

## Thesis

Workday trades above its intrinsic value because investors pay for steady subscription growth and a high margin, even though they fear that AI agents will shrink seat-based business software. Subscription revenue grew 13.9% in Q2 of fiscal 2027 and the non-GAAP operating margin was 31.1%, but growth can slow if AI agents do work that customers now pay for per employee seat. Workday also spends on AI, changed its chief executive in February 2026, cut staff in February and September 2026, and sold $2.5 billion of new notes at rates of 5.7% to 6.5% in October 2026. For the price to hold, three things must be true. Subscription revenue growth must stay near the 12% to 13% guided for fiscal 2027, with AI adding revenue, as shown by AI in more than 25% of new annual contract value in Q2. The non-GAAP operating margin must reach the guided 31% and free cash flow must grow faster than share-based compensation, which was $871 million in the first half of fiscal 2027. And repurchases, $2.9 billion in the first half and $4.0 billion of new authority, must keep lowering the share count. The Q3 fiscal 2027 report in late November 2026, the fiscal 2028 guidance in February 2027 and the close of the C1.ai purchase by January 2027 are the next tests.

## Checkpoints

- Aug 27, 2026: Q2 fiscal 2027 results: guidance and margin. Status: Passed. Watch: Raised subscription guidance and a non-GAAP operating margin near 30% pass; a cut fails. Outcome: Subscription revenue grew 13.9%, guidance rose to $9.940 billion to $9.950 billion and the margin guidance rose to 31.0%.
- Nov 24, 2026 (estimate): Q3 fiscal 2027 results: subscription growth and AI. Status: Pending. Watch: Subscription revenue of $2.515 billion or more with a non-GAAP operating margin of 30.0% or more passes; a miss on either fails.
- Jan 2027 (estimate): C1.ai purchase closes. Status: Pending. Watch: The purchase closes by the end of fiscal 2027 on January 31, 2027 passes; a delay or a block fails.
- Feb 2027 (estimate): Q4 fiscal 2027 results and fiscal 2028 guidance. Status: Pending. Watch: Subscription revenue growth of 11% or more guided for fiscal 2028 passes; guidance below 10% fails.

## Balance sheet

- Cash: $3.4B
- Debt: $3.0B
- Net cash: $403M
- Undrawn credit line: $1.0B, to April 2027
- Debt due within 12 months: $1.0B
- Last debt due: 2032

At July 31, 2026, Workday held cash, cash equivalents and marketable securities of $3,403 million and had $3.0 billion of senior notes, with a carrying value of $2,989 million: $1.0 billion of 3.500% notes due April 1, 2027, $750 million of 3.700% notes due 2029 and $1.25 billion of 3.800% notes due 2032. The $1.0 billion of 2027 notes is the current part of debt. A $1.0 billion revolving credit facility was undrawn. Total stockholders' equity was $6,460 million. In the first half of fiscal 2027, free cash flow was $1,076 million and repurchases of common stock were $2,924 million. After the quarter, Workday signed a new five-year $1.5 billion revolving credit facility on October 1, 2026, and sold $2.5 billion of senior notes on October 23, 2026 to retire the 2027 notes and for general purposes. Its board authorized $4.0 billion more of repurchases in August 2026.

As of 2026-07-31.

Sources:

- https://www.sec.gov/Archives/edgar/data/1327811/000132781126000044/wday-20260731.htm
- https://www.sec.gov/Archives/edgar/data/1327811/000132781126000042/wday-07312026x991.htm
- https://www.sec.gov/Archives/edgar/data/1327811/000110465926118496/tm2626731d6_8k.htm

## Dividends

Workday does not pay a dividend.

Source: company filings and market data, read on 2026-11-13.

