Workday (NASDAQ: WDAY) reported a strong Q2 performance, with revenue growing 12.8% year-on-year to $2.65 billion, exceeding expectations and driven by a 13.9% increase in subscriptions. AI contributed significantly, accounting for 25% of new contract value, as the number of clients using AI products surged by 35%.
During the quarter, Workday bought back approximately $1.33 billion in shares, reducing the share count by about 8.8% from the previous year. A new $4 billion buyback authorization has been issued, representing about 8.3% of the company’s market cap as of late August.
Analysts are cautiously optimistic, with a consensus rating of “Hold” and a price target range around $220. Despite short-term limitations on upside potential, institutional ownership has increased to nearly 90%, signaling strong confidence in Workday’s future, especially with ongoing growth in its AI and subscription segments.
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