Workday Expands AI Push as Backlog Growth Trails Subscription Revenue

Workday is expanding its AI offerings under returning co-founder Aneel Bhusri, while total subscription-revenue backlog grows more slowly than subscription revenue.

Workday posted fiscal second-quarter revenue of $2.649 billion for the quarter ended July 31, up 12.8% from a year earlier. Subscription revenue rose 13.9% to $2.471 billion.

The company forecast fiscal 2027 subscription revenue of $9.940 billion to $9.950 billion, representing 13% growth. It also projected a 31.0% non-GAAP operating margin for the fiscal year ending Jan. 31, 2027.

Workday’s 12-month subscription-revenue backlog increased 14.2% to $9.034 billion as of July 31, 2026. Total subscription-revenue backlog rose 8.0% to $27.403 billion, slower than the quarter’s 13.9% subscription-revenue growth.

AI adoption is becoming a central part of Workday’s growth strategy. More than 5,500 customers were using at least one of the company’s organic AI agents as of Aug. 27, and AI contributed more than 25% of new annual contract value in fiscal second-quarter 2027.

“We had a strong Q2, with AI driving more than 25% of our new ACV and more than 5,500 customers now using at least one of our organic agents,” Aneel Bhusri, Workday’s co-founder, CEO and chair, said Aug. 27.

Workday made Sana available to customers worldwide on March 17. The company provides cloud software for human resources, finance and related enterprise functions. It generated $9.552 billion in fiscal 2026 revenue, including $8.833 billion in subscription revenue, for the year ended Jan. 31, 2026.

Bhusri became CEO effective Feb. 6, while retaining the chair position. Carl Eschenbach stepped down as CEO and from Workday’s board and remained a strategic adviser.

Bhusri described AI as a transformation larger than software-as-a-service. “AI is a bigger transformation than SaaS — and it will define the next generation of market leaders,” he said Feb. 9.

Workday’s fiscal 2025 analyst-day framework listed fiscal 2028 subscription-revenue growth scenarios of 12%, 13%-14% and 15%. Its non-GAAP operating-margin scenarios were 33%, approximately 35% and 36%.

The figures show continued double-digit subscription growth alongside slower backlog expansion as Workday positions AI as a central growth strategy.