## Recent events

- 2026-10-23: Workday sold $2.5 billion of senior notes: $750 million at 5.700% due 2029, $500 million at 6.000% due 2031, $750 million at 6.300% due 2033 and $500 million at 6.500% due 2036. Net proceeds were about $2.47 billion. It plans to retire its $1.0 billion of 3.500% notes due April 2027.
- 2026-10-13: Workday agreed to buy C1.ai, an identity governance platform for people and AI agents. It expects the deal to close in Q4 of fiscal 2027, which ends January 31, 2027. The price was not given.
- 2026-10-01: Workday signed a new five-year credit agreement for a $1.5 billion revolving credit facility, which replaced its $1.0 billion facility. No revolving loans were outstanding.
- 2026-09-29: Workday announced reorganizations that cut about 2.5% of its workforce, mostly in Product and Technology, and reduce leased office space. It expects charges of $65 million to $80 million, mostly in Q3 of fiscal 2027, and reiterated its fiscal 2027 outlook.
- 2026-08-27: Workday reported Q2 of fiscal 2027. Revenue rose 12.8% to $2.649 billion and subscription revenue rose 13.9% to $2.471 billion. Workday raised its fiscal 2027 subscription revenue guidance to $9.940 billion to $9.950 billion and its non-GAAP operating margin guidance to 31.0%.
- 2026-08-27: In the same report, Workday said that it repurchased about 9.8 million shares for $1.3 billion in Q2, and that its board authorized $4.0 billion more of open-ended repurchases.
- 2026-02-24: Workday reported fiscal 2026 results with revenue of $9.552 billion, up 13.1%, and free cash flow of $2.777 billion. It guided fiscal 2027 subscription revenue to $9.925 billion to $9.950 billion.
- 2026-02-06: Workday's board named co-founder Aneel Bhusri Chief Executive Officer. Carl Eschenbach left as Chief Executive Officer and as a director.
- 2026-02-04: Workday announced reorganizations that cut about 2% of its workforce, mostly in non-revenue roles in Global Customer Operations. It expected charges of about $135 million in Q4 of fiscal 2026.

## Latest news and filings

- Last earnings: 2026-09-29 (8-K: https://www.sec.gov/Archives/edgar/data/1327811/000132781126000048/)
- Next earnings: 2026-11-24 (expected; the company has not confirmed it)

| Filed | Form | Headline | Period end | XBRL document | Link |
| --- | --- | --- | --- | --- | --- |
| 2026-10-23 | 8-K | New material agreement and New debt or financial obligation |  |  | https://www.sec.gov/Archives/edgar/data/1327811/000110465926118496/tm2626731d6_8k.htm |
| 2026-10-13 | 8-K | Other company news |  | wday-20261012 | https://www.sec.gov/Archives/edgar/data/1327811/000132781126000051/wday-20261012.htm |
| 2026-10-01 | 8-K | New material agreement and End of a material agreement |  |  | https://www.sec.gov/Archives/edgar/data/1327811/000110465926112898/tm2626731d2_8k.htm |
| 2026-09-29 | 8-K | Earnings release and Exit or restructuring costs |  | wday-20260929 | https://www.sec.gov/Archives/edgar/data/1327811/000132781126000048/ |
| 2026-08-27 | 10-Q | Quarterly report for the period ended Jul 31, 2026 | 2026-07-31 | wday-20260731 | https://www.sec.gov/Archives/edgar/data/1327811/000132781126000044/wday-20260731.htm |
| 2026-08-27 | 8-K | Earnings release and Other company news |  | wday-20260827 | https://www.sec.gov/Archives/edgar/data/1327811/000132781126000042/ |
| 2026-06-22 | 8-K | Shareholder vote results |  | wday-20260616 | https://www.sec.gov/Archives/edgar/data/1327811/000132781126000031/wday-20260616.htm |
| 2026-05-22 | 10-Q | Quarterly report for the period ended Apr 30, 2026 | 2026-04-30 | wday-20260430 | https://www.sec.gov/Archives/edgar/data/1327811/000132781126000026/wday-20260430.htm |
| 2026-05-21 | 8-K | Earnings release |  | wday-20260521 | https://www.sec.gov/Archives/edgar/data/1327811/000132781126000024/ |
| 2026-04-24 | 8-K | Current report |  | wday-20260420 | https://www.sec.gov/Archives/edgar/data/1327811/000132781126000019/wday-20260420.htm |

Every filing on SEC EDGAR (CIK 1327811): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001327811&type=&dateb=&owner=include&count=40

## Risks

- High: AI agents could do work that customers now pay for per employee seat, and customers could use fewer seats or shift to rival AI tools. Workday's growth and valuation depend on AI adding revenue and not replacing it.
- Medium: Share-based compensation was $1,626 million in fiscal 2026 and $871 million in the first half of fiscal 2027. Reported free cash flow excludes it, so the real cost to holders is the repurchases needed to offset the dilution.
- Medium: Workday sold $2.5 billion of notes at 5.700% to 6.500% in October 2026, and its earlier notes carry 3.500% to 3.800%. Debt and interest cost rise, and the company also spent $2.9 billion on repurchases in the first half.
- Medium: Workday changed its chief executive in February 2026 and cut staff twice. It also buys companies, such as Sana, Paradox, Pipedream and C1.ai, and integration can go wrong or cost more than planned.
- Low: Net income in Q2 included a tax benefit of $1.52 per share from an internal restructuring of intellectual property, so GAAP earnings per share are not a guide to future earnings.

## Links

- Page: https://picks.utilarium.app/company/WDAY/
- History of changes: https://picks.utilarium.app/company/WDAY/history/
- JSON with full history: https://picks.utilarium.app/data/company/WDAY.json

